Tuesday, November 25, 2008

Managing the Mediocre

HR's brave new frontier is, of course, Talent Management. As Tom Peters puts it [as no one but Tom Peter can put it] - look at a business like a football team or an Orchestra, hire top talent and let them play. This whole thing about Talent is music to all ears, hire the best, retain the best and reward the best - and you get the job done.

I believe in it. Yes, of course, the reasoning is obvious, and proof all too evident. There may be debate on what the top talent is - Tom Peters talks about someone who is a nonconformist, who 'would have screwed up something when they were twenty' - and how best to get them. But it is undeniable that being able to hire the best people puts the organization on a positive feedback loop, and improves performance beyond ordinary measures.

However, the question is how to hire these people. They are not always available, looking for jobs. They are usually motivated by money, opportunity or by something more intangible - like making a difference - but small businesses, especially, find it very hard to find [given their limited resources] these people. And, even if you can find them, it is harder to entice them, unless you have a Steve Jobs and a company like Apple, and invite someone to change the world.

It is not that I am arguing for the Second Best. But focusing on top talent is often a Fortune 500 management trap for small companies. Besides, one has not yet figured out what the top talent looks like. Many people will go by past careers and credentials, often compounding errors of past judgement, further. The recruitment systems must be geared towards hiring the top talent, no doubt. The question is how wise is it to create a management system focused on great people.

As we all know, top talent is not available in plenty. It is their scarcity that makes them top talent in the first place. In a workplace, it is usually a 10:70:20 distribution, with 10% top talent, 70% mediocre and 20% laggards. We know what to do with the top 10%. There are some debates on what you do with the bottom 20%, but the general capitalist consensus is that they belong to the realm of social welfare. But, it is the middle 70% which poses the greatest management challenge.

Which, it should not be. After all, Management as a discipline was made for this middle 70%; only later a greater focus on the top 10% was added. The key problem is, of course, the nature of work has changed. In a manufacturing environment, the productivity difference between the top-notch and the mediocre, while significant, did not make or break a company. But, in a customer-facing mission-sensitive service environment, it often does. What a big difference a great chef makes? Or a great salesman? The problem is that our management theories for the mediocre are often on the shaky ground.

What it does, of course, is that it pushes more and more people out of that middle 70% to the bottom 20%. Unfortunately, the focus on talent accentuates the problem. The companies, almost intentionally, build a system so that if you are not able to move to the top 10%, you start your unstoppable glide towards the bottom 20%, and exit. And, when you add the fact that it isn't easy to hire top 10% material, and SMEs will only get them once in a while, the organization starts looking like a huge pipe with an open bottom.

So, unless you have godsend proposition and a pile of cash that no one can refuse, it is time to look at how you manage the mediocre and move people up. For the uninitiated, the simple answer is training, but hardly that's the answer, as not everyone responds to training equally. And, this middle majority has different training and communication needs than the top 10%, or from the bottom 20% for that matter. The key is a strategy for mediocre management, or if that's offensive, majority management; or if that sounds political, just plain simple humane management, with a long term view of HR, and an approach to value-add to people and coach them to greater level of achievement will do.

I saw organizations spending an absurd sum of money on Business Process excellence training. Like Six Sigma, for example. The problem is that these training programmes happen at too abstract a level, and often does not connect to the middle-level data entry clerk who keeps misplacing her notebook all the time. She is at an error level significantly higher than six sigma - no issues, most people are - but what she needs a bit of handholding and help, and should not have to stare at the bottom of the pipe straightaway.

Standards, especially government monitored, does not help at all. I have seen organizations in the UK who display the Investors In People tag, which they achieve by throwing money at employee training and getaways, but they are as insensitive to people and their aspirations as they can be. Standards can not shift with the needs of the business, and business environment [it will be interesting to note if they have made any changes to IIP requirements in the context of ongoing credit crunch], and they introduce a bias in policy, which businesses should be able to do without.

I think the key here is patience and simple good management. Sort of paternalistic entrepreneur, who leads the team and are concerned about everyone's well-being - that sort of management. This allows the stars to shine, while taking care of the emotive needs of the middle majority. In old days, such entrepreneurial involvement would have acted as a stern gatekeeper for talents and an involved coach for the laggards. Today, with hands off management and purely financial view of business in most SMEs, the focus on only top talents often makes it lose-lose game.

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