Why Should the Best Talent Work for You?
By Michael Maccoby
Research Technology Management, Vol. 43 No. 5 September-October, 2000. pp. 57-58.
In the new economy, the line between R&D and the rest of the company is becoming increasingly blurred. Learning from the market and continual creation are the name of the game. Companies need players who can create together, and the demand for talent continues to be greater than the supply.
The business press has responded to this situation with a deluge of articles like the Fortune cover story, "The Talent Chase" (May 20, 2000). This article describes how the new Internet companies have lured away executives from Fortune 500 companies with big signing bonuses and stock options. Some of these companies also offer a kind of challenge and excitement that contrasts with larger, more bureaucratic, companies.
To be sure, the big companies are fighting back, even giving managers budgets to offer bonuses on the spot to stars who are tempted by glittering offers. Also, as the stock market has become more discriminating, some people have become disillusioned in their new ventures. With the promise of instant wealth fading, they have returned to the mother ship, which in many cases has welcomed them back.
Learning from Sports
Technology managers must not only attract and retain the best talent, but they must first be able to recognize it. Professional sports presents a telling analogy for companies. Each year, teams look for the best young players from colleges. However, some players who emerge as prime draft choices and are given million-dollar signing bonuses end up as duds on the field. Others with lower ratings but fire in their bellies turn out to be prime performers.
How can a professional team predict who will be the stars? Some teams pick players according to their records at well-known schools. One very successful coach, Joe Gibbs of the Washington Redskins pro football team, had a different philosophy. He selected players from little-known colleges who met two criteria. One was physical skills such as speed and strength; the other was character, such as ethics, perseverance, work habits, helping others.
An article by Malcolm Gladwell in The New Yorker (May 29, 2000) describes how company recruiters are instantly impressed by one Harvard senior. After a brief interchange, Steve Ballmer, CEO of Microsoft, not only offers the student a job but is willing to be his mentor. In the end, the graduate opts to work for Tellme, a start-up that provides Internet access through the telephone.
Why is this student so attractive to Ballmer as well as other technology executives? His resume is good but not exceptional for students in the top rank. But he comes across as totally confident, without self-doubts. He smiles a lot, treats older people as peers rather than authorities. Indeed, he might believe he has as much to teach Ballmer as to learn from him.
But how does anyone know whether this charming young man will contribute to the company? He may be a potential star, but I have been charmed by people who later disappointed me by their self-serving behavior. Some of them turned out to be marketing personalities whose main competence was selling themselves.
Watch for Industrial Psychopaths
Paul Babiak, an organizational psychologist, presented an even darker scenario about attractive candidates in a paper presented to the recent annual meeting of the American Neuropsychiatric Association. He finds that companies are often taken in by "industrial psychopaths" who charm interviewers and people in power. Once established in the company, these people, who lack a sense of guilt or empathy, lie and manipulate their way up the organization. They spread disinformation to enhance their image and disparage others. They are adept at undermining those who stand in their way. Dr. Babiak believes such people thrive in the turbulence of today's companies as opposed to bureaucracies of the past with rigid policies and procedures.
Babiak's study suggests that recruiters should be critical about their first impressions and use structured interviews that get at people's deeper values. I have used this kind of interview both in recruiting and research. (see Why Work? Miles River Press, 1995.) I ask questions about work experience, what the person has liked best and least about their work, the kind of leadership they seek and how they have themselves exercised leadership, their goals in life, who they most admire and why, and other questions that can provide a pattern of values or character traits. When someone attempts to give the "right" answer to every question, a probe can reveal inconsistencies and insincerity.
Of course, to interpret the answers, the interviewer needs knowledge of personality dynamics. However, skilled interviewers are much better able to predict how a person will behave over the long run than an executive who goes by gut instinct. The ideal interviewer would be a superior performer who understands the company culture and also learns enough psychology to interpret interviews.
Holding Onto Talent
Once recruited, how is talent best retained? Most, companies today are not loyal to employees and don't expect employees to be loyal to them. But there are exceptions. In Silicon Valley companies, overall, there is a 25-percent turnover rate, but at Hewlett-Packard (HP) turnover is only 5 percent. Why?
Thirty years ago, I interviewed Bill Hewlett and asked him what kind of employee he was looking for. He said he wanted entrepreneurs, but they had to be ethical, cooperative people. He had hired some people to start HP's computer division and they turned out to be manipulative and dishonest. Hewlett and Dave Packard got rid of them and restarted the computer division with internal HP people. I suggested that real entrepreneurial types would leave HP to establish their own businesses. "That would be OK." Hewlett said. "If we had treated them well, they would become good customers and good suppliers."
Recently, an HP executive told me this philosophy still prevails. Loyalty does not have to imply lifetime employment. It can mean a sustained relationship of honesty and respect which is a formula for creating a valuable network.
Another large technology company has been very successful in hiring the best engineering graduates, but has found that many of them do not stay long. The management interviewed employees who left and found some of the same things I have been observing at companies over the last decade. The best young professionals may jump at the chance to get rich at a start up, but they, like those who opt for the established companies, want challenging work, growth opportunities and the chance to speak up and be heard by leadership. A combination of challenge, voice, rewards, and good relationships are strongly motivating, but many of the most promising recruits also want a balance between life and work.
Recent research by Cindy Larson in collaboration with the George Washington University's School of Business and the Graduate School of Education finds that while these factors are important in the retention of IT workers, good supervision is even more important.
This leads us back to Joe Gibbs of the Redskins. He believed that if a young player had the skills and character, he could motivate him and teach the rest. Furthermore, he believed in his players and that strengthened their own belief that they were the best in the world. And they proved it in the Super Bowl.
In the long run, when the stock options are no longer so seductive, the companies that will be most attractive to the best talent will be those that combine sustained market success with sustained personal growth of employees.
The companies that attract the best talent will be those that combine sustained market success with sustained personal growth.