5943 sop lens on talent (web)


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5943 sop lens on talent (web)

  1. 1. sustainable organisation performance stewardship, future-fit A collection of Next Generation HR thought pieces leadership and governance organisations Part 2 – August 2012 building xxx xxxcapability Lens on talent building HR capability
  2. 2. sustainable organisation performance stewardship, future-fitGet involved ... leadership and governance organisationsSustainable Organisation Performance is a three-year research programmeproviding insight, thought leadership and practical guidance, focusing on thefollowing themes:• stewardship, leadership and governance• future-fit organisations• building HR capability. building xxx xxx HR capabilityGet involved in this exciting programme and receive regular updates aboutour new research Sustainable Organisation Performance.Join today and access our latest thinking at: cipd.co.uk/sopand be part of something bigWhen you’re a member of the CIPD, you’re part of a globally recognisedorganisation with over 135,000 members across 120 countries – includingmore than 50,000 who are Chartered. CIPD members include the nextgeneration of HR professionals and many of the world’s most influentialsenior HR leaders from world-class organisations. Wherever you are in yourHR career, the CIPD and its members will support and inspire you to achieveyour full potential.Call +44 (0)20 8612 6208 to discuss your options.Or visit cipd.co.uk/membership 2    Lens on talent
  3. 3. sustainable organisation performanceCan we overrate talent as a source ofinnovation? Another example of the future-fit stewardship, leadership organisations and governance‘too-much-of-a-good-thing effect’Investment in talent or, as academics like to call it, ‘human capital’ (the skills, knowledgeand abilities that individuals bring to an organisation), has become the major agenda Graeme Martin isitem for HR practitioners and people management, especially in knowledge-intensive Professor and Chairand creative industries. Such was the belief in a need for talented individuals’ role of Managementto create innovation and change that it sparked an industry in itself from the 1990s at the CEPMLP, building xxx xxxonwards. Consultants, CEOs and HR practitioners took up a call to arms to participate University of HR capabilityin the McKinsey-inspired ‘war for talent’. The basic premises underlying this Hollywood- Dundee. Priorbased metaphor were that individuals’ skills, knowledge and abilities were the most to this, he heldimportant sources of innovation and creativity in organisations, but that senior business professorial postsleaders had paid insufficient attention in recruiting, motivating, developing and retaining at the University of‘A-grade’ talent. Even worse, they did little to remove or replace ‘C’ performers. So what Glasgow and Heriotwas needed was a new talent mindset, which called for better search, performance Watt University,management and reward strategies. and holds/has held visiting professorialAcademics soon got in on the act by articulating, from an evidence base, what this new appointments intalent mindset should look like. A group of prominent US scholars, some of whom were Sydney, Venice,influential with the CIPD, invoked the ‘power law’, which, in its human capital variant, Lyon, Denverstates that 80% of value is created by 20% of people. These academics have advocated and Beijing. Hetreating scarce and valuable human capital (and core jobs) distinctly, distinctively, has authoreddifferently from other forms of human capital (and non-core jobs). In effect, they have and co-authoredargued for a strict form of labour market segmentation, in which those people in the seven books andhigh-value-adding and unique segment are managed and rewarded very differently from numerous refereedthose in other segments. This is not to say that other employees in an organisation don’t journal articles onadd value, but that either they may be in plentiful supply or do not contribute directly HRM, managementto the core activities of the business. In short, these were arguments for an ‘exclusive’ and leading change.version of talent management, rather different from the more egalitarian perspectives Graeme previouslyheld by some UK firms. worked in industrial relationsA parallel development occurred over the same time period in the field of leadership, and personnelagain rooted in the individualistic, ‘psychologistic’ assumptions that have characterised management,the American (and to a lesser extent the British) business model. Transformational and has consultedleaders, whose job was to create innovation and change by devising a compelling vision, for numerousaligning others behind the vision and motivating and inspiring employees to achieve organisations instretching goals through the application of emotional intelligence, became the mantra many countries. Heof many firms. Such leaders are seen – controversially – as distinct (superior?) from has also workedtransactional managers, whose work is essentially concerned with ensuring stability, that with the CIPDis, planning, budgeting and controlling. As a consequence, over the last few decades for a number ofwe have witnessed a ‘romance’ with leaders, leadership competences and individualistic years, producingapproaches to developing them such as coaching and mentoring – which, when aligned research reportswith exclusive talent management philosophies, become subject to the ‘too-much-of-a- on topics such asgood-thing effect’, a well-known phenomenon predicting terminal illness for most HR employer branding,fads and fashions. technology and HR and social media. 3    Lens on talent
  4. 4. sustainable organisation performanceFor, underpinning both of these trends (some might say fads) was a privileging of individual skills and knowledgeover more diffuse and necessarily complex but accurate attributions of innovation and creativity to groups and stewardship, future-fitcontext. However, recent events following corporate scandals such as Enron and the fall-out from the global leadership organisationsfinancial crisis, in which HR has been described as an un-indicted co-conspirator, have called into question this and governancefocus on exclusive talent and transformational leaders. Well-respected critics such as Boris Groysberg, Gary Hamel,Henry Mintzberg and Barbara Kellerman have written extensively from an evidence base on the ‘myth of talentand the (lack of) portability of performance’ and the need for a ‘Management (or Leadership) 2.0’, which focusesless on artful, visionary leaders and more on leadership as a process and on the inextricable ties between leadersand followers. Moreover, recent academic evidence on successful innovation also reflects a shift from this talent/human capital approach to one based on social capital. These perspectives emphasise not only people but alsothe context that enables creativity and innovation to happen by showing how creative people are embedded innetworks of expertise and influence, how such people form strong bonding ties within and between groups toexchange ideas and how they need to engage in mutually supportive relationships based on trust. building xxx xxx HR capabilityOne good example of the contribution of social capital to innovation is evidenced in a recent McKinsey report(2012), which has shown how innovations in strategic thinking are created by ‘crowd sourcing’. By drawingon existing social capital, organisations such as IBM, 3M and Aegon have involved thousands of employees incontributing to new products, processes and strategic outcomes using social media networks. In so doing, theyhave generated further social capital by embedding dynamic innovative capabilities into these firms.However, this illustration would not have been possible without investments in organisational capital. This issometimes referred to as the non-human capital left in an organisation ‘when people walk out of the door atnight’, including captured knowledge and experiences in databases, technologies such as social media (see above),patents, manuals, organisational structures, routines, processes and even organisational culture. The principal roleof organisational capital is to link the other two capitals to form processes that create value for customers. It isalso important because it provides employees with the motivation and opportunities to develop and use their skillsfor the collective good.Recent research has demonstrated how different people management configurations – comprising employmentrelationships, managerial values, ‘high performance’ work systems and leadership models – shape human capitaland innovation. We suggest they are also drivers of the other two capitals and, through them, more sustainableinnovation. So by drawing on our previous work (Martin et al 2011) and on the literature on intellectual capital,which refers to investments in organisational learning, we propose the framework in Figure 1 for analysing‘the future of HR’ and its links to innovation. This framework maps the relationships between firms’ peoplemanagement strategies, relationships and processes; human, social and organisational capital; and the necessarylevels of intellectual capital to produce sustainable innovation in organisations.Thus, for example, we might expect that high expectations of all employees and high inducements/supportivesocial and organisational capital for them (an inclusive talent management approach) would result in widespreadinnovative behaviour in organisations, as was evident in the earlier ‘crowd sourcing’ example. We might alsoexpect to find high expectations and high inducements and support for only certain high-value-adding employees(an exclusive talent management approach) would lead to restricted pockets of innovation, as was evidenced inthe recent 2012 CIPD Learning and Talent Development survey. Even worse, however, is where high expectationsare combined with low inducements/lack of supportive social and organisational capital for all employees orwhere low expectations are combined with low inducements/support. Unfortunately, this low road to growth andinnovation is one that characterises too much of British industry. 4    Lens on talent
  5. 5. sustainable organisation performanceFigure 1: People management, different forms of capital and innovation (based on Martin et al 2011) stewardship, future-fit leadership Human capital organisations Individuals’ and governance knowledge, skills and abilities Innovations Social capital Intellectual in products, People Bonds, bridges capital processes Sustainable management and trust Investments in and systems competitive configurations organisational and dynamic advantage learning innovative Organisational capabilities building capital xxx xxx HR capability Knowledge banks, technologies, structures, culture, and so onSo, if this analysis is anywhere near the mark, what are the ‘killer’ questions that senior HR professionals have toanswer with respect to their talent management policies and innovation? Here are my four candidates:1 Is there an over-emphasis on selecting and developing talented individuals and ‘stars’ in your organisation and an under-emphasis on the team that helps make them? To what extent do senior managers commit the ‘fundamental attributional error’ of explaining and rewarding innovation based on individual attributes rather than on the interaction between these individuals and the social and organisational context in which they operate?2 Is there an unhealthy ‘romance’ with selecting and developing leaders in your organisation rather than focusing on leadership as a process, which recognises that leaders and followers create each other – that you can’t have good/bad leaders without having good/bad followers?3 To what extent does your organisation invest in and measure social capital? Are staff at all levels encouraged to ‘step outside’ to build external networks for the purposes of learning as well as building internal bonds with each other? On this last issue, how much emphasis is placed on creating and sustaining high-trust relationships in your organisation?4 Are there high expectations and high inducements for all employees in the organisation with respect to innovation, and are there the necessary levels of supportive organisational as well as social capital for widespread involvement in innovation?A collection of Next Generation HR thought piecesThe CIPD has produced this collection of thought pieces to build on the themes introduced in the Next GenerationHR research (2009). Specifically we have asked a number of leading academics and experts to write a provocativethought piece that applies a ‘Next Generation HR’ lens to a specific HR discipline. This thought piece, Lens ontalent, is written by Professor Graeme Martin. Others in the series include:Lens on engagement, by Professor Katie Truss. Spinning plates and juggling hats: engagement in an era of austerity.Lens on reward, by Vicky Wright. Insight-led reward management. 5    Lens on talent
  6. 6. sustainable organisation performance susta Building HR capability is one of the three themes in our Sustainable Organisation Performance research programme. The other two themes are future-fit organisations and stewardship, leadership and governance. Within each of these themes we will research a range of topics and draw on a variety of perspectives to enable us stew stewardship, future-fit le to provide insight-led thought leadership that can be used to drive leadership organisations and go organisation performance for the long term. and governance sustainable organisation performance sustainable organisation performanceble ion stewardship, stewardship, future-fit future-fit building nce building leadership leadership organisations organisations xxx HR capability xxx and capability governance HR governance and Issued: August 2012 Reference: 5943 © Chartered Institute of Personnel and Development 2012ding building xxx xxx xxx xxxbility capability HR Chartered Institute of Personnel and Development 151 The Broadway London SW19 1JQ UK Tel: +44 (0)20 8612 6200 Fax: +44 (0)20 8612 6201 Email: cipd@cipd.co.uk Website: cipd.co.uk Incorporated by Royal Charter Registered charity no.1079797