Tag Archives: Talent Management

Research Refining the Vision of the Future of HR

CEO Perspectives Screen ShotA couple of weeks ago, I published a blog here discussing the revolutionary opportunities Human Resource professionals now have in reshaping their role in the organization.  As a follow up to that blog, I’d like to share a study that was recently published  by The Economist Intelligence Unit entitled, “CEO Perspectives ~ How HR Can Take On A Bigger Role In Driving Growth”.  The study, co-sponsored by Oracle and IBM, surveyed 235 “C” level executives, of which 57% were CEOs.

The study points out two driving trends that are intersecting to fundamentally change the opportunities HR professionals have to elevate their strategic input in organizational success.  First is the rise of knowledge workers, something I’ve been discussing since 2008 when I began writing my book, “The Transformational Entrepreneur”.  This reflects the fundamental shift regarding the inputs of value creation in companies.  Human beings, and their creativity, are now the raw material for the creation of commercially viable intellectual property and processes.  This changes everything.

The second relates to the outsourcing of the transactional, historical, administrative functions of HR.  Areas such as payroll, pensions and compliance have been and can be outsourced to third parties and two thirds of companies now outsource some portion of these administrative functions.  This frees up HR to truly reinvent itself to focus on driving the strategic value of talent and ascend to a new level of critical functionality within the organization.

To quote directly from the study, “Unburdened by some of their former responsibilities, HR specialists have a chance to transform their role, exploiting their image as experts in people to place themselves at the heart of the debate on a company’s strategic direction.”  This also has implications that cut both ways.  If HR doesn’t take the necessary steps to impact both the strategic and financial trajectory of the organization they may find themselves marginalized to the point of irrelevance.

CEOs are pulling for HR executives to step up and contribute at a higher level.  The study revealed 55% of CEOs report that HR is a key player in the strategic planning of the organization, yet 70% expressed their desire to see HR take a stronger leadership role in this process.  The door is open.

The study goes on to identify two factors that are holding HR back in capturing this opportunity.  The study states, “Perhaps heads of HR are not being included in strategic planning because doubts linger about whether they have the requisite breadth of business knowledge to participate productively”.  Of the CEOs surveyed, 41% believe their HR executives are “too focused on process and rules” and 37% say they don’t “understand the business well enough”.  This is a perception that I addressed in my previous blog regarding the opportunities to develop one’s own business acumen.

The second constraining factor relates to performance outside the traditional confines of the HR function.  While two thirds of CEOs believe HR performs well in their traditional role, approximately half or fewer think HR is making the grade in talent development, succession planning, or creating a high performance culture.  Another recent survey identified the fact that Board of Directors believe talent management is totally failing to make a positive impact on company performance.  Why is this?  There’s a misalignment in what many HR executives perceive to be the CEOs’ areas of primary concern.  I’ve seen this firsthand in discussion groups of senior HR executives at various conferences…they don’t always understand and appreciate what’s keeping the CEO awake at night.  They would be well served to understand this primary customer’s areas of concern.

What are these concerns?  According to the study, CEOs are worried about (in order of significance):

  1. Insufficient talent within the organization as a whole (56%).
  2. Insufficient leadership talent (43%).
  3. Lack of alignment of individual and business objectives (41%).
  4. Low employee satisfaction (38%).

CEOs have also expressed a need to capture a 20% increase in productivity from existing resources in order to meet current financial and performance obligations (Corporate Executive Board, 2013).  In fact, McKinsey & Co.® recently released a major study that indicates companies will need to achieve a 30% improvement in current productivity in order to maintain the same levels of growth and the standard of living we all enjoyed in the 1960s.

The study makes some suggestions as to how HR leaders can ascend to a more strategic role within the organization.  It comes down to cultivating stronger relationships with the CEO and functional heads by demonstrating insight and competency, ensuring cohesion amongst the leadership team, and taking the initiative and being accountable in this new level of authority and impact on the organization.  These recommendations are less specific than the recommendations I offered in my previous blog, but are very much in alignment.

© 2013, Terry Murray.

1 Comment

Filed under Health Care, Leadership Development, Organizational Culture, Strategic Planning, Talent Management

The Revolutionary Future of Human Resources

When many of us first embarked upon our professional careers, few if any disciplines had the opportunity to truly reinvent their organizational roles on the fly.  Things were fairly steady, moving forward at a relegated pace, keeping stride with what, at the time, was the revolutionary influx of information technology.  While the support tools were evolving, sales was still sales, finance was still finance, and HR was still HR.  Turning our contemporary lens back onto those bucolic days of the 80s and 90s now has the feel of looking back into the archeological record of some ancient civilization.

Things have change.  Really changed.  Not just on the surface, but deep into the very essence of what business now does in its never ending pursuit of value creation.

During the Industrial Age, value was created through the exploitation of cheap and abundant raw materials, the organization of specialized labor (think assembly lines), and the application of capital.  Industrialists like Henry Ford and Alfred Sloan helped usher in the golden age of the corporation.  Economies of scale, vertical integration, corporate finance and sophisticated marketing methodologies took root and flourished.  Great sales people ascended to dizzying heights.  These were the tools and drivers of their time.

The Information Age, the precursor of today, breathed new life into tiring, threadbare methodologies of management and organizational development.  Information technology enabled the aging structures to shed overhead and secure gains in productivity, while the very essence of their fundamentals were quietly slipping away beneath their feet.  Resource constraints, environmental concerns, the first waves of globalization, and labor strife were all taking their toll during the 1970s, right at the threshold of the coming IT revolution.  Those of you old enough will remember the gas lines, stagflation and the emergence of the Rust Belt that marked the close of the decade.

While the internet, cloud computing, and Big Data all offer productivity promise, the very source of value creation has shifted dramatically over the past thirty years.  In today’s economy, value is created through the efficient commercialization of intellectual property (IP).  The assembly lines of the past have been supplanted by teams of knowledge workers.  Multi-cultural, multi-generational workers that are often dispersed around the globe.  The new raw material of our age is human creativity and the human beings that bring their creativity to life.

The implications are far reaching, but the opportunities are even greater, especially for the professionals in Human Resources and Talent Management.  The fact of the matter is, what was once perceived by senior leadership as overhead, a department that was saddled with risk management and often derided as a necessary evil that slowed things down, is now center stage in the value creation equation.

With this unprecedented opportunity for unleashing remarkable productivity gains (Gallup® once again, for the 12th year running, reported employee disengagement levels hovering at 70%) comes equally remarkable challenges for HR.  While the source of value creation has shifted, the political capital HR requires in their new role has lagged behind.  Chances are, this political capital wont be philanthropically handed over by the Sales and Marketing folks; it simply isn’t in their nature.  But the fierce competitors must inevitably give sway to the fierce collaborators if companies are to maintain their competitive advantage in rapidly changing markets.

So HR professionals are left to blaze a new trail, to build their voice at the strategic table of senior management.  The challenge is, where are the forbearers?  Where are the pioneers to whom we can look for guidance and methods to set this new standard?  You’ll find them in the mirror.  It’s you, and it’s your time to step up and lead.

Having been on the forefront of this revolution for the past five years, I’d like to share a few thoughts as you embark on the first steps of this new journey:

  1. Cultivate your business acumen.  Tap into the thought leaders beyond the traditional practice of HR (i.e. The McKinsey Quarterly®, the Harvard Business Review®, and people like Dan Ariely, Daniel Goleman and Rich Davidson).  Tap into the many entrepreneurial voices heard through blogs and the unadulterated business press of the internet.  Find a senior mentor from outside HR and learn as much as you can, as quickly as you can about both the new and evergreen fundamentals of business.
  2. Invest in your leadership competencies.  Not the old command-and-control philosophies, but methods based upon transformational and service leadership.  It is values-driven leadership that resonates with today’s multi-cultural and multi-generational workforce.  And it is intrinsic values that resonate (i.e. authentic relationships, purposefulness, being of service and a part of something bigger than one’s self) in today’s world.  Leveraging extrinsic values alone (i.e. money, power, prestige) is an artifact of the past (and a contributing factor to endemic employee disengagement).
  3. Look for integrative solutions that drive insights.  Today’s business world is faced with accelerating complexity.  One-off, simple solutions are no longer capable of bridging the growing performance gap.  The solutions to today’s adaptive challenges lie in the convergence of seemingly disparate disciplines (i.e. the convergence of neuroscience, applied behavioral economics, emotional intelligence, leadership development, creativity science, and advanced analytics).
  4. Build metrics into every HR initiative.  This is crucial in gaining a respected voice at the leadership table.  Sales is transactional and easily measured.  Human creativity, collaboration, leadership development, and innovation precursors require a bit more thought to construct meaningful metrics.  But these metrics are there if you look, and be sure to ask every HR vendor for their metrics as well.  If they shy away from measuring their own impact on the business, find vendors willing to step up and be accountable.
  5. Be prepared to take some risks.  This is the threshold, the point at which you will either embark on what famed author and scholar Joseph Campbell called The Hero’s Journey or fall back into the staid definitions of the past.  Here’s the thing, if you follow the first four steps of advice, the risks will be measured, rational, and justifiable.  Those are risks worth taking and those are risks one survives.

We’re truly working and living in unprecedented times.  The HR profession has arrived at a nexus.  The opportunities for those bold enough to redefine themselves and their role within the organization will enjoy equally unprecedented success.

© 2013, Terry Murray.

Leave a comment

Filed under Diversity & Inclusion, Health Care, Leadership Development, Organizational Culture, Talent Management

Five Steps for Solving the Endemic Employee Disengagement Crisis

The Gallup Company® just released their annual report, The State of the American Workforce ~ 2013, and once again, employee engagement levels are woefully low.  Sadly, this isn’t news.  This has been consistently reported upon for at least ten years.  Addressing employee engagement represents the most cost effective way a company can improve productivity and profitability.  Here’s a few strategies that can make a difference in a few short months.

It’s an issue we’ve been discussing for years.  In fact, one of my earliest blogs on this site explored this very topic.  While we speak with business leaders and HR executives every day, we hear them expressing their desire to improve on collaboration, innovation, productivity and performance.  None of these objectives can emerge without first engaging the workforce, both cognitively and emotionally.  Yet, for some reason, the disconnect remains.  The recent Gallup study identifies only 30% of employees are engaged, 20% are actively disengaged (meaning their spreading discontent and working at cross purpose with their employers…actually destroying value), and 50% are disengaged, meaning they’re sleepwalking through their day.  Our additional research identifies the fact that upwards of 50% of many firms’ payrolls, their single largest expense line, is delivering little to no return on investment.

When we consider that in today’s New Economy, value creation in business emerges through the efficient commercialization of intellectual property, we must understand that human beings are the new raw material of production.  Now, if Henry Ford had been experiencing a scrap rate of 50% on steel, his raw material of the day, I think he would have found his way down to the factory floor and addressed it in relatively short order.  Yet, the Gallup study reveals this endemic situation has been steady since 2001.  Eleven years of leaving value lying fallow on industries’ floor.

How important is this issue for businesses, hospitals and our economy overall?  Let’s take a look…

The Business Case for Employee Engagement ~

Actively disengaged employees cost the U.S. economy an estimated $450 billion to $550 billion in lost productivity every year.

For a small to medium size company, with 100 employees averaging (on the low end) $45,000 in salary and benefits, actively disengaged employees are costing the business owner $1,350,000 in wasted compensation and, conservatively, another $500,000 in destroyed productivity of fellow associates.  Giving the sleepwalkers the benefit of the doubt, that they’re contributing something at least half of the time, are also costing the business owner $1,125,000 in wasted compensation.  As a business owner, can you afford to keep tossing approximately $3 million a year out the window?

Looking at the comparisons between companies in the top quartile of reported engagement, versus those in the bottom quartile of engagement, higher engaged firms:

~ Score 10% higher in customer ratings

~ Are 22% more profitable

~ Have 65% lower turnover rates

~ Enjoy 37% lower absenteeism

~ Incur 48% fewer safety-related accidents

~ Experience 28% lower shrinkage

~ Create 41% fewer quality defects

~ Hospitals incur 41% fewer patient safety incidents

After twenty five years of leadership experience, in both corporate and entrepreneurial settings, and five years of research, application and validation of our philosophy and approach at Performance Transformation, LLC™, we know how to solve employee disengagement in five, relatively easy, and very cost affordable steps (you’ll actually lower your training and development expenses by following our suggestions while unleashing remarkable breakthroughs in productivity, creativity and innovation):

mckinsey-quarterly-right-leaders-image-0031.) Address the broken, traditional leadership development approach.  Over the past 20 years, corporations and institutions have invested upwards of $1 trillion in leadership development programs.  The results?  Thanks to Gallup’s study, we’re staring them right in the face…and McKinsey & Company reported in July, 2011 only 1% of “C” level and “one-step down” executives scored excellent in eight key leadership competencies.  Nearly 90% scored below average.  Leadership development based in the theories of behavioral psychology simply don’t work.  If you disagree, please show me the proof.  We must migrate to an approach based in neuroscience to address the underlying causation of behaviors in the workplace.  We must conduct leadership development around tangible business outcomes.  Experiential learning and immediate application, framed by an educationally-based coaching process is essential.  Demand a clear ROI to be reported on every developmental investment from your vendors.

2.) Help HR bring their focus and practices into the landscape of the 21st Century.  While line management is playing to win, based upon their historical charter of responsibilities, HR has little choice but to play not to lose.  Due to this, many HR practices have naturally evolved to be highly risk-averse at a time when boldness and leadership is most needed.  As an example, traditional Diversity & Inclusion training (another $8 billion per year expense with no discernible ROI) is archaic and typically a vacuous exercise lacking context, strategic communication, or business application.  D&I training needs to transform into Collaboration & Innovation learning.  We’re already diverse (companies are very multi-cultural and multi-generational, but still far too homogenous at the senior levels), but real inclusion cannot emerge without engagement.  Also, resist automating misaligned HR practices still rooted in the Industrial Age with Talent Management systems that are little more than CRM platforms turned inward.  First, process map your procedures and competency models to see if they’re actually in alignment with the rapidly changing needs of the business.  Then, and only then, migrate to systems that enable predictive analytics through the use of machine learning technology.  It is through this application that insights into the future will emerge rather than simply accelerating and duplicating the broken processes of the past.

3.) Stop spending money on foolish Team Building workshops.  Get down off the ropes courses, stop building toy boats in resort swimming pools, put the paint gun pistols down, and leave the trust falls to adolescent summer camps where they belong.  Many of these so-called team building activities are exclusionary to older workers, workers that may have physical limitations, or workers that have differing cultural concerns.  Want to cultivate collaborative behaviors?  Focus on cultivating relationship-based skills (i.e. Emotional Intelligence) and only conduct Team Building within the direct and immediate context of the business.  Invest in employee development using meaningful and science-based learning modalities.  The recent discoveries from the neurosciences provides us with rich insights into what truly matters and provides us with a roadmap for sparking lasting, meaningful neurological change in perspectives and orientations of one’s self, of others, and how we can engage in positive communication and open collaboration.

4.) Create an organizational culture that embraces and celebrates intrinsic values (authentic relationships, purposefulness, personal and professional development, being a part of something larger than one’s self, service to others) over extrinsic values (money, power, prestige).  Intrinsic values are core to human happiness while extrinsic values are anchored in culture and conditioning.  We were all born to care for one another; it’s part of our primary survival mechanism.  No other mammal on the planet is born more vulnerable or develops more slowly than human beings.  Without empathy and compassion, our natural, inborn attributes that enabled us to evolve over the past 80,000 years, we never would have survived as a species.  Leveraging intrinsic values engages the entire human continuum, transcending the superficial differences of cultural perspectives and generational orientations.

5.) Align and optimize transformational leadership, enlightened strategy and a highly engaging and inclusive organizational culture.  This is the primary theme of my book, The Transformational Entrepreneur ~ Engaging The Mind, Heart & Spirit For Breakthrough Business Success, published in February, 2011.  Companies that thrive follow this path.  This isn’t conjecture, the book provides historical facts and was cited by the academic Journal of Economic Literature in March, 2012.

It truly is this straight forward.  But if you want to thrive, and going forward, simply survive in business, the first step is up to you.  You have to want to make the change, awaken and take a few steps forward, and stop simply talking about it.

© 2013, Terry Murray.

1 Comment

Filed under Health Care, Leadership Development, Organizational Culture, Strategic Planning, Talent Management

Establishing a Talent Management Baseline for Breakthrough Productivity

As the economy continues to gain ground, organizations are faced with the risk of unprecedented turnover.  Years of downsizing have left many workers disengaged, mistrustful of leadership, and generally burned out.  A recent survey illustrated the fact that 55% of employees feel they cannot handle their current workload and the resulting stress much longer.  From an organizational development viewpoint, this unsettling situation threatens the foundational competitiveness of many firms, fore it is the best and the brightest that are the most mobile.  The collaborative challenges of leading a multi-cultural and multi-generational workforce, in an ever-accelerating environment, only exacerbates the threat.

Let’s face it, traditional approaches to leadership development have fallen far short of their promise.  With enterprises investing $50 billion a year in leadership development, you’d think we’d see better results, yet only 1% of 5,560 executives assessed (McKinsey Quarterly, July, 2011) scored excellent in key competencies.  Nearly nine out of ten score below average.  The fact of the matter is, behaviorally-based approaches to leadership development only treat the symptoms of poor leadership, blindly missing the causal elements that differentiate mediocre management from inspirational leadership.  Even worse, these traditional approaches to talent management are failing to identify upwards of 65% of high potentials.  All of these factors are combining to create the perfect storm for many companies.  With the speed of business and demands for innovation what they are today, committing a misstep in talent management can be fatal…and there no longer exists even a modicum of time to respond.  If you get blindsided by this today, you may not be around tomorrow.

Here’s a short, video white board describing how leveraging the state-of-the-science findings from the field of affective neuroscience, along with incorporating targeted, demonstrated high performer competencies (in today’s volatile world), can anticipate this coming wave of disruption by creating a quantitative, talent management baseline that aligns with the demands of the day.

© 2013, Terry Murray.

2 Comments

May 1, 2013 · 4:07 pm

Are You Positioned to Succeed in the Third Industrial Revolution?

The risk of being an innovator is that you’re often the first one in the room with the next big idea.  It can be a lonely place while you’re waiting for the mainstream to catch up.  Trust me, we know.  We’ve been at the very forefront of thought leadership for nearly five years, but the wait was worthwhile as study after study is hitting the mainstream business press validating our approach with one salient, statistically-signficant point after another.

Here’s another study that supports our perspective.  The SHL Talent Report is monumental, having canvased data from more than one million professionals, executives and associates from around the world to gather insights into People Intelligence and the strategic role this perspective is already playing in organizational success or failure.  The study focuses on several key facets of Leadership for Today, Leadership for Tomorrow, Innovation, Talent Management and Behavioral Risk, Gender & Generational Diversity in Leadership, and the Global Race for Talent.  I think you’ll find it to be an informative and eye-opening weekend read!

Here are some of my thoughts on the major points brought to light in the study ~

First, an opening word on People Intelligence.  SHL defines this as, “The intelligence that is delivered through reliable, scientifically valid and objective measures of people’s talents, ranging from their potential to be an effective leader to the specific skills and knowledge required for the thousands of daily transactions that make or break an organization.”  As a former member of Naval Intelligence and a seasoned Executive Strategist, this is why our firm is in the sector we chose to be in…human beings are the raw material of value creation in the New Economy.  It’s also why we partnered to bring Talent Sprocket (Talent Sprocket Performance Transformation Toss Sheet eVersion) and Democrasoft® (How One Simple Step Can Solve Your Engagement, Inclusion and Collaboration Challenges eVersion) into our open network partnership.

Leadership for Today ~ The great disconnect continues between leaders and associates.  Only 1 out of 4 associates believe their organizations have the leadership necessary to succeed in the future.  Only 1 out of 3 associates believe their firm has the the top leadership available from within their industry.  Leaders are equally concerned about the pool from which they can find the successors to the 76 million Baby Boomers that will be retiring in the coming years.

The study goes on to identify both the transactional skills and transformational skills necessary for effective leadership.  These skills include the ability to build effective relationships, analytical and organizational skills, adaptive ability to navigate change, effective communication skills, collaborative influence, lateral creative thinking to deliver new insights, and the drive to see things through.  Notice a theme?  These are primarily the soft skills that many still roll their eyes at the mention.  Feel free to continue to roll your eyes, but take a moment to notice what happens to your field of vision when you do so.

Takeaway ~ Only 6.7%, or 1 in 15 managers, professionals, or global executives have the skills and potential for effective leadership today.

Leadership for Tomorrow ~ Take heart, fore herein lies our future success.  One out of three professionals from Gen-X and Gen-Y display some potential (same criteria as above) for effective leadership tomorrow.  The challenge lies in identifying the right high potentials and investing in their training and development to translate potential into actuality.  U.S. firms best beware, however, because emerging economies have a greater pool on which to draw upon.

Takeaway ~ The question isn’t whether or not their is potential leadership talent, but how intelligent your enterprise is in recognizing that talent and developing it.  Currently, only 1 in 15 managers or executives have the potential to become a top leader, but why?  A recent CEB study identified that the vast majority of firms overlook the right high potentials because they don’t understand or recognize the contributory skills and aptitudes that are cogent for today and the future.  They’re caught looking for the attributes of yesteryear.

Innovation ~ Today’s buzzword, right?  We all know this is the key to survival in the future.  However, companies are often missing both the recognition of true innovators and cultivating the fertile soil of organizational culture necessary for innovation to translate into commercially viable products and services.  The study identifies the behaviors that drive effective innovation that evolve around a mix of focus, insight, networking and collaboration.  These include, ability to reason, capacity to think laterally, focus, adaptability, persistence, a capacity to build effective relationships, ability to navigate social networks, influential communications skills, and the ability to impart excitement and passion for the innovation.  Pretty similar theme to the leadership attributes listed above, wouldn’t you say?  Again, soft skills and creativity reign.

Takeaway ~ Innovation is a strategic imperative.  Innovation is, at its very core, about change.  Yet 70% of traditional change management programs fail. In addition, only 1 out of 17 graduates and professionals, or 5.8%, have the capacity to become true innovators.  How are you going to attract, recruit, retain, reward and acknowledge these rare talents?  This is why culture is key.  According to a report published by The Economist, this will be the driver of The Third Industrial Revolution.  If traditional change management fails, why would you look to traditional organizational and leadership development approaches to drive innovation?  It’s a recipe for failure.

Behavioral Risk ~ People take risks, not processes and Talent Management must be seen as a part of Risk Management.  Risk comes from hidden biases that stem from a lack of self and social awareness.  Again, developing soft skills, at all levels of the organization are key.

Takeaway ~ As the speed of change continues to accelerate, authority and trust must move deeper into the organization.  Developing self and social awareness throughout the business mitigates organizational risk.

Gender & Generational Diversity ~ The study demonstrates that the difference between leadership potential for women and men is less than 1% (and it slightly favors women, by the way), yet on a global level men enjoy senior leadership positions by a ratio of 3:1 over women.  In the U.S. the figures are exceptionally poor, with 83% of leadership roles held by men.  Only places like Japan and countries in the Middle East fare worse.

Generationally, only 30% of Gen-Y’s plan to spend their entire career with one firm.  They’re mobile.  And they embrace intrinsic values (personal and professional development, authentic relationships, purposefulness, being a part of something larger than themselves) over the extrinsic values of the Baby Boomers (money, power, prestige).

Takeaway ~ I’ll leave the gender diversity issue for Warren Buffett to answer.  As to generational diversity, if you’re not strategizing how you’re going to leverage intrinsic values over extrinsic values, you’re holding the door open for your technology natives and future innovators to walk out the door.

The Global Race for Talent~ I’ll let you read this for yourselves.  The point I wish to make here is the U.S. ranks 23rd in the world for professionals with the right talents to succeed globally in the coming years.

Takeaway ~ Simply put, the traditional approaches for leadership and organizational development in our country have failed.  It’s time for a breath of fresh air and if innovation is important to you, perhaps it’s time to embrace an innovative approach to leadership and organizational development.

© 2013, Terry Murray.

1 Comment

Filed under Diversity & Inclusion, Leadership Development, Organizational Culture

The Top 5 Signs You’re Already Losing the Talent War

I just returned from attending and speaking at the HR Management Institute’s conference entitled, “Enhancing HR as a Strategic and Transformative Business Partner in Times of Volatility and Change”.  It was a compelling event in which our team had the opportunity to meet and interact with some of the most progressive HR executives I’ve had the privilege of knowing and working with throughout my career.  Upon my return home, I read an article about Yahoo’s CEO making the decision to end telecommuting at their company.  The irony of this decision hit me immediately.  One of the few companies to survive the dot com crash over a decade ago, a company that is entirely built around the value proposition of internet connectivity, is retreating to an Industrial Age, brick and mortar mentality.  Just as the rest of the business world is poised to leverage new thinking and new technologies that will catapult the foundations of internet connectivity to transparent engagement and rapid innovation.

These two recent experiences compelled me to share my insights on the early warning signs that you may already be losing the talent war (and by the way, 2.9 million workers voluntarily left their employer in January, the highest level since June, 2008).

1. You’re resisting flexibility in the workplace ~ I haven’t worked out of a traditional office setting since 2000.  I’ve worked with teams of dispersed associates scattered around the country, and now around the world, and we’ve created remarkable value.  Knowledge workers warming a seat in a cubicle does not ensure productivity or innovation.  At a time when, according to the CEB Executive Guidance ~ 2013 report, CEOs are looking for an additional 20% increase in productivity, forcing knowledge workers to waste time commuting to an expensive piece of real estate doesn’t make sense.  The American Consumer Institute reports that over 350 billion days per year are spent community.  The lost work time and transportation expense represents roughly 7.2% of our gross domestic product.

Even worse, the not-so-subtle message Yahoo is telling its employees is, “We don’t trust you and feel compelled to babysit you to ensure you’re getting your work done.”  Gen Y workers are interactive, online, mobile workers.  For them, the lines between work and life are blurred.  Take that flexibility away from them and you wont have to worry about engaging them; they’ll be working for your competitor.

2. You’re still exclusively entrusting psychologists to train your next generation of leaders ~ McKinsey & Co.® published a study in July, 2011 that identified only 1% of “C” level and one step down executives scored excellent in eight core leadership competencies.  Ninety percent scored below average.  The Corporate Executive Board’s Executive Guidance ~ 2013 report identified the top ten, key competencies shared by more than 23,000 current high performers in today’s fast paced, ambiguous business environment.  Of these ten competencies, only three were identified and measured by the McKinsey study. A study published a mere eighteen months ago.

According to a study conducted by Doris Gomez of Regent University, and published in 2007 in the International Journal of Leadership Studies, corporations are spending in excess of $45 billion a year on leadership training.  That’s a breathtaking investment level for the reported outcomes and painfully obvious disconnect revealed by the McKinsey and CEB studies.

I don’t mean to take the organizational psychologists to task.  I’m sure they have good intentions and work hard at their profession.  They simply are not solely equipped to train the leaders we need today and for tomorrow.  Psychologists have long dominated leadership training efforts and leadership development firms.  If they have been so successful, why do we see such a disconnect?  The fact is, leaders develop leaders, not academics that have been comfortably observing on the sidelines, with no skin in the game, while the rest of us are engaged in the day-to-day trenches, actually leading fellow human beings.  Academics enrich the discourse through their research and scientific method, but this needs to be mindfully blended with real world, leadership experience.

3. You’re still focused on yesterday’s leadership model ~ Transactional leadership is about as relevant today as a rotary dial phone.  Command-and-control leadership tactics are the fastest way to disconnect Gen Y and Gen X workers and create cross generational and cultural rifts in the workplace.  Why?  Because transactional leaders focus exclusively on leveraging extrinsic goals and values.  What motivated and engaged a homogenous workforce once dominated by white, male Baby Boomers rings hollow in today’s multi-cultural, multi-generational workplace.

To engage today’s remarkably rich and diverse environment, one must include intrinsic goals and values in their approach to leadership.  Authentic relationships, opportunities for personal and professional growth (Gen Y and Gen X don’t differentiate between the two), and purposefulness, of feeling a part of something meaningful and larger than ourselves, transcends multi-cultural orientations and multi-generational perspectives.  It speaks to how we’re neurologically wired for survival.  It speaks to that which makes us human beings.

4. You’re still focused on training hard skills and not developing the soft skills of your talent ~ Training is fine for health and safety, but it does nothing to move the needle of effective leadership, employee engagement and innovative collaboration.  It is rote and boring (a Harvard study demonstrated that traditional lectures improve conceptual learning by only 14%).  Companies must embrace more compelling opportunities that include experiential learning and environments that support the development of emotional intelligence competencies (research shows that 80% of success in life can be attributed to one’s emotional intelligence, with the remaining 20% based in cognitive abilities).

For years we’ve been told to leave our emotions at home when coming to work.  The fact is, this disengages us from our authentic selves and creative abilities.  Emotions are a part of our primary survival mechanism.  Emotions inform us, guide us, and connect us on a neurological and biochemical level.  This also harkens back to the problem of having psychologists running leadership development.  The mainstream academic field of psychology dismissed emotions as messy side effects until the 1980s.  Shocking, right?  It shocked me when I discovered, while reading Richard Davidson’s book, “The Emotional Life Of Your Brain”, that up until about thirty years ago, mainstream psychologists were entirely enamored with behaviorism.  Progressive researchers like Dr. Davidson struggled to even get approval from their institutions, never mind the funding, to conduct psychological studies that looked into the relationship between the brain and emotions!  Thankfully they prevailed, and the field of Affective Neuroscience was born.

5. You’re still conducting traditional diversity and inclusion training as a compliance-driven have-to-do ~ As an esteemed colleague of mine says, “We have diversity, what we don’t have is inclusion.”  Many organizations still conduct D&I training at the same level of enthusiasm and strategic importance as they conduct health and safety training.  Employees are sent an email, told when and where to show up, and they check off the box for another year.  The demands and pace of business are such that we had better be fully engaging our entire workforce.  And if we’re to capture that 20% improvement in productivity CEOs are looking for, I don’t think we can consciously or unconsciously relegate a single employee to the sidelines.

We need all of our associates to feel authentically cared for and genuinely included in the central conversation of the business.  If we don’t, one of our competitors certainly will.

© 2013, Terry Murray.

3 Comments

Filed under Diversity & Inclusion, Experiential Learning, Health Care, Leadership Development, Organizational Culture

Triangulating Talent Management ~ Leadership, Strategy and Organizational Culture

Over the course of my career, both in Corporate America and with investor-driven startups, I came to understand the driving elements of breakthrough performance.  Elements that transcend markets, industries and technologies. What I observed, and wrote extensively about in my book, was that the companies that consistently over-achieved and outperformed their competition optimized and aligned leadership, strategy and organizational culture.  As simple as this sounds it takes a concerted, mindful effort to coordinate and execute these mission-critical elements.

Adding to this challenge is the shift in the underlying driver of value creation in our ever-accelerating evolution from the Information Age to the Age of Ideas.  Human creativity, in the form of commercially viable intellectual property, is now the source of value creation in our global economy.  Today’s business leaders, for the most part, came up through the ranks optimizing processes, eliminating variability (think Six Sigma and TQM), and reducing costs.  Optimizing processes requires technical skills and evolves around good management.  Optimizing human capital requires adaptive skills (the so-called soft skills) and is driven by inspirational leadership.  The underpinnings of business success have shifted beneath our feet.

Taleo Research® published a white paper that supports this perspective.  The study, entitled, “Talent Intelligence – Key To U.S. Business Success”, identifies that in today’s knowledge economy upwards of 70% of an organization’s value is based upon the skills and experiences of its associates.  When we overlay other research from Gallup, McKinsey, and CEB, breathtaking opportunities for breakthrough performance and company valuation growth are revealed.

Employee engagement levels continue to hover around 30%, meaning that upwards of 70% of employees are sleepwalking through at least a part of their day.  Realistically, what level of discretionary effort can we expect from the 70%?  CEB’s Executive Guidance – 2013 report revealed CEOs currently believe they will need to increase workforce productivity by 20% in order to stay competitive in the coming years (the CAGR of workforce productivity has been a little over 3% per year since 1993).  The takeaways?  The 30% of employees that are intrinsically motivated contribute the vast majority of company value and elevating the growth rate of productivity from 3% to 20% will require innovative thinking and new approaches to engaging and motivating the other 70% of associates.  As daunting as this appears, the upside is nothing short of spectacular.

The fact is, robust Talent Management is central to success going forward.  So where do we begin?  Taleo identified the most important talent analytics and found they could be broken down into four major categories.

1.) Business Strategy – Defining goals and aligning employees to achieve these goals.

2.) Retention – Identifying and retaining high potentials and high performers.

3.) Leadership Development – Identifying and developing leadership bench strength.

4.) Workforce Metrics – Insights into the skills gaps to execute the business strategy.

Supporting my observations from twenty years of executive experience, Taleo’s report reveals leadership, strategy and organizational culture (a key to retention) are driving elements of Talent Management, which is now the driver of breakthrough performance.

mckinsey-quarterly-right-leaders-image-003It all begins with leadership, but what kind of leadership?  In June, 2011, the McKinsey Quarterly® published a major study that identified the fact that only 1% of “C” level executives and one step down executives measured “excellent” in five out of eight leadership competencies.  Ten percent scored “above average”, leaving the vast majority of executives scoring average or below average.  Strikingly, many of the competencies McKinsey was measuring back in 2010/2011 were more closely aligned with an approach to leadership that no longer resonates in our multi-cultural, multi-generational workforce.

Fortunately, CEB’s recent research has identified the key competencies high performers are demonstrating in today’s highly volatile, fast-paced environment.  Skills that include self-awareness and social/organizational awareness, adaptive, innovative thinking, as well as learning agility.  Critical skills that don’t show up in McKinsey’s research.  Critical skills that must be present if we are to reverse the employee engagement trends and achieve a 20% improvement in productivity.  There’s lots of room for improvement here as well, as CEB reports that, on average, only 5% of workers demonstrate a well balanced blend of these skills.

We’ve coined a phrase to describe this approach to leadership.  We call it Affective Leadership, which is the leadership of engagement (the approach integrates research from many scientific disciplines including affective neuroscience; how our brains react and function under various, emotional stimuli and interpersonal relationships).  An approach to leadership that is grounded in empathy and authenticity.  In fact, the Creative Leadership Institute conducted an eight year study in which they identified the only competency that differentiated mediocre management from inspirational leadership was empathy.  This is a learnable skill that requires a shift in perspective; from me to we.  The path for cultivating empathy begins with the development of emotional intelligence competencies; self-awareness and social awareness; which leads to self-regulation and the emergence of strong relationship management skills.

This is the starting gate for capturing that 20% improvement in productivity.  There’s a hidden workforce lying just beneath the surface in many organizations and it is through the process of implementing Affective Leadership that spectacular improvements in productivity, innovation and creative thinking will emerge.  With this foundation of leadership in place, strategy becomes more mindful and adaptive, and the organization’s culture becomes much more supportive of open collaboration, communication and innovation.  It is this approach to leadership that will set the tone and trajectory for success in the 21st Century.

© 2013, Terry Murray

Leave a comment

Filed under Leadership Development, Organizational Culture, Strategic Planning