Leadership, Intangibles & Talent Q4 2008 - Four Groups

Q4 2008

Linking Behaviour to Bottom Line Performance

Leadership, Intangibles & Talent Q4 2008 Welcome to the first issue of the Four Groups Leadership, Intangibles and Talent review. The purpose is to try to distil and comment on some of the more interesting and articles shaping the field. That said, the subject matter is not strictly defined but takes into account wider economic issues, particularly given the challenging climate. In this issue, articles have been included from the likes of Deloitte, IBM, McKinsey, The Hay Group and Towers Perrin. There is no set criteria for inclusion, just that an article, survey or blog entry should be thought provoking, challenging or state more than the obvious. Comments and feedback are of course welcome. Summary for Q4 2008 Unsurprisingly, many articles are focusing on what it will take to emerge from the current downturn in a position of strength. As such the main themes focus on; • Is creativity and intelligence being filtered out of the system? • The need to let go of many of HR’s traditional functions • The need for senior level sponsorship • The psychological change agenda • Managing talent • Ethics and employee branding There seems to be considerable agreement that the organisations likely to manage and emerge from the downturn in the strongest position are ones which are; flexible, promote clear and consistent communication, are innovative and exhibit consistency between their internal and external behaviour. The theme tying all these attributes together is developing the ability to manage the intangibles of organisational behaviour, such as; social networks, collaboration, innovation and change.

Is creativity and intelligence being

deficiencies holding back the pace of

academia as much as scientific ability

filtered out of the system?

scientific progress, Charlton argues that

and this has a serious impact on the

the way the scientific process is organ-

pace and levels of innovation. Indeed,

Obviously the economic downturn is

ised is best suited to ‘plodders’ rather

this leads Charlton to argue that cre-

the hot topic. However, the article

than the ‘creative’ but sometimes

ativity and intelligence are being fil-

which really caught the attention, on

‘erratic’ thinkers who may be capable

tered out of the system.

the face of it, has nothing to do with

of genuinely revolutionary insight.

the current economic situation. Bruce Charlton blogs1 about a book he is cur-

Charlton points to the fact that success

“We can only conclude that science is

in modern science is often down to an

dull mainly because its requirements

rently writing. Focusing on structural

ability to navigate the bureaucracy of

for long term plodding, perseverance

Leadership, Intangibles & Talent Q4 2008

and social inoffensiveness have the

Tag Cloud

effect of ruthlessly weeding out too many smart and interesting people.” Charlton, Why are Scientists so Dull? This is all good stuff and got me wondering whether a similar dynamic is impacting the ability of organisations outside of the scientific community to encourage innovation and manage change? In particular do large organisations actively promote people to senior

strategic role in the organisation. For

Unless these three key areas are ade-

positions who are likely to struggle

instance, the report provides evidence

quately addressed, HR will continue to

with the twin challenges of innovation

that the focus on HR technology is

struggle to find the time — and the

and radical change? As will be shown

moving away from the process or deliv-

invitation — to make a more strategic

below, the consensus is that change is

ery side and is more focused on man-

contribution.” Towers Perrin, People,

the new normal and companies are

aging talent and performance through

Change and Performance: Emerging

going to have to exhibit an agility and

systems. In effect, HR practitioners are

Issues in HR Service, Delivery and

flexibility that has historically been dif-

no longer slaves to automation and

Technology

ficult to implement. Maybe one of the

time saving technology, but are instead

reasons for this inability is the presence

are placing more focus on the systems

The need for senior level sponsor-

of senior managers who are funda-

and technology which can deliver on a

ship

mentally unsuited to work in this type

strategic level. This is welcome news

of environment?

and potentially marks a key transition

This perspective is reinforced by an

in HR being able to develop a more The need to let go of many of HR’s

sophisticated and valuable dialogue

interesting interview in the McKinsey Quarterly3 with Beth Axelrod, head of

traditional functions

within the organisation.

HR at Ebay.

Elsewhere, a number of broad themes

Before this can happen however, the

companies have in hiring and retaining

are emerging. Many articles have

Towers Perrin report argues that HR

women, strategies she has seen suc-

sought to put a positive spin on recent

practitioners will need to let go of

ceed, and her view of how HR can

economic events and articulate a num-

many of the traditional HR functions;

become a strategic partner with busi-

In this interview, Ms.

Axelrod discusses the difficulties that

ber of opportunities which could poten-

nesses.

tially reshape the role of the HR func-

“HR must relinquish some control over

tion. One of the most comprehensive

mundane administrative processes

surveys this quarter is the Towers

and grow comfortable with line man-

difficulties companies have in hiring

Perrin,

and

agers and others playing a more active

and developing women in the work-

Performance: Emerging Issues in HR Service, Delivery and Technology2. This

role in decision making. Second, HR

place. As a McKinsey alumnus and co-

must learn to do more with the tech-

author of “The War for Talent” Axelrod

survey covers a wide range of HR

nology that it already has — making it

unsurprisingly takes an analytical and

issues, one of which concerns how the

more effective and more integrated

research-based approach to the prob-

HR function could develop over the

across disparate HR processes or tech-

lem and urges organisations to focus

medium term. The report draws atten-

nology platforms. Finally, success

on getting the basics right before any-

tion to a number of evolutionary issues

requires a well-planned and well exe-

thing else.

which may shed light on the perennial

cuted change management process.

People,

Change

conundrum of how HR can play a more

Ostensibly the interview focuses on the

Leadership, Intangibles & Talent Q4 2008

However, the most salient points focus

change agenda. In the current climate,

hinge primarily on technology –

on Axelrod’s assertion of the need for

change is not something which can be

instead, success depends largely on

senior level sponsorship and support

thought of as taking place on a period-

people…..

for HR initiatives, a universal theme in

ic basis. In the future and in order to

whatever you are hoping to achieve.

maximise flexibility and innovation,

Change challenges: The soft stuff is

Without this key component, HR is not

change is something which will be a

hard

going to be able to leverage any of its

constant and to achieve this organisa-

specific knowledge, insight or view of

tions will have to engineer a consider-

the organisation. There is no doubt that

able shift in workforce attitudes and

the level of senior level sponsorship

perceptions.

and communication determine the suc-

The main obstacles identified were: Changing mindsets and attitudes (58 percent)

cess of any corporate initiative, the

Across the board there is acknowledge-

Corporate culture (49 percent)

challenge in these tough times is for HR

ment that managing change is as much

Underestimating project complexity

practitioners to ensure that their col-

a psychological challenge as it is a pro-

(35 percent).” IBM, Making Change

leagues prioritise these issues highly

cedural or systemic one. Focusing on

Work

enough.

behaviours and reaction to change is a key issue. This is likely to become more

Furthermore, the report goes on to

Relationships are paramount to creat-

important over time as market condi-

echo the view that “change is the new

ing a connection between people and

tions require companies need to con-

normal.” As part of this assertion, peo-

the organisation and Axelrod notes the

stantly evolve. This is echoed by a cou-

ple are going to have to get used to

importance of informal networks with-

ple of reports from IBM. In the first, the executives surveyed5 said that in the

less hierarchy, control and supervision.

in the organisation in encouraging the development and success of individu-

future successful companies will be

considerable challenges, particularly

als. The development of social net-

“hungry for change and disruptive by

when it comes to communicating infor-

working is another theme emerging

nature”. Once again, the need for inno-

mation across complex organisational

from recent articles which is seen as a

vation and enabling greater collabora-

structures and geographies.

key tool for leveraging expertise and

tion across the organisation is widely

collaboration throughout the organisa-

acknowledged as a key component in

tion. Dovetailing nicely with this theme, over at Deloitte4 there is an interesting dis-

Dealing with this is going to present

Managing talent

the ability of organisations to successfully deliver strategic goals.

Another key aspect of managing in the

The second IBM survey6 focuses on

taken to talent management. The Hay

downturn is likely to be the approach

cussion about the relevance and com-

what they describe as “The Change

mitment of executives to the “our peo-

Gap”. This is the discrepancy between

Group published an interesting take on this particular issue7. Advocating an

ple are our greatest asset” mantra. The

the CEOs expecting substantial change,

approach based on the US Mutual Fund

discussion succinctly highlights the

a number increasing dramatically and

industry, the report highlights the dan-

additional challenges to living up to this

the apparent effectiveness or outcome

ger of placing all your eggs in one bas-

statement which current economic cir-

of change programmes, a number stay-

ket rather than a more balanced broad-

cumstances present.

ing roughly the same. The report also

er brush approach.

discusses the relatively low level of The psychological change agenda

success in change projects;

Meanwhile a Towers Perrin report on managing in the downturn8 advocates

The speed with which the unravelling

“What accounts for these vastly differ-

a three-pronged approach to managing

of the global economy has taken placed

ent rates of project success? We found

talent.

seems to have focused minds on what

in our detailed analysis of study results

I would loosely refer to as the new

that achieving project success does not

• Effective senior management

Leadership, Intangibles & Talent Q4 2008

• Taking a targeted and consistent

ple. Particularly when one takes into

Finally, how important is innovation

approach to dealing with cost and risk

account the earlier assertion that in the

going to be during the downturn?

issues

future there is going to be less hierar-

Innovation is another of those key

• Keeping employees focused and

chy and direct supervision. The first

intangibles which are naturally difficult

engaged

step in ensuring that information is understood across the board is to

to measure and quantify. A McKinsey report11 gives it a go. The headline fig-

The report argues that organisations

ensure that everyone is clear and

ures suggest that organisations which

should see the downturn as an oppor-

understands the organisation’s key val-

take a balanced portfolio approach to

tunity to focus on their most profitable

ues and direction.

innovation are more likely to achieve

activities and develop a consistent

high performance. There is also correla-

internal and external culture. All good

A good example of how an employer

tion between the number of metrics

advice but considerably easier said than

brand is likely to develop is the future

used to measure innovation and suc-

done.

role of CSR, most commentators agree

cessful outcomes. Will companies

that this is something which is likely to

spend the time and effort to pursue

On a wider level and slipping some-

gain in importance and it is down to

this?

what

the Government sponsored DIUS report9

organisations to show employees that

into developing our brains from cradle

deeds. The role of ethics within the

to grave. A wide-ranging report, it

organisation over the coming years is

The clear message from these articles is

focuses on three key areas; learning in

that HR is potentially in a very strong

the early years, wellbeing at work and

discussed in a Deloitte webcast (registration required)10. There is the sug-

position to play a key role in develop-

an ageing population. Of particular

gestion that this is another key lever in

ing the way organisations operate and

interest in the wellbeing at work, the

the search for employee and customer

how they will emerge from current

report identifies absenteeism and pre-

engagement. This is an interesting area

economic difficulties. A focus on the

under

the

radar

is

their words are backed up by their

Conclusion

senteeism as particularly pressing prob-

and again a key intangible, how best to

intangibles such as relationships, net-

lems in the workplace.

measure the ethical climate of an

works, culture and change is also likely

organisation? Something that is likely

key for long term success. The big

to require considerable senior level

caveat however is the level of sponsor-

Ethics and employee branding

commitment. The discussion advocates

ship and support that is available from

Another area which can potentially

that now is a good time to put this the-

senior management. At times like this,

help organisations manage the down-

ory into practice. Naturally there is a

it is easy to see how issues not specifi-

turn is employer branding and organi-

questioning of whether managers have

cally tied to the bottom line may well

sational identity. The argument goes;

the desire to engage in this subject at

be given short shrift.

the companies whose values are either

the moment. There are also some good

inconsistent or lacking clarity are going

tips on how to overcome resistance and

to struggle to effectively manage, com-

apathy.

municate and engage with their peo-

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Leadership, Intangibles & Talent Q4 2008

Footnotes and References 11. McKinsey “Assessing innovation 1. Bruce Charlton “Why are Scientists so

metrics:

Dull?” http://fourgroups.com/link/?1

Results”

McKinsey

Global

Survey

http://fourgroups.com/link/?14 2. Towers Perrin “People, Change and Performance: Emerging Issues in HR Service, Delivery and Technology” http://fourgroups.com/link/?2 (opens as a pdf) 3. McKinsey Quarterly “The challenge of hiring and retaining women: An interview with the head of HR at eBay” http://fourgroups.com/link/?3 4. Deloitte “Are People Really Your Most Important Asset?” http://fourgroups.com/link/?4 5. IBM “Unlocking the DNA of the

About Four Groups

Adaptable Workforce” http://fourgroups.com/link/?5

Four Groups have developed a new approach called 4G to understand

6. IBM “Making Change Work”

behaviour, relationships and culture. 4G

http://fourgroups.com/link/?6

provides its users with insight into per-

7. The Hay Group “Adopting a mutal-

develop within teams and groups and

funds model for talent management”

how culture can be best defined and

http://fourgroups.com/link/?7

managed.

8. Towers Perrin “Managing Amid

4G provides organisations with infor-

sonal characteristics, how relationships

Market Turmoil: Top Priorities for

mation on how best to deploy and opti-

Business and HR Leaders”

mise the performance of their people.

http://fourgroups.com/link/?8 (opens

It also enables preventative measures

as a pdf)

to be taken which minimise the less productive aspects of interaction and

9.

Department

for

Innovation,

group dynamics such as friction and

Universities and Skills “Developing our

misunderstanding between colleagues.

brains from cradle to grave” http://fourgroups.com/link/?9

4G represents a systematic approach to managing the previously intangible

10. Deloitte “Why Measuring the

aspects of organisational life. The

Corporate Climate for Ethics Should Be

methodology is easily replicable and

On Your Radar”

can be implemented quickly and effi-

http://fourgroups.com/link/?10

ciently.