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Lessons from Fearless HR
Talent Decisions that Can Make
or Break Your Business
Contents
A Personal Message from the Author
The "Fearless HR" Story
Part One: Lessons for Business
Part Two: Lessons for Recruiting
Dealing with Historical Perceptions of Recruiting
A Concluding Message
References
About the Author
2
2
4
11
13
17
18
21
1 / 21Talent Decisions that Can Make or Break Your Business
The Fearless HR Story
The genesis for “Fearless HR” came from two conflicting views of the human resources profession.
On the one hand, HR has been viewed as a second-tier function for much of its history. In 2005,
Keith Hammonds captured the view that HR was often a barrier, too process-driven, not focused
on the needs of the business and lacked visionary talent. His article was titled “Why We Hate HR.”
A decade later, the Harvard Business Review ran a cover story about blowing up HR for many of
the same reasons.
The other side of the coin told a very different story. It was represented by studies and books
from McKinsey, Gallup, Deloitte, leading universities and respected business thought leaders
such as Jim Collins and Gary Hamel. These experts affirmed the fact that effective talent practices
could make a significant impact on business performance.
2 / 21Lessons from Fearless HR
A Personal Message from the Author
After a career in human resources spanning 35 years in a variety of roles ranging from individual
contributor to executive, I aspired to write a book that would pass along insights that I have learned.
This motivation came partly from several people who have been so helpful to my career. I also wanted
to have a point of view, tell a unique story and provide a useful resource for the profession.
It took me six months to find the right storyline and only then was a single word written.
The development and production of the book spanned two years; and now, as the first year of
the publication of “Fearless HR” comes to a close, I wanted to recount the reactions, guidance and
feedback received from those who read the book and reflected on its meaning. Many of these
observations went far beyond my views about the HR profession, and have, therefore, led to this paper
about generalizable principles that can be applied to the broader context of the business itself.
David Forman
Talent Decisions that Can Make or Break Your Business
Since HR is the only function that touches every person in the business and is the driver behind
intangible value, HR’s role is not second-tier at all. Furthermore, leading adopters of this
view—companies such as Southwest Airlines, Google, Whole Foods, W.L. Gore and SAS—have
outperformed their peers consistently over the years.
Which perspective is true? Is HR in a perpetual muddle or is it the path forward? It turns out that
both views are widely held, but people were talking past each other, based on biases and
perspectives. Instead, it is important to address both views by connecting historical perceptions
to the latest evidence, research and best practices.
There is one more chapter in the “Fearless HR” storyline: HR has had an uncertain direction and
focus over the years. This ambiguity is best illustrated by the cavalcade of names used to
describe HR in the past, from industrial relations to personnel to administrative services to
human relations to human resources to people operations to… The central questions become:
What is HR’s fundamental purpose? What value should HR provide to the organization that pays
its salary? What are the reasons for its existence? If the answers to these questions are unclear,
then HR will not meet expectations and only experience varying degrees of success.
HR is not an entity by itself; it is part of an organization and its ultimate role is to make that
organization more successful. HR’s purpose must look beyond internal preferences and
compliance practices to see the bigger picture. Peter Drucker was the master of short, incisive
statements that often challenged convention. In his words “the purpose of business is to create
and keep a customer.” It’s not about profit maximization, an exclusive focus on shareholders or
crushing the competition. Drucker identified the essence: keep things simple and enable people
to follow. In a similar vein, the purpose of HR is to drive business results, period. There should be
no equivocation in a purpose statement; it must be clear, direct and compelling.
3 / 21
Part One
Lessons
for Business
Talent Decisions that Can Make or Break Your Business 4 / 21
Lessons for Business
5 / 21Talent Decisions that Can Make or Break Your Business
Internal-facing groups are less likely to change. Customer and market facing groups are
confronted with challenging situations every day. The scorecard is very clear for these
externally-facing groups: adjust or become less relevant. Internal groups feel less urgency, and
can have a tendency to become isolated, complacent and siloed. The key question for all
groups to answer: Are we adjusting fast enough to meet changing market and customer
expectations?
Our products connect people everywhere, and they provide the tools for our customers
to do great things, to improve their lives and the world at large. Our company is open
to all, and we celebrate the diversity of our team here in the United States and around
the world ― regardless of what they look like, where they come from, how they
worship or who they love.
Possible Actions: Think in terms of meaningful purpose not just financial results; identify
multiple bottom lines that impact employees and citizens as well as shareholders; help shift
from a focus on jobs to a career to a calling; involve others in creating purpose statements;
find ways to reinforce the message so that the familiar (going to work every day) becomes
special (fulfilling a purpose); stress the “line of sight” from a person’s job to the values and
purpose of the organization; celebrate purpose.
Recommended Thought-Leaders: Simon Sinek, Dan Pink, Chip Conley, Rosabeth Moss Kanter,
Abraham Maslow.
Purpose matters. People want to believe in something larger than themselves. Writers, artists
and psychologists have understood this aspect of our human nature for decades though it
often takes business leaders longer to come to the same realization. Purpose can emanate
from a variety of sources, including what your business does, how it operates, the values it
demonstrates every day and community activities. It is important for everyone to have a
significant purpose, not just a segment of the workforce. Purpose matters to everyone.
As an example, consider the purpose statement of Apple.
Without intending to do so, “Fearless HR” became a model for organizational re-design and
change. Its initial focus was the HR function itself, but the principles extend beyond to business in
general. The top issue faced by global CEOs is the unrelenting pace of change in the face of
unprecedented turbulence in the marketplace; and the principles from “Fearless HR” can provide
useful guidance in this uncertain environment. Each fearless principle is described and then
possible actions and important thought leaders are identified.
6 / 21Talent Decisions that Can Make or Break Your Business
A LinkedIn study showed that having a third and fourth functional area of expertise improved
a person’s chance to be a senior executive considerably and counted as much as an MBA from
a top-five program. According to McKinsey, a new category of hybrid jobs is emerging: “Work
used to be much more hierarchical. You could build a nice career within any particular
function by taking on more responsibility within that specialty. But if you look at most
companies now, work has become incredibly cross-functional.”
The business’s agenda is everyone’s agenda. Dave Ulrich uses a very simple activity to work
with internal groups in companies, asking the question: “How’s business?” If the answers are
about internal practices, issues and contentions, he knows it will be a long day. If the replies
focus on the big picture, customers, innovation, the marketplace, competitors and different
possible futures, it will be a much better day. This simple test assesses the group’s foundation
and alignment: are they internally focused or do they understand that everything starts with
strategy and the business’s value proposition? Are people acting as business owners,
regardless of their role or position? Are employees aligned to doing what is most important to
the organization?
Possible Actions: Seek different experiences; move outside of comfort zones; participate in
cross-functional teams; develop bridging networks; convert weak ties to strong ones; adjust
leadership development programs to be more experiential, team-based, and collaborative.
Recommended Thought-Leaders: Charles Duhigg, Noel Tichy, Ram Charan, Center for Creative
Leadership.
For leaders, functional expertise is no longer enough. Every aspiring executive should want
to be recognized as a business leader, not simply as a functional leader. Leadership paths are
different today than decades ago. These paths are not strictly upward and linear, instead
focused on acquiring wide ranging skills and experiences.
Possible Actions: Challenge conventional practices, ask ‘why’ something is done, create a
sense of urgency, get involved in customer experiences, brainstorm future market scenarios,
network outside of your function, participate in sales calls, listen in on customer service
discussions, listen to earning calls with analysts.
Recommended Thought-Leaders: Dave Ulrich, Norm Smallwood, Peter Capelli, John
Boudreau.
7 / 21Talent Decisions that Can Make or Break Your Business
It is important to candidly discuss these perceptions in the light of research and best practices,
and to confirm or deny their veracity. Without this step, these perceptions will live on and
become even more indelibly imprinted. Confront the past so that the future can strike out on
its own path.
A force multiplier. The greatest value in redesigning organizations is to create situations and
contexts in which many people can prosper. It is about improving the workplace so that the
workforce can flourish. It is about contributing more than simply the value of an individual’s
direct labor to make or sell a product, but in opening up opportunities for teams, departments
and even cultures to contribute and perform. An individual’s effort is not highly leverageable –
the real difference appears when the crowd gets involved. As Ulrich has observed the
emphasis in organizations is moving beyond individuals to “victory through organization—
while individuals may win awards, it is teams that win championships.”
Possible Actions: Identify past perceptions that exist; understand why these perceptions
persist; develop plans to alter mindsets and scale the new vision; set stretch goals; recognize
the emotional aspects of change; create campaigns to change attitudes and mindsets;
celebrate new views; gather data to track progress.
Recommended Thought-Leaders: Dave Ulrich, John Kotter, Dan and Chip Heath, Bob Sutton
and Higgy Rao, Charles Duhigg.
Historical perceptions matter and must be addressed. Unconscious patterns and subtle
habits impact behaviors more than we understand. If an organization or profession is trying to
change and move beyond its history, it is essential to address past stereotypes and viewpoints
because they still endure. People remember the past and try to extend it into the future. Mark
Twain talked about the perils of ignoring the elephants in the room.
Possible Actions: Have groups perform a SWOT analysis on the business; list key strategic
initiatives and business outcomes for each major group; communicate business goals and
results frequently; complete a competitive differentiation map; describe the line of sight from
the organization’s strategy to the team and individual jobs; brainstorm different future
business scenarios; begin each day with a business acumen challenge activity that identifies
current events that impact the organization; listen to analyst calls and quarterly earnings
reports.
Recommended Thought-Leaders: Dave Ulrich, John Boudreau, Ram Charan, Laszlo Bock.
8 / 21Talent Decisions that Can Make or Break Your Business
Get better or get worse. Every professional, whether in sports, the arts, non-profit activities
or business, has a choice to make each and every day. This is especially true given the rapid
pace of change and turbulence in the world today. Yesterday’s insights may not only be old,
they may be wrong. It is important to turn the workplace into a learning laboratory in which
people can sharpen and enhance their skills, experiences and reflections. Risks need to be
rewarded and seen as learning opportunities, rather than avoided or punished. As author and
philosopher Eric Hoffer said, “In times of drastic change, it is the learners who inherit the
future. The learned usually find themselves equipped to live in a world that no longer exists.”
Possible Actions: Identify strategic alignment for major initiatives; link measures and
outcomes to each key initiative; identify the most important business outcomes for each
group; brainstorm a range of productivity improvements that could be implemented;
brainstorm “bureaucracy busters” that impeded progress; think beyond quick cost cutting;
participate in workout programs to improve processes; develop ground-up suggestion
programs to improve the business.
Recommended Thought-Leaders: John Boudreau, Wayne Cascio, Thomas Davenport, James
Heskett, Steve Kerr.
Levers to drive business results. Everyone can drive business results if people perceive this
to be their purpose and have practical examples to follow. People want to help the business
be more successful, but are just not sure how. The metaphor of a lever is a useful way to get
practical. There are, in fact, four types of levers that can improve the business. The first is to
strengthen strategic alignment: Is an initiative linked to the company’s strategy and business
goals? Are we spending time on what matters most? The second is cost savings from doing
things more efficiently and making necessary reductions based on business conditions. The
third is improving productivity, and the fourth is adding further to business outcomes. The
third and fourth levers have the greatest potential impact for both short and long term
benefits.
Possible Actions: Challenge past talent practices to be more inclusive; focus on teams and
networks – not simply individuals; involve others and open up access; foster ground-up
practices; build communities; expand bridging networks; seek out connectors and hubs; look
for leverage points; gather data from a variety of colleagues; celebrate positive influence.
Recommended Thought-Leaders: Tony Parasida, Dave Ulrich, Laszlo Bock, Gary Hamel, Seth
Godin, Reid Hoffman, Rob Cross.
9 / 21Talent Decisions that Can Make or Break Your Business
Building a transparent, reciprocal and collaborative workplace. An innovative and agile
culture today has these three inherent qualities: being transparent, reciprocal and
collaborative. It is transparent in the sense that the atmosphere is open, everyone is a partner
and there are no more secrets. Transparency is based on the mindset that says: if people have
access to the information they need, they will do the right thing. It is reciprocal in that it is not
a one-way, top-down exchange, but rather a relationship that works equally well for the
employee and employer with each receiving benefits that are valued. Finally, it is collaborative
in that divergent groups and teams work together, share information and expand collegial
networks. Organizations with these qualities, win.
Measures that matter. There is truth to the axiom that “what gets measured gets done.” The
problem is that many functions and groups within companies measure the wrong things. They
look at what is easy to count and focus on efficiency measures that have limited value. Groups
also measure so many things that they begin to suffer data paralysis. Instead, it is important
to focus on the consequential few as opposed to the inconsequential many. If everyone’s
agenda is the organization’s agenda, then measures should emphasize effectiveness and key
business outcomes. People should be held accountable for driving the business forward, not
just achieving short-term goals. As Albert Einstein once said, “Just because something can be
counted, doesn’t mean that it counts.”
Possible Actions: Identify the most important business outcomes; list the intangible assets
that are important to board members; emphasize effectiveness and impact measures; be
accountable for driving business results; determine measures that matter to different
stakeholders; generate a set of hypotheses and test them out with data; use data to uncover
risks and successful practices.
Recommended Thought-Leaders: Thomas Davenport, Jac Fitz-enz, John Sullivan, Laurie Bassi,
John Boudreau.
Possible Actions: Invest in personal development activities; move outside of silos; take risks;
join cross-functional teams; participate in community activities; seek new challenges; mentor
others; be a knowledge coach; set stretch goals; further develop strengths; celebrate failures
and successes alike.
Recommended Thought-Leaders: Angela Duckworth, Reid Hoffman, Carol Dweck, Marshall
Goldsmith, Marcus Buckingham.
Talent Decisions that Can Make or Break Your Business
Possible Actions: Articulate the company’s intangible value; describe the talent brand;
calculate revenue and profit per employee; track the new product vitality index; improve
employee engagement and commitment; estimate the talent mindset of leaders; open up
participation in innovation programs.
Recommended Thought-Leaders: Dave Ulrich, Norm Smallwood, Thomas McGuire, Gary
Hamel, Jim Collins, McKinsey & Company.
The soft stuff turns out to be the hard stuff. In a 2015 Harvard Business Review article,
Ram Charan observed that “Businesses don’t create value, people do.” It is the people
practices that distinguish companies. This statement is clearly true of Silicon Valley, high tech
and innovation-centric companies, but it is also applies to manufacturing and capital intensive
businesses. Most company resources and assets can be borrowed or emulated. Former
Southwest Airlines CEO Herb Kelleher has expressed a similar view. He believes that the
business of business is people: “All airlines have airplanes; you can’t, however, copy culture
and spirit.” It is easy to lose sight of the primacy of people practices because they can be
messy, time-consuming and complicated; however, they are the key to both long term and
enduring success. Walmart recently adjusted its talent strategy as a way to improve stagnant
business outcomes. After an overemphasis on shrinking costs, Walmart now is investing in its
workforce and offering more developmental and career options. This human capital talent
strategy is based on the belief that to be successful in the marketplace, companies first have
to be successful in the workplace.
Possible Actions: Open up closed practices; encourage every person to be a business owner;
focus on sustainable not situational values; communicate openly; do not restrict information
to people based on hierarchy; have ‘huddle up’ team sessions to clarify direction; continue to
develop skills and gain experiences; reach out to colleagues; search for new connections; build
new communities; earn your colleagues’ trust.
Recommended Thought-Leaders: Gary Hamel, Neel Doshi and Lindsay McGregor, Reid
Hoffman, Ed Lawler, Bill Taylor, Tony Schwartz, Dov Seidman.
10 / 21
Part Two
Lessons
for Recruiting
Talent Decisions that Can Make or Break Your Business 11 / 21
Talent Decisions that Can Make or Break Your Business
In addition to these general business principles, the Fearless HR storyline has direct application
to companion HR functions such as recruiting. While recruiting has a longer tradition and history
than the HR function itself, the parallels are easy to discern. First, the purpose of recruiting must
be clear and direct: to drive business results. Clarity of purpose enables sharper focus, better
alignment, stronger prioritization, less distraction and improved professional confidence. And
second, recruiting must address its past as it endeavors to change. Recruiting, just like the
broader HR function, is undergoing a transformation to be more responsive, agile, market-driven
and impactful. At FedEx, chief learning officer Bob Bennett described these changes as moving
from being a bricklayer (tactical) to more of an architect (strategic).
Figure 1:
Recruiting's Shift from
Tactical to Strategic
Proactive
Planner
Business Focused
Strategist
Global
Results
Solutions Provider
Partner
Engagement
Reactive
Order Taker
People Focused
Tactician
Local
Theory
Problem Finder
Staff Support
Retention
Another way to address this impending change in talent acquisition is to review the work of
Professor Carol Dweck on mindsets. Her work at Stanford University found that people have
fundamentally different views about talent and excellence. Some people believe that talent is a
natural quality determined at birth (Fixed Mindset), while others believe that talent can be
developed and enhanced (Growth Mindset) through hard work, passion and grit. Dweck further
determined that these different mindsets affect subsequent behavior, actions, attitudes and even
definitions of success and failure. Henry Ford echoed a similar view a century before when he
said, “Whether you think you can or whether you think you can’t, you are right.”
12 / 21
13 / 21Talent Decisions that Can Make or Break Your Business
Dealing with Historical Perceptions of Recruiting
The transition to the architect and builder role is not simple or easy. Author Charles Duhigg notes
that old habits and past perceptions are very hard to break. A first step is to acknowledge that
these perceptions exist and then hold these views up to current evidence and best practices.
There are five historical perceptions of recruiting that need to be considered, each is described in
terms of their derivation and analyzed in terms of research and best practices today. A number
of practical guidelines will also be presented to assist the transition from order-taker to fulfill the
role of architect and builder.
Recruiters are just order takers who fill seats. This has certainly been a prevailing view of
the profession by many. Dr. John Sullivan has whimsically observed that “recruiters are sales
people with lousy budgets.” The association with sales people perhaps contributes to a less
than positive view of recruiting, which, of course, is ludicrous. Without sales people – for
products, services or talent – a business would not exist. It is also true that recruiters are
under extreme pressure to fill requisitions, and some hiring managers are only interested in
recruiters being order takers who retrieve requisitions thrown over the wall. There are many
barriers and past perceptions that inhibit success and keep recruiting from contributing more
to the enterprise.
Recruiters cannot just automatically become architects and builders; new skills and
capabilities are needed to bridge this gap. When recruiters do make these transitions and
focus on such factors as quality of hire versus time to fill, being more consultative and making
stronger contributions to the business, the results can be significant. The Boston Consulting
Group (BCG) has shown that recruiting is the highest rated of 22 different HR functions in
terms of improving an organization’s revenue and profit margins. Similarly, research
conducted by Bruce Pfau and Ira Kay of Watson Wyatt Worldwide found that excellence in
recruiting contributes 7.8 percent to the market value of a company.
1.
So what is the recruiting mindset going forward? Some recruiters still feel most comfortable
being an order taker; it is familiar and serves a role, albeit a limited one. However, organizations
are now requiring more by looking for recruiters to be architects and builders of organizational
capability. Organizations are asking recruiters to be business partners and to strengthen
competitive positioning. The architect and builder mindset is very different from that of the
order-taker and it requires different skills and abilities.
14 / 21Talent Decisions that Can Make or Break Your Business
Recruiters don’t improve the business. It is true that organizations have consciously or
unconsciously erected barriers that restrict the contributions of recruiters, whether from rigid
processes, outdated technology or past mindsets. As recruiting becomes a function that drives
business results, consider how it can strengthen the business:
The hiring process is too complex and takes too long. And it certainly can be. In 2016, the
Society for Human Resource Management (SHRM) reported that the average time to fill a
position is forty two days. This figure hides significant variation depending on the specific job
and corresponding market availability for talent. All jobs are not created equal, especially in
terms of the strategic value to the organization. One of the biggest time wasters in the hiring
process is waiting for interviews to occur so it is important to challenge past practices to look
for efficiencies and cost savings.
All of these actions can be monetized to demonstrate that, in fact, recruiting efforts have a
significant impact on the business.
2.
3.
External hires account for 72 percent of all hires and are therefore the primary source of
talent for the organization. Everything starts with talent and the quality of people in the
organization.
The cost of a bad hire is significant, with 25 percent of companies reporting that a single bad
hire costs more than $50,000. Bad recruiters and bad hiring practices lead to bad hires.
Eighty percent of turnover is attributed to bad hiring decisions. This is a multimillion dollar
problem.
The strength of employer brand can increase quality of hire by 9 percent. A strong employer
brand is a power multiplier, improving both the quantity and quality of candidates.
A poor candidate experience leads to reduced sales of a company’s products and services
(from the affected candidate) by 23 percent – and 9 percent of that candidate’s friends and
acquaintances will not do business with the company. These are direct and immediate dollar
impacts.
A bad candidate experience will cause 42 percent of candidates not to apply again, thereby
shrinking the qualified talent pool. Bad experiences travel fast.
15 / 21Talent Decisions that Can Make or Break Your Business
Google, for example, routinely had dozens of people interviewing candidates in their quest to
hire only the best and brightest. The ramifications of this practice were that it took a great deal
of time, cost huge amounts of money and led to unhappy candidates. Their researchers
discovered that after the fourth interview, the next interview did not measurably improve the
predictive power. Google dramatically re-engineered their interview process based on this
research and adopted the “rule of four” interviews. “That change alone shaved our median
time to hire to forty seven days from ninety to one hundred eighty days in the past and have
saved employees hundreds of thousands of hours,” observed Laszlo Bock, former Google
senior vice president of People Operations.
The other business impact of an inefficient hiring practice is the cost of vacant positions.
Unfilled for a long time, open positions carry risk for the organization. Dr. John Sullivan’s
research shows that for key strategic and revenue-producing positions, the cost of a vacant
position can range from $7000 to $12,000 per day. As recruiting moves away from being the
bricklayer, it must optimize the hiring process, in order to save time and money, generate
more opportunity, attract talented candidates and create brand strength.
Hiring is subjective and idiosyncratic making it easy to make bad hiring decisions. Yes, it
is hard to hire strangers. If the recruiting process, technology and talent are not synchronized,
it is easy to make bad hiring decisions. Forty percent of leadership hires fail within the first
eighteen months. Research from global talent and leadership expert Claudio Fernández-Aráoz
determined that the cost for a single failed executive hire can be as high $2.7 million.
Drawing on the research of experts including Fernández-Aráoz, Sullivan, George Anders and
Lou Adler, these are practical steps that support better hiring decisions:
4.
Don’t treat all jobs the same. Triage the most critical roles and devote more attention to them.
Use technology to source commodity, repetitive jobs.
Don’t force-fit candidates to fill roles quickly. As one expert has said, “Although you can teach
a turkey to climb a tree, it’s much easier to hire a squirrel.”
Create realistic job previews and descriptions to set expectations properly.
Recognize the different success criteria for getting a job and doing a job.
Look for unconventional sources of talent.
Read resumes from the bottom up.
16 / 21Talent Decisions that Can Make or Break Your Business
5.
Figure 2:
Types of Human Capital Measures
by Business Value
High
Business
Value
Low
Internal Activities
Efficiency
Effectiveness
Impact
Types of Human Capital Measures
Don’t overemphasize the importance of technical skills.
Search for important “soft” qualities such as the big three: resilience, curiosity and learning
agility.
Recognize the best people may have the least experience.
Optimize the interview process to focus on capability and cultural fit and take the appropriate
amount of time (but not too much) to make wise decisions.
Integrate with other talent practices.
Think about continually trying to improve the candidate experience.
These are all practices that can dramatically improve the hiring process, strengthen quality of
hire, and enable recruiters to drive business results.
Recruiting measures are too soft and not very useful. Recruiting, like most HR functions,
has a tendency to measure too many or the wrong things. As recruiting becomes firmly
anchored in its purpose of driving business results, a different set of measures await. The
following visual depicts four types of measures: counting internal activities, efficiency,
effectiveness and impact or results.
A Concluding Message
The “Fearless HR” book started out as a modest effort to chronicle my experiences and tell a story. As I
heard from colleagues who read the book and from students who used it in classes, I realized that the
story and point of view resonated. A comment from a colleague suggested that “Fearless HR” is actually
a business book that just happens to concern HR, and not a typical HR book at all. His observation was
really the impetus for this paper. I hope that the “Fearless HR” lessons for business and recruiting
leaders are useful, challenging, and thought-provoking; and more importantly, can contribute value to
you and your organization.
17 / 21Talent Decisions that Can Make or Break Your Business
“Cost to hire” is an example of an efficiency measure. However, efficiency measures are usually
not very meaningful to business leaders, who are more concerned with effectiveness and impact
metrics; because these measures are relevant to their own business objectives and
accountabilities. Quality of hire (or quality of candidate experience) is an effectiveness measure,
while an impact measure would be to trace candidates as they become employees and follow the
results they produce. These are the measures that will increasingly define the success or failure
of recruiters in their role as architect and organizational builder.
Recruiting is a dead-end career. Have a talk with Bill Gates or Steve Ballmer. Both are very
proud of their recruiting activities at Microsoft. Mary Barra of General Motors is another case in
point. She believes her CHRO role was excellent preparation for her current CEO role. The path to
leadership today emphasizes different experiences, not just in-depth functional expertise. A 2016
New York Times article, titled “A Winding Path to the Top,” emphasized that diverse roles and
experiences are more likely to lead to leadership positions than a steady rise up a siloed
hierarchy. A leadership assignment in the talent acquisition function is actually a great
developmental experience because it encompasses marketing and branding skills, external talent
supply and partnerships, process optimization and connections across all aspects of the business
– all valuable skills for future leaders to possess. Recruiting is anything but a dead-end career.
6.
18 / 21Talent Decisions that Can Make or Break Your Business
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Fitz-ens, J. The ROI of Human Capital. New York, NY: AMACOM, 2000 and 2009
Friedman, T. and Mandelbaum, M. That Used to Be Us. New York, NY: Farrar, Straus and Giroux, 2011
Friedman, T. The World is Flat. New York, NY: Farrat, Straus and Giroux, 2006
Godin, S. Small is the New Big. New York, NY: Penguin Group, 2006
Goldsmith, M. Triggers. New York, NY: Random House, 2015
Hamel, G. The Future of Management. Boston, MA: The Harvard Business School Press, 2007
Hammonds, K. “Why We Hate HR.” Fast Company. August, 2005
Heath, C. and Heath, D. Switch. New York, NY: Broadway Books, 2010
Heskett, J., Sasser, E. and Schlesinger, L. The Service Profit Chain. New York, NY: The Free Press, 1997
Hoffman, R, Casnocha, B. and Yeh, C. The Alliance. Boston, MA: Harvard Business Review Press, 2014
Kanter, R. Supercorp. New York, NY: Crown Business, 2009
Kelleher, H. The Business of Business is People. YouTube video
Kotter, J. and Cohen, D. The Heart of Change. Boston, MA: Harvard Business School Press, 2002
20 / 21Talent Decisions that Can Make or Break Your Business
References
Kotter, J. Leading Change. Boston, MA: Harvard Business School Press, 1996
Lawler, E. Talent: Making People Your Competitive Advantage. San Francisco, CA: Josey-Bass, 2008
Pease, G, Byerly, B. and Fitz-enz, J. Human Capital Analytics. New York, NY: John Wiley & Sons, 2013
Pfau, B. and Kay, I. The Human Capital Edge. New York, NY: McGraw Hill, 2002
Pfeffer, J. and Sutton, R. Hard Facts: Profiting from Evidence-Based Management. Boston, MA: Harvard
Business School Press, 2006
Pink, D. Drive. New York, NY: Riverhead Books, 2009
Seidman, D. How. Hoboken, NJ: John Wiley & Sons, 2007
Sinek, S. Start with Why. New York, NY: Penguin, 2009
Spencer, L., McClelland, D. and Spencer, S. Competency Assessment Methods. Boston, MA: Hay/McBer
Research Press, 1994
Sullivan, J. Articles and columns on the website: www.DrJohnSullivan.com
Sullivan, J. Rethinking Strategic HR. Chicago, IL: CCH Incorporated, 2014
Sutton, R. and Rao, H. Scaling Up Excellence. New York, NY: Crown Business, 2014
Taylor, W and LaBarre, P. Mavericks at Work. New York, NY: William Morrow, 2006
Ulrich, D. and Broadbank, W. The HR Value Proposition. Boston, MA: Harvard Business School Press, 2005
Ulrich, D. and Ulrich, W. The Why of Work. New York, NY: McGraw Hill, 2010
Ulrich, N. and Smallwood, N. Why the Bottom Line Isn’t. New York, NY: John Wiley, 2003
21 / 21
About the Author
David Forman
David C Forman is the author of Fearless HR, the President of Sage Learning
Systems and former Chief Learning Officer of The Human Capital Institute.
The courses he has developed and taught for HCI have been taken by
thousands of HR professionals all over the world. In 2002, David worked with
SHRM to create materials to support the GPHR certification program. Prior to
these experiences, David spent 25 years in the training industry, working
with large global organizations to improve the knowledge, skills and
performance of their people. Major clients include FedEx, IBM, DuPont,
Microsoft, SAP, American Express, PwC, Ford, Prudential, Apple, Scripps
Healthcare, Allstate Insurance and the University of Farmers. In 1984, David
had the unique opportunity to work with Apple on the release of the
Macintosh; and several years later to help IBM streamline and cross-train
over 22,000 manufacturing employees.
David has written more than 40 articles on talent management, analytics,
strategic human resources, learning systems, high-performance cultures and
leadership. He has also spoken at many national and global talent and
leadership conferences, both in his role of hosting HCI’s conferences for
many years but also as a key note speaker.
Talent Decisions that Can Make or Break Your Business

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[Whitepaper] Talent Decisions that can Make or Break your Business - Lessons from Fearless HR

  • 1. Lessons from Fearless HR Talent Decisions that Can Make or Break Your Business
  • 2. Contents A Personal Message from the Author The "Fearless HR" Story Part One: Lessons for Business Part Two: Lessons for Recruiting Dealing with Historical Perceptions of Recruiting A Concluding Message References About the Author 2 2 4 11 13 17 18 21 1 / 21Talent Decisions that Can Make or Break Your Business
  • 3. The Fearless HR Story The genesis for “Fearless HR” came from two conflicting views of the human resources profession. On the one hand, HR has been viewed as a second-tier function for much of its history. In 2005, Keith Hammonds captured the view that HR was often a barrier, too process-driven, not focused on the needs of the business and lacked visionary talent. His article was titled “Why We Hate HR.” A decade later, the Harvard Business Review ran a cover story about blowing up HR for many of the same reasons. The other side of the coin told a very different story. It was represented by studies and books from McKinsey, Gallup, Deloitte, leading universities and respected business thought leaders such as Jim Collins and Gary Hamel. These experts affirmed the fact that effective talent practices could make a significant impact on business performance. 2 / 21Lessons from Fearless HR A Personal Message from the Author After a career in human resources spanning 35 years in a variety of roles ranging from individual contributor to executive, I aspired to write a book that would pass along insights that I have learned. This motivation came partly from several people who have been so helpful to my career. I also wanted to have a point of view, tell a unique story and provide a useful resource for the profession. It took me six months to find the right storyline and only then was a single word written. The development and production of the book spanned two years; and now, as the first year of the publication of “Fearless HR” comes to a close, I wanted to recount the reactions, guidance and feedback received from those who read the book and reflected on its meaning. Many of these observations went far beyond my views about the HR profession, and have, therefore, led to this paper about generalizable principles that can be applied to the broader context of the business itself. David Forman
  • 4. Talent Decisions that Can Make or Break Your Business Since HR is the only function that touches every person in the business and is the driver behind intangible value, HR’s role is not second-tier at all. Furthermore, leading adopters of this view—companies such as Southwest Airlines, Google, Whole Foods, W.L. Gore and SAS—have outperformed their peers consistently over the years. Which perspective is true? Is HR in a perpetual muddle or is it the path forward? It turns out that both views are widely held, but people were talking past each other, based on biases and perspectives. Instead, it is important to address both views by connecting historical perceptions to the latest evidence, research and best practices. There is one more chapter in the “Fearless HR” storyline: HR has had an uncertain direction and focus over the years. This ambiguity is best illustrated by the cavalcade of names used to describe HR in the past, from industrial relations to personnel to administrative services to human relations to human resources to people operations to… The central questions become: What is HR’s fundamental purpose? What value should HR provide to the organization that pays its salary? What are the reasons for its existence? If the answers to these questions are unclear, then HR will not meet expectations and only experience varying degrees of success. HR is not an entity by itself; it is part of an organization and its ultimate role is to make that organization more successful. HR’s purpose must look beyond internal preferences and compliance practices to see the bigger picture. Peter Drucker was the master of short, incisive statements that often challenged convention. In his words “the purpose of business is to create and keep a customer.” It’s not about profit maximization, an exclusive focus on shareholders or crushing the competition. Drucker identified the essence: keep things simple and enable people to follow. In a similar vein, the purpose of HR is to drive business results, period. There should be no equivocation in a purpose statement; it must be clear, direct and compelling. 3 / 21
  • 5. Part One Lessons for Business Talent Decisions that Can Make or Break Your Business 4 / 21
  • 6. Lessons for Business 5 / 21Talent Decisions that Can Make or Break Your Business Internal-facing groups are less likely to change. Customer and market facing groups are confronted with challenging situations every day. The scorecard is very clear for these externally-facing groups: adjust or become less relevant. Internal groups feel less urgency, and can have a tendency to become isolated, complacent and siloed. The key question for all groups to answer: Are we adjusting fast enough to meet changing market and customer expectations? Our products connect people everywhere, and they provide the tools for our customers to do great things, to improve their lives and the world at large. Our company is open to all, and we celebrate the diversity of our team here in the United States and around the world ― regardless of what they look like, where they come from, how they worship or who they love. Possible Actions: Think in terms of meaningful purpose not just financial results; identify multiple bottom lines that impact employees and citizens as well as shareholders; help shift from a focus on jobs to a career to a calling; involve others in creating purpose statements; find ways to reinforce the message so that the familiar (going to work every day) becomes special (fulfilling a purpose); stress the “line of sight” from a person’s job to the values and purpose of the organization; celebrate purpose. Recommended Thought-Leaders: Simon Sinek, Dan Pink, Chip Conley, Rosabeth Moss Kanter, Abraham Maslow. Purpose matters. People want to believe in something larger than themselves. Writers, artists and psychologists have understood this aspect of our human nature for decades though it often takes business leaders longer to come to the same realization. Purpose can emanate from a variety of sources, including what your business does, how it operates, the values it demonstrates every day and community activities. It is important for everyone to have a significant purpose, not just a segment of the workforce. Purpose matters to everyone. As an example, consider the purpose statement of Apple. Without intending to do so, “Fearless HR” became a model for organizational re-design and change. Its initial focus was the HR function itself, but the principles extend beyond to business in general. The top issue faced by global CEOs is the unrelenting pace of change in the face of unprecedented turbulence in the marketplace; and the principles from “Fearless HR” can provide useful guidance in this uncertain environment. Each fearless principle is described and then possible actions and important thought leaders are identified.
  • 7. 6 / 21Talent Decisions that Can Make or Break Your Business A LinkedIn study showed that having a third and fourth functional area of expertise improved a person’s chance to be a senior executive considerably and counted as much as an MBA from a top-five program. According to McKinsey, a new category of hybrid jobs is emerging: “Work used to be much more hierarchical. You could build a nice career within any particular function by taking on more responsibility within that specialty. But if you look at most companies now, work has become incredibly cross-functional.” The business’s agenda is everyone’s agenda. Dave Ulrich uses a very simple activity to work with internal groups in companies, asking the question: “How’s business?” If the answers are about internal practices, issues and contentions, he knows it will be a long day. If the replies focus on the big picture, customers, innovation, the marketplace, competitors and different possible futures, it will be a much better day. This simple test assesses the group’s foundation and alignment: are they internally focused or do they understand that everything starts with strategy and the business’s value proposition? Are people acting as business owners, regardless of their role or position? Are employees aligned to doing what is most important to the organization? Possible Actions: Seek different experiences; move outside of comfort zones; participate in cross-functional teams; develop bridging networks; convert weak ties to strong ones; adjust leadership development programs to be more experiential, team-based, and collaborative. Recommended Thought-Leaders: Charles Duhigg, Noel Tichy, Ram Charan, Center for Creative Leadership. For leaders, functional expertise is no longer enough. Every aspiring executive should want to be recognized as a business leader, not simply as a functional leader. Leadership paths are different today than decades ago. These paths are not strictly upward and linear, instead focused on acquiring wide ranging skills and experiences. Possible Actions: Challenge conventional practices, ask ‘why’ something is done, create a sense of urgency, get involved in customer experiences, brainstorm future market scenarios, network outside of your function, participate in sales calls, listen in on customer service discussions, listen to earning calls with analysts. Recommended Thought-Leaders: Dave Ulrich, Norm Smallwood, Peter Capelli, John Boudreau.
  • 8. 7 / 21Talent Decisions that Can Make or Break Your Business It is important to candidly discuss these perceptions in the light of research and best practices, and to confirm or deny their veracity. Without this step, these perceptions will live on and become even more indelibly imprinted. Confront the past so that the future can strike out on its own path. A force multiplier. The greatest value in redesigning organizations is to create situations and contexts in which many people can prosper. It is about improving the workplace so that the workforce can flourish. It is about contributing more than simply the value of an individual’s direct labor to make or sell a product, but in opening up opportunities for teams, departments and even cultures to contribute and perform. An individual’s effort is not highly leverageable – the real difference appears when the crowd gets involved. As Ulrich has observed the emphasis in organizations is moving beyond individuals to “victory through organization— while individuals may win awards, it is teams that win championships.” Possible Actions: Identify past perceptions that exist; understand why these perceptions persist; develop plans to alter mindsets and scale the new vision; set stretch goals; recognize the emotional aspects of change; create campaigns to change attitudes and mindsets; celebrate new views; gather data to track progress. Recommended Thought-Leaders: Dave Ulrich, John Kotter, Dan and Chip Heath, Bob Sutton and Higgy Rao, Charles Duhigg. Historical perceptions matter and must be addressed. Unconscious patterns and subtle habits impact behaviors more than we understand. If an organization or profession is trying to change and move beyond its history, it is essential to address past stereotypes and viewpoints because they still endure. People remember the past and try to extend it into the future. Mark Twain talked about the perils of ignoring the elephants in the room. Possible Actions: Have groups perform a SWOT analysis on the business; list key strategic initiatives and business outcomes for each major group; communicate business goals and results frequently; complete a competitive differentiation map; describe the line of sight from the organization’s strategy to the team and individual jobs; brainstorm different future business scenarios; begin each day with a business acumen challenge activity that identifies current events that impact the organization; listen to analyst calls and quarterly earnings reports. Recommended Thought-Leaders: Dave Ulrich, John Boudreau, Ram Charan, Laszlo Bock.
  • 9. 8 / 21Talent Decisions that Can Make or Break Your Business Get better or get worse. Every professional, whether in sports, the arts, non-profit activities or business, has a choice to make each and every day. This is especially true given the rapid pace of change and turbulence in the world today. Yesterday’s insights may not only be old, they may be wrong. It is important to turn the workplace into a learning laboratory in which people can sharpen and enhance their skills, experiences and reflections. Risks need to be rewarded and seen as learning opportunities, rather than avoided or punished. As author and philosopher Eric Hoffer said, “In times of drastic change, it is the learners who inherit the future. The learned usually find themselves equipped to live in a world that no longer exists.” Possible Actions: Identify strategic alignment for major initiatives; link measures and outcomes to each key initiative; identify the most important business outcomes for each group; brainstorm a range of productivity improvements that could be implemented; brainstorm “bureaucracy busters” that impeded progress; think beyond quick cost cutting; participate in workout programs to improve processes; develop ground-up suggestion programs to improve the business. Recommended Thought-Leaders: John Boudreau, Wayne Cascio, Thomas Davenport, James Heskett, Steve Kerr. Levers to drive business results. Everyone can drive business results if people perceive this to be their purpose and have practical examples to follow. People want to help the business be more successful, but are just not sure how. The metaphor of a lever is a useful way to get practical. There are, in fact, four types of levers that can improve the business. The first is to strengthen strategic alignment: Is an initiative linked to the company’s strategy and business goals? Are we spending time on what matters most? The second is cost savings from doing things more efficiently and making necessary reductions based on business conditions. The third is improving productivity, and the fourth is adding further to business outcomes. The third and fourth levers have the greatest potential impact for both short and long term benefits. Possible Actions: Challenge past talent practices to be more inclusive; focus on teams and networks – not simply individuals; involve others and open up access; foster ground-up practices; build communities; expand bridging networks; seek out connectors and hubs; look for leverage points; gather data from a variety of colleagues; celebrate positive influence. Recommended Thought-Leaders: Tony Parasida, Dave Ulrich, Laszlo Bock, Gary Hamel, Seth Godin, Reid Hoffman, Rob Cross.
  • 10. 9 / 21Talent Decisions that Can Make or Break Your Business Building a transparent, reciprocal and collaborative workplace. An innovative and agile culture today has these three inherent qualities: being transparent, reciprocal and collaborative. It is transparent in the sense that the atmosphere is open, everyone is a partner and there are no more secrets. Transparency is based on the mindset that says: if people have access to the information they need, they will do the right thing. It is reciprocal in that it is not a one-way, top-down exchange, but rather a relationship that works equally well for the employee and employer with each receiving benefits that are valued. Finally, it is collaborative in that divergent groups and teams work together, share information and expand collegial networks. Organizations with these qualities, win. Measures that matter. There is truth to the axiom that “what gets measured gets done.” The problem is that many functions and groups within companies measure the wrong things. They look at what is easy to count and focus on efficiency measures that have limited value. Groups also measure so many things that they begin to suffer data paralysis. Instead, it is important to focus on the consequential few as opposed to the inconsequential many. If everyone’s agenda is the organization’s agenda, then measures should emphasize effectiveness and key business outcomes. People should be held accountable for driving the business forward, not just achieving short-term goals. As Albert Einstein once said, “Just because something can be counted, doesn’t mean that it counts.” Possible Actions: Identify the most important business outcomes; list the intangible assets that are important to board members; emphasize effectiveness and impact measures; be accountable for driving business results; determine measures that matter to different stakeholders; generate a set of hypotheses and test them out with data; use data to uncover risks and successful practices. Recommended Thought-Leaders: Thomas Davenport, Jac Fitz-enz, John Sullivan, Laurie Bassi, John Boudreau. Possible Actions: Invest in personal development activities; move outside of silos; take risks; join cross-functional teams; participate in community activities; seek new challenges; mentor others; be a knowledge coach; set stretch goals; further develop strengths; celebrate failures and successes alike. Recommended Thought-Leaders: Angela Duckworth, Reid Hoffman, Carol Dweck, Marshall Goldsmith, Marcus Buckingham.
  • 11. Talent Decisions that Can Make or Break Your Business Possible Actions: Articulate the company’s intangible value; describe the talent brand; calculate revenue and profit per employee; track the new product vitality index; improve employee engagement and commitment; estimate the talent mindset of leaders; open up participation in innovation programs. Recommended Thought-Leaders: Dave Ulrich, Norm Smallwood, Thomas McGuire, Gary Hamel, Jim Collins, McKinsey & Company. The soft stuff turns out to be the hard stuff. In a 2015 Harvard Business Review article, Ram Charan observed that “Businesses don’t create value, people do.” It is the people practices that distinguish companies. This statement is clearly true of Silicon Valley, high tech and innovation-centric companies, but it is also applies to manufacturing and capital intensive businesses. Most company resources and assets can be borrowed or emulated. Former Southwest Airlines CEO Herb Kelleher has expressed a similar view. He believes that the business of business is people: “All airlines have airplanes; you can’t, however, copy culture and spirit.” It is easy to lose sight of the primacy of people practices because they can be messy, time-consuming and complicated; however, they are the key to both long term and enduring success. Walmart recently adjusted its talent strategy as a way to improve stagnant business outcomes. After an overemphasis on shrinking costs, Walmart now is investing in its workforce and offering more developmental and career options. This human capital talent strategy is based on the belief that to be successful in the marketplace, companies first have to be successful in the workplace. Possible Actions: Open up closed practices; encourage every person to be a business owner; focus on sustainable not situational values; communicate openly; do not restrict information to people based on hierarchy; have ‘huddle up’ team sessions to clarify direction; continue to develop skills and gain experiences; reach out to colleagues; search for new connections; build new communities; earn your colleagues’ trust. Recommended Thought-Leaders: Gary Hamel, Neel Doshi and Lindsay McGregor, Reid Hoffman, Ed Lawler, Bill Taylor, Tony Schwartz, Dov Seidman. 10 / 21
  • 12. Part Two Lessons for Recruiting Talent Decisions that Can Make or Break Your Business 11 / 21
  • 13. Talent Decisions that Can Make or Break Your Business In addition to these general business principles, the Fearless HR storyline has direct application to companion HR functions such as recruiting. While recruiting has a longer tradition and history than the HR function itself, the parallels are easy to discern. First, the purpose of recruiting must be clear and direct: to drive business results. Clarity of purpose enables sharper focus, better alignment, stronger prioritization, less distraction and improved professional confidence. And second, recruiting must address its past as it endeavors to change. Recruiting, just like the broader HR function, is undergoing a transformation to be more responsive, agile, market-driven and impactful. At FedEx, chief learning officer Bob Bennett described these changes as moving from being a bricklayer (tactical) to more of an architect (strategic). Figure 1: Recruiting's Shift from Tactical to Strategic Proactive Planner Business Focused Strategist Global Results Solutions Provider Partner Engagement Reactive Order Taker People Focused Tactician Local Theory Problem Finder Staff Support Retention Another way to address this impending change in talent acquisition is to review the work of Professor Carol Dweck on mindsets. Her work at Stanford University found that people have fundamentally different views about talent and excellence. Some people believe that talent is a natural quality determined at birth (Fixed Mindset), while others believe that talent can be developed and enhanced (Growth Mindset) through hard work, passion and grit. Dweck further determined that these different mindsets affect subsequent behavior, actions, attitudes and even definitions of success and failure. Henry Ford echoed a similar view a century before when he said, “Whether you think you can or whether you think you can’t, you are right.” 12 / 21
  • 14. 13 / 21Talent Decisions that Can Make or Break Your Business Dealing with Historical Perceptions of Recruiting The transition to the architect and builder role is not simple or easy. Author Charles Duhigg notes that old habits and past perceptions are very hard to break. A first step is to acknowledge that these perceptions exist and then hold these views up to current evidence and best practices. There are five historical perceptions of recruiting that need to be considered, each is described in terms of their derivation and analyzed in terms of research and best practices today. A number of practical guidelines will also be presented to assist the transition from order-taker to fulfill the role of architect and builder. Recruiters are just order takers who fill seats. This has certainly been a prevailing view of the profession by many. Dr. John Sullivan has whimsically observed that “recruiters are sales people with lousy budgets.” The association with sales people perhaps contributes to a less than positive view of recruiting, which, of course, is ludicrous. Without sales people – for products, services or talent – a business would not exist. It is also true that recruiters are under extreme pressure to fill requisitions, and some hiring managers are only interested in recruiters being order takers who retrieve requisitions thrown over the wall. There are many barriers and past perceptions that inhibit success and keep recruiting from contributing more to the enterprise. Recruiters cannot just automatically become architects and builders; new skills and capabilities are needed to bridge this gap. When recruiters do make these transitions and focus on such factors as quality of hire versus time to fill, being more consultative and making stronger contributions to the business, the results can be significant. The Boston Consulting Group (BCG) has shown that recruiting is the highest rated of 22 different HR functions in terms of improving an organization’s revenue and profit margins. Similarly, research conducted by Bruce Pfau and Ira Kay of Watson Wyatt Worldwide found that excellence in recruiting contributes 7.8 percent to the market value of a company. 1. So what is the recruiting mindset going forward? Some recruiters still feel most comfortable being an order taker; it is familiar and serves a role, albeit a limited one. However, organizations are now requiring more by looking for recruiters to be architects and builders of organizational capability. Organizations are asking recruiters to be business partners and to strengthen competitive positioning. The architect and builder mindset is very different from that of the order-taker and it requires different skills and abilities.
  • 15. 14 / 21Talent Decisions that Can Make or Break Your Business Recruiters don’t improve the business. It is true that organizations have consciously or unconsciously erected barriers that restrict the contributions of recruiters, whether from rigid processes, outdated technology or past mindsets. As recruiting becomes a function that drives business results, consider how it can strengthen the business: The hiring process is too complex and takes too long. And it certainly can be. In 2016, the Society for Human Resource Management (SHRM) reported that the average time to fill a position is forty two days. This figure hides significant variation depending on the specific job and corresponding market availability for talent. All jobs are not created equal, especially in terms of the strategic value to the organization. One of the biggest time wasters in the hiring process is waiting for interviews to occur so it is important to challenge past practices to look for efficiencies and cost savings. All of these actions can be monetized to demonstrate that, in fact, recruiting efforts have a significant impact on the business. 2. 3. External hires account for 72 percent of all hires and are therefore the primary source of talent for the organization. Everything starts with talent and the quality of people in the organization. The cost of a bad hire is significant, with 25 percent of companies reporting that a single bad hire costs more than $50,000. Bad recruiters and bad hiring practices lead to bad hires. Eighty percent of turnover is attributed to bad hiring decisions. This is a multimillion dollar problem. The strength of employer brand can increase quality of hire by 9 percent. A strong employer brand is a power multiplier, improving both the quantity and quality of candidates. A poor candidate experience leads to reduced sales of a company’s products and services (from the affected candidate) by 23 percent – and 9 percent of that candidate’s friends and acquaintances will not do business with the company. These are direct and immediate dollar impacts. A bad candidate experience will cause 42 percent of candidates not to apply again, thereby shrinking the qualified talent pool. Bad experiences travel fast.
  • 16. 15 / 21Talent Decisions that Can Make or Break Your Business Google, for example, routinely had dozens of people interviewing candidates in their quest to hire only the best and brightest. The ramifications of this practice were that it took a great deal of time, cost huge amounts of money and led to unhappy candidates. Their researchers discovered that after the fourth interview, the next interview did not measurably improve the predictive power. Google dramatically re-engineered their interview process based on this research and adopted the “rule of four” interviews. “That change alone shaved our median time to hire to forty seven days from ninety to one hundred eighty days in the past and have saved employees hundreds of thousands of hours,” observed Laszlo Bock, former Google senior vice president of People Operations. The other business impact of an inefficient hiring practice is the cost of vacant positions. Unfilled for a long time, open positions carry risk for the organization. Dr. John Sullivan’s research shows that for key strategic and revenue-producing positions, the cost of a vacant position can range from $7000 to $12,000 per day. As recruiting moves away from being the bricklayer, it must optimize the hiring process, in order to save time and money, generate more opportunity, attract talented candidates and create brand strength. Hiring is subjective and idiosyncratic making it easy to make bad hiring decisions. Yes, it is hard to hire strangers. If the recruiting process, technology and talent are not synchronized, it is easy to make bad hiring decisions. Forty percent of leadership hires fail within the first eighteen months. Research from global talent and leadership expert Claudio Fernández-Aráoz determined that the cost for a single failed executive hire can be as high $2.7 million. Drawing on the research of experts including Fernández-Aráoz, Sullivan, George Anders and Lou Adler, these are practical steps that support better hiring decisions: 4. Don’t treat all jobs the same. Triage the most critical roles and devote more attention to them. Use technology to source commodity, repetitive jobs. Don’t force-fit candidates to fill roles quickly. As one expert has said, “Although you can teach a turkey to climb a tree, it’s much easier to hire a squirrel.” Create realistic job previews and descriptions to set expectations properly. Recognize the different success criteria for getting a job and doing a job. Look for unconventional sources of talent. Read resumes from the bottom up.
  • 17. 16 / 21Talent Decisions that Can Make or Break Your Business 5. Figure 2: Types of Human Capital Measures by Business Value High Business Value Low Internal Activities Efficiency Effectiveness Impact Types of Human Capital Measures Don’t overemphasize the importance of technical skills. Search for important “soft” qualities such as the big three: resilience, curiosity and learning agility. Recognize the best people may have the least experience. Optimize the interview process to focus on capability and cultural fit and take the appropriate amount of time (but not too much) to make wise decisions. Integrate with other talent practices. Think about continually trying to improve the candidate experience. These are all practices that can dramatically improve the hiring process, strengthen quality of hire, and enable recruiters to drive business results. Recruiting measures are too soft and not very useful. Recruiting, like most HR functions, has a tendency to measure too many or the wrong things. As recruiting becomes firmly anchored in its purpose of driving business results, a different set of measures await. The following visual depicts four types of measures: counting internal activities, efficiency, effectiveness and impact or results.
  • 18. A Concluding Message The “Fearless HR” book started out as a modest effort to chronicle my experiences and tell a story. As I heard from colleagues who read the book and from students who used it in classes, I realized that the story and point of view resonated. A comment from a colleague suggested that “Fearless HR” is actually a business book that just happens to concern HR, and not a typical HR book at all. His observation was really the impetus for this paper. I hope that the “Fearless HR” lessons for business and recruiting leaders are useful, challenging, and thought-provoking; and more importantly, can contribute value to you and your organization. 17 / 21Talent Decisions that Can Make or Break Your Business “Cost to hire” is an example of an efficiency measure. However, efficiency measures are usually not very meaningful to business leaders, who are more concerned with effectiveness and impact metrics; because these measures are relevant to their own business objectives and accountabilities. Quality of hire (or quality of candidate experience) is an effectiveness measure, while an impact measure would be to trace candidates as they become employees and follow the results they produce. These are the measures that will increasingly define the success or failure of recruiters in their role as architect and organizational builder. Recruiting is a dead-end career. Have a talk with Bill Gates or Steve Ballmer. Both are very proud of their recruiting activities at Microsoft. Mary Barra of General Motors is another case in point. She believes her CHRO role was excellent preparation for her current CEO role. The path to leadership today emphasizes different experiences, not just in-depth functional expertise. A 2016 New York Times article, titled “A Winding Path to the Top,” emphasized that diverse roles and experiences are more likely to lead to leadership positions than a steady rise up a siloed hierarchy. A leadership assignment in the talent acquisition function is actually a great developmental experience because it encompasses marketing and branding skills, external talent supply and partnerships, process optimization and connections across all aspects of the business – all valuable skills for future leaders to possess. Recruiting is anything but a dead-end career. 6.
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  • 22. 21 / 21 About the Author David Forman David C Forman is the author of Fearless HR, the President of Sage Learning Systems and former Chief Learning Officer of The Human Capital Institute. The courses he has developed and taught for HCI have been taken by thousands of HR professionals all over the world. In 2002, David worked with SHRM to create materials to support the GPHR certification program. Prior to these experiences, David spent 25 years in the training industry, working with large global organizations to improve the knowledge, skills and performance of their people. Major clients include FedEx, IBM, DuPont, Microsoft, SAP, American Express, PwC, Ford, Prudential, Apple, Scripps Healthcare, Allstate Insurance and the University of Farmers. In 1984, David had the unique opportunity to work with Apple on the release of the Macintosh; and several years later to help IBM streamline and cross-train over 22,000 manufacturing employees. David has written more than 40 articles on talent management, analytics, strategic human resources, learning systems, high-performance cultures and leadership. He has also spoken at many national and global talent and leadership conferences, both in his role of hosting HCI’s conferences for many years but also as a key note speaker. Talent Decisions that Can Make or Break Your Business