Leadership, Intangibles & Talent Q4 2008 Four Groups


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• Is creativity and intelligence being filtered out of the system?
• The need to let go of many of HR’ s traditional functions
• The need for senior level sponsorship
• The psychological change agenda
• Managing talent
• Ethics and employee branding

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Leadership, Intangibles & Talent Q4 2008 Four Groups

  1. 1. Q4 2008 Linking Behaviour to Bottom Line Performance Leadership, Intangibles & Talent Q4 2008 Welcome to the first issue of the Four Groups Leadership, Intangibles and Talent review. The purpose is to try to dis- til and comment on some of the more interesting and articles shaping the field. That said, the subject matter is not strictly defined but takes into account wider economic issues, particularly given the challenging climate. In this issue, articles have been included from the likes of Deloitte, IBM, McKinsey, The Hay Group and Towers Perrin. There is no set criteria for inclusion, just that an article, survey or blog entry should be thought provoking, challenging or state more than the obvious. Comments and feedback are of course welcome. Summary for Q4 2008 Unsurprisingly, many articles are focusing on what it will take to emerge from the current downturn in a position of strength. As such the main themes focus on; • Is creativity and intelligence being filtered out of the system? • The need to let go of many of HR’s traditional functions • The need for senior level sponsorship • The psychological change agenda • Managing talent • Ethics and employee branding There seems to be considerable agreement that the organisations likely to manage and emerge from the downturn in the strongest position are ones which are; flexible, promote clear and consistent communication, are innovative and exhibit con- sistency between their internal and external behaviour. The theme tying all these attributes together is developing the abil- ity to manage the intangibles of organisational behaviour, such as; social networks, collaboration, innovation and change. Is creativity and intelligence being deficiencies holding back the pace of academia as much as scientific ability filtered out of the system? scientific progress, Charlton argues that and this has a serious impact on the the way the scientific process is organ- pace and levels of innovation. Indeed, Obviously the economic downturn is ised is best suited to ‘plodders’ rather this leads Charlton to argue that cre- the hot topic. However, the article than the ‘creative’ but sometimes ativity and intelligence are being fil- which really caught the attention, on ‘erratic’ thinkers who may be capable tered out of the system. the face of it, has nothing to do with of genuinely revolutionary insight. the current economic situation. Bruce Charlton points to the fact that success “We can only conclude that science is Charlton blogs1 about a book he is cur- in modern science is often down to an dull mainly because its requirements rently writing. Focusing on structural ability to navigate the bureaucracy of for long term plodding, perseverance
  2. 2. Leadership, Intangibles & Talent Q4 2008 and social inoffensiveness have the Tag Cloud effect of ruthlessly weeding out too many smart and interesting people.” Charlton, Why are Scientists so Dull? This is all good stuff and got me won- dering whether a similar dynamic is impacting the ability of organisations outside of the scientific community to encourage innovation and manage change? In particular do large organisa- tions actively promote people to senior strategic role in the organisation. For Unless these three key areas are ade- positions who are likely to struggle instance, the report provides evidence quately addressed, HR will continue to with the twin challenges of innovation that the focus on HR technology is struggle to find the time — and the and radical change? As will be shown moving away from the process or deliv- invitation — to make a more strategic below, the consensus is that change is ery side and is more focused on man- contribution.” Towers Perrin, People, the new normal and companies are aging talent and performance through Change and Performance: Emerging going to have to exhibit an agility and systems. In effect, HR practitioners are Issues in HR Service, Delivery and flexibility that has historically been dif- no longer slaves to automation and Technology ficult to implement. Maybe one of the time saving technology, but are instead reasons for this inability is the presence The need for senior level sponsor- are placing more focus on the systems of senior managers who are funda- ship and technology which can deliver on a mentally unsuited to work in this type strategic level. This is welcome news of environment? and potentially marks a key transition This perspective is reinforced by an in HR being able to develop a more interesting interview in the McKinsey The need to let go of many of HR’s Quarterly3 with Beth Axelrod, head of sophisticated and valuable dialogue traditional functions within the organisation. HR at Ebay. In this interview, Ms. Axelrod discusses the difficulties that Elsewhere, a number of broad themes Before this can happen however, the companies have in hiring and retaining are emerging. Many articles have Towers Perrin report argues that HR women, strategies she has seen suc- sought to put a positive spin on recent practitioners will need to let go of ceed, and her view of how HR can economic events and articulate a num- many of the traditional HR functions; become a strategic partner with busi- ber of opportunities which could poten- nesses. tially reshape the role of the HR func- “HR must relinquish some control over tion. One of the most comprehensive mundane administrative processes Ostensibly the interview focuses on the surveys this quarter is the Towers and grow comfortable with line man- difficulties companies have in hiring Perrin, People, Change and agers and others playing a more active and developing women in the work- Performance: Emerging Issues in HR role in decision making. Second, HR place. As a McKinsey alumnus and co- Service, Delivery and Technology2. This must learn to do more with the tech- author of “The War for Talent” Axelrod survey covers a wide range of HR nology that it already has — making it unsurprisingly takes an analytical and issues, one of which concerns how the more effective and more integrated research-based approach to the prob- HR function could develop over the across disparate HR processes or tech- lem and urges organisations to focus medium term. The report draws atten- nology platforms. Finally, success on getting the basics right before any- tion to a number of evolutionary issues requires a well-planned and well exe- thing else. which may shed light on the perennial cuted change management process. conundrum of how HR can play a more
  3. 3. Leadership, Intangibles & Talent Q4 2008 However, the most salient points focus change agenda. In the current climate, hinge primarily on technology – on Axelrod’s assertion of the need for change is not something which can be instead, success depends largely on senior level sponsorship and support thought of as taking place on a period- people….. for HR initiatives, a universal theme in ic basis. In the future and in order to whatever you are hoping to achieve. maximise flexibility and innovation, Change challenges: The soft stuff is Without this key component, HR is not change is something which will be a hard going to be able to leverage any of its constant and to achieve this organisa- specific knowledge, insight or view of tions will have to engineer a consider- The main obstacles identified were: the organisation. There is no doubt that able shift in workforce attitudes and the level of senior level sponsorship perceptions. Changing mindsets and attitudes (58 and communication determine the suc- percent) cess of any corporate initiative, the Across the board there is acknowledge- Corporate culture (49 percent) challenge in these tough times is for HR ment that managing change is as much Underestimating project complexity practitioners to ensure that their col- a psychological challenge as it is a pro- (35 percent).” IBM, Making Change leagues prioritise these issues highly cedural or systemic one. Focusing on Work enough. behaviours and reaction to change is a key issue. This is likely to become more Furthermore, the report goes on to Relationships are paramount to creat- important over time as market condi- echo the view that “change is the new ing a connection between people and tions require companies need to con- normal.” As part of this assertion, peo- the organisation and Axelrod notes the stantly evolve. This is echoed by a cou- ple are going to have to get used to importance of informal networks with- ple of reports from IBM. In the first, the less hierarchy, control and supervision. executives surveyed5 said that in the in the organisation in encouraging the Dealing with this is going to present development and success of individu- future successful companies will be considerable challenges, particularly als. The development of social net- “hungry for change and disruptive by when it comes to communicating infor- working is another theme emerging nature”. Once again, the need for inno- mation across complex organisational from recent articles which is seen as a vation and enabling greater collabora- structures and geographies. key tool for leveraging expertise and tion across the organisation is widely collaboration throughout the organisa- Managing talent acknowledged as a key component in tion. the ability of organisations to success- fully deliver strategic goals. Another key aspect of managing in the Dovetailing nicely with this theme, over downturn is likely to be the approach at Deloitte4 there is an interesting dis- The second IBM survey6 focuses on taken to talent management. The Hay cussion about the relevance and com- what they describe as “The Change Group published an interesting take on this particular issue7. Advocating an mitment of executives to the “our peo- Gap”. This is the discrepancy between ple are our greatest asset” mantra. The the CEOs expecting substantial change, approach based on the US Mutual Fund discussion succinctly highlights the a number increasing dramatically and industry, the report highlights the dan- additional challenges to living up to this the apparent effectiveness or outcome ger of placing all your eggs in one bas- statement which current economic cir- of change programmes, a number stay- ket rather than a more balanced broad- cumstances present. ing roughly the same. The report also er brush approach. discusses the relatively low level of The psychological change agenda success in change projects; Meanwhile a Towers Perrin report on managing in the downturn8 advocates The speed with which the unravelling “What accounts for these vastly differ- a three-pronged approach to managing of the global economy has taken placed ent rates of project success? We found talent. seems to have focused minds on what in our detailed analysis of study results I would loosely refer to as the new that achieving project success does not • Effective senior management
  4. 4. Leadership, Intangibles & Talent Q4 2008 • Taking a targeted and consistent ple. Particularly when one takes into Finally, how important is innovation approach to dealing with cost and risk account the earlier assertion that in the going to be during the downturn? issues future there is going to be less hierar- Innovation is another of those key • Keeping employees focused and chy and direct supervision. The first intangibles which are naturally difficult engaged step in ensuring that information is to measure and quantify. A McKinsey report11 gives it a go. The headline fig- understood across the board is to The report argues that organisations ensure that everyone is clear and ures suggest that organisations which should see the downturn as an oppor- understands the organisation’s key val- take a balanced portfolio approach to tunity to focus on their most profitable ues and direction. innovation are more likely to achieve activities and develop a consistent high performance. There is also correla- internal and external culture. All good A good example of how an employer tion between the number of metrics advice but considerably easier said than brand is likely to develop is the future used to measure innovation and suc- done. role of CSR, most commentators agree cessful outcomes. Will companies that this is something which is likely to spend the time and effort to pursue On a wider level and slipping some- gain in importance and it is down to this? what under the radar is the organisations to show employees that Government sponsored DIUS report9 their words are backed up by their Conclusion into developing our brains from cradle deeds. The role of ethics within the to grave. A wide-ranging report, it organisation over the coming years is The clear message from these articles is focuses on three key areas; learning in discussed in a Deloitte webcast (regis- that HR is potentially in a very strong tration required)10. There is the sug- the early years, wellbeing at work and position to play a key role in develop- an ageing population. Of particular gestion that this is another key lever in ing the way organisations operate and interest in the wellbeing at work, the the search for employee and customer how they will emerge from current report identifies absenteeism and pre- engagement. This is an interesting area economic difficulties. A focus on the senteeism as particularly pressing prob- and again a key intangible, how best to intangibles such as relationships, net- lems in the workplace. measure the ethical climate of an works, culture and change is also likely organisation? Something that is likely key for long term success. The big Ethics and employee branding to require considerable senior level caveat however is the level of sponsor- commitment. The discussion advocates ship and support that is available from Another area which can potentially that now is a good time to put this the- senior management. At times like this, help organisations manage the down- ory into practice. Naturally there is a it is easy to see how issues not specifi- turn is employer branding and organi- questioning of whether managers have cally tied to the bottom line may well sational identity. The argument goes; the desire to engage in this subject at be given short shrift. the companies whose values are either the moment. There are also some good inconsistent or lacking clarity are going tips on how to overcome resistance and to struggle to effectively manage, com- apathy. municate and engage with their peo- Four Groups Ltd 5 St. Johns Lane London EC1M 4BH, United Kingdom Tel: +44 (0) 20 7250 4779 Email: contact@fourgroups.com www.fourgroups.com © 2009 Four Groups Ltd, 5 St. Johns Lane London EC1M 4BH, United Kingdom. Company Number: 4650494 All rights reserved. No part of this document may be reproduced without express written permission from Four Groups Ltd. VAT Number: 817 7962 85 Registered in England and Wales
  5. 5. Leadership, Intangibles & Talent Q4 2008 Footnotes and References 11. McKinsey “Assessing innovation 1. Bruce Charlton “Why are Scientists so metrics: McKinsey Global Survey Dull?” http://fourgroups.com/link/?1 Results” http://fourgroups.com/link/?14 2. Towers Perrin “People, Change and Performance: Emerging Issues in HR Service, Delivery and Technology” http://fourgroups.com/link/?2 (opens as a pdf) 3. McKinsey Quarterly “The challenge of hiring and retaining women: An inter- view with the head of HR at eBay” http://fourgroups.com/link/?3 4. Deloitte “Are People Really Your Most Important Asset?” http://fourgroups.com/link/?4 About Four Groups 5. IBM “Unlocking the DNA of the Adaptable Workforce” http://fourgroups.com/link/?5 Four Groups have developed a new approach called 4G to understand 6. IBM “Making Change Work” behaviour, relationships and culture. 4G http://fourgroups.com/link/?6 provides its users with insight into per- sonal characteristics, how relationships 7. The Hay Group “Adopting a mutal- develop within teams and groups and funds model for talent management” how culture can be best defined and http://fourgroups.com/link/?7 managed. 8. Towers Perrin “Managing Amid 4G provides organisations with infor- Market Turmoil: Top Priorities for mation on how best to deploy and opti- Business and HR Leaders” mise the performance of their people. http://fourgroups.com/link/?8 (opens It also enables preventative measures as a pdf) to be taken which minimise the less productive aspects of interaction and 9. Department for Innovation, group dynamics such as friction and Universities and Skills “Developing our misunderstanding between colleagues. brains from cradle to grave” http://fourgroups.com/link/?9 4G represents a systematic approach to managing the previously intangible 10. Deloitte “Why Measuring the aspects of organisational life. The Corporate Climate for Ethics Should Be methodology is easily replicable and On Your Radar” can be implemented quickly and effi- http://fourgroups.com/link/?10 ciently.