5943 sop lens on talent (web)

sustainable organisationperformance





stewardship,leadership

and governance

buildingHR capability

sustainable organisation performance sustainable organisation performance

future-fitorganisations

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building HR capability

Lens on talent

A collection of Next Generation HR thought piecesPart 2 – August 2012

2 Lens on talent







and governance




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Get involved ...Sustainable Organisation Performance is a three-year research programme

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• stewardship,leadershipandgovernance

• future-fitorganisations

• buildingHRcapability.

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Can we overrate talent as a source of innovation? Another example of the ‘too-much-of-a-good-thing effect’

Investment in talent or, as academics like to call it, ‘human capital’ (the skills, knowledge and abilities that individuals bring to an organisation), has become the major agenda item for HR practitioners and people management, especially in knowledge-intensive andcreativeindustries.Suchwasthebeliefinaneedfortalentedindividuals’roleto create innovation and change that it sparked an industry in itself from the 1990s onwards.Consultants,CEOsandHRpractitionerstookupacalltoarmstoparticipateintheMcKinsey-inspired‘warfortalent’.ThebasicpremisesunderlyingthisHollywood-based metaphor were that individuals’ skills, knowledge and abilities were the most important sources of innovation and creativity in organisations, but that senior business leadershadpaidinsufficientattentioninrecruiting,motivating,developingandretaining‘A-grade’talent.Evenworse,theydidlittletoremoveorreplace‘C’performers.Sowhatwas needed was a new talent mindset, which called for better search, performance managementandrewardstrategies.

Academics soon got in on the act by articulating, from an evidence base, what this new talentmindsetshouldlooklike.AgroupofprominentUSscholars,someofwhomwereinfluential with the CIPD, invoked the ‘power law’, which, in its human capital variant, statesthat80%ofvalueiscreatedby20%ofpeople.Theseacademicshaveadvocatedtreating scarce and valuable human capital (and core jobs) distinctly, distinctively, differentlyfromotherformsofhumancapital(andnon-corejobs).Ineffect,theyhaveargued for a strict form of labour market segmentation, in which those people in the high-value-adding and unique segment are managed and rewarded very differently from thoseinothersegments.Thisisnottosaythatotheremployeesinanorganisationdon’tadd value, but that either they may be in plentiful supply or do not contribute directly tothecoreactivitiesofthebusiness.Inshort,thesewereargumentsforan‘exclusive’version of talent management, rather different from the more egalitarian perspectives heldbysomeUKfirms.

Aparalleldevelopmentoccurredoverthesametimeperiodinthefieldofleadership,again rooted in the individualistic, ‘psychologistic’ assumptions that have characterised theAmerican(andtoalesserextenttheBritish)businessmodel.Transformationalleaders, whose job was to create innovation and change by devising a compelling vision, aligning others behind the vision and motivating and inspiring employees to achieve stretching goals through the application of emotional intelligence, became the mantra ofmanyfirms.Suchleadersareseen–controversially–asdistinct(superior?)fromtransactional managers, whose work is essentially concerned with ensuring stability, that is,planning,budgetingandcontrolling.Asaconsequence,overthelastfewdecadeswe have witnessed a ‘romance’ with leaders, leadership competences and individualistic approaches to developing them such as coaching and mentoring – which, when aligned with exclusive talent management philosophies, become subject to the ‘too-much-of-a-good-thing effect’, a well-known phenomenon predicting terminal illness for most HR fadsandfashions.

Graeme Martin is Professor and Chair of Management at the CEPMLP, University of Dundee. Prior to this, he held professorial posts at the University of Glasgow and Heriot Watt University, and holds/has held visiting professorial appointments in Sydney, Venice, Lyon, Denver and Beijing. He has authored and co-authored seven books and numerous refereed journal articles on HRM, management and leading change. Graeme previously worked in industrial relations and personnel management, and has consulted for numerous organisations in many countries. He has also worked with the CIPD for a number of years, producing research reports on topics such as employer branding, technology and HR and social media.

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For, underpinning both of these trends (some might say fads) was a privileging of individual skills and knowledge over more diffuse and necessarily complex but accurate attributions of innovation and creativity to groups and context.However,recenteventsfollowingcorporatescandalssuchasEnronandthefall-outfromtheglobalfinancialcrisis,inwhichHRhasbeendescribedasanun-indictedco-conspirator,havecalledintoquestionthisfocusonexclusivetalentandtransformationalleaders.Well-respectedcriticssuchasBorisGroysberg,GaryHamel,Henry Mintzberg and Barbara Kellerman have written extensively from an evidence base on the ‘myth of talent andthe(lackof)portabilityofperformance’andtheneedfora‘Management(orLeadership)2.0’,whichfocusesless on artful, visionary leaders and more on leadership as a process and on the inextricable ties between leaders andfollowers.Moreover,recentacademicevidenceonsuccessfulinnovationalsoreflectsashiftfromthistalent/humancapitalapproachtoonebasedonsocialcapital.Theseperspectivesemphasisenotonlypeoplebutalsothe context that enables creativity and innovation to happen by showing how creative people are embedded in networks of expertise and influence, how such people form strong bonding ties within and between groups to exchange ideas and how they need to engage in mutually supportive relationships based on trust.

One good example of the contribution of social capital to innovation is evidenced in a recent McKinsey report (2012),whichhasshownhowinnovationsinstrategicthinkingarecreatedby‘crowdsourcing’.Bydrawingon existing social capital, organisations such as IBM, 3M and Aegon have involved thousands of employees in contributingtonewproducts,processesandstrategicoutcomesusingsocialmedianetworks.Insodoing,theyhavegeneratedfurthersocialcapitalbyembeddingdynamicinnovativecapabilitiesintothesefirms.

However, this illustration would not have been possible without investments in organisationalcapital.Thisissometimes referred to as the non-human capital left in an organisation ‘when people walk out of the door at night’, including captured knowledge and experiences in databases, technologies such as social media (see above), patents,manuals,organisationalstructures,routines,processesandevenorganisationalculture.Theprincipalroleoforganisationalcapitalistolinktheothertwocapitalstoformprocessesthatcreatevalueforcustomers.Itisalso important because it provides employees with the motivation and opportunities to develop and use their skills forthecollectivegood.

Recentresearchhasdemonstratedhowdifferentpeoplemanagementconfigurations–comprisingemploymentrelationships, managerial values, ‘high performance’ work systems and leadership models – shape human capital andinnovation.Wesuggesttheyarealsodriversoftheothertwocapitalsand,throughthem,moresustainableinnovation.Sobydrawingonourpreviouswork(Martinetal2011)andontheliteratureonintellectualcapital,which refers to investments in organisational learning, we propose the framework in Figure 1 for analysing ‘thefutureofHR’anditslinkstoinnovation.Thisframeworkmapstherelationshipsbetweenfirms’peoplemanagement strategies, relationships and processes; human, social and organisational capital; and the necessary levelsofintellectualcapitaltoproducesustainableinnovationinorganisations.

Thus,forexample,wemightexpectthathighexpectationsofallemployeesandhighinducements/supportivesocial and organisational capital for them (an inclusive talent management approach) would result in widespread innovativebehaviourinorganisations,aswasevidentintheearlier‘crowdsourcing’example.Wemightalsoexpecttofindhighexpectationsandhighinducementsandsupportforonlycertainhigh-value-addingemployees(an exclusive talent management approach) would lead to restricted pockets of innovation, as was evidenced in the recent 2012 CIPD Learning and Talent Developmentsurvey.Evenworse,however,iswherehighexpectationsarecombinedwithlowinducements/lackofsupportivesocialandorganisationalcapitalforallemployeesorwherelowexpectationsarecombinedwithlowinducements/support.Unfortunately,thislowroadtogrowthandinnovationisonethatcharacterisestoomuchofBritishindustry.

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So, if this analysis is anywhere near the mark, what are the ‘killer’ questions that senior HR professionals have to answerwithrespecttotheirtalentmanagementpoliciesandinnovation?Herearemyfourcandidates:

1 Is there an over-emphasis on selecting and developing talented individuals and ‘stars’ in your organisation and an under-emphasisontheteamthathelpsmakethem?Towhatextentdoseniormanagerscommitthe‘fundamentalattributional error’ of explaining and rewarding innovation based on individual attributes rather than on the interactionbetweentheseindividualsandthesocialandorganisationalcontextinwhichtheyoperate?

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/badleaderswithouthavinggood/badfollowers?

3 Towhatextentdoesyourorganisationinvestinandmeasuresocialcapital?Arestaffatalllevelsencouragedto ‘step outside’ to build external networks for the purposes of learning as well as building internal bonds with eachother?Onthislastissue,howmuchemphasisisplacedoncreatingandsustaininghigh-trustrelationshipsinyourorganisation?

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 widespreadinvolvementininnovation?

A collection of Next Generation HR thought piecesTheCIPDhasproducedthiscollectionofthoughtpiecestobuildonthethemesintroducedintheNextGenerationHRresearch(2009).Specificallywehaveaskedanumberofleadingacademicsandexpertstowriteaprovocativethoughtpiecethatappliesa‘NextGenerationHR’lenstoaspecificHRdiscipline.Thisthoughtpiece,Lens on talent,iswrittenbyProfessorGraemeMartin.Othersintheseriesinclude:

Lens on engagement,byProfessorKatieTruss.Spinningplatesandjugglinghats:engagementinaneraofausterity.

Lens on reward,byVickyWright.Insight-ledrewardmanagement.

Figure 1: People management, different forms of capital and innovation (based on Martin et al 2011)

Human capitalIndividuals’

knowledge, skills and abilities

Organisational capital

Knowledge banks, technologies,

structures, culture, and so on

Intellectual capital

Investments in organisational

learning

Innovations in products, processes

and systems and dynamic innovative capabilities

People management

configurations

Sustainable competitive advantage

Social capital Bonds, bridges

and trust

Chartered Institute of Personnel and Development151TheBroadwayLondonSW191JQUKTel:+44(0)2086126200Fax:+44(0)2086126201Email:[email protected]:cipd.co.uk

IncorporatedbyRoyalCharterRegisteredcharityno.1079797

Building HR capability is one of the three themes in our Sustainable OrganisationPerformanceresearchprogramme.Theothertwothemes are future-fit organisations and stewardship, leadership andgovernance.Withineachofthesethemeswewillresearcharange of topics and draw on a variety of perspectives to enable us to provide insight-led thought leadership that can be used to drive organisationperformanceforthelongterm.







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