Dr Robin Stuart-Kotze's archived blog:

How do you retain talented employees? (11/11/2008)

We’ve done a lot of work with the Boston Consulting Group (BCG) over the years and have been impressed by the level of talent they attract and retain. In a recent Fortune magazine, BCG’s CEO, Hans-Paul Burkner had a few things to say about what BCG does to retain talented employees. They are worth repeating.

1. Give people constant feedback on their performance, and provide it from every direction.

One of the problems that people encounter as they do their jobs is that there is often no clear set of objectives – i.e. “what” they are supposed to achieve. And to make things even more difficult they are very rarely given advice on “how” they should go about achieving these objectives – i.e. what sort of behaviour is most appropriate.

2. Be patient and give people time to show their potential. Burkner says that it can take three years for someone to reach their potential.

Talent has two elements – ability and capability. Ability is about current skills, but capability is about the future and potential. Helping people maximise their capability involves Burkner’s third point.

3. Give people new challenges regularly.

But that has to be done properly. Unfortunately what tends to happen is that an individual is given a new job but not given any help about how to tackle it. The “what” and the “how” have to be made clear each time someone is given a new role. Performance is driven by behaviour and behaviour varies with the job – i.e. the “how” changes.

4. Don’t force people down paths in which they have no interest.

The relationship between personality and behaviour as they impact on performance is important. Personality is about preference – what one prefers to do and what sorts of things one is comfortable with. Personality is unchangeable, but what it does is define the range of behaviour within which a person feels comfortable. We can all change our behaviour to fit the situation and do jobs that are outside our comfort range for a short period of time but in the longer term performance tends to drop off because we lose interest and lose motivation. Matching people with jobs that challenge them and which they enjoy is critical.

Finding the talent in a merger/acquisition (11/11/2008)

I received this interesting email from my friend Professor Robert Cochrane.

I have been re-reading chapter 5 of your splendid book and would be interested in your thoughts.

Whilst I agree that just calling the people problems "culture clash"

does not help much, there are problems which are not really discussed in the BAT example.

The approach seems to me to be very rational but to require a detailed plan for the new organisation from an early stage and the early formation of a top team managing the merger, who are empowered to make the critical lists of staff (page 81).

Moreover, the example seems to assume that the new organisation has a "neutral" structure and culture - it does not say anything about how close this plan is to the existing structures of the two firms or about the makeup of the top team in terms of representation from the two organisations.

My experience is that it is at this stage that things go wrong. Even the slightest dominance of the change group by one or the other culture, or a tendency to adopt the structure of one company (perhaps the larger) leads to alarmist messages going down and serious problems in identifying talent in the firm with the poorer fit to the new structure or fewer representatives on the change management team.

My question is how should this first step be handled.  The rest all makes very good sense, but it is this first step which often seems to go wrong in mergers.

Professor Cochrane has hit on a critical element in the process of identifying the people who stay and the people who go in a merger or acquisition situation. The approach adopted in the BAT example did indeed assume rationality on the part of the team that compiled the critical lists of staff . He is absolutely correct in pointing out that these individuals were far from “neutral” and that, despite their efforts, rationality did not prevail in their decision making.

I have had a number of personal experiences of mergers and acquisitions and of the process of deciding who the talented people are and who to let go. Those experiences formed a large part of my motivation to develop a mechanism that made the process more objective by focusing on behaviour and the match of behaviour to the requirements of the job (as described in the book).

In an earlier email exchange with Prof. Cochrane I made the following comment:

There is a clash of cultures and egos in M&A situations and I have witnessed it first hand a number of times. In each case I think what I saw was individuals who were accustomed to doing things their way - i.e. the way their company's culture required - and in addition who, if they were senior, attributed success to their personal skills and attributes (ego). The combination of culture - the way we do things here - and ego - the success that has resulted from “my intelligence, experience, skill and knowledge” - has meant that whichever partner is bigger selects the people who, to paraphrase Rooster Cogburn, “remind them of them”,  and fires the others.

Another helpful hint (10/11/2008)

If you've ever been to Rome and gone to see the Vatican you will understand the power that physical surroundings have. One can imagine, in the middle ages, a priest who has been kicking up dust somewhere out in the provinces being called to Rome and walking up the avenue to the gates of the Vatican. He would instantly understand where the ultimate power lay and by the time he was admitted to the precinct much of his rebelliousness would have been quelled.

Recent research at Ohio State university shows that if you want to influence someone who is more powerful than you - in this case your boss - it helps if you can get them away from their physical power base. As people become more senior their offices tend to reflect their power and authority. The office, the boardroom, even the company building, support individuals' sense of authority. The Ohio state research shows that when people are moved away from their power-supporting surroundings however, they become more easily influenced - i.e. they listen more to what you have to say or ask.

So if you want something, don't approach your boss where he or she is surrounded by the trappings of power and authority; do it outside the office, perhaps in a neutral social setting like the pub.

A tip on how to keep your job (8/11/2008)

In times like these when companies are shedding employees, here’s a suggestion that might help you keep your job.

Psychological research shows that that when you do something for someone that you don’t have to do, that person’s view of you improves and they become more interested in helping you. But here’s the really interesting bit: it works the other way as well.

If you ask your boss for career advice he or she becomes interested in ensuring your career success. The reason is that when people offer advice, especially when it has been specifically asked for, they want it to result in a positive outcome. People like to be regarded as respected advisors. It gives them a feeling of worth. It’s flattering. By asking your boss, or an individual who can influence your career, for helpful advice you make them part of solution.

But do it now; don’t wait until the decision to place you in the tumbril has already been made.

Modesty is for wimps (7/11/2008)

Jim Collins, the author of Good to Great, says great leadership involves being modest and considerate. According to Collins, great leaders “build enduring greatness through a paradoxical blend of personal humility and professional will”. Oh yeah? Tell that to Larry Ellison, Richard Branson, Alan Sugar, Steve Jobs, Philip Green, or a host of other highly effective and successful leaders.

Collins defined organisational “greatness” as being the ability to transform a record of average results into fifteen unbroken years of significantly above average returns. He identified eleven companies that had done this and then he looked at the characteristics of their leaders and concluded that if you wanted your company to outperform the market for fifteen years you better find a leader like that. (And by extension, if you wanted to become a leader of a highly successful company you had better concentrate on being self-effacing, thoughtful and considerate.)

However if you start by selecting a group of companies based on some set of outcomes and then take the fact that the outcomes correlate with the characteristics of the companies’ leaders, that doesn’t mean you can assume that the leaders caused the outcomes. There are all kinds of things that determine corporate effectiveness and the character of the person at the top does not completely overshadow everything else. Being modest, understated and humble is not necessarily how you create great results and great companies, nor is it, in the vast majority of cases, how you get to the top – or even how you progress generally.

What’s needed to succeed in organisational life is a clear personal brand. Brands are about differentiating products and services. They represent a promise about what can be expected. So what’s your brand promise? What do people think about you, what do they expect of you, what do you have a reputation for, what sort of performance you have delivered in the past and what performance do they believe you can deliver in the future. Modesty is not a compelling brand promise.

Is experience important? (6/11/2008)

There’s a continuing debate about whether it’s better to hire people on the basis of their experience or their potential. If you believe in hiring people on the basis of experience, and you believe that age equates with experience, there’s no better time than now. By 2010 about half the population of the western world will be over 40, which means they will have had 20 or so years of work “experience”.

Experience is not the issue of course; the question is experience of what? Is experience as a bank manager a predictor of performance as a customer service manager in a telecoms company? Is a person who has been in a job for five years more experienced that someone who has been in the job for one year, or does five years actually mean one year’s experience five times in a row?

The even bigger problem of hiring on the basis of experience gained in a former job is the assumption that it parallels what is needed in the new job. But organisational cultures and situations can and do differ dramatically. Experience is situation specific and unless there are major similarities in the old and the new situation, it’s difficult to predict success.

While we try not to acknowledge it, experience also tends to equate with baggage. Behaviour is learned. We do what we do on the basis of it having led to success in the past. We’ve all been annoyed by people who seem unable to refrain from telling us how things were done in their last company or last job. There may be benefit to be gained from learning how other people do things but often the underlying message is that what we’re doing is no good, and that tends to be irritating.

A policy of hiring people on the basis of their potential comes with some small print. For “potential” one can read “lack of directly applicable experience” and that means that the organisation needs to give the individual time to learn. It also implies training, coaching and the provision of development opportunities, which is one of the reasons many companies fall back on what they hope is the quicker-fix solution of hiring so-called experienced people; it takes less effort.

If you wish to hire people for their potential, you need to define the core competencies for the roles in question. These are things like a demonstrated ability to motivate people, being able to close sales, a record of building effective teams, or being able to make and stand by hard decisions. They can be tested and observed. Either people have done these things or they haven’t. Assessing potential doesn’t have to be subjective; potential manifests itself in observable behaviour.

What's your next move? (5/11/2008)

Lifelong careers are becoming a thing of the past in Europe and North America. Statistics indicate that people now have more than three careers over the length of their working life. However the definition of career change tends to be rather unclear. Is it changing functions within a company – e.g. from marketing to operations? Is it moving from one company to another? Is it moving to a completely different occupation, like architect to chef? Each of these moves entails a progressively bigger change and each presents different challenges. The University of Nebraska defines career change as moving to a new job family. A job family is a grouping of jobs that have a continuum of similar knowledge, skills and abilities and have associated and related key behaviors. In other words one can move up through jobs at the lowest levels of the family to those at the highest by continually building on a common base of knowledge, skill and abilities. The professions – medicine, engineering, accountancy, etc. – are examples. Moving to a different job family implies the need for different knowledge, skills and abilities, and career changes of this magnitude are not easy. Research indicates that it takes individuals upwards of three years to make a career move of this type successfully. Nor is the process of change smooth; it’s a bumpy ride with lots of psychological ups and downs. A major career change is a life change, not totally unlike getting married or having children. One of the first things one needs to think about in terms of making a career change is what transferable skills you possess. What do you already know and what skills and abilities do you possess that can be applied to the new job? A second question is what new skills you need to develop and what new knowledge you need to acquire. Richard Bolles, the author of What Colour is Your Parachute?, says the key thing is to identify what you really enjoy doing. One of the traps that people fall into, he says, is making the decision to change careers based on what the market wants rather than what they want. Bolles says it is critical to put yourself and your needs and wishes first. There is virtually no area of endeavor where success can be attained without others. Becoming something like a concert pianist or a successful novelist may appear to be purely a matter of individual effort but without impresarios, agents, publishers, publicists, and a variety of other people the piano solo will never be heard and the novel will never be read. One of the most critical elements of success in any venture is the network of relationships and associations that one makes. Moving to a new career successfully means building a new network of people and groups that can and will provide advice, help, support, counsel, and necessary skills and knowledge. Before making a career change, work on building the network you will need.

Why new leaders fail (4/11/2008)

I have a new article over on BNET-UK which raises the issue of why people often run into difficulty when they enter new jobs. At the heart of the matter are two critically important things - perceptions and relationships. Failure to understand and manage both of these elements makes success difficult to achieve. Add to that a lack of clarity about the behaviour required for high level performance, and it's surpising that more managers don't fail to make the transitions to new roles. Research into why new leaders fail shows they don’t know who they should be creating relationships with, aren't sure of how they are perceived and don't manage that perception and, more than 75 per cent of the time, haven’t got a clear idea of what behaviour’s expected and what is censured.

Failing is good (30/10/2008)

I have a new article over on BNET-UK. Having failed many times in my life I know these things work. Any thoughts? By the way, the last quote is from Mary Poppins. It had me fooled there for a while.

Will 2009 be the year of the autocrat? (30/10/2008)

Companies are laying off people in the thousands - American Express is cutting 7,000 people, 5,000 are going at Whirlpool, 5,000 at Chrysler, 4,000 at Volvo, 5,000 at BP, and Asian markets aren't escaping either; companies in India are expected to cut their workforces by about 25%. What we've noticed in the past is that when there is high or rising unemployment, managers tend to exhibit more dominating behaviour. Organisational cutlure moves from asking people for their views and opinions to telling them what they must do (with the unspoken threat that failure to do so might result in joining the march to the exit). It would be a great mistake for managers to adopt this attitude. Now is the time when it's critically important to try to get the very best out of people, and treating them as though they have nothing to contribute is not the way to do that. Now is the time to ask everyone for their suggestions about how to improve performance.

What's the future for jobs? (28/10/2008)

If you're trying to gain some perspective on what is currently happening in the world of organisations, reading Nassim Nicholas Taleb's two books, Fooled by Randomness and The Black Swan is not a bad place to start. Taleb points out some interesting behavioural facts, one of which is that people tend to overemphasise and overvalue recent events when they are trying to predict future events and decide on future action. We magnify the significance and importance of the most recent events, or our most recent experience. A simple example is that when people move to a new job they do what worked best for them in their old job rather than try to see what might be different in the new job and adjust their behaviour accordingly. On a larger scale, we currently see companies talking about cutting staff - what they have always done in the past - but what we don't see is them talking about what they might do differently. How might they manage in a way that is more appropriate for the changing times? Why do they focus on making percentage headcount cuts? How do they decide who gets to keep their head and who gets it cut? Are there any clear criteria? Unfortunately often there aren't; it's just a random process and that means that everyone is potentially at risk. Uncertainty is the current common state. Uncertainty and vulnerability create stress. And stress has a negative effect on the brain and how it functions. People experiencing high levels of stress think less clearly and make poorer decisions. So unless companies take a more rational approach to cost cutting or other forms of adjustment to declining markets, and reduce the level of uncertainty among their workforce, the future for jobs looks rather like roulette - the Russian variety.

What is a US president supposed to do? (28/10/2008)

With thankfully only a week to go before the US elections are over, and with all the talk and promises, I began to think if anyone, particularly the two presidential candidates, actually knows what a "good" president does. We all know what bad ones do - engage in criminal activities like Richard Nixon or make a series of bad decisions like George W. Bush - but how does a US president get, to put it in gymnastics rating terms, a perfect 10? What does he (or she - it will happen sooner or later) have to do? What is the behaviour specification for the job? We know that performance is the result of behaviour - what you do determines your results. Presumably the outputs or objectives of the president's role remain basically similar, but the question is how to achieve these things. As you know, we say "Best" occurs when the individual's behaviour matches the behaviour demands of the job. To do the job of President of the US is there a set of specific behaviours - actions - that will result in Best performance?

Any thoughts?

Whatever....Why people stop caring about work (22/10/2008)

I have a piece over at BNET on why people stop caring about work. There is a lively discussion going on in the comments section.

Go and join in the fun!

Misperceptions of talent (16/10/2008)

The stampede that the so-called War for Talent created has had a number of negative side effects. In the financial services industry “talented” people have tended to be defined as those who combine an aggressive drive for revenue with an articulated mathematical brain. These were the people who developed complex derivatives and who traded them. The measure of their talent was the amount of money they generated.

But as Michael Skapinker commented in an article in The Financial Times on October 13^th, “What makes a business sustainable? Customers, served by motivated staff”. The banks got their definition of talent wrong. Ego-centred, money-driven people with high technical intelligence don’t pay much attention to customers. Customers are something that can’t be completely ignored but can be avoided as much as possible. Which is why, for instance, RBS has approximately 25,000 people in call centres in Britain.

Skapinker makes another interesting comment: “Underlying the disconnection between companies and their customers is a breakdown of trust between companies and their staff”. There is little trust or loyalty between staff and their bank employers. Sir Fred Goodwin earned the sobriquet “Fred the Shred” for laying off 18,000 people when RBS took over NatWest. Current estimates are that about 60,000 City workers will lose their jobs as a result of the recent bank fiascos.

And, just as an aside, even when things were running smoothly for the banks, turnover in the RBS call centres, for one, has been estimated at 40% a year. That doesn’t sound much like loyalty and trust to me. Nor does it sound much like finding and keeping talented people.

Give People a Choice (14/10/2008)

Marcus Buckingham asks the key question about managing talent: “What would happen if men and women spent more than 75% of each day on the job using their strongest skills and engaged on their favourite tasks, basically doing exactly what they wanted to do?”

People who spend their time using their strongest skills to do what they love doing tend to produce results. The question is how can we harness that productivity and focus those results for the organisation? The answer is twofold: make sure that people are given jobs that suit both their abilities and capabilities, and make sure they understand the actions and behaviours they need to use to perform the job well.

Why can’t we ask people what they feel their skills are and what they think they could do to add the most value to the organisation – and then try to give them these jobs? Is it that we think people are intrinsically lazy and that they’ll only want to do as little as possible? Is it that we think that there are a lot of jobs that can never be enjoyable or satisfying and nobody would elect to do them? However what might seem interminably boring to you may be very interesting to me. Managers need to have courage and trust in people to allow them the choice.

They also need to understand that not everyone wants a job change or career progression. Often people are at their best where they are, and moving them or promoting them in order to reward their excellent performance is a formula for failure. Well known examples include promoting the best sales person to sales manager, the best engineer to manager, a strong functional specialist to general management, etc. Not to say that excellent sales people can’t become, or don’t become, excellent sales managers, or that engineers or functional specialists can’t become excellent senior managers. Of course they can. But not all of them can, and not all of them want to.