How To Manage Clever People

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Francisco Trigueiros

Digitally signed by Francisco Trigueiros DN: cn=Francisco Trigueiros, o, ou, [email protected], c=PT Date: 2009.07.08 21:58:49 +02'00'

FRANCISCO MIGUEL TRIGUEIROS MBA CLASS Human Resources Management

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AGENDA 1. Introduction 2. “Leading Clever People” 2.1 Summary 2.2 Personal review and critic 3. “Why are we loosing our good people?” 3.1 Summary 3.2 Personal review and critic 4. “Why smart people underperform?” 4.1 Summary 4.2 Personal review and critic 5. Final Critical Review & Conclusion

Introduction 3 

Nowadays, a company´s value cannot be measured by the fair value of its physical assets. In these days where there´s easy access to capital and technology, the value of a firm is directly related with its intangible assets, mainly the Human Capital. Competitive advantage no longer relies on cash positions or high tech products but rather retaining and attracting talented people.

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Here lies the biggest problem managers have to face today: How to we protect our intangibles? One might be tempted to look up on the Internet articles about legal protections: patents, non-disclosure agreements and non-compete contracts. It is wise to use these tools, but is it safe to rely on them? If your competitive advantage lies in superior manufacturing skills, can you really prevent your employees from ending up at competitors and bringing a lot of know-how with them? Or if your company is famous by being innovative and creative, will the legal protections protect you from headhunters that seek creative and innovative people?

There are some pertinent questions that need to be addressed 4

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How to retain and attract intellectual capital?

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What is the role of HR in this issue?

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Are managers responsible for loosing their talented people?

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How can organizations protect themselves against headhunters?

Objective 5 

My theme selection relies on how managers can successfully manage and retain talented people.

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Firstly I will briefly summarize all the articles separately, highlighting the key points that support my theme selection.

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Secondly I will give a short personal comment at the end of each article summary.

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Finally I will finish with my own critical review about the articles and the reason why I chose them. I will then try to answer the critical questions mentioned before by providing a three step framework that will allow managers and HR professionals to successfully manage, retain and attract talented human capital.

The three HBR articles are all related with the topic “How to manage the most talented” 6

1.

“Leading clever people” - by Rob Goffee and Gareth Jones (March 2007)

2.

“Why are we loosing our good people?” - by Edward E. Lawler III, with commentaries by Anna Pringle, F. Leigh Branham, Jim Cornelius, and Jean Martin (June 2008)

3.

“Why smart people underperform?” – by Edward M. Hallowell (January 2005)

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„Leading Clever People“ – Harvard Business Review by Rob Goffee and Gareth Jones (March 2007) „I never read my reviews“

"If you'll recall, my resume pointed out that I'm a self-starter and don't need supervision”

When managing clever people, important issues may arise 8

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How do you manage people who don’t want to be led and may be smarter than you?

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How to foster an environment that explores the full potential of these clever people in way that produces value for all stakeholders?

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How to retain your intellectual capital in a globalized world where mobility is not an issue?

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How to make sure that you recognize their value before they or someone else does?

Although clever people are not all alike, they do share a number of defining characteristics 9

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Good News 

Clever people need the organization as much as the organization needs them

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They need structure and discipline, someone that takes the best out of them

Bad News 

They know that the organization needs them badly, they know their value and sometimes they consider themselves more valuable then their managers

The 7 „sins“ of clever people that managers should understand 10

They know what they are worth

1.

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They know that the organization´s resources are worthless without their intellectual capital They need support for their projects

2.

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They will choose the organization that will better serve their interests in supporting their own petty projects They ignore corporate hierarchies

3.

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They don’t care much about promotions or corporate titles, however they do care about status and like to be called as such (e.g. professor or doctor) They expect instant access

4.

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They want to be able to reach the CEO when needed They cant stand being bored

5.

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If not engaged mentally they will move to another more motivating organization They are not allured by high wages

6.

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They prefer to work in challenging environment where they think they can change the world rather then receive a high salary or big bonuses They don’t care much about politeness

7.

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Don’t expect them to thank you even if you are being a good manager and you have complied with all the points mentioned before

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There are 4 principles for managers to sucessfully deal with clever people 1.

Understanding them 

2.

Manage the organizational “rain” 

3.

Clever people dont like bureucracy or administrative work, managers need to clear this in order to establish a productive relationship.

Implement a culture of sharp-minds 

4.

Know the seven sins and go along with them.

Clever people like to be sorrounded by other like-wise clever people. Organizations should also not rely in only a few clever minds.

Establish credibility 

Managers must show to the clever people that even though they are clever, that they need you to share competencies. Managers must develop credibility by demonstrating that they can complement the clever people with their area of expertise.

In my personal opinion this article highlights some important issues, however... 12

I believe this is a very good article that can help managers realize the peculiar characteristics of the clever employees. It provides a good framework for social relationship between both manager and employee.

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This article highlights the importance of understanding and respecting one´s personallity and values in order to establish a productive relationship between leaders and their clever people.

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...it fails to provide answers for the following questions 13

Is it enough to understand them and respect their peculiarities in order to retain them?

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Are the leaders the only ones who should be aware of such peculiarities?

What about HR? Dont they also play an important role in attracting and retaining talented people? 

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What concrete measures should leaders follow up?

This article provides the framework on how to manage talented people 14

The article fails in answering the previous questions by only touching on the surface of the problem of why today it is so difficult to retain talented people. The author focused more on managers and how they should develop their relationship with their talented people. It also fails to give some more direct actions, such as specific incentives and other motivational factors. Finally the author also fails to recognize the importance of HR when dealing with talented people. Managers need to coordinate HR resources and initiaves with the needs of their creative people. 

I choose this article as the first one to base my considerations upon, because it provides the basic understanding about how clever people think and their desired working conditions. 

However this article by itself is not enough to protect managers from headhunters that seek to allure talented employees. Managers together with the HR team must create an organizational shield that protects the best interest of these creative ones. The next article will address this issue.

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„Why

are we loosing our good people?“ – Harvard Business Review by Edward E. Lawler III „I never read my reviews“

Source: Charles Barsotti, John Caldwell, Todd Condron, Patrick Hardin, and P.C. Vey

About the article 16 

This article is a case study presented by Edward E. Lawler III, about an architecture company called Sambian Partners, that are loosing their best people to direct competitors.

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The case study is then commented by 4 proeminent people in the field of people management: 

Anna Pringle - the head of international people and organization capability for Microsoft.

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F. Leigh Branham – the CEO of Keeping the People, a human resources consultancy in Overland Park, Kansas. He is the author of The 7 Hidden Reasons Employees Leave

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Jim Cornelius - the chairman and CEO of Bristol-Myers Squibb in New York City.

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Jean Martin – the executive director of the Corporate Leadership Council, a global membership of chief human resources officers and a division of the Corporate Executive Board, headquartered in Washington, DC.

Sambian Partners was always considered a great place for young talented desginers 17

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About the firm 

Sambian is a young architecture firm founded in 1975 by Peter Gasbaryan

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His idea was to build a top-notch architecture and engineering firm by making appealing offers to young talent

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The founder dies in 1997 and his daugther Helen Gasbaryan, also an architect becomes the CEO

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Helen immediately took the company into the next level, being in the vanguard of the “green building “ movement

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In the first years, Helen was able to attract the best talented and young designers in the industry

Lately Sambian has problems in retaining their talented people 18 

Current Crisis  Tom one of Sambian´s best desginers was recently recruited by J&N (Sambian´s biggest rival)  Mary (HR manager) interviews Tom the day he left and tries to figure out why he is leaving, however her questions did not gave wings to concrete answers  Recently two other more talented designers also left Sambian  To stop the leakage of talented human capital, Mary decided to run some surveys in a vain hope to try to find out by questionaires where the problem is  Shortly after Tom left, there are rumors that another talented designer ,Adrienne, could possibly join Tom in moving to J&N  Not being willing to wait for Mary´s questionnaire results, Helen the CEO of Sambian decided to immediately promote Adrienne, to a level that she had no preparation or necessary skills for, in order to keep her in the firm  Mary (HR manager) opposed but because the decision was already made she couldn´t do much to stop this hasted action  The results from the survey finnaly come out and they dont show any conclusive evidences about the rooth causes of the employee disatisfaction  Mary proposes then to perform one-on-one interviews with every single employee  Meanwhile every employee comments on the management and HR performance, and they all know what is causing the problems, however they do not disclose any information

How can Sambian discover what’s really driving people out the door? 19

4 commentators use their expertise to solve this case 

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Anna Pringle (Head of international people for Microsoft) states:  Mary is not performing her job as the custodian of talent at Sambian  Mary asks poor questions, gives stock responses and gives up too soon  Helen should dedicate 40% of her time listening to the employees, this task cannot be delegated to anyone else inside or outside the firm  Helen should use mentoring and coaching as way to integrate its employees and attract other talented ones  Both Helen and Mary should conduct weekly „listening tours“ gathering direct feedback from supervisors and staff  Mary should create a blog where employees can express themselves anonimously  Tailor individual needs(customized incentives) F. Leigh Branham (CEO of Keeping the People consultancy firm):  Reccomends more coaching and feedback  Helen need to provide a forum where employees can openly expose their opinions and emotions  Reccomends workout sessions (GE style)  Helen needs to hire a third party (outsiders) to help Mary

How can Sambian discover what’s really driving people out the door? 20

4 commentators use their expertise to solve this case  Jim Cornelious (CEO Bristol-Myers Squibb) states that Helen:

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Needs to build a culture of trust

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Should simplify the management structure

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Clarify and make sure all understand Sambian´s vision

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Ensure fair compensation

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Dedicate more time to the key talented players

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Build simple communication lines

Jean Martin (executive director of Corporate Leadership Counsil) states: 

Helen and Mary must understand the emotional motives why employees would want to stay at Sambian

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Communicate a clear vision and the role of the employees to fulfill this vision

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Conduct „culture audits“ to find out what the employees value in a corporate culture

My personal review of the article 21

Implementing a culture of trust 

After reading through all of the commentators advices, I realized that all lead to a very important point: in order to retain the talented employees, there has to be a deep understanding of their emotions, values and satisfaction levels. This is done by establishing communication lines where all members of the organization can freely express themselves without fears of repurcussions. However this cannot be successfully done without trust.

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In my personnal opinion trust is the key factor for employee retention. Talented employees know their talent and if they dont know it then headhunters will make them know about their value. Therefore, if employees dont trust that the communication system will bring them any bennefits, and they dont trust that the line managers will listen to them or that the leader will take proper actions and held people responsible, then they wont believe the company´s vision and mission statement. Once this trust is inexistent then smart people will see no need to stay. One might be tempted to foulishly raise their salary or give them a quick promotion and fancy titles(just like Helen did), however this will be a short-term remedy, for sooner or later, the talented people will realize that money is not more important than a challenging, inspirational and above all trusworthy environment, and they will leave.

This article fails to explain why some talented people underperform 22

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The article focused on key employees that left the company for reasons rather than their own performance. These important players either left the organization because of lack of recognition, lack of trust or lack of corporate culture.

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But what about those employees that work in challenging environment, where there´s a culture of trust, where their work is recognized and alligned with the corporate vision and yet they underperform? Why do these talented people that work in their desired environment and receive more than fair compensation and incentives underachieve? Why are they not performing at their best? The next article provides the answer for „Why smart people underperform?“.

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„Why smart people underperform?“ – Harvard Business Review by Edward M. Hallowell (January 2005) “We’ve invested heavily – if not always wisely – in talent.”

Source:Charles Barsotti, John Caldwell, Todd Condron, Patrick Hardin, and P.C. Vey

“Attention deficit trait” is turning smart people into frenzied underachievers 24 

The author identifies a corporate illness called „attention deficit trait“ that is turning talented employees into underperformers.

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„Attention Deficit Trait“ or ADT is the inability of the employee to focus, to concentrate and therefore extract the best out of his/her intellectual potential.

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As a result of ADT employees tend to become nervous people, addicted to caffeine , easily distracted , impatient and inner frenzy. Moreover, people with ADT have difficulty in being organized, setting priorities and managing time.

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This happens because of brain overload related to excessive workload. Managers and leaders excessively push their employees to the extreme.

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According to the author companies that ask their employees to do too much at once tend to reward those who say yes to overload while punishing those who choose to focus and say no. Moreover, organizations make the mistake of forcing their employees to do more and more with less and less by eliminating support staff.

To counter attack ADT leaders should contribute to a positive atmosphere 25 

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Managers can help to prevent ADT by: 

Matching employee´s skills to tasks

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Assign goals that dont stretch people too far

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Provide support staff if necessary

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Create alert systems to identify ADT symptoms

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Inform staff about ADT and how to control it

People can control their ADT at work by: 

Do all you can to create a trusting, connected work environment.

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Have a friendly, face-to-face talk with colleagues

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Break large tasks into smaller ones.

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Keep a section of your work space or desk clear at all times.

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Each day, reserve some "think time" that's free from appointments, e-mail, and phone calls.

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Try to act on, file, or toss every document you touch. Don't let papers accumulate.

My own personal review about the article 26

I

believe that its about time that someone brings psychological issues in to the managing talented people atmosphere. This article touches an important issue that managers and executives tend to often to forget: Employees by how much clever or talented they might be, they are still humans not machines. Managers know the value that their employees pose to the company´s overall performance and therefore even when these employees underperform they dont think of leting them go or firing them but they try to help them getting back on their feet. Managers

do want to get the best out of their talented one and firing them is usually never an option. The problem relies on how they try to help them and this article mentions this very clearly. Managers too often rely on external consultants that focus on time management or internal couches. However, like the author very clearly states, this is a not a problem of mismanagement or lack of organizational skills but rather a psychological one. People tend to get stressed however they do not want to admit they are stressed and therefore enter a denial phase that will ultimately lead them to a brain overload.

Leaders alone cannot ensure the best working atmosphere for their employees 27

Once

again this article focus too much on how leaders should manage their talented ones. It is a fact that leaders should be aware of the needs of their employees and how to manage them. However leaders by definition are very busy people and alone they cannot manage to successfully implement a healthy working athmosphere. The

role of HR is again very important in this case. They are the right wing positioned directly on the front line of the „battle“ and therefore play an important role in aiding the senior managers in creating the best working environment for their employees. I will talk more about the importance of the role of HR in my final critical review.

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Final Critical Review “ A younger guy could have ducked faster. You’re fired!”

Source: Charles Barsotti, John Caldwell, Todd Condron, Patrick Hardin, and P.C. Vey

The three HBR articles together provide the solution 29

The

reason why I chose these three articles reviewed on the previous slides its because they all touch the three main points in how to successfully manage and retain talented employees. Separetely the articles do not provide any valid solution for success in ensuring the retention of the human capital, however the articles do complement each other. Together the articles provide a framework in which managers together with the HR department can successfully create a working environment that will attract and ensure the performance of the brightest minds. The

major flaw from all these articles was the lack of clear responsibilites and importance attributed to the role of HR. Only the commentator from the second article, Anna Pringle of Microsoft really highlighted the importance of role of HR. This could probably explain why Microsoft is considered to be one of the best places to work for.

Managing and retaining talented employees is a three stage process 30

Understanding the unique characteristics of smart people

Implementing a culture of trust

Develop a healthy atmosphere

Understanding the unique characteristics of smart people 31

In order to establish a healthy interpersonal relationship with clever people managers and HR staff should know their ten common traits 1.

They know what they are worth

2.

They need support for their projects

3.

They ignore corporate hierarchies

4.

They expect instant access

5.

They cant stand being bored

6.

They are not allured by high wages

7.

They don’t care much about thank you notes

8.

They need to know that their leaders are credible

9.

They dislike bureaucracy and organizational „rain“

10.

They enjoy working with other creative people

Once managers and HR professionals have understood and respect these peculiarities, they have then taken the first step towards a healthy relationship.

Creating a culture of trust 32

In order to successfully implement a culture of trust ,managers and HR professionals must consider the following instruments: Allign

the talented people with corporate vision

Straight

line communication between management, HR professionals and employees, Eliminate hierarchical „jams“ (excessive bureaucracy)

Assign

mentors or coaches to develop deep smarts (intellectual capital from

inhouse) Create

blogs or forums

Implement Make

360 degree feedback

managers accountable for their talented people

Create

workout sessions (GE´s workout)

Establish

talent review routines

Implement

a „cafeteria“ incentive system (incentives customized or tailored to meet employees personal needs)

Implement a healthy atmosphere 33

At the third and last step managers and HR professionals must create a healthy atmosphere that balances both professional and personal lifestyle of the smart employees. Such healthy atmosphere is necessary to make sure that talented employees dont underperform. Managers and HR professionals must then create the necessary conditions that will allow their key players to focus and perform at their highest level: Employee´s

skills need to be alligned to the designated tasks

Perform

regularly EQ (emotional quotient) tests

Support

staff should be provided if necessary

Balancing

personal and professional life with special incentives (such as fitness studio, sabbatical timeout, extra days-off,etc...)

HR plays a key role in aiding managers to successfully retain human capital 34

Human

Resources Management include a vast array of activities that are directly related with attracting and retaining talented and skillfull employees. HR professionals are in the battlefront of the war on talent:

HR provides the linkage between employee concerns and corporate goals 35

HR bridges the gap between corporate and staff CORPORATE CHALLENGES • Globalization • Technology • Managing change • Human capital • Responsiveness • Cost containment

HUMAN RESOURCES

EMPLOYEE CONCERNS

• Planning • Recruitment • Staffing • Job design •Training/development • Appraisal • Communications • Compensation • Benefits • Labor relations

• Background diversity • Age distribution • Gender issues • Educational levels • Employee rights • Privacy issues • Work attitudes • Family concerns

Conclusion 36 Clearly,

many variables affect an organization's ability to attract and retain top talent. Organizations must follow the three step framework in order to successfully retain and attract intellectual capital: 1-Understand talented people and their particular characteristics; 2-Create a culture of trust, as someone once said, "Trust is the social equivalent of air and water." ; 3-Implement a healthy atmosphere, people are emotional, EQ tests. The

HR function plays a key role in developing and implementing coherent strategies for building intellectual capital, working in alliance with CEOs and senior leadership teams. To be effective, these strategies must inform and drive ongoing programs such as recruitment, orientation, and career development. Uncertain economic prospects add complexity to the development of retention strategies, but the cost of losing key employees is high, no matter what the economic conditions. In times of downsizing, the risks of losing top talent are especially high. And in the long run intellectual capital remains the key competitive advantage for companies who want to succeed in a global economy.

References 37 

Harvard Business Review (March 2007) “Leading clever people” - by Rob Goffee and Gareth Jones

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Harvard Business Review (June 2008) “Why are we loosing our good people?” - by Edward E. Lawler III, with commentaries by Anna Pringle, F. Leigh Branham, Jim Cornelius, and Jean Martin

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Harvard Business Review (January underperform?” – by Edward M. Hallowel

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Harvard Business Review (June 2008) „The right stuff“ by Charles Barsotti, John Caldwell, Todd Condron, Patrick Hardin, and P.C. Vey

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HRPS Workshop Report by Peter Karp, President-Elect, HRPS

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“How to manage smart people” by Scott Berkun (Jan 2004)

2005)“Why

smart

people

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„Top ten reasons why people quit their jobs“ by Gregory P. Smith

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„Human Resources Management“ (slides and class notes) by Professor Doctor Mario Dent