How institutionalizing talent strategies helps to future-proof businesses

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by Don Robertson

 

For quite some time, the talent landscape has acted as a chameleon, constantly evolving to meet the moment and blend in. Human resource and talent executives have seen the dynamics shift from the War for Talent to the Great Resignation to the Great Resurgence to Quiet Cutting and more.

If one thing remained consistent throughout these cycles, it was why the winning organizations were winning. It starts and ends with the way they approach their talent strategies. Over time, it has become increasingly clear that organizations with employee-centered processes, protocols and standards in place stand out. In fact, in 2012, London Business School’s Alex Edmans found that the companies on Fortune’s “100 Best Companies to Work For in America” list generated higher stock returns per year than their peers.

That’s a call to action for organizations of any size. Now more than ever, it is a business-critical priority to have a strong employee value proposition and consistent approach to recruiting, developing and engaging top talent. By developing and formalizing a talent strategy that supports broad business goals with a talent-first approach, it also helps eliminate outdated HR practices that can act as a competitive drag on growth.

The good news is this: Organizations can get started by implementing the following five key steps toward building an institutionalized talent strategy.

Understand the desired business outcomes first

While HR can oftentimes feel like a siloed part of the business, it is anything but. Talent is perhaps the most essential part of any business strategy, constantly driving companies forward, especially during uncertainty and instability. Chief human resource officers need to step out of the HR domain, understand the business, and clearly see what talent it needs to deliver. Continue reading →

Incorporating DEI into Decision-Making

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by Edward Chang, Siri Chilazi, James Elfer, Cansin Arslan, Erika Kirgios, Oliver Hauser, and Iris Bohnet

 

Most people don’t think of themselves as biased or prejudiced, and people often explicitly endorse diversity as something companies should strive for. But many organizations struggle with DEI. Why?

Implicit or unconscious biases can lead to inequitable decision-making. More mundanely, people are just busy. They have lots of competing priorities and lots to occupy their brains. Even if they care about DEI, they might not have it top of mind as they go about their work. As a result, they might not see how their decisions are relevant for DEI and so might inadvertently make inequitable decisions.

To fix this, managers and organizations should make DEI more immediately obvious, or salient, when it matters most — that is, when consequential decisions about such matters as hiring, promotions, and performance evaluation are being made. Our academic research and experiences partnering with companies suggest that to make real progress on DEI, managers and organizations need to make DEI salient in those moments of consequential decision-making. We’ve identified three particularly effective ways of doing so.

1. Ask managers to hire for more than one job at a time.

Many hiring decisions are made in isolation, with only one person being hired at a time. When this is the case, diversity simply just isn’t that salient to decision-makers, who are often thinking not about diversity but instead about technical skills, cultural fit, or how quickly a candidate can start. This shouldn’t be surprising, because diversity is a property of groups, not individuals. You can describe a group of people as “diverse” or “homogeneous,” after all, but not an individual person.

On the other hand, when people make collective hiring decisions — when they hire multiple people at a time — our research shows that people select more diversity. They start thinking about the candidates they’re selecting as a group, which makes diversity more salient and leads to hiring decisions that improve it. For example, rather than hiring one person every month, a company might benefit from grouping these decisions together and hiring three people very quarter. The total number of people hired will be the same, but making collective decisions every quarter should lead to more diversity. Relatedly, it might also be beneficial to give one person oversight over hiring decisions across teams or departments, enabling that person to make collective hiring decisions.

Continue reading →

Why we manage people so poorly—and what we can do about it

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by Peter Cappelli

 

A couple of years ago, I started to write a book about how we actually manage employees—how we hire, how we determine pay, how we manage performance and so forth—because the reality is so different from textbook descriptions.

What I found in researching Our Least Important Asset … was a common theme to the contemporary approaches. First, they focus on doing things as cheaply as possible (e.g., we measure cost per hire carefully but not quality of hire) but only consider up-front costs rather than longer-term costs. Keep positions vacant as that reduces payroll costs, for example, and don’t worry about how the work gets done or the effects on turnover.

Part of the explanation for that shift has to do with financial accounting standards, which punish employment costs relative to other expenditures. I wrote about this in a previous column.

But there is another part of the explanation that has to do with changes in business leadership and the backgrounds of those who lead companies. It is based on the old scientific management idea that the way to maximize performance is to have experts figure out the one best way to perform jobs and then monitor employees closely to ensure that they do it. It is as if the last hundred years of management—from the Western Electric studies on—never existed. How did we get so far back so quickly?

A paradigm problem in people management

A generation or so ago, corporate leaders likely went through years-long “management development” programs when they were hired, where they were taught lots of things but mainly about managing employees. They were required to succeed at running smaller groups before running anything bigger.

Related to that is a striking rise in the number of engineers who now run companies. LinkedIn data suggests that almost a third of CEOs now are engineers by training where the optimization approach to problems is deeply ingrained. Even in business programs, majors like finance and accounting—let alone operations research—have the same cost-minimization focus.

To be clear, the goal here is not cost minimization, per se; it is optimization on numbers that are easily measured, such as headcount and payroll. That doesn’t include productivity, which is hard to measure, let alone employees’ discretionary effort or other big costs such as turnover. The problem is not what managers are taught in these programs, it is what they are not exposed to—anything about actual employees as humans. Continue reading →

‘Unless We Challenge, We Don’t Get Change’

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by Emily DeNitto

 

Pioneering female fighter pilot Mandy Hickson on what she’s learned about overcoming obstacles, being a better leader—and living a good life.

 

There’s a reason that battle metaphors are used for business so often. Like war, much of business is about winning and losing, preparing for challenges, organizing teams, leadership.

Mandy Hickson has experience with all of it. One of the first female pilots in the UK’s Royal Air Force, she had an extraordinary career flying the Tornado GR4 on front lines, including patrolling the no-fly zone over Iraq. Hickson was the only female aircrew member for much of 45 missions and three tours of duty.

She learned valuable lessons about overcoming challenges, understanding risk and the importance of failure. Hickson, author of An Officer, Not a Gentleman, will share those lessons as a featured speaker in the next installment of our Women in Leadership series, on September 27 (join us!).

She gives a preview here, including where she was on 9/11, why the Air Force made her lose 50 pounds and what still makes her a little bitter.

What made you want to be an Air Force pilot? And maybe more important, what made you think you could do it?

It’s about the importance of role models. My grandpa happened to be a pilot during the Second World War. And because I grew up hearing his stories, it drip-fed into my imagination. We have an organization in the UK called the Air Cadets. And my mum happened to be reading an article and she said, “Oh, the Air Cadets is opening its doors to girls next week.”

When would that have been?

That was in 1986. And once I joined the Air Cadets, I absolutely loved it. I loved the team ethos. I loved the leadership aspect of it. But more importantly, I loved the flying. I had a half an hour flight. And I remember very keenly, I was 14 years old, and I said to the pilot, “Do you get paid to do this?” And he said, “Yes, this is my job.”

It was this sort of moment where I thought, “My goodness, someone’s getting paid to do something they absolutely love.” And it was this joining of the dots as a 14-year-old girl to recognize that actually a job doesn’t have to be something that’s tedious, it doesn’t have to be something that you have to do. It can be something you’re passionate about.

5 rules that transform outsourcing outcomes Opinion

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For organizations seeking a collaborative win-win approach to outsourcing, the Vested sourcing business model is worth consideration. It is the product of nearly 20 years of research at the University of Tennessee, beginning with a deep-dive funded by the United States Air Force on outcome-based outsourcing in 2003.

UT’s ongoing research into the world’s most successful outsourcing relationships, including those from Dell’s and the Canadian government, has uncovered five key rules for establishing win-win strategic partnerships that work collaboratively to achieve business outcomes. When a company and its outsourcing partner follow these rules they become vested in each other’s success: A win for the buying company is a win for the service provider.

The model offers a significant shift away from the transaction-based model commonly used in IT oursourcing arrangements, and its rules resolve several structural flaws that can emerge in transaction-based and managed servicesagreements.

For example, a buying organization might want “outcomes,” but the contract spells out dozens or even hundreds of service level agreement metrics instead. The buying organization might also want “innovation,” but the contract with the supplier has an 800-page Statement of Work with exacting details on how the supplier should perform each of the activities in scope. Or it might want the supplier to implement “efficiencies” while spelling out a transactional pricing scheme that inherently incentivizes the supplier to perform more transactions.

Instead, the Vested sourcing model refocuses business partnerships from a “what’s-in-it-for-me” transactional approach to a highly collaborative “what’s-in-it-for-we” model that promotes (and rewards) the parties when they collaborate. For example, instead of negotiating who will bear the risk of inflation, the parties embrace the fact that inflation is a reality of business and collaborate to identify and invest in operational efficiencies to mitigate the risk of inflation.

The following five Vested rules might sound simple, but UT research has found that most companies fail to follow them in an effort to the refocus on the outsourcing relationship on mutual success. Continue reading →