How to Win the War for Talent
In 1998, McKinsey & Co declared the “War for Talent.” They didn’t do so lightly. Their study spanned an entire year, involved scores of companies, thousands of people and had a specific conclusion: In the “new economy” the key to success is to attract and retain the best talent. Their findings were logical, widely accepted and most likely wrong.
Much important research has been done on talent over the last few decades and recently the subject has been taken on by mainstream authors such as Malcolm Gladwell in Outliers and, more seriously, by Fortune Editor Geoff Colvin in his book Talent is Overated.
While there is very little indication that talent can be identified beforehand, there is a growing body of evidence that talent can be developed to an astounding degree after employees are hired.
Where Does Talent Come From?
Talent, the ability to produce superior performance that is measurable, reliable and reproducible, is fraught with myths. Some people hold that talent is innate, you either have it or you don’t. Others believe that it comes with experience. The longer you do something, the better you get at it. Neither proposition holds up to scrutiny.
While it is true that some children show amazing aptitudes in certain areas, very few child prodigies ever become tops in their fields. Moreover, most top performers, from Einstein to corporate paragons like Steve Ballmer and Jack Welch showed meager early promise. There seems to be little or no correlation between innate ability and top performance.
An Olympic Champion of one hundred years ago couldn’t even place in a high school championship today. In the 1906 Olympics, not one competitor ran 100 meters in less than 11 seconds. Today, high school athletes routinely run the same distance in the low 10 second range. It is much more likely that training accounts for the difference than a change in “natural talent.”
Experience as well seems to be a poor indicator of capability. In fact, sometimes experienced people are actually worse at what they do! For instance, experienced doctors regularly perform worse on tests of medical knowledge than their younger counterparts. A team of researchers at INSEAD, among others, have documented this phenomenon and call it “The Experience Trap”
So, if neither innate ability nor experience is responsible for superior performance, what is?
The Golf Analogy
A top scientist in field of talent is Anders Ericsson, who has been studying performance for over 20 years. He explains the phenomenon of performance with a golf analogy.
When one starts the game of golf, it is hard to hit the ball straight enough to finish a game. With some practice (he estimates 50 hours), an average person will be able to hit the ball effectively and can enjoy playing. However, after that most people don’t improve.
Dr. Ericsson explains the mystery through the concept of deliberate practice. When most people are proficient enough to play fairly well they stop practicing. Playing is enjoyable and relaxing, while practicing is hard and exhausting. To most people, the former is preferable.
Principles of Deliberate Practice
In studies ranging from musicians to chess players to mathematicians, Ericsson and other researchers have found that the one factor that separates top performers from the pack is how much they practice.
Moreover, recent advances in neurology support the findings. Biochemical factors in the brain such as myelin build-up (which speeds information transmission) and synapse development (which creates stronger signals) do accumulate with activity. Brain plasticity, which is a field that studies how the brain changes, is one of the most exciting areas in medical science today.
However, not just any kind of practice will do. Hard, concentrated practice is required. It must be directed, focus on weak skills and take us out of our “comfort zone.”
It also requires feedback, both from others and from oneself. It is mentally demanding. Top athletes even engage in “mental practice” where they visualize technique. (As a former competitive athlete myself, I can attest to both the difficulty and efficacy of mental practice.)
The implication of the vast and growing body of research is that talent can’t be bought or even recruited effectively. It must be earned and can be developed.
Building Talent in Organizations
Just as talent can be developed in individuals, it can also be strengthened in organizations. Jeffrey Pfeffer, Robert Sutton and Charles O’Reilly from Stanford University have written extensively on the topic. CEO superstar Jack Welch is a fanatic on the subject and uber-guru Gary Hamel devoted a significant portion of his latest book to the topic. Taken together, a common framework emerges.
Proprietary training: All companies say they are committed to training, but very few actually expend significant management resources on it. Some, like McDonalds, GE and IBM devote enormous time, money and effort to their corporate universities.
Others reflect the view of a top manager I met at a media conference who felt that training is a waste of money. His reasoning was that people will just go elsewhere once resources have been devoted to them. It is doubtful that he will be able to attract or nurture much talent for his company.
Significantly, the training must be intense and ongoing. Having a third party come in and present for a few days rarely is effective unless a specific problem area is explicitly targeted. Moreover, training can be much more productive if it focuses on teams rather than just on rising stars. GE’s training campus at Crotonville increasingly takes a team approach.
Coaches and Mentors: A clear conclusion from the vast body of research is that coaching and mentoring are crucial to achieving top performance. Feedback is essential to the development process and top performers are always learning.
The best people not only critically evaluate their own proficiency but seek out feedback from others. Jack Welch talks and writes at length about the importance of candor and its value for employee development.
Many companies depend on a counterproductive annual review process in order to provide feedback. Once a year evaluations are surely far too removed from actual performance and are usually filled with platitudes while avoiding key issues. Top companies provide constant feedback, mentoring programs and extensive coaching.
Fire Nasty People: To provide the environment that encourages learning and builds great accomplishment, a supportive company culture is critical. While the rationale to keep nasty people is undoubtedly that they deliver results, research shows the opposite is true. They invariably destroy more value than they create.
Stanford’s Robert Sutton documents much of the data in his colorfully titled book and my own experience supports the fact that nasty people are usually much more talented at self promotion than they are at doing their jobs.
Intrinsic Motivation: While many companies focus on compensation schemes, the best professionals are intrinsically motivated. Champions in any field are competitive perfectionists who value achievement.
While nobody wants to feel cheated and compensation needs to be fair, it is accomplishment that ambitious people covet. The world’s most innovative companies such as Google and 3M give their employees a lot of latitude to pursue their own projects. Other companies like GE encourage activities outside the workplace in order to build skills.
Community of Purpose: Probably the most important motivator for top performers is that they feel they are working towards a meaningful goal. Some of the world’s most talented people forego monetary rewards to pursue careers in cutting edge research.
Gary Hamel emphatically states that in order to compete companies must build a “community of purpose.” Jack Welch emphasizes the need to make values authentic. Both stress the need for leadership to provide meaningful goals and for employees to believe in them. Mere lip service will not do.
While McKinsey & Co.’s conclusions were flawed they did have a salient point. Company performance, more than ever, depends on the talent of its people. However, talent must be developed within corporations rather than sought from the outside. A high performing culture invariably produces high performing people.