Philip Sadler CBE

Futurist, Author, Speaker

Futurist
Author
Speaker

Finding and Keeping top Talent

15/07/2010

Whereas in the past the typical companies in the advanced industrial societies were either labour-intensive, such as coal mining or textiles, or capital-intensive such as chemicals and steel, today the businesses of growing economic significance are better described as knowledge-intensive or talent-intensive. The obvious examples are companies in fields such as software, pharmaceuticals, business and professional services, investment banking, music publishing, entertainment and sport. Many of the new dot.com companies fall into this group, as well as very many smaller enterprises in such fields as software, website design, arts and crafts and personal and financial services. In such organizations the principal assets consist of the knowledge and special skills of talented people, rather than the tangible assets of financial reserves, capital equipment, buildings and stocks of the so-called old economy.
The management of knowledge has become a lucrative field for management consultants and academic gurus in recent years and it is obviously important that a company should exploit its know how to the greatest extent possible. Sooner or later, however, all today’s knowledge will be obsolete, and in many industries it will be sooner rather than later.. The competitive edge lies with companies that can create the knowledge and competencies that will be required in the future. The value of a software house to a potential investor will lie in the ability of its creative team to develop new products in the future. In a world in which there is no shortage of capital for investment, talent is the only remaining scarce resource.

However, the kind of talent needed most urgently by many of today’s businesses is not always of the kind that traditionally has been involved in creating and exploiting new knowledge. As well as computer experts, biochemists and doctors society needs and rewards fashion designers, international football stars, creative writers, consistently successful investment analysts, inventors such as Dyson, entrepreneurs such as Richard Branson, members of boy bands, and website designers. These kinds of people may use some knowledge in their work but the essential qualities that distinguish them have little to do with their ability to absorb knowledge. This explains why so many outstanding performers in so many fields have not enjoyed success in their schooldays.

Characteristics of talent-intensive organizations
Talent-intensive organizations share several characteristics:
• Their chief assets (i.e. their talented people) do not appear on the balance sheet. (Although they are, or should be, the main determinants of the company’s market value.)
• These key assets are mobile. They can, despite the use of contracts of service, simply walk away.
• Talent-intensive organizations rely particularly on creativity and imagination.
• The success criteria for talent-intensive organizations stretch far beyond the accountant’s bottom line. Winning an industry award or gaining recognition in other ways may weigh far more with the people involved than bonuses or fancy job titles.
Companies increasingly understand that they must compete for staff in the context of a highly competitive market for talent, both domestically and internationally, as a glance at the team list for a top level Premiership soccer team illustrates only too well. There is a constant flow of talented people from countries with lower living standards and rewards or higher levels of personal taxation to countries where talent can enjoy a higher reward – the so-called brain drain. The competition comes not only from other companies but also from the attractions, for many talented people, of independence and self-employment.
The twin challenges for business can be summed up quite simply as recruiting and finding talent on the one hand and keeping talent on the other. These tasks are particularly challenging for smaller enterprises competing with global businesses with household names.
Recruiting and finding talent
The distinction between recruiting talent and finding it is important. Sometimes an organization looks outside for new talent when the potential for outstanding performance already exists unrecognised among existing employees.
The recruitment activity itself can be separated into two quite distinct processes. The first is that of attracting people whose exceptional talent has already been established and recognised elsewhere. This can be called the transplanting type of recruiting – equivalent to digging up a mature tree or shrub in the quest for an instant garden. In such instances companies often make the mistake of assuming that cash is the most important factor. While it is obviously true that an outstanding performer in any field is unlikely to move from one organization to another if it involves a drop in remuneration, it remains the case that other factors are seldom given enough weight or consideration. For example, in the case of highly talented people, a key influence on the decision whether or not to move jobs is the reputation of the organization in its particular field; is it at the leading edge, does it set the pace for its industry, does the individual feel honoured by being approached? Reputation building, therefore, is a key element in recruiting strategy. The smaller company, with limited money to spend on public relations or advertising must do this largely on the basis of the quality of its products, word of mouth recommendation and the publicity that comes with winning awards of various kinds.
The second process can be termed the seed bed or nursery approach – recruiting young people straight from school or university, nurturing or developing their emerging talent and bringing it to fruition. This is clearly a longer-term approach and one fraught with obvious risks, one of which is the difficulty of predicting ultimate success. The obstacles in the way of successful prediction are many, including:
• Different rates of maturing of individuals’ abilities. Late developers are often missed.
• The relative weakness of psychometric tests when it comes to predicting things like creativity and entrepreneurial ability.
• The tendency to give too much weight to academic qualifications.
• Failure to value diversity with regard to the work force. A great deal of fine talent is overlooked among ethnic minorities.
• The fact that motivation and drive may well be more powerful determinants of performance than sheer ability.
Small businesses, in particular, are more likely to succeed in nurturing talent among existing employees than in attracting either the cream of the universities output or recruits who have already established reputations for outstanding ability.

Michael Howe, Reader in Human Cognition at Exeter University (Howe 1990) is one of the world’s leading experts on the subject of talent. He points to the danger of seeing talent in any field as a gift which you either have or not as the case may be.”We are easily convinced that the most striking feats must depend on circumstances which, except for certain rare individuals, are entirely unattainable. Some of the most widespread beliefs about exceptional people revolve around the view that certain individuals are not only remarkable but inherently so, while the remainder of us are doomed to ordinariness.” Howe challenges such beliefs and produces compelling evidence of the ability of appropriate training and development to bring about exceptional performance.
Keeping talent
When it comes to keeping talent the need for an adequate rewards package goes without saying. What will make the real difference in keeping talented employees loyal, however, is the extent to which the company provides them with a working environment that is favourable to creativity, self-expression and the exercise of initiative. Here the smaller enterprise is at an advantage. The paradox that faces large organizations, is that they are hierarchical, bureaucratic and conformist in order to achieve efficiency and uniformity, yet it is just these characteristics which turn highly creative people off.
The term ‘skunk works’ has entered the language of organizations to describe small, informal, tightly-knit teams who are shielded from standard company practices and rules in order to foster their creative energies. Warren Bennis (Bennis 1997) gives a graphic description of the very first ‘skunk works’, set up by Lockheed to develop the first US Jet fighter during the second world war. Lockheed’s chief designer selected a team of twenty-three engineers and thirty support staff. They built makeshift quarters from discarded engine boxes, roofed with a circus tent. They worked in secrecy and did their own cleaning and their own secretarial work. Bennis describes the designer Johnson as “a visionary on at least two fronts –designing aeroplanes and organizing genius. Johnson seemed to know intuitively what talented people needed to do their best work, how to motivate them, and how to make sure the desired product was created as quickly and cheaply as possible.” His unit was characterised by egalitarian treatment of people, absence of paperwork, informality of dress and open debate. The culture of an organization is an important factor in its ability to retain talent. The chief characteristics of a culture that will allow talent to flourish are the following:
• Highly cohesive work teams.
• Authority resides in expertise and competence rather than rank or status
• Elites are recognised without elitism, in that talented people respect and recognise the contribution of those less gifted colleagues who support them.
• Respected leadership. Talented people are critical people. They do not follow blindly and they know when the emperor has no clothes.
• Freedom, autonomy, space and flexibility.
• Openness and trust.
• Encouragement of risk taking.
• A taken for granted dedication to excellence – an almost obsessive concern for doing a good job.
In other words, the right approach for organizations anxious to retain their most talented people is not so much to create a skunk works inside the company but to make the company as a whole as much like a skunk works as possible and this is a much easier task in a small firm than in a multinational business..
References
Bennis, Warren (1997), Organizing Genius, Addison Wesley, Reading MA
Howe, Michael J. A. (1990,) The Origins of Exceptional Abilities, Blackwell, Oxford
For further reading
Ochse, R. (1990) Before the Gates of Excellence, The Determinants of Creative Genius, Cambridge University Press, Cambridge
Sadler, Philip (1993) Managing Talent, FT Pitman London