Are people your organisation's greatest asset?
The mantra that “People are our greatest asset” seems to have been somewhat discredited recently as commentators recognise that there are other, more important factors that help to sustain competitive advantage, including; technological innovation, and financial & physical assets. The greatest asset in an LNG company, for example, is the gas field and associated exploration rights.
Yet “Talent Management” - defined as the organisation’s commitment to recruit, retain and develop the most talented employees available - seems to have caught the attention of CEO’s and Senior Management in companies across the world.
The reason for this might be explained by the Pareto Principle (or 80/20 rule) which states that, in people management terms, 80% of contribution is made by 20% of the employees. A few employees are making a disproportionate contribution and it is these most talented group that gives the company a real competitive advantage.
Margaret Heffernan and others argue that this binary judgement [talent or not] is unhelpful. Performance can change over time. Talented individuals are unlikely to be doing the same jobs when they start with the company, in ten years’ time and the skills that they need will change will be different. The “Peter Principle” says that people will be promoted beyond their capability and might not be able to perform at a higher level.
On the other hand there are many examples of people started badly yet went on to become great successes; Henry Ford’s early businesses failed, but he went on to form the Ford Motor Company. Colonel Sanders Kentucky Fried Chicken [KFC] was far from an overnight success, while Walt Disney [founder of the Disney Company] was dismissed by a newspaper editor because he “lacked imaginations and had no good ideas” in his early career.
Employees may be reluctant to bring their best game to work if they have been indirectly told that they are not talented and therefore don’t have a great long term future with the company. In short the label “Talent” is wasteful as it writes off others not regarded as “Talent”.
Carol Dweck [from Stanford University] says that a “growth” mindset as opposed to a “fixed” mindset is a predictor of future success. The “growth” perspective says that everyone can get smarter. Continuous learning is embraced and set backs are seen as positive; individuals know how to persist when things get tough. Dweck believes that not everything can be measured, and testing can’t be relied upon. Grading and Ranking tend to reinforce a “fixed” mindset, so do not enable people to succeed. Laszlo Bock former HR Director at Google on the other hand believes that the answer is to assess people frequently using a variety of methods. While Angela Lee Duckworth sees “Grit” as the differentiator - defined as someone who has a passion to achieve meaningful goals and works very hard to make them a reality. It is a journey [we can’t all be anything we want, but can go much further]. This can be a self-fulfilling prophesy as Henry Ford said; “whether you think you can or can’t you are right.”