Monday, August 17, 2009

Diary: The Flip Side of Talent Management

Talent Management was, and still is, the buzzword. As championed by numerous management gurus, including the uber-guru, Tom Peters, Talent Management is envisioning your company like a football team. He says, you must have the stars and the others. Like a football team, you must have the miracle man, who will pull up that miracle goal, which will make all the difference between winning and losing. In today's hyper-competitive economy, that's what makes a difference.

Makes sense, indeed, just that the companies are not football teams. They are not even an orchestra, which is the next best parallel that Talent Management consultants draw. Well, they can seem to be, if you all you care for is 90 minute glory. But if one sees a business organization as the hard long term slog that it actually is, suddenly the poor knowledge workers seem to be as much valuable as anyone else.

The point I am making is - yes, stars make a difference. But since building a great company usually is a long term process, these human organizations are more like a country where everyone must contribute, rather than one or two stellar leaders.

Before I explain this, I shall also state why I think talent management seems so attractive. Because that doctrine is in sync with our culture, or it used to be. Our celebrity-crazed culture, where inequality is accepted as a norm and some people are supposed to earn more than others, not 10, 15 or 20 times more, but 1000 times or so more. So, the management gurus were not importing the analogy of football field to companies, they were actually reading up their morning tabloid and was having their eureka moment.

But then, suddenly it all came unstuck. Consider the whole debate about Citigroup giving $10 million on average to their top 25 executives, and roughly $100 million to their top trader, while they are still receiving taxpayers money to remain in business. Similar things have happened in AIG last year, and also in Britain, where failed institutions took money from government to survive and then allowed the failed executive team to steal some of that money. All in the name of talent management!

Yes, the logic of these completely unbelievable bonus-giving is that they need to retain talent! Talent, what? The same failed executives and traders who almost brought down the whole bank and created misery for so many across the world. That talent to mess it up completely! This whole drama suddenly shows - in one capsule - what's wrong with the management of the companies today: thinking that business is a football match and the ultimate objective is to win at the end of 90 minutes [or 90 days, if you will].

But business used to be about making a difference, creating economic value by bringing resources to requirements, building communities of people - suppliers, employees and customers together - and creating happiness and satisfaction. Management books still talk about this; every business degree extol this as the final goal. But, in business practise, when did we lose sight of this?

I shall blame the culture of 'talent management', which is about creating a group of unconnected, and often untalented people, who runs the organization to their own selfish ends. And, short term ends, because they run away exactly when things start going bad. Henry Mintzberg, in his recent HBR essay, points this out - companies have stopped becoming communities. And, this has been exposed clearly by the recent sub-prime debacle and its aftermath. If the end of Cold War was anyway a triumph for modern management, this is its nadir.

Once this whole political furore over unjust bonuses settle down, it is likely that everyone will return to business as usual. Not because it is the most sensible thing to do, but because it is the easiest. The point, however, is that we have seen the crisis this brings. One can argue that such recession is once in a lifetime affair, and it will not happen again. But, that can not be the excuse to make the same mistakes over again, and wish nothing will happen. [Besides, I strongly believe that this is going to be an unfinished recession and these ghosts will come back in 10 to 15 years time for one terminal crisis for the system as it is]

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