The war for talent used to be a hot topic - until the financial crisis made the war for liquidity hotter. We may be on the edge of another crisis now, but we’re also at the start of a new cycle of talent wars. So how can you win this time?*
Carol Dweck’s work may offer the revolutionary breakthrough to winning the talent war. For talent itself is not about how intelligent or capable a person appears to be, but how fixed they think their abilities are.
The fixed mindset
A great education, rapid career progression and impressive bearing in interviews are clear signals of real talent. A great business school convinces organisations to pay over the odds ‘because that kind of education doesn’t come cheaply’. Premiums are paid for great work, even if another company has already reaped the benefits of that. And as to whether this person fits our organisation - well, talent trumps culture! Doesn’t it?
Many talented people on paper will have a deeply debilitating affliction though: they believe they were born with a fixed amount of intelligence and capability and while the quality of the latter can be maximised, it’s limited by the quantity of the former. They have ‘fixed mindsets.’
The problem with ‘fixies’ is that they spend their lives driven by the need to prove their innate stock of talent is exceptional. They obsessively seek explicit recognition of this and avoid anything that might risk exposing its limits (and challenging their identities).
Winners on paper therefore are often not those who always find a way through, but those who avoid getting into risky environments in the first place. If it looks like it could go wrong they’ll pass the risk onto another group. Fortunately, that group embraces such challenges.
The growth mindset
The ‘other’ group are those with a ‘growth mindset’ who see their abilities as open to cultivation, unlimited by birth constraints. Even their level of intelligence can be increased.
At first glance this may appear to go against much of what we know - fortunately, much of what we know is wrong. People often point to IQ tests as ‘proof’ that intelligence is fixed, without being aware that IQ tests were invented to measure how well schools were growing the intelligence of French schoolchildren. IQ tests were a measure of growth - checking how well schools were performing - not one-off indicators of a child’s capabilities.
‘Growthers’ don’t cheery pick what they’ll do to protect a fragile self-image. They take on challenges that force them to become better, learn from failure, become resilient. They often do this because they were not born in the ‘right’ place as the ‘right’ kind pf person, so didn’t have the options others - the talented ones - had. But over time their mindsets are making such niceties redundant.
For ‘growthers’ do more in their next role than they did in the last, because they’re still learning. If talent management focuses on this future potential, rather than paying for past performance, not only will costs decrease but the talent pool widens exponentially. You’re searching in places your rivals aren’t, and your demand will not outstrip supply.
In the war for talent seek out and pay for those whose best work is ahead of them, not behind.
*Advice on winning in times of crises doesn’t come free!
During a recent conversation at a major bank the head of internal communications drew a line on a whiteboard - curving upwards ('A' in the picture above). 'When things are going well' she said 'the mood of our people is up.' Then she drew an opposing line curving down (B) explaining 'and then something can suddenly happen and the mood plummets.'
Then she drew a horizontal line (C) cutting through the two curves and said 'but our internal communications remains monotone, regardless of the situation. We don't tailor our communications to where people are: when they're up we should celebrating with them, otherwise we look out of touch; but when they're down we need to show empathy, otherwise we seem aloof and uncaring.'
What was lacking was a reliable guide to the mood of the organisation. Fortunately we're able to deploy a simple, rapid yet powerful method for this.
So, how are your internal communications - responsive or monotone?
Just 19% of employees in Russian organisations are engaged. The opportunity cost is staggering: $50 billion invested annually in people not motivated to achieve organisational goals. Is there any other investment area leaders would accept such returns without acting?
In a country that prior to the 2008 crisis had arguably the best human resources anywhere in the world (Economist Intelligence Unit 2007) this represents the biggest missed opportunity for organisations in Russia today. But can anything be done about it?
The management thinker Gary Hamel once famously declared that “human beings are limited not by our resources but by our aspirations”. Nowhere is this more true than in Russia. Organisations overall are unhealthy, for they are not “adaptable … innovative at their core” or “engaging, exciting places to work.”
It’s perhaps unsurprising. Private enterprise was only legalised a little over a quarter of a century ago, giving the modern Russian organisation little time to develop a healthy corporate culture. The road has also been bumpy - from the gangster capitalism of the early 90’s to crashes of ’98, ’01 and ’08. While imported expat talent - meant to accelerate commercial development - was often not of the first variety.
When the going was good though, it was very good. But then again, even a turkey flies in a tornado. But what do you do when the trade winds have died down and you must make your way forward under your own steam?McKinsey have shown the path. Over a decade of research across multiple industries they have uncovered what they call the ‘great paradox of management’ - that “when it comes to achieving and sustaining excellence in [organisational] performance, what separates winners from losers is, paradoxically, the very focus on performance itself.” In other words, if you want to be a great organisation, stop focusing on performance (your measurable operational and financial activities) alone.
What McKinsey discovered was that those who focus on both organisational health and performance simultaneously are “nearly three times as successful as those that focus on performance alone”.
The answer seems obvious - if you want to get more out of your people investment then create an environment that provides what talented employees everywhere want - a dynamic workplace where they feel empowered to make meaningful change happen.
The question is, how do you do that with depleted resources and an environment where tomorrow might be too late …. ?
In Russia, continued sanctions and falling oil prices force leaders to answer existential questions: do we cut costs to survive the short-term (and hope the good times come back again soon) or do we accept that today’s business climate is the new normal and adapt?
Perhaps unsurprisingly to those who’ve been doing business in Russia a long time the bias is towards the former. Yet the longer the ‘lock-down’ goes on the sooner someone will take the snake by the tail and start to exploit disrupted industries to their advantage.
In reality this is already happening and those who wait too long to react will get left behind.
Whilst not traditionally a core driver of Russian business HR has been placed under extraordinary pressure in recent years to prove it’s more than just a cost centre. It must also do this with less resources than ever and it’s currently ill-prepared to cope.
In an excellent book looking over a decade of research as to what drives real, top and bottom-line performance two McKinsey partners highlight how the same old questions leaders ask of HR are often at fault for producing the same old answers:
If these questions sound familiar your organisation might be in more trouble than you think!
The need to measure everything as a form of scientific proof has led HR to develop tools and processes that ape the work the hard functions like finance and operations do. But humans are not resources like capital and goods: they are irrational and unpredictable but also versatile and creative; the very skills now needed to pull organisations out of trouble.
HR must discover a way to work with the way people really are, rather than how they want them to be to unlock new answers to old questions:
Shape the Future
Don't just adapt to it