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How to Win the War for Talent

2009 October 18

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.

– Greg

27 Responses leave one →
  1. October 19, 2009

    Funny how so few of the chattering digirati are so messianic about Social Media, especially those self-declared experts (e.g. advotes of ROI for example). They never discuss the importance of the broader media mix nor the fact that social media is still in its hype cycle. This myopia is generally linked to a general disregard for the importance of capturing and re-using proprietary intellectual capital – knowledge management and the importance continously re-tooling skills and capabilities. These are requisites for efffective management of business in the extended customer/brand environment of digital media. It’s also requisite for sustained competitiveness. Like Covey, keep sharpening the saw. Nice post. http://www.twitter.com/morristed

    [Reply]

    Greg Reply:

    Ted,

    I agree. If you wanna win a horse race, you gotta have the horses!

    Everything else is technique.

    – Greg

    [Reply]

  2. Michael McGuinness permalink
    October 20, 2009

    Responding to “How to win the war for talent”. When you find a rock star, let them rock and have your colleagues follow in their footsteps. Get the roadblocks out of the way. Roadblocks are mostly negative people, know-it-alls-who-dont and bureaucracy.
    In my experience as a rock star, I appreciate the below.

    Management who:
    Doesn’t think everything is by the book and plays outside the box when needed.
    Appreciates and recognizes talent. Knows it when it sees it. Respects & Protects it.
    Rewards talent with dollars. Talk is cheap. Dollars allow you freedom of choice.
    Provides latitude to the individual for their own style.
    Supports with tangibles not talk.
    Does NOT micromanage.
    Demonstrates Loyalty.

    [Reply]

  3. Michael McGuinness permalink
    October 20, 2009

    Great post from Greg………thanks for your effort……..MM

    [Reply]

  4. October 21, 2009

    Thank you Gregg, for this very exhaustive article of yours on “War for Talent”. I think, we must say that both are right: McKinsey was also right. They did talk about talents in a way which is slightly different from yours, I think. Talent = High Potentials, people you want to build on for your future management boards! And I have always understood talent as such. High Potentials means necessarily = developing their potential, because they are considered as employees who have a potential as a leader or manager! But first of all: you have to identify and train these specific high potentials. Inside and outside the company. So: the war for talent (or the aim to develop what a lot of people call Talent Management) is still very much alife! Especially in my speciality, the Emerging Markets, it is still very difficult to identify and train the high potentials (see my article on http://www.xavantes;com on the subject). They are not attached to the same values any more, training is accepted, but not necessarily rewarded with long presence in the company! A lot of those local high potentials are in reality no high potentials, because they are only attached to one single value = Money (means unstable and rotating from one job to another). With this in mind, finding the right high potentail for your company remains a difficult task ! Finding and KEEPING the ONE who is willing to accept your values, to work hard and give value for money, is getting a real challenge! In Emerging Markets, sometimes only 1/10th of the students are “recruitable” and only 1/10Th of the management staff in a local company can be considered high potential. So, how will we fill all these open positions in the future? If you find that the person is not worth your training efforts (and I can tell you that this exists) then …you are at war with other companies to find your rare brain/high potential/talent! Thanks again for bringing up the subject! Stefanie Pfeffel, CEO, Xavantes

    [Reply]

    Greg Reply:

    Stefanie,

    I agree with you. Potential is important. However, I also think that it is overrated.

    I like the example with the 1906 Olympics. I don’t think anyone would say that today’s high school athletes have more potential than yesterday’s Olympic Gold medalists did, however they outperform them by a sizable margin.

    I also agree with your assessment of emerging Markets. I have been active in Emerging Markets since 1997 and it is difficult to find people with impressive credentials who are willing to learn. The attitude is often “I’ve been doing this for 5 years, so I know everything.”

    My solution has been to train people right out of university. I developed a 3 month media management training program and several hundred young professionals have gone through it. Some now have senior positions at multinationals.

    While it takes a few years to get the full effect, the older staff starts to feel the pressure within 6 months or so. When a 22 year old girl starts doing things that you can’t understand, it can be very motivating:-)

    btw. I tried to read your article, but the link seems to be broken.

    Thanks for coming by and contributing.

    – Greg

    [Reply]

  5. Valentina permalink
    October 23, 2009

    Greg, thank you for article. It was very interesting.
    However, I think that different people have different ability to be trained, different potentials and different brains. Company can spend millions of dollars on training and education, but it will be just waste of money, if the right people are not chosen. I suppose that McKinsey means it: to find the right people. Company should seek for those peeple who can make judgements, logical conclusions, causal effect. I think that talent is in these abilities.

    [Reply]

    Greg Reply:

    Valentina,

    I see your point, however research shows that all of those qualities can be trained for. So while aptitude is important, curiosity, temperament and motivation would probably be more important factors.

    – Greg

    [Reply]

  6. Karl Burns permalink
    November 11, 2009

    Hi Greg.
    A mentor of mine who developed talent development programs at Fortune 100 companies once provided excellent advice:
    “When firms are looking for their top talent, they look for two things: Hunger and Aptitude, and in that order.”
    I think my mentor would also agree with the majority of your article.
    Regards,
    Karl

    [Reply]

    Greg Reply:

    Karl,

    I like that. I always say it’s curiosity and temperament, but the two are pretty close:-))

    – Greg

    [Reply]

  7. December 9, 2009

    Greg you are right on target but unfortunately outside of a few enlightened companies your points have been known and ignored for at least two decades. It seems so obvious to those of us that reflect on business and long term issues but apparently it’s not obvious to the manager looking to cut more and more to meet the goals handed down to them. As soon as they are faced with having to cut costs training is one of the first things to go. I have concluded that most managers today must train themselves and that is why I wrote the book “The Manager’s Guide to Effective Leadership”.

    [Reply]

    Greg Reply:

    Joe,

    I think it’s kind of a half full/half empty thing. While most companies don’t develop people well, the most successful ones do. Companies like Macdonald’s #M, GE and others invest not only money, but time, effort and focus on their people.

    Your book looks interesting btw. http://www.mymanagersguide.com/Book.html

    – Greg

    [Reply]

  8. December 9, 2009

    I think you are right. The question is why don’t other companies learn from the successful companies that do train their people?

    [Reply]

    Greg Reply:

    …And a very good question it is…

    Thanks, Joe.

    – Greg

    [Reply]

  9. Adeola permalink
    December 11, 2009

    This is a very good piece.
    The reason why some fail to attain top performance may also be due lack of passion for the job. In order to practice ‘deliberate practice’ I think one must be engaged in a job you really enjoy doing. Again, internal environment of organization may encourage, discourage or even stiffen innovation and personal development.

    [Reply]

    Greg Reply:

    Adeola,

    That’s a very good point. Motivation is crucial.

    – Greg

    [Reply]

  10. December 29, 2009

    Greg,

    In reading this article, I come to what I will call “default agreement”. Now I’m going to have to qualify that. If people understood and practiced strategic recruitment, then I would contend that your article wouldn’t have the same value. However, strategic recruitment is an oxymoron in most environments. I will give you the first few thoughts of “why” and then focus on some other dynamics.

    People don’t understand that recruitment is fundamentally the foundation of your “human system”. I give you the following, not to be self propagating, but to condense things here. The “people flow continuum” is a model I used to explain the life flow of all employees through an organization: http://www.rottmangroup.com/peopleflowcontinuum.html. In short, recruitment, or the assembling of the candidate pool is the first step. Where people go wrong, even when they take sophisticated selection tools, is that they fail to qualify how strategically, how qualitatively those candidates were sourced. If you can’t get to the best candidates and have to live with selecting the best of the worse, then your whole article makes much more sense. You have to make the best with the clay you have. However, I’m going to contend that you can indeed get a better group of candidates, but its harder work for multiple reasons.
    1. The best people are currently working, not actively looking. This then gets into a broader discussion on how you reach them with your message….strategic recruitment.
    2. Recruitment is a step-child function in most organizations and within most HR departments. It isn’t fun, it isn’t sexy, and because of those two primary reasons, it doesn’t attract the best and brightest to even perform the function. Do you know anyone that went to school to get a BS degree in recruitment? (Now, as a side note, many recruiters could be accused of having a degree in BS though.)
    3. The best ways to get the best candidates are many times the most expensive. If you have a piece of the puzzle missing, you are going to spend a bunch of money, not get the best people, then fail do repeat the process, even if it was the right process with the wrong players. You can have a good strategy, be willing to pay the $ to get the best candidates, but not get a good quality recruiter….and end up with a botched process. Good luck with the good recruiter part. To capsulize a longer story, at a national HR conference, I began asking HR leaders this question: “Given your experience, out of 10, how many recruiters to think understand recruitment and how it fits into your human system?” The greatest answer I got was 2, most said none. I’ve never known a more pitiful commentary on an industry than for the ones that most utilize the service to have such little faith in those that provide the service. I then understood why I was so different and why getting into to new doors was so challenging.

    Back on topic. If you can’t strategically get the best group of candidates, have a system to select the best of that group, then sure, grow your own is going to be a better program. However, that still doesn’t measure what kind of clay you have to work with. What it does is say that I’m going to work with my clay and invest in it because its at least a known entity and I don’t have to take some of the other risks of dedication, attendance, and other unknown risks hiring a new person brings. So while there is validity in the article, it is secondary vs. primary strategy, but one that must be considered. I would first take and understand the People Flow Continuum (PFC) and make sure I had the best, most strategic recruitment department/function possible. Your risk of making other mistakes along the way go down and your cost of other parts of the PFC go down as well.

    If you are going to win the war on talent, have an army of green berets, not wooden soldiers….should I have just said that first?

    [Reply]

    Greg Reply:

    Don,

    Thanks for sharing your perspective.

    – Greg

    [Reply]

  11. December 30, 2009

    Excellent article with lots of links to great sites.
    Strategy’s strength within the company is the most important from my experience with fast growing, robust companies. When people know the big goal and the values to achieve this goal it can inspire them. This solid identity will attract those with the same values.
    One CEO told me he likes to hire candidates who have been poor or are poor and are hungry to achieve.
    Terry Matthews of Mitel says he likes to hire out of university and help the team set up a company and then he hits them hard at their quarterly meetings. Within a year, they hit back hard and he knows they now have the drive and guts to grow the business. They also have ownership – the best motivator of all.
    I write about this in Money Magnet – http://bit.ly/MoneyMagnetindigolink

    [Reply]

    Greg Reply:

    Jacoline,

    Thanks. It’s a very good point. Motivation is not a general principle. Goals have to be aligned.

    – Greg

    [Reply]

  12. January 2, 2010

    Hi Greg,
    Great article.
    I so agree with the paragaph on “Fire Nasty People”!
    I cannot understand the employers who are afaid to confont the nasty people who work “for” them. And in my experiences, they let these people run their companies.
    Aside from the fact that I love what I do, this issue was a major motivator, through the hard days, in keeping me focused on my own business. And I’m glad I did.
    Happy Holidays and I hope you had a wonderful New Year!
    Sincerely,
    Lisa

    [Reply]

    Greg Reply:

    Lisa,

    Thanks. Best of luck in the New Year to you as well.

    – Greg

    [Reply]

  13. January 10, 2010

    Greg,

    The 1906 Olympics is a bit of a flawed argument, since it has more to do with technique and method. The 1906 runners all started from a standing start pose, these days high-school athletes all start from the crouched position with starter blocks. Have the high school athletes use the same techniques as the 1906 Olympians and their times will be significantly worse.

    The “War for Talent” starts with establishing the skill sets needed, the attitude and behavior desired that works within the company culture, and the right reward system (which quite often is less to do with money than other perks). You wouldn’t put a talented software developer in a receptionist position, so attracting talent is maybe a first challenge, but fitting a job around the person rather than shove a person into a job is key.

    We have Product Development departments, but don’t seem to have Human Development departments. We have recruiters, but not retainers. We hire from outside rather than grow from within. We hire based on keywords matching in resumes, rather than on personal profiles. We see the desk and chair as an asset, but the employee as an expense and liability.

    Until we change how we value people, the “War for Talent” is already lost before it has begun.

    [Reply]

    Greg Reply:

    James,

    Yes, the differences in performance have to do with technique and method, but also training methods. And the diferences in performace apply to not only sprinting, but almost every Olympic event and field of human endeavor.

    Many companies do have extensive employee development programs, with corporate Universities, extensive evaluation and mentoring programs, etc. GE, IBM and 3M are just a few examples.

    – Greg

    [Reply]

  14. Nemesis Fixx permalink
    November 16, 2010

    Thanks Greg,
    Am a fresh graduate, currently enjoying the painful path to mastery of the craft. There are not any serious software houses in my country (Uganda) as the arena is just growing and so I spend a good amount of my time learning more, hacking on ideas I hope will eventually put food on my plate and advance both my society and the craft.

    I came to you articles from http://www.codeproject.com, and for sure, you have a ton of good advice and opinion on the site. A while a go, we attempted to invest in a start-up with my bro, but management issues and too much trust in tech-alone probably defeated our goals, but am out of campus and ready to take on the voyage with more focus.

    Thanks again.

    [Reply]

    Greg Reply:

    Nemsis,

    Thx. I’m glad to hear that you’re enjoying the site.

    Good luck in your future career !

    – Greg

    [Reply]

  15. Albert Misul permalink
    June 24, 2013

    Greg,

    Great article I really enjoyed it! I have a question though why are some people more efficient at learning things? Talent itself might not be innate, but the tools to build talent seems to be decided beforehand. I would just like your thoughts on this.

    [Reply]

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