How Good Are You at Candy Crush? It May Determine your Career!

imagesca4dnz00“People with criminal records stay longer and perform better”

“Relevant experience does not lead to increased productivity”

“Management quality influences attrition & productivity more than employee background’

“Educational attainment is not as critical”

“Long period of unemployment does not make you a worse worker”- From Your boss wants to be Nate Silver

I’m sure most of you have believed at least one of the above but according to recent research ALL of them might be false.  People Analytics or applying Big Data to Talent Management may be fundamentally changing how employees are selected and managed.  It is allowing companies to use predictive analysis on not just personality tests but biometrics and personal data that we all leave everywhere. 

Clearly, the ability to identify the real drivers of employee success and using those to select the right employees is a very powerful tool. If having been to college or which college is not critical, the potential candidate pool looks dramatically different (If true, it also changes the value of an education but that’s for another day.)  That in and of itself could cause a major disruption in the job market.  If having relevant experience is not critical, then career management takes on a whole new dimension?  By the way, similar techniques are  also being planned for assembling the “right” teams of people.

Utilizing video games as part of the selection process allows for the collection of biometric data.  Not only can your play predict your behavior at work but the biometric data collected predicts your responses in certain situations. Your next interview may involve a head mounted video camera, an optical pulse recorder and measuring electrodermal activity.  This is no longer science fiction; it is available to early adopters today.

The data trails that we leave everyday are also being collected and analyzed for predictive patterns.  The number of sick days, attendance issues, what you buy and where you spend your online time – all of these combined offer vast amounts of predictive power.  That predictive power is already being extensively used for marketing and politics and now employment.  Companies are combing the cloud for all the data we leave behind and offering it to employers as a screening device.

A lot of this sounds scary – we have all seen science fiction movies where “machines” are sorting out humans and predicting human behavior (Minority Report).  The “identification” of people into certain “categories”, though based on some tests and algorithms, eerily sounds like a caste system.  The notion that everything that you have ever done (whether online or off) and how you interact with a video game or perform on some personality test will actually determine your (and everyone else’s) station in life is daunting. You can just imagine the Jonah Hill character in Moneyball sitting over a computer and deciding what you are good for.   What happens to our lives when the machines know us better than we know ourselves”?

This is clearly a debate that we will all need to engage in.  This clearly has the potential to fundamentally disrupt how we select and manage employees-and how we as individuals prepare for employment.  The potential predictive power sounds very exciting and inviting.  The ability to identify the perfect employee is clearly better than depending on instinct.  It looks like Big Data has crept into and may fundamentally change Competency Based Talent Management.  Yet, it comes with all kinds of risks and concerns that must also be dealt with.  These two statements probably sum it up well:

 “This video game (interview) never ends.  This job interview is permanent.” – referring to the data we leave behind.

 “In the long run, will it be healthy for society to run everything by the numbers?”

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Netflix- Common Sense Rules Talent Management

Can common sense be the underlying principle for a Talent Management program?  Evidently it can and is for successfully managing talent at Netflix.  In “How Netflix Reinvented HR” in this month’s Harvard Business Review, former Chief Talent Officer Patty McCord chronicled how the culture was shaped and performance motivated through some basic, common sense HR practices. I thought I would share some of the highlights as what might be considered Next Practices in Talent Management.  

First, Netflix has of late been on our radar screen because of some innovative business practices that led to three Emmy Awards, a significant increase in its’ U. S. subscriber base and its stock that more than tripled.  But the hidden jewel here may be their approach to culture and talent which is derived from common sense – imagine that!  According to Patty McCord , here are the  . . . . “five ideas that have defined the way Netflix attracts, retains and manages talent.” 

1. Hire, Reward and Tolerate Only Fully Formed Adults.  Here the philosophy was quite simple,  . . . .  “hire people who will put the company’s interests first, who understand and support the desire for a high-performance workplace  . . . .”.  Some elements here are :

    • Talking openly about issues with your boss, peers and employees. Underlying premise – do the right thing
    • No vacation policy – salaried employees took whatever time off they felt was appropriate as long as they worked it out with their boss / colleagues
    • Company expense policy was simply stated – “Act in Netflix’s Best Interest”
    • Rich severance packages – be willing to let go of people whose skill set no longer fit

 2. Tell the Truth About Performance.  Here, formal performance reviews were eliminated because they were seen as “too ritualistic and too infrequent”.  They were replaced with:

    •  frequent, ongoing conversations between managers and employees which proved to be much more effective;
    •  Performance Improvement Plans (PIPs) were replaced by honest, tough conversations that employees appreciated (supported by generous severance packages where appropriate 
    • Informal 360-degree reviews

 3. Managers Own the Job of Creating Great Teams.  Here, managers are asked to envision the future and use that vision to determine the skills and competencies they need in their people to get there.  Some interesting elements include:

    • Honest conversation with team members whose skills do not fit
    • Market based compensation
    • Flexible compensation structures – employees decide  how much risk they are willing to take; salary vs. salary + stock options
    • Recruiting the right team was top priority for managers

 4. Leaders Own the Job of Creating Company Culture.  Here, values and culture are not only articulated by the leaders but also modeled through their behavior.  Some lessons include:

    • Values and goals are clearly articulated and communicated
    • Reward behavior that supports those values and goals
    • Leaders need to do more than talk – they need to walk the talk
    • Clearly communicate how the company makes money and what behaviors are required to drive success
    • There will be subcultures within the organization that may require different management approaches

 5. Good Talent Managers Think Like Businesspeople and Innovators First, and Like HR People Last.  Here, the message is to think like a businessperson and consider what is good for the company in managing talent.  Some key points include:

    • Help employees understand what is meant by “high performance”
    • If your company has a bonus plan, make sure that employees understand what it takes to earn that bonus
    • Communicate, communicate – employees want to know what is going on, good or bad
    • If innovation is a critical value for the company, make sure that innovation drives every part of your business INCLUDING talent management

What I found most interesting about this article was that Netflix attributes its’ success to its people.  With all the talk about disruptive business models, rapidly changing technology, on-demand content, digital, big data, etc., all of which can be attributed to them, Netflix is talking about people as their greatest asset.   To me, this was not only refreshing but made the most common sense of all. . . . . . .

Share your thoughts with us and join in the conversation  . . . .  


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One More Time: Competency Based Talent Management is Still the Key!!

A recent white paper from SAP proclaims: ”The ability to attract, retain and manage talent will soon become one of the biggest factors in determining organizational success”.  While the paper is focused on the unique challenges that millennials pose to organizations, the points it makes are broadly valid.

  • Relevance and importance of work in their life are different
  • They are looking for collaboration, innovation and teamwork
  • Their focus is not on promotions but competencies like teamwork and decision making
  • Demographic gap in organizations poses a significant knowledge leakage issue

Another white paper from Deloitte proclaims how Procurement/Supply Chain must transform itself by 2020 (Really?  We haven’t started yet and we have that much time????).  They see the role as not one of sourcing goods and services but sourcing ideas.  They talk about Innovation and Creativity as key competencies for Procurement/Supply Chain organizations.  Expectations that category management is  just normal expected activity and driving top line (revenue) growth are what will set organizations apart as Next Practice organizations.  And then they go on to identify Talent Management as one of the top four capabilities needed by Purchasing/Supply Chain organizations – “helping strike a balance of roles and the right expertise at all levels”.

We have one thing to say to our professional colleagues in these esteemed firms – welcome!!  For those of you familiar with our firm, you will know that we have been talking about Competency Based Talent Management (“CBTM”) for quite a while.  And while we have seen a fair amount of progress in our most recent research, it is clear that we still have a long way to go.  Our colleagues are now starting to talk about Change Management, Collaboration, Alignment, Stakeholder Engagement, Innovation, and Creativity as key competencies.  Finally!!  We have been steadfast in our belief for close to two decades that rather than the derogatory label of “soft” skills, these are actually the strategic competencies that enable any and all value generation – at least that which is valued by our stakeholders. 

By now the debate should be over – CBTM is what will separate the men from the boys or the women from the girls (just to be gender neutral) and within CBTM, the organizations that rightfully acknowledge and incorporate the strategic competencies will be Next Practice organizations and the rest will be “also- ran” or Best Practice organizations.  The ability to forecast and align your needed/desired organizational competency model and then put in motion a strategy that closes those gaps will set leaders apart.  The ability to manage, grow, invest and develop your competency asset base will be your competitive differentiator.  Protecting existing knowledge and then growing it as an asset will be a huge risk factor.  Moving away from “certifications” as competency indicators and more towards applied knowledge will be critical. Having a CBTM strategy to manage the entire hire to retire lifecycle will be crucial.  I know you have heard us say this before but given the recent attention by some of our colleagues, it perhaps merits another discussion.  Where are you in your CBTM journey?  Are you still trying  to convince your boss and your leadership?  Is your training budget the first thing to go?  When was the last time you assessed the risk that you are carrying as far as CBTM is concerned?

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Can you Depend on the Educational System to Deliver “Usable” Talent?

By now you have all heard the gloom and doom surrounding the current talent shortage plaguing the economy, especially as it relates to high skilled and manufacturing jobs.  While that may be true in very specific localized geographies, a recent report from Boston Consulting Group offers intriguing insights that apply beyond just manufacturing.  Availability of the right talent at the right time (Competency Based Talent Management-CBTM or Talent Supply Chain Management-TSCM, take your pick) have been and will continue to be a major competitive differentiator for your company.  However, depending on the educational system to be your supplier of talent is highly risky.  Having worked on this issue for almost 2 decades gives me some license to opine.

“The real problem”, according to BCG, “is that companies have become too passive in recruiting and developing skilled workers…Companies are not doing enough…have scaled back in house training….retirement of aging workers…companies must do much more to identify, recruit, train and employ are all points that apply to every other sector, not just manufacturing.

I have spent lots of time with senior executives who bemoan the fact that while they recruit from very good schools, they are still not getting “usable” talent and it takes 12- 18 months to start getting net value.  I’ve talked to the Deans of many educational institutions who, even when a few acknowledge the issue, don’t really see it as “their” problem – yet!!  This is why many, many large organizations have started setting up in-house ”schools” and “universities” to ensure a steady supply chain of talent.  This is why many organizations put new recruits through internal “finishing” schools to make them far more productive and usable a lot faster.  We know because we have worked on a number of these initiatives for clients.

The report goes on-“Investment by the public and private sectors in skills development needs to increase and accelerate (emphasis mine).  Companies can meet many of their needs on their own through more aggressive recruiting and training”.  It is clear that most aggressive and progressive companies have realized that they must develop their own talent pool.  Unfortunately, training budgets are still the first line item sacrificed during budget wars.  This dichotomy is significantly increasing the Talent Supply Chain risk and that risk cannot be mitigated by the educational system.  And the long lead time on the Talent Supply Chain makes that risk even harder to mitigate – Talent Development takes time.

The other larger issue (to be discussed another day) is that almost all of the current efforts, whether in the educational system or the private “schools” and “universities” are all geared to the acquisition of new skills and behaviors – and the mere acquisition process is a net cost to the corporation and no value at all.  In addition, mere acquisition has a very short shelf life in terms of retention.  Acquisition is what every training program focuses on.  Application of new skills and behaviors leads to value creation for the organization – it’s the payback or the return on the training investment.  Application leads to Competency Development – and competencies have a much, much longer shelf life.

So where are you in your personal competency development?  What about your team?  Your functional organization?  Are you focused on Talent Development as a competitive differentiator?  Have you launched your own “school” or “university” or are you depending on the current educational system to manage your Talent Supply Chain?

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May Question of the Month Answered! What is the Best Way to Manage Supply Chain Risk?

The question of the month from an anonymous reader was posed like this:  What is the best way to manage supply chain risk?

We were working with the Chicken Platform team at one of the world’s largest QSR (Quick Service Restaurant) in helping them introduce chicken to their menu.  While it may not sound like a big deal, it was a huge undertaking that involved significant complexity.  One of the elements we added to their menu strategy was risk management because it became obvious to us that while there was significant risk involved, there was no systemic way of identifying and mitigating that risk.  So you can blame us if you don’t like the chicken items at this iconic global QSR.

Here are some of the key lessons we have gathered from the many, many years of dealing with Risk Management (RM).

Unavoidable necessity or desired need?      While there are many tools, templates, methodologies, software packages etc. related to risk that you can spend your money on, it’s far more important to address risk at a meta level in the organization first.  Let me start with a hypothetical question – does your CEO view risk management as a competitive advantage or a necessary nuisance?  If it’s not the former, then that ironically becomes your biggest risk in implementing risk management AND also the first step.  A more robust risk management process converts into a competitive advantage leading to more sales, better margins, etc. etc.  That takes RM from an unavoidable necessity to a desired need.

2D or 3D risk model?     Most of the risk models are two dimensional in nature – they measure impact and likelihood of the event and then allocate resources to manage the risks.  Level of control and influence is often ignored.  What is the point of dedicating resources to measure and monitor risks that you cannot do anything about?  In determining priorities, it is critical that all three dimensions be considered.

Portfolio Risk?  Even when we see risk management being deployed, we are always surprised by the lack of aggregating risk across the “portfolio”.  Various divisions of an organization are doing an excellent job at managing risk individually but no one is aggregating the risk to understand the total exposure.  For example, each division is sourcing from the same geographical region adding significant portfolio risk to the corporation.  While optimizing sub-system risk, we end up sub-optimizing “system” risk.

External vs. internal factors?  Risk is most often viewed as something external to the corporation (market, industry, supplier etc. etc.).  It is fairly obvious that there are a number of internal factors that are never acknowledged or addressed.  Inability to make timely decisions, ineffective implementation of decisions, bad information flow (inventory, demand, lead times etc.) are just a few examples.

“Consonants” vs. “Vowels”?  Clients who have designed pretty good risk models end up not paying enough attention to the adoption of those processes.  Theoretically, they have actually increased their risk exposure by introducing a false sense of security within the organization.  A well designed RM process (consonants) does very little unless it is accompanied by an equally well designed and robust adoption process (vowels).

Controlled response?  In spite of a RM program, risks will manifest themselves.  The question then becomes how does an organization react to it?  What we have observed is that organizations that have a credible RM program in place do a far superior job of reacting to those events because they have developed the confidence and the competencies to deal with events. Organizations that don’t have a RM program end up in a much more reactive mode. A greater impact is then caused by their reaction than the original event.  We recently had a Fortune 25 client go through a major disruption in their supply chain.  Their reaction was to severely tighten up the selection criteria and the decision process to mitigate future risk.  Unfortunately, they also ended up “freezing” their own supply chain organization and their supply base.  40% of suppliers that had been acceptable became non-compliant overnight, even though they had absolutely nothing to do with the disruption.  It’s been months and months since the original incident but the client is still suffering from their reaction to the event rather than the event itself.

Competencies?  The competencies required to effectively roll out a robust RM program are unfortunately in the dreaded soft skills category which are in short supply in most organizations.  RM at the end of the day is all about changing behaviors and the functional skills that are in vogue in most companies can’t really help.

While it is critical to understand various risk factors in our supply chain and try to mitigate them, our research has shown that unless RM is addressed at the meta level in the organization, most efforts fail.  It is for that reason that we must fundamentally change the definition of RM to a competitive advantage as opposed to a necessary evil.  A great place to begin would be for you to start including RM as a decision factor in selecting your suppliers.  Have them show you their RM plan for their supply chain.  It is the best way to elevate the discussion around RM and you may learn a thing or two about how to manage risk.



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