What’s surprising about a new analyst report from Aberdeen is that in 2012 HR professionals still need to be reminded that talent management is as much a strategy as a tactic they should be captaining.

“HR still struggles to become a ‘strategic partner’ with the business, engaging employees and aligning integrated talent management initiatives with overall organizational goals,” write the authors of an Aberdeen Analyst Insight about developing a “Talent First” culture.

Drawing  from an upcoming Aberdeen report, analysts Madeline Laurano and Mollie Lombardi say HR’s day-to-day work and the lack of support and buy-in from other business leaders and senior management stand in the way of developing the strategic approach that HR leaders say must be a part of their skill set.

Yet there’s some sort of disconnect here. The analysts note that in Aberdeen’s Quarterly Business Review, the 1,300+ business leaders in the survey named workforce and talent concerns in half of their top 10 business challenges. However, 35 percent of the HR leaders participating in the forthcoming HR Executives Agenda 2012 complained of a lack of buy-in from their senior management.

Integrated talent management will help with this, say Laurano and Lombardi. “An integrated approach to talent management can help organizations carry out key talent initiatives that will benefit the business,” they write, citing evidence from “Best-In-Class” companies. These are the top 20 percent of scorers on three Aberdeen metrics: Employee engagement, bench strength, and hiring manage satisfaction.

This Best-in-Class group reported improved retention, high employee engagement, and achievement of key performance indicators. Overall, 70 percent of the group credited their integrated approach to talent management with achieving organizational goals.

As the authors note, “integrated talent management is not a new phenomenon.” Fine-tuning recruiting methods to the performance of workers three months, six months, even a year after hire has been going on for years. Projecting worker and skill needs into the future, based on company growth, workforce demographics, competition, and so on, and then using that intelligence to plan recruiting, is much more recent, yet hardly brand new.

These examples are part of the drive toward developing a unified approach to talent within a company. Many, note the authors, have “succeeded in breaking down traditional HR silos.”

“Without integration,” they add, “HR operates in one department, rather than spanning the entire organization.”

In many ways technology can hasten the integration. Besides shifting paperwork to managers or to the employee themselves, and thus freeing HR for more strategic work, it brings to line managers information once available only in HR.

Integrated talent management technology isn’t the determinant of a “Talent First” culture, but it does make big-picture viewing easier, and sometimes even possible. “Analytics matter,” say Laurano and Lombardi. Technology makes it simpler to access the data that leads to business insights.

“Organizations that integrate talent data with business data are three-and-a-half times as likely to achieve Best-in-Class as those that do not integrate data,” they write.

How should HR move forward in its quest for integration putting talent first? By first eliminating the silos and integrating management processes, while focusing on improving employee engagement. As the company becomes more sophisticated about talent management as a critical business strategy, the authors say talent management must be tied to business goals, progress has to be measured and success defined.

To reach Best-in-Class status, analytics have to be a priority. “An HR professional today must keep analytics as the backbone of any talent management strategy,” conclude Laurano and Lombardi. “Analytics will help HR gain support for integrated talent management, and improve the reputation of HR throughout the organization.”

While talking about customer service on a radio program, I shared a customer service nightmare story last week that also happens to be a perfect analogy for the mistake so many employers make. More specifically, the way the business allocated resources to advertising vs. customer service mirrored the costly mistake employers make when it comes to recruiting, employer branding, and onboarding.

It’s a mistake you want to ask yourself if you’re making.

The story speaks to how often employers waste time, money, and creative horsepower when it comes to attracting and retaining talent because they put their attention in the wrong place.

So here’s the story … 

Years ago a friend of mine was telling me how much he loved his Audi. In the same “I love my Audi” story, he mentioned that he will never buy another one again … ever. Before I could ask how Statement A leads to Statement B, he told me that the one and only Audi dealer in the area was a nightmare to deal with. The car-buying experience felt sleazy and the service experience after the sale continued to be a horror show.

He then went on to tell me about another customer of he had met. That customer had brought his car to a dealership out of state for the very same reason my friend disliked this particular dealership.

I knew the name of the dealership, but never had an opinion of them prior to his story.

Fast forward two weeks.

I hear this dealership’s ad on the radio. It is incredibly creative and clever.

When it’s over, I think:

“Isn’t this classic. They spend all this money and creativity coming up with clever ways to get people through the door, only to drive them back out the door by the experience they deliver.”

Since I love analogies and tend to see them everywhere, I then found myself thinking:

“Isn’t this a perfect analogy for what employers do? They spend all kinds of time and money trying to get the best and brightest through their doors, only to drive them back out — or drive them crazy — by the frustrating, disrespectful, and spirit-crushing work experience they deliver.”

Wouldn’t it make sense to invest just as much time, money, and creative horsepower delivering the work experience you promise as you do making a compelling promise to job prospects?

Doesn’t it make sense to invest as much in making sure talent stays once they come through the door, rather than creating a revolving door experience?

Doesn’t it make sense to create a work experience that makes your employees not only happy to stay, but also want to tell their talented friends: “This is an awesome place to work. When there’s an opening, I’ll let you know”?

Think of how much money you could help your employer save in recruiting costs if you helped them create a work experience that turned your employees into a volunteer recruiting firm.

If all this makes sense to you, here’s what you can do about it.

Share this article with your leadership team and suggest that you, as a team, examine:

• Whether you truly deliver the work experience your recruiting campaign promises.
• Whether you really know what kind of work experience you deliver.
• Whether you truly understand the key components of an inspiring, commitment-generating work experience … and how to deliver them.
• Whether your managers know how to manage in ways that inspire loyalty, passion, and pride.
• How much you are investing in telling the world you are a great place to work, and how much you are investing in actually being a great place to work.
• If you are doing the things Todd described in the comment here that are the things that make a workplace a good workplace: appreciation, interesting work, the chance to make a difference, opportunities for new skills, work/life balance, recognition, flexibility, health and retirement benefits, nice co-workers, smart co-workers, good managers but not micromanagers, training, a good location, money, promotions, and raises.

Share this article with your employees as a conversation starter. Find out from them whether they would recommend you as an employer, and why … or why not. Don’t just do this as a survey. I have found over the years that interviews and focus groups provide much richer, more actionable information. I don’t recommend replacing surveys with them, but combining the two.

Invest in helping your managers learn:

• What key practices create an inspiring work experience where employees feel not only valued and respected, but they also have the resources, support, and training to do great work.
• What key human needs drive employee performance and engagement, and how to create a work experience that satisfies these human needs. Here are just a few: the need for meaning and purpose, the need to learn and grow, and the need to feel a sense of control over one’s experience.
• How to become more mindful of critical Managerial Moments of Truth that affect employee engagement and morale. Examples of such critical Managerial Moments of Truth include: 1) Onboarding a new employee, and whether it’s a “sink or swim” experience or new hires get the message: “We’re glad you’re here, here’s how we are going to help you succeed”; 2) Giving employees feedback and doing performance reviews; 3) Communicating to employees about major changes; 4) How you ask employees for input, and what you do with that input.
• The critical communication skills that make it comfortable for people with less power — i.e. their direct reports — to speak honestly and openly about difficult issues.
• The myriad of other skills and the managerial practices that bring out the best in employees.

If you are serious about not just getting talent “through the door,” but also keeping them and bringing out the best in them, forward this article to your management team and your direct reports, and get the process rolling.

Note: I’m writing this “think piece” as part of a series of articles designed to expand your thinking about strategic HR.

HR and talent management leaders are constantly striving to become more strategic. But more often than not it seems that when they are presented with a strategic alternative that really breaks new ground, they retreat and stick with the status quo. However, if you are serious about making a strategic impact and you take a minute to reflect, it’s hard to think of many things that could have more of a strategic impact than increasing corporate revenues.

This is because increasing revenue or “topline growth” is on every CEO’s agenda and it is also almost always a top corporate goal and an executive success measure.

Other business functions like marketing, sales, supply chain, and product development have become corporate heroes (and are richly budgeted as a result) because they have demonstrated that they have a direct and measurable impact on this critical strategic goal.

HR has historically focused exclusively on cost cutting, but realize that increasing revenue is a far superior goal. That is because almost anyone can cut costs using an arbitrary number. However, in order to generate more revenue in the marketplace from your customers, you must meet a much higher standard, which requires that you be competitive in every aspect of the business.

Now if you are an HR traditionalist or someone who is happy to maintain HR’s status as a service/overhead function, you are probably already thinking that a strategic goal to impact revenue is a ridiculous idea. However, you would be wrong. We know that HR can directly increase revenues because several firms have already succeeded in demonstrating to their CFOs that they could directly increase revenue. At least take a minute and look at a quick example where HR has increased revenue.

Think it’s not possible? Here is a quick example to demonstrate the possibilities.

It’s obvious that average salespeople produce revenue and good salespeople produce more. So in an attempt to hire better salespeople, this technology firm analyzed its current sales hiring process and reengineered it, so that it measurably identified and hired better salespeople.

If the new process hired salespeople that sold on average 10% more (than those hired under the previous recruiting process), you could (with the CFO’s blessing), publicly state that this HR action had improved sales revenue by X dollars (i.e. the actual amount would be the 10% improvement in the average salesperson’s yearly sales revenue, multiplied by the number of new salespeople who were hired under the improved process).

Still skeptical? Here is another quick example of how HR can increase revenue.

The recruiting function at this Midwest bank realized it was losing significant revenue every day that a loan officer position was vacant. Obviously, with no one in the position, you can’t make or close any revenue-generating loans. In order to reduce the number of days that loan officer positions were vacant, it called on recruiting to apply its speed-hiring techniques on these positions.

By speeding up the requisition process, placing the best recruiters on these positions and identifying and eliminating “deadtime” throughout the hiring process, it cut the number of vacancy days nearly in half. At $5,000 per eliminated vacancy day, over dozens of requisitions, it increased the bank’s revenue by millions. Everyone from the CFO on down agreed that HR had substantially increased revenue. If these two brief examples are not enough for you, the next section contains the top 15 HR actions that can lead to increased corporate revenue.

The Top 15 Talent Management Actions With the Highest Impact on Revenue

Even if you’re not ready to implement an HR-wide coordinated “revenue impact strategy,” realize that there are many independent actions that the functions within talent management can take in order to increase organizational revenue. If you’re looking for some “low-hanging fruit” actions to take, here are some to consider (those with the potential for producing the most revenue impact listed first).

1. Prioritize revenue-generating business units, jobs, and employees — the highest impact and the lowest cost action is prioritization. HR needs to work with executives, the CFO, and risk management to identify and then prioritize the specific business units that generate the most revenue. You should also identify the highest revenue-generating jobs and employees. Next, you must also identify revenue “impact” jobs, which are jobs that don’t directly generate revenue but the actions of the employees in the jobs directly “influence” the likelihood of subsequent revenue generation. You should also identify revenue “impact” functions (note that product development and customer service are often the highest revenue-impact functions). Finally, you should identify and prioritize jobs where a major error would significantly decrease revenues or increase costs. Obviously after setting your priorities, you need to develop processes that ensure that the most HR resources and the best HR personnel are allocated to those priorities.
2. Targeted recruiting from competitors — recruiting talent away from your direct competitors has a high ROI, because if you are successful, your revenues will go up and theirs will go down. Start by “mapping” the revenue-generating talent at your competitors. Next, recruit away the top sales manager or exceptional salespeople from your competitors. Once you land a “magnet” individual, others are likely to follow. Other high-impact targets for your recruiting from competitors might include innovators, game-changers, pioneers, and individuals with expertise in monetizing products and services.
3. Retain revenue producers — retention has a high ROI because most of the factors that cause top revenue generators to leave are not related to their pay. Interview the most successful revenue producers and those who significantly impact revenue. During the interview, identify the factors that currently frustrate them, as well at the factors that would make their job a dream job. Put together a personalized retention plan to minimize the negatives and to increase the positives.
4. Hire revenue producers — external hiring brings in individuals with a proven track record for generating revenue. External hires also bring with them revenue-generating ideas. Focus your employer branding and recruiting processes on revenue-generating jobs. Reengineer the process so that it leads the industry in its ability to identify, attract, and hire individuals with a superior revenue-generating track record. For example, a major mobile phone network provider found that by adding an online testing component to its hiring process , the resulting call center rep that were hired produced over 10% more revenue than the untested hires.
5. Training on how to increase revenue — revenue generation and the related skills that support it must become a key corporate competency. The T&D function must target its offerings so that they cover all aspects of revenue generation. The quality of the offerings must also be improved, so that individuals show at least a 10% improvement in revenue generation after returning to their jobs after completing the T&D programs. In addition to targeting revenue-generating employees, revenue impact learning modules need to be developed so that every employee (regardless of their position) can understand the concept and subsequently improve their support of revenue-generating employees and business units. In this light, Wal-Mart routinely makes it a part of pre-shift store meetings to make all employees aware of which specific products produce the highest margins and revenue. This awareness allows employees to focus their sales and customer service efforts.
6. Identify barriers — HR must proactively use surveys, interviews, and metrics to forecast upcoming revenue-generating problems and opportunities. HR must also have a process for rapidly identifying current problems and the barriers that restrict revenue generation.
7. Create a fast-reaction team — HR must put together a team of specialists that can respond rapidly to the identified revenue problems that occur anywhere in your organization. Team members should excel at discovering HR related “root causes” and have the skills and experience necessary to solve sudden revenue generation problems.
8. Leadership development and succession must focus on revenue-related competencies – revenue generators also need to be effectively led and managed. So as a result, the leadership function needs to make revenue generation a key competency and development area for leaders. The ability to increase the revenue impact of their team should also be added as a key criterion for promoting managers and leaders.
9. Proactive internal movement — employees and contingent workers need to be proactively placed into the “right jobs” where they can have the highest possible revenue impact. The initial placement of top revenue producers needs to be regularly re-assessed so that key individuals (and even teams) are redeployed to the needed business areas. Seasonal and business cycle rotations may also be required to ensure that there is no excessive idleness among revenue generators.
10. Identify those who support revenue producers — once a year, survey your top revenue producers and ask them which individuals or support positions have directly helped/contributed to their revenue production. Make sure that these impactful support personnel are rewarded and recognized.
11. Release poor performers quickly – the performance management process must be redesigned so that it focuses on rapidly identifying, fixing, and releasing employees who fail to meet their revenue or revenue impact goals. The recruiting function should also continuously be on the lookout for top-performing talent that can be “swapped” with these lower-performing current employees.
12. Implement revenue-impact metrics and rewards – work with the COO, the CFO, and performance management to develop a process and a set of metrics that accurately assess an individual’s revenue generation and revenue impact. Rewards and recognition programs must also be focused and reengineered to better encourage revenue generation.
13. Onboarding — even the onboarding process can impact revenue generation if a weak process means that new-hires get up to speed slowly. As a result, the onboarding process must be reengineered so that new-hires on the first day clearly understand the importance of revenue generation, no matter what job they have. They also need to be informed about how their revenue generation/impact will be measured and rewarded. And finally they need to be educated as to where they can go to get help in this area.
14. Contingent workers and vendors must be included — because a significant percentage of the “workforce” are not technically employees, HR must also work to ensure that contingent workers are hired and evaluated based on their ability to impact revenue. HR should work with purchasing to ensure that vendors, contractors, and consultants are also all capable of increasing revenues.
15. Generate a direct profit — the least ambiguous of any HR action is directly generating revenue from external activities. Firms like Disney, HealthEast, Southwest, and Wachovia have generated revenue as a result of offering their HR services externally in areas including training, temp services, building a culture, and executive recruiting.

The Benchmark Firm to Copy

In addition to the 15 examples that were provided above, you should also know that the HR function at Google is the world’s leader in operationalizing a business-impact strategic approach. HR leaders at Google consistently use metrics and mathematical algorithms to scientifically improve business performance from programs like hiring, retention, and leadership. HR leaders can tell you the revenue impact of people management offerings like 20% time, free food, workspace design, and collaboration practices. They can also easily show you which business units (i.e. Adwords) have the most impact on revenue.

Understanding the five key components of a “revenue focused” HR strategy.

If you decide to implement this revenue-focus strategy, be aware that there are five key components that make a “revenue-focused” HR strategy successful.

Collaboration with the CFO — the first component is collaboration with the CFO. HR leadership must work directly with the CFO’s office (who is the undisputed “king” of measuring revenue). Together they must develop a credible process for proving when an action has a revenue impact and what the value of that impact actually is. Next, HR can provide the CFO’s office with a list of its intended actions and then finance can help to sort out any on the list that simply wouldn’t be credible no matter what the data said (i.e. an example of an action that might be sorting out as not credible could be the premise that hiring and retaining better janitors would increase revenues).

Make it an HR goal — the second component of the strategy is goal setting by making “impacting revenue” a major HR and talent management goal. As a major HR goal, it would need to be part of every HR function’s execution plan. The importance of the goal would be reinforced by adding revenue impact to the HR reward and metric structure. Together these actions would help to get everyone in HR to focus on this goal.

Prioritization — the third component is prioritization. If you start with the assumption that there will be no additional budget at least initially for this strategy,focus and concentrate your current HR budget and your best HR people on the business units, the jobs, and the employees that have the most impact on increasing revenue. Instead of equal treatment or first-come first-serve, high-priority jobs and employees would be serviced first. Resources would also be channeled toward the HR programs and processes which proved to have the most success on increasing revenue (i.e. usually they are hiring, retention, training, metrics, and rewards).

A process for identifying problems and barriers — the fourth component of the strategy involves identifying barriers to prohibit revenue from increasing. By applying benchmarking, research, and analyzing metrics, HR can determine which “people management problems” or barriers are having the most impact on reducing revenues. (Examples of problems include extended position vacancies in revenue-generating jobs, high turnover among top salespeople, salespeople unwilling to attend sales training etc.). The same effort should be put into identifying “positive people management opportunities” that when taken advantage of, directly increase revenues.

Best-practice sharing – the final strategy component is best-practice identification and sharing. Under this component, HR uses research, benchmarking, and metrics to proactively identify and then rapidly spread the implementation of the most effective revenue improving “people management practices” to all managers throughout the organization.

Final Thoughts

If you are still skeptical about this strategy and approach, ask your CEO whether they would prefer that you hire great clerks versus great salespeople. Also ask them if they would prefer that HR excel at low hiring costs, hiring without fewer legal issues, or would they instead prefer you to hire innovators and individuals who can increase revenues by 10 to 20%?

Although the initial concept might seem daunting, a number of advanced HR departments have been using a piecemeal approach to increasing corporate revenue for years. If you’re HR department were to adopt “revenue impact” as a primary HR strategy, the net impact for even a medium-sized firm would literally be in the hundreds of millions of dollars. If you implemented the strategy, not only would you “have a seat at the table” but you would be listened to and respected because you successfully made the transformation from “overhead function” to a strategic contributor. Your work would be noted in the annual report, so even the shareholders would become aware of the major contribution that HR made.

And incidentally, if you like this strategy, you should also consider related HR strategies. Where instead of focusing on revenue, the strategy would focus on increasing quality, speed/agility, customer service or innovation throughout the organization as a result of HR actions.

And one final question … Did this article succeed in expanding your thinking?

This year’s list of the Best Companies to Work For reads a lot like last year’s. The rankings have changed a bit; SAS, for instance, got unseated for the #1 spot by Google, but otherwise the list (click here for the list of all 100) shows that a great place to work tends to stay that way.

That’s because it’s no easy feat to win a spot in the top 100, which Fortune released today. Many companies compete — 1,000 typically start the process. They’re put through the wringer by The Great Place to Work Institute, which requires each to undertake employee and management surveys, examines employee engagement, and develops a Trust Index. The Index measures what the Institute believes are the cornerstones of a great place to work: Credibility, Respect, Fairness and Pride, and Camaraderie.

While economic and financial conditions influence the rankings, the Trust Index is the cornerstone of the ranking. Building a high Trust Index takes time and commitment from every part of the company, beginning with the CEO and C-suite. The culture that creates endures.

It doesn’t hurt, though, to offer great pay and great benefits. Fortune notes Google’s “free gourmet food, on-site laundry, dry-cleaning, and alterations, an outdoor sports complex, (and) the star-studded lineup of speakers.”

But even for perk-heavy Silicon Valley, three-time first-place winner Google offers an unrivaled assortment of benefits and perks, including custom workstations. Says Fortune, “One option that became increasingly popular last year was swapping out the standard sit-down desk for a standing desk. Googlers place an order with the company’s Ergolab, choose from a number of desk models, and have their desk measured to their height.”

Google isn’t alone in providing unusual perks. GoDaddy, #93 on the list, holds off-site activities that have included “whitewater rafting, gold panning, competitive cooking courses, and trapeze classes.” Zappos gives every employee $50 to award as a bonus to a co-worker. From those getting a bonus, the company picks a winner who gets a parade, special parking, a $150 gift card, and a cape.

For the complete list of this year’s best 100 companies and their 2011 rankings, click here.

If you are among the many strategic leaders frustrated with your inability to anticipate and handle the volatility and the speed of change in the talent management environment, you should take a few minutes to understand VUCA. VUCA best describes the volatile and chaotic business, economic, and physical environment that we all now face. Unless you have had your head in the sand, you must have noticed the chaotic business and economic conditions under which we currently operate. In fact, the last decade was so chaotic that in its cover story, Time magazine labeled it “the decade from hell.”

Many in talent management have been hoping that this chaos is a short-term phenomenon, but it is a permanent condition that we must all learn how to manage under.

Because they were designed for more predictable times, almost all current HR, talent management, and workforce planning processes fail to perform in this chaotic environment. In a VUCA environment, there are more changes, a faster rate of change, and the size of the changes are so impactful that they must be labeled as “disruptive.” So the question for talent leadership becomes, “how do you effectively hire, develop, place, and retain individuals and leaders in the volatile environment where literally everything changes in months rather than years?”

V.U.C.A. (pronounced voo – ka) is an acronym for an environment that is dominated by:

Volatility – where things change fast but not in a predictable trend or repeatable pattern.

Uncertainty – where major “disruptive” changes occur frequently. In this environment, the past is not an accurate predictor of the future, and identifying and preparing for “what will come next” is extremely difficult.

Complexity — where there are numerous difficult-to-understand causes and mitigating factors involved in a problem.

Ambiguity – where the causes and the “who, what, where, when, how, and why” behind the things that are happening are unclear and hard to ascertain.

Talent Management Has Been Lagging in VUCA Preparation

The concept of operating in a chaotic environment is not new. Tom Peters has been talking about managing under chaos for years, and “decision-making under uncertainty” is a well-established academic field. What is new is that most economic, business, and political leaders have realized that the VUCA environment is a permanent condition.

Business executives have been preparing for the VUCA environment for years. Although most of the initial work was done by the military and in counterterrorism, VUCA planning has been part of business processes like supply chain and risk management for years. A few firms like GE, Unilever, and McDonald’s have even begun changing their leadership development model to fit the VUCA environment. But unfortunately, no one in recruiting, retention, skill development, compensation, performance management, onboarding, etc. has paid more than lip surface attention to this strategic problem. As a result, the time has come to face the fact that you can’t be strategic in talent management, HR, or recruiting unless you can manage and thrive in a VUCA environment.

Why Talent Managers and Workforce Planners Must Prepare for VUCA

Under the established 20th-century talent management model, the future was relatively predictable. As a result, firms hired, trained employees, and developed leaders in order to prepare for the “predictable” upcoming business environment. Most firms prepared their employees for the single-most likely future scenario (i.e. scenario A), which was usually a 5%-10% extrapolation from the current situation.

The more advanced firms prepared for not just the single-most-likely scenario but also for one or two alternative predictable scenarios (i.e. scenario A and B, C). But unfortunately, in a world of continuous disruption and VUCA, using this traditional model usually means that you end up hiring, training, and developing for business and talent management scenarios that will literally never occur. Planning, forecasting, and training simply cannot work if the environment that you are preparing for never appears!

A Quick Example to Illustrate Complexity and Volatility

For example, recruiting routinely plans for three distinct scenarios: no hiring, moderate hiring, and large-scale hiring. However, in a VUCA environment, talent acquisition must plan for each of those scenarios, but in addition, it must also plan for periods where the firm will do rapid hiring in some business units and regions, while simultaneously having a hiring freeze or even layoffs in other business units.

What Is Needed Is an Agile Talent Management Model

The 21st-century VUCA model that I am advocating requires talent management to have plans for handling numerous “disruptive events” that traditional narrow workforce planning simply can’t handle. Some of those disruptive events might include generational shifts that occur every six years, social media changing the way we communicate, and simultaneous talent surpluses and shortages.

One possible conclusion for talent management leaders could be that you should stop any planning process that never accurately forecasts the future. But that would be a major mistake. Instead, in a VUCA environment, talent management needs to develop an “agile model” that prepares for a wider range of options (i.e. scenario A-Z) but more importantly, it must also develop Talent Management processes/systems that can actually shift and handle any unpredicted upcoming event “just-in-time.” It might seem counterintuitive at first, but the military has proven that you make people more agile and successfully prepare them for handling unpredicted events that literally no one thought of in advance.

Things That Talent Management Must Start Doing to Meet the VUCA Environment

Talent management leaders must prepare for disruptive problems and opportunities that cannot be predicted. Some of the action steps that you should take to prepare for complete surprises and the VUCA environment include:

• Agile employees — Develop as a primary goal a focus on the hiring, training, and retaining of employees and managers who are agile, who thrive in a VUCA environment, and those who have the capability of acting effectively in unforeseen and unpredicted situations.
• Agile processes – Require agility, flexibility, and a rapid change capability as an essential component in all current and new talent management processes and programs.
• Self-obsolescence of processes — Require all talent management programs and processes to include a component that continually “self-obsoletes” its own current practices and replaces them with updated ones.
• Training to solve unanticipated problems — training and development must create the capability to prepare employees and managers to identify and effectively handle previously unknown problems. A high volume of scenario training and simulations can make an employee more comfortable and confident when they encounter a completely new situation. With repetition, employees can eventually develop skills and their own processes for handling “brand-new” volatile and complex situations that are full of uncertainty and ambiguity.
• Focus on innovation — Prioritize talent management so that it focuses on innovators, game-changers, and pioneers who are essential for success in a VUCA environment.
• Rapid learning — Develop systems to increase the speed of individual and organizational learning.
• More internal movement — Develop process to proactively speed up the movement of employees internally to where they can have a greater impact.
• Contingent labor — Use contingent labor as a significant percentage of the workforce, in order to increase your capability to meet sudden upturns, downturns, and new skill needs.
• Rapid increase in talent — Develop the capability for rapid hiring for sudden needs through poaching, with pre-identifying talent pools and by building professional communities.
• Rapid release of talent — Develop the capability for rapidly releasing surplus and inappropriately skilled workers.
• Fluid job descriptions — Develop continually evolving job descriptions and hiring standards that reflect the continually changing work.
• Outsourcing for flexibility — Use outsourcing to fill sudden needs and overflow work.
• Competitive advantage — Develop talent management processes and programs that provide a continual competitive advantage over other talent competitors.

Things That Talent Management Must Stop Doing to Meet the VUCA Environment

Leaders must dramatically modify or stop doing the following things to prepare for a VUCA environment.

• Stop seeking permanent solutions in talent management and HR
• Stop relying on the past and trends as an accurate predictor of the future
• Stop benchmarking best practices and solutions to most current problems
• Stop assuming that long-term employee retention is possible or even desirable
• Stop assuming that “one-size-fits-all” is a good approach to managing employees
• Eliminate “fit” as a desirable criterion in hiring and retention
• Stop assuming that the corporate culture and even corporate values should automatically remain fixed

You Must Also Prepare for Disruptive Changes That Can Be Predicted

Although these listed problems will likely appear unexpectedly, these dramatic changes in talent management can be anticipated, so they must be planned for.

• A continually changing set of required employee skills and job duties and a huge gap between the needed and the available skill sets
• A completely new set of leadership skills that will focus on agility, flexibility, and in developing a “just-in-time” solutions capability within the team
• Dramatic fluctuations in employee turnover
• Continually changing candidate expectations
• Dramatic shifts in the volume and quality of applications
• Frequent changes in offer acceptance rates
• Continuous development of new communications and learning tools
• Generational changes that occurs every 6 years instead of 20

Final Thoughts

The new talent management model that I am recommending is based on the assumption that for the foreseeable future, most problems and opportunities will simply not be predictable. The model however does take advantage of the fact that the skill and capability of handling completely new unforeseen situations can be developed. My challenge and question to talent management leaders is “What are you doing to ensure that every talent management process and employee can produce optimal results in a VUCA environment? The time is come to put together a planning session devoted to making the shift toward the new agile talent management model.

The New Year is an opportune time to “raise the bar” by doing something strategic in talent management. In many corporations, new plans and budgets take effect at the first of the year, so the holiday period preceding the New Year is an ideal time to review the potential strategic actions to put in front of your team. Unfortunately, many talent management leaders are risk adverse, and although they constantly talk about the need to “be more strategic” they all-too-frequently find excuses that indefinitely postpone those dramatic and strategic actions.

The leadership set aside at least half the day for the team to identify upcoming problems and opportunities and the resulting strategic moves that need to be made. This article is merely a checklist of the strategic talent management actions that I have found that the very best corporations should have on their potential to-do list.

The Top 15 Potential Strategic Actions to Consider in Talent Management

If you’ve decided to stop fighting fires and to do something major with a strategic impact, here is a list of possible programs and actions that you should consider.

1. Increase the productivity of your workforce – workforce productivity is merely comparing the output of your entire workforce (the total value of the products and services they produce) with the cost of your workforce (total labor and talent management costs). Many talent management departments measure engagement (a precursor to productivity) but they don’t measure workforce productivity. Even fewer take proactive actions to directly increase it. Increasing productivity requires talent management to identify the barriers that restrict productivity and then to proactively provide the consulting advice, best practices, and tools that have been proven to increase a team’s productivity.
2. Increase employee innovation – fierce marketplace competition requires firms to accelerate innovation in product and service areas, despite having fewer resources. Rather than targeting a few departments, talent management must increase innovation in all areas of the business. Typically, innovation can be increased tough the targeted hiring of innovators, retaining innovators, and minimizing the barriers that innovators face within the corporation. Talent management must help shape the culture so that the expectation of continuous innovation permeates every business area.
3. Reward great people management – Most managers simply don’t spend enough time on talent management activities. The primary reason is that managers are not directly measured or rewarded based on how well they manage their talent. This is true even though talent management “owns” all of the key components related to measuring and rewarding (performance management, performance appraisal, competencies, and reward systems). The key action step is to develop a “people management scorecard” for each individual manager and reward them based on their performance against those standards.
4. Identify and fix bad managers – research by Google has shown that in most cases, an employee’s or a team’s manager is the single-highest impact factor on the hiring, retention, innovation, productivity, and the development of employees. Yet most organizations have no formal program for identifying weak managers. Strategic actions would include implementing surveys and metrics to identify with managers and to provide general lists with proven tools and approaches to improve a manager’s people management performance.
5. Convert talent management metrics into their dollar impact – unfortunately, most traditional talent management metrics fail to impress executives because they are not expressed in “the language of business,” which is dollars. Saying we have a 12% turnover rate, a 54% engagement rate, or an 87-day time to fill generally won’t impress senior managers because the metrics are not expressed in their dollar impact on corporate revenue. In contrast, stating that every percentage point increase in regrettable employee turnover costs us $7.2 million gets an immediate reaction. Work with the CFO’s office to credibly calculate the impacts.
6. Calculate the risks of weak talent management — shifting from the positive business impact to the possible negative impacts requires a risk management manager. Risk management is an increasingly important function throughout the business, but unfortunately, few talent management functions have put anyone charge of risk management. Risk managers identify and quantify the risks associated with potential talent problems (its probability and likely costs). Underfunding important talent programs can create tremendous economic risks such as losing key innovators to competitors, failing to have enough developed leaders, and a weak employer brand that drives top candidates away.
7. You need to prepare for a leadership gap — the combination of increased growth and higher turnover rates will mean that most corporations will begin to suffer because of a lack of leadership bench strength. In addition, because the type of leaders who will be needed will also change, the entire leadership and succession program will have to be re-examined and new social media and project rotation tools will need to be developed and implemented.
8. Speed up internal movement through proactive internal placement – very few things increased productivity, retention, and employee development faster than periodic internal movement. Unfortunately, most corporate programs require the employee to initiate the movement and to find the “correct” placement area. A more strategic approach is a proactive one where recruiters periodically identify employees and then help to correctly place these individuals who should be moved both for their own and for the corporate good.
9. Improve internal best-practice sharing – most talent management leaders spend most of their time and resources on developing new programs and approaches. Surprisingly, the data indicates that you can have a higher impact faster and at lower cost by simply identifying and sharing “hidden” existing best practices. Rather than relying on this best-practice sharing occurring organically, a superior approach is a proactive one that seeks out these affected practices wherever they might be in the organization. And once identified, they are shared in such a manner that managers easily understand their value and implement them.
10. Update your retention approach – just like employer branding, retention programs have been allowed to atrophy because the economy has reduced most turnover to a trickle. Unfortunately, turnover is about to dramatically increase, so processes to prioritize key individuals, processes for identifying who is at risk, and retention toolkits need to be reinvigorated before it is too late.
11. Employee referral programs need to be reinvigorated — as the rate of hiring and competition for talent increases throughout the year, stagnant employee referral programs need to be re-examined. Because they produce the highest quality and volume of hires, referrals as the percentage of all hires should begin to reach over 40%. Employee referral programs must be closely integrated with the developing social media approaches.
12. Assess your external employer brand – during the economic downturn, the area of employer branding has been frequently ignored because very little hiring was going on. Unfortunately, during the same time, the reputation of many corporations has been tarnished as a result of layoffs, salary/promotion freezes and a reduction and development resources. In addition, corporate images in general and in some specific industries like banking, oil etc., have been damaged by recent events and “occupy” type movements. The growth of glassdoor.com, blogs, Twitter, and Facebook now make it much easier for negative messages to be spread. At the very least, the positive/negative aspects of your employer brand should be measured and monitored before an upturn in hiring begins.
13. Re-examine your social media approach – although many talent managers have “done something” in the area of social media recruiting, realize that the potential for social media in talent management is much greater than almost everyone anticipated. Plans should be developed to determine how social media can positively impact training, employee development, learning, retention, collaboration, problem identification, crowdsourcing of answers, and best-practice sharing. The mobile platform should be examined in a similar manner because it is rapidly becoming the dominant communications platform for employees.
14. College recruiting needs to be reengineered — communications and job seeking approaches have changed dramatically on college campuses but college recruiting programs have unfortunately been stagnant for years. Program features that need to be examined include remote college recruiting, social media approaches aimed at college students, mobile platform approaches and marketing research to better understand the needs and the actions of top grads.
15. Improve non-monetary motivation – when compensation and reward resources are limited, nonmonetary motivators need to be emphasized. Unfortunately, the compensation function focuses almost exclusively on “expensive” salary, benefits, and bonuses … even though a significant percentage of employee motivation comes from … recognition, praise, and feedback. Talent management should develop non-monetary motivation tools for managers that are easy to use and that produce measurable results. They should also target key employees and server them in order to identify “how to best manage and motivate me” plans.

Benchmark Firms to Learn From

A key competency for any talent management leader is rapid self-directed learning, so it only makes sense to benchmark the firms that are aggressively making tremendous strides in talent management. My extensive research has identified some of the best firms to learn from. Many are from the Silicon Valley, which has already returned to a “war for talent” (Google, Facebook, Zynga all approach talent management using a more scientific approach).

Firms outside of technology have also taken some amazing steps so they should not be ignored (Zappos, Sodexo, CACI, DaVita, Deloitte, KPMG, PepsiCo, and the U.S. Army have all taken bold steps).

Additional Strategic Talent Management Actions to Consider

In addition to the top 15 major actions recommended above, some other strategic actions to consider include:

• Prepare for VUCA, the new normal — talent management plans, approaches, and processes need to be improved so that they can handle the new business environment that we face (VUCA = Volatility, Uncertainty, Complexity, Ambiguity)
• Increasing revenues — examining how talent management actions can directly increase individual employee revenue generation
• Integration of talent management functions – an almost-universal weakness is a lack of integration. Talent management functions must more closely cooperate, coordinate, and integrate so that they work seamlessly.
• Hire right before they do — if your firm doesn’t have the strongest employer brand, location or glamorous product, you must develop a plan to quickly initiate hiring immediately before your talent competitors. A rapid “explode out-of-the-box” plan is also required.
• Corporate headcount “fat” – setting up a process that ensures that the return to hiring doesn’t result in a surplus of employees (i.e. headcount fat).
• Competitive analysis — identifying the competitive advantage that your talent management practices provide compared to your talent competitors.
• Prioritizing — prioritizing jobs, managers, and talent management programs so that your limited resources provide the highest possible impact.
• SWAT team — creating a rapid response team that can respond to sudden talent management opportunities and problems.
• Alerts — providing a process that alerts managers about upcoming problems before they get out of hand.
• Lean or agile talent management – adapting lean, CRM, and agile business approaches and tools to the area of talent management.
• Remote work opportunities — as technology, communications, and social media tools improve, talent management must develop ways that allows top talent to work from anywhere.
• Forward-looking metrics — unfortunately, almost all current talent management and recruiting metrics are backward looking, in that they tell you what happened in the past. Instead, forward-looking and predictive-metrics that allow for improved decision-making need to replace them.
• Reengineer performance appraisals – this is an almost universally disliked process that requires tremendous amount of time but produces no measurable results. A completely new approach is required.
• Transparency – throughout the business world there is an increasing emphasis on transparency and openness. The time has come for talent management leaders to reassess their entire approach to secrecy, privacy, and the degree of openness with employees and applicants.
• Cloud talent management – HR and talent management cannot be exempt from the powerful trend to move everything to the cloud.

Final Thoughts

The period immediately before the beginning of the New Year is a great time to sit back and think of your accomplishments and your legacy. Unfortunately, rather than being strategic, too many talent leaders have been simply happy to survive the last few years with their sanity intact.

Now is the time to shake loose any lethargy, to take some risks, and do something bold before you retire or move on. You may have “earned a seat at the table” but you can’t be truly respected and admired unless you produce a measurable strategic business impact.

Most methods of hiring, retaining, developing, and managing recruiting and talent acquisition professionals are ineffective, non-strategic, and mostly outdated.

In my upcoming workshop at the spring ERE Expo, we’ll be discussing many of the common issues that are faced by those who manage and hire recruiters, and will share some of the most groundbreaking research in this arena.

For now, let’s discuss one issue in the hiring of recruiters, and one issue in the performance of recruiters and talent acquisition professionals.

Hiring Recruiters

It is safe to assume that most professionals enter the recruiting industry into highly transactional positions where performance is mostly measured by how much they “do.”

For example, how many calls they make per day, how many e-mails they can send, how many interviews they can set-up, and how many people they can get hired are core methods of measurement. This is especially prevalent in entry-level agency recruiting environments where most recruiters are brought into the industry.

Of course, recruiting is not the only profession where this is the accepted method of hiring new talent, but it is the most essential, simply because recruiting is not, in its core, about transactional items. The argument that is used to justify giving new recruiter incentives to engage in more “doing” or transactional activity is that activity is correlated with results. But the truth is that activity does not guarantee good results.

This matters because to many recruiting professionals, recruiting is about the process of recruiting and not the larger picture of acquiring talent. In entry-level and junior-level positions, this is not an issue of contention. But when recruiters become managers and directors they are unable to provide the strategic value that top organizations need.

For example, high-volume recruiters sometimes fail to understand the relative quality of talent needed by internal corporate recruiting professionals, because they have not been developed and trained into thinking about the long-term goals of the business. They may see a job description as all the necessary requirements on which to hire someone for, but focus less on soft items that are increasingly important as that candidate moves up in the organization.

I believe that this is because of how they were trained and developed — to focus more on prioritizing fast hires over quality hires (within reason of course). This is not a criticism of agency or “fast” recruiters. This is a criticism of how their managers and leaders develop them.

In an organization that has a strategic plan to move overseas, for example, it will fall upon the strategic recruiter to ask the question (for each position): “Will this person possibly go overseas when we expand there? And if so, where?” to which she/he may receive a response: “That’s a great question John/Jane. Yes, they may have to go overseas to China in about two years when we move our operations there.” To which the strategic recruiter may respond: “Excellent. I’ll try to recruit someone, based on our conversation and the job description who may also have some experience handling Chinese businesses or something related.”

The transactional recruiter, because she/he has not been developed to think strategically over the years would likely not gear his/her questions in such a way. They’d would focus more on questions that would allow her to make the most efficient hire possible. Although both recruiters will get the job done, one will bring long-term value that cannot be measured, and which she is not being assessed on.

Hiring recruiters in the right way is an issue of early training and development. Recruiting leaders and managers are entirely responsible for this phase.

We will discuss how to develop your recruiting staff (in the early phase of employment as well) to suit your overall needs, as well as when process execution is more important than strategic thinking.

Performance Management

Typically, recruiters are measured, assessed, and evaluated based on hard data (which for some organizations is still a step forward) in some of the best organizations. This is an excellent start, and any performance management system should include process-oriented data as part of an overall performance appraisal.

However, where the industry falls short is in developing enough career development as well as leadership opportunities to augment that appraisal. In fact, only a minority of recruiting professionals actually receive an opportunity to expand their academic, professional, or social knowledge either on or off the job, which in turn, never allows recruiting leaders to develop career paths, professional specialties, succession management, or leadership development opportunities for their employees.

To add, the best most organizations will do is send a small number of their internal talent staff to external training programs, without any thought or planning on how that new knowledge could be disseminated and integrated into leadership development opportunities. In short, even this potentially expensive training is done in a very tactical way and is not sustainable.

The importance of getting this right is paramount: Performance management is one of the main reasons that CEOs of major organizations throughout the entire world rarely (if ever) come from a talent acquisition background.

In addition, there is new and groundbreaking research that top performers in recruiting environments are not necessarily the most independent individual contributors, but individuals who manage internal relationships and social connections with stakeholders.

In fact, social dynamics are better predictors (statistically) of recruiter’s performance than human capital metrics and measurements.

We’ll talk about all these challenges in detail in my workshop at the spring ERE Expo.

Do you have Gen Y, or Millennial, employees who, in your opinion, think they are more proficient than they are or think they should advance faster than you believe is realistic?

If so, join the club. This is one of the biggest frustrations I hear from managers.

While it may be frustrating, how you handle this will make a huge difference in whether your Gen Y employees:

1. Listen to, and respect, your feedback now and in the future.
2. Stay.
3. Remain engaged if they stay.
4. Refer their friends to become job candidates at your company.

Just recently, I was coaching a senior executive who was feeling frustrated with one of his young managers, whom I’ll call Jenna. Jenna, a millennial, firmly believed she had mastered her present position and was ready to move on.

The senior executive, whom I’ll call Bill, believed that anyone in that position needed several years in the position to experience the myriad of situations required to develop a deep understanding of the department she was in, and the wisdom to make sound decisions.

Bill also believed that Jenna overrated her knowledge and ability. Jenna was a classic case of someone who “didn’t know what they didn’t know” — a common challenge for novices, especially young novices with the confidence, and sometimes brashness, that comes with youth.

I’d like to share the key points we covered in our session with the hope that you’ll find it useful for your interactions with Gen Y employees who believe they are ready to progress faster than you believe they are.

You’ll find that everything covered in the following points will help you with any employee, but doing these things—and being skilled at them—is especially important when dealing with your millennial employees.

“It takes time” and “be patient” will douse the flame of enthusiasm and ambition, and leave you with a disheartened, disengaged employee. 

You will end up with an employee who believes:

1. You don’t understand their ability.
2. You don’t value their enthusiasm and ambition.
3. Your organization doesn’t provide opportunities for advancement.
4. Growing professionally will require looking for a new job.

You need to first shift your millennial employee from Unconscious Incompetence to Conscious Incompetence. 

Jenna doesn’t know what she doesn’t know, i.e. she has Unconscious Incompetence. To believe her boss’s assessment that she needs more time, and to become receptive to learning, she first needs to realize she needs to learn.

She needs to become aware of what she doesn’t know and what necessary skills she doesn’t possess. In other words, Bill needs to help Jenna develop Conscious Incompetence.

Helping someone shift to Conscious Incompetence creates cognitive dissonance in the person being coached. Cognitive dissonance is the uncomfortable feeling created when our current viewpoint can’t hold up under the weight of new information (“Oh … I’m not as ready as I thought …”).

Helping the Gen Y employee develop Conscious Incompetence also stimulates motivation. They now see a gap between where they thought their current ability could take them and their new understanding that it won’t take them to where they want to go.

With this understanding, they’re more open to hearing what they need to do next. This sense of “I don’t know X and I need to know X to get to where I want to go” provides the fuel to power self-directed learning. Therefore, as a manager and coach, you need to make a list of the specific skills and knowledge that your Gen Y employee doesn’t yet know, but needs to, for them to progress.

Give Specific, Crystal-clear Examples

Don’t be vague when describing the areas you believe they need to develop. “I want to see you develop better conflict management skills” might be fine as a start, but it must be followed up with specific situations you’ve witnessed where the Gen Y employee fell short. Then give specific descriptions of what you would like to see them do differently in that situation.

As I teach in my constructive feedback seminars: When we give vague, nonspecific feedback, the receiver feels helpless because they don’t have the information they need to remedy the problem. When people feel helpless, it triggers primitive hard-wired responses to helpless — from anxiety all the way up to fear. At a primitive, hard-wired level, fear is linked closely with aggression (that’s why you don’t back an animal into a corner). Thus, when people feel helpless, they often become aggressive. By being crystal-clear with your feedback, you help the listener feel a sense of control: “Ah … I know what he wants, what he doesn’t want, and what I can do to fix it.”

So, make sure you’re crystal clear.

State Explicitly How Much You Value the Employee’s Enthusiasm and Ambition

Don’t forget what a gift enthusiasm and ambition is. Since only about 1 out of 4 employees reports being highly engaged, according to Gallup’s landmark study on engagement, you want to make sure your engaged employees stay engaged. You want to make sure they know that you notice and appreciate their enthusiasm and ambition.

The executive I was coaching said: “I don’t want to dampen Jenna’s enthusiasm or have her leave.”

My response:

“Make sure you tell her that. Make sure you let Jenna know that you notice and appreciate her enthusiasm and ambition, and you really want her to stay and grow with the company.”

By being this explicit both about valuing Jenna’s interest and about his desire not to dampen her enthusiasm, Bill communicates that he values and respects Jenna at both a professional and a personal level.

Addressing both aspects of the relationship openly communicates to the Gen Y employee that you care about them as an individual. While wanting your boss to care about you as an individual is not generation-specific, it’s especially important to the Gen Y generation.

Having been raised in a very child-centric time in history where many parents played coach and mentor — along with taxi driver — Gen Y employees are as a group more likely to become demoralized by an emotionally disengaged boss.

This point cannot be overemphasized.

The last thing you want is for your coaching meeting with your Gen Y employee to come across as cold and “all-business.”

Attending to the human and relationship aspect of the conversation, doesn’t just increase your ability to get commitment to change from your Gen Y employee.

It also helps to build a stronger, more productive relationship. This stronger, more productive relationship will make future conversations easier and more effective. Because they can see you care about them and want to understand their perspective, they will care more about you and your perspective.

Also, because they feel respected, valued, and heard, they will most likely care more about pleasing you in the future. Isn’t that true for you?

Haven’t you been more interested in pleasing bosses who care about you?

Remind Your Gen Y Employee That You Want to Help her Grow Professionally

This is important for three reasons. First, as Gallup’s Q12 research shows, having a manager who cares about your professional development is a major driver of employee engagement. Second, professional development is a huge priority among Gen Y employees, so it’s especially important to remind them you want to help them in this area. Third, showing that you care about their development helps frame the discussion in terms of “We have the same goal here” rather than you and your Gen Y employee sitting on opposite sides of the negotiation table.

Add the “My Responsibility to You and …” Frame

When someone sees us differently than we do, or they’re not giving us what we want, it’s easy to take it personally. You can mitigate this by emphasizing that your responsibility to your Gen Y employee is to help them grow and succeed. Doing that involves helping them get the experience they need — rather than promoting them too early and setting them up to fail. Thus, you’re communicating that you recognize this isn’t just about you and your job. You’re saying “I really am thinking about what I believe is best for you, which is one of my responsibilities.”

Also, by stating that you obviously have a responsibility to your employer to grow employees — and not prematurely promote — it helps frame your position as you being a responsible manager, rather than you simply withholding something they want because you’re unreasonable.

A quick caveat: I understand that saying these things doesn’t guarantee your Gen Y employee will understand or appreciate your position. They might even question your sincerity. But, as with any difficult discussion, all we can do is everything we can to increase the odds that the conversation will go well. We can guarantee it will work.

Provide a Vision of Hope

You want your Gen Y employee to see that there is hope — that there is a path to get to where they want to go. You do this in part by being crystal-clear about what you want them to work on. You give examples of how you would want to see them act or respond.

I like the term “videotape descriptions” when describing the way to communicate clearly what you want. When describing what you want, imagine you are describing what you are seeing and hearing on a training video depicting the desired behavior. The more clear and specific you are, the more hopeful your Gen Y employee will feel about their chances of success. They know what the target is; they can see the goal.

You also provide a vision of hope by making it clear that you want to help them get there and by working together to create a professional development plan. You don’t want to leave it as “OK, here’s a laundry list of things you need to get good at. We’ll reconvene in six months to see how you’re doing.”

Working together to create a plan not only creates greater confidence that they’ll achieve their goal, it also makes it far more likely they will succeed.

7 Things to Remember

1. “It takes time; be patient” will douse the flame of enthusiasm and ambition, and leave you with a disheartened, disengaged employee.
2. You need to first shift your millennial employee from Unconscious Incompetence to Conscious Incompetence.
3. Give specific, crystal-clear examples.
4. State explicitly how much you value the Gen Y employee’s enthusiasm and ambition.
5. Remind your Gen Y employee that you want to help her grow professionally.
6. Add the “My responsibility to you and…” frame.
7. Provide a vision of hope.

So, Let’s Apply This…

Think of some conversations about an employee’s distorted perception of their readiness to advance that you’ve been avoiding. Think of how you can use these guidelines to increase the odds of that conversation going well. And then have that conversation.

I owe the term “Riduculist” to Anderson Cooper. Every so often he discusses something so silly it defies explanation. This article deals with an email solicitation I received recently that was so ridiculous, I laughed out loud.

Job Failure and Job Success

My profession is studying jobs and designing tests/exercises/interviews that measure both skills and attitudes. Extensive job experience and exhaustive graduate studies have brought me into contact with hundreds of managers in large corporations. One of my first activities has always been to interview people, either in the job or supervising the job, and ask: “What are all the reasons employees succeed or fail in this job?” The following responses are typical:

Can’t manage time, Makes bad decisions, Can’t get along with people, Doesn’t seem to care, Can’t sell, Can’t lead others, Poor communicator, Not honest in dealing with people, Poor communication with customers, Poor planner, Doesn’t follow up, Can’t learn new information, Poor attitude, Doesn’t show initiative, Can’t see the forest for the trees, Doesn’t consider enough information, Never anticipates consequences, Has poor judgment, No tact, Not a “people person,” Ignores deadlines, Inflexible, Doesn’t like the work, Not a team player, Doesn’t support organizational goals, Can’t see the big picture, Can’t make a decision, Bad fit

Now that we know what people who supervise (and do) the job say, let’s look at how HR usually answers the same question:

No one helped them, Not given direction, Bad management, Never trained, Bad fit, De-motivated, Not really sure, Personality conflict …

(Yes, it’s usually a very short list.)

Notice the difference? Managers and job-holders cite about 80% skills-related items and 20% attitude-related ones. HR, on the other hand, almost always attributes performance to victimization. I think this is a pretty significant finding, don’t you? Now consider the following claims from the email vendor:

The vendor says:

• Our research shows 89% of bad hires are due to attitude such as coachability, emotional intelligence, and temperament.
• Source credibility for this data is attributed to articles in Fortune, IndustryWeek, and other newsstand magazines.
• Almost everything about job attitudes can be discovered from an interview.
• You can learn all your need to know by attending a 60-minute webinar.

On what planet?

Obviously the vendor’s body of research has been kept completely secret from the hiring-science community. Sure, if an employee arrives on the job with a full complement of skills, attitude can have a big effect. But, by completely ignoring ability, do you think this vendor is appealing to people who supervise the position, or the HR community? More to the point, if this product ignores 80% of job experts’ data, do you think their product can possibly be as good as they claim?

I’ve been on the end of many of interviews and can say with certainty most magazine authors are less-than-expert in the subject matter. In fact, they work hard to find simple sound-bite answers to complex questions, seldom caring about hard research because it makes for dry and uninteresting reading. In short, articles published in mainstream media are a better indicator of clever PR than expert peer-reviewed research. If you want opinions, visit the newsstand or bookstore. If you want facts, read unbiased hiring research studies.

Measure attitude using only an interview? Sure. For one thing, everyone knows a smart candidate can dance rings around a typical interviewer. For another, interviewers neither have the training nor the experience to be personality psychologists. Anyway, abundant literature (I know… booooring!) shows clinical evaluations (e.g. trained psychological experts) are inaccurate predictors of job success. You won’t find this information in the WSJ or HBR because it is not “catchy.”

Hard Facts

In my experience, there are thousands of training-program vendors, thousands of junk-science test vendors, and a few hundred professional selection tool vendors. Seldom will you find both training and professional selection technology coexisting — the technology and philosophy is totally different.

If a vendor’s website talks all about training, it’s a good idea to pass. You see, developing a professional hiring test takes more than drafting a few questions. It takes months of editing and statistical analysis to demonstrate it actually predicts some aspect of job performance. BTW: This would be a good time to revisit the manager’s succeed-or-fail list.

If you are responsible for making hiring decisions, be careful of self-promoting vendors entering the hiring and selection marketplace. Professionally, I never found one sufficiently qualified in the science of test development to develop a product that will eliminate dead-wood candidates. And believe me, if you use junk-science tests, you will learn the hard way they don’t work as advertised. Furthermore, all that dead-wood will be on your payroll.

This warning is true for all products that suggest they can teach you to analyze a candidate’s motivations, use self-reported personality surveys to match performance with a data base of job titles, predict job performance without actually measuring skills, or use any other method that is less than comprehensive or validated. From a legal perspective, the user, not the vendor, is always responsible for test use.

I have been accused by some of promoting “assessments?” Get real. It’s semantics: Interviews, resume reviews, application blanks, surveys, tests, sourcing, and so forth, all all assessments. Assessment is just another word for test, and, valid tests are useful tools for evaluating qualifications. If you don’t have proof your test/interview/assessment predicts job performance for your job in your organization, then you will assuredly turn away good people and hire useless ones.

Why should you worry? Experts estimate poor employment decisions cost about six month’s salary, not to mention perpetuating HR’s professional reputation for quick, ineffective solutions to complex problems. Forget vendor hype. Simple, one-step hiring solutions are nonsense. They don’t deliver.

Despite all of the recent talk about the need for openness and corporate transparency, there is still one area where corporations tightly hold on to secrets … revealing who is/isn’t designated as “high-potential.” According to Towers Watson’s 2011 Talent Management and Rewards survey, a scant 28% of employers let employees know their designation.

If you are a proponent of transparency, you’ll be happy to know that despite this low percentage of openness, there are many benefits associated with making managers and the high-potentials themselves aware of who is on the high-potential list for succession planning and leadership development.

The following list covers the positive benefits. (The arguments for maintaining secrets was covered last week.)

20 Benefits of Transparency in High Potential Selection

1. The designation motivates and increases engagement — openly recognizing the potential of individuals certainly excites and motivates the employee, and because other employees know, they will get additional reinforcement actions from your coworkers. Their manager might also feel excited, proud, and recognized because they now know that their development efforts were successful. Employee engagement may also increase as a result of your proactive action.
2. The designation helps to reduce anxiety — during weak economic times, even high-performing employees are naturally anxious about their future. Designating an individual as high potential helps to reduce their level of anxiety and uncertainty about their future. The designation lets them know that they will be continually developed and that they will have a major role to play in the future of the organization.
3. You can expect increased retention among HiPos — one of the primary advantages of telling HiPos of their status is to give them a sense of belonging. Being designated a HiPo is a form of recognition and accomplishment, and openness allows the firm to send a message to the individual that there is a high probability of a bright future for them. HiPos should also be made aware that should they leave this current organization and move to another, it is unlikely that, even with their outstanding track record, they will automatically receive the same “high-potential” designation until they have proven themselves. This level of rotation combined with the uncertainty should they move to another organizations helps to improve their retention rate.
4. The designation may cause HiPos to take themselves more seriously — after being notified that they are high-potential, individuals who are not self-aware of their potential may begin to take their careers more seriously. As a result, they may increase their learning and self-development or they may even pursue advanced degrees now that they know that that development or learning will actually be put to use by the organization.
5. Designation allows a more targeted focused use of resources — when a limited number of individuals are openly designated as high-potentials, it’s obviously easier for everyone involved to prioritize and focus their development resources and opportunities on these individuals. When the individuals’ names are kept secret, managers may devote too many development resources on individuals who are not likely to become future leaders and top performers.
6. It is easier to develop when the employee knows why it is happening — openness makes it more likely that any development advice and recommended actions will be taken seriously because the employee involved knows that they are being groomed for possible succession. If the selected individuals are not told their status, it can be awkward having development conversations and scheduling increased levels of development without revealing the reason behind it. It is also true that when everyone involved knows the goal of the development conversation, it allows for a more direct and honest exchange about the HiPos’ weaknesses and their development needs.
7. Keeping the names secret is hard work and openness makes everything easier — if your policy is to keep the names secret from all employees and managers, reaching that goal will be difficult and time-consuming. This is because employees are naturally curious and they will devote time to finding out who is on the list. You will need to keep secret not only the actual list of names but also the title and the invitee list of all development meetings that are designed exclusively for high-potentials.
8. They will find out anyway — experience tells us that despite your secretive efforts, employees will eventually learn who is on the list. Even if they don’t find out for sure, they will guess, and if they guess wrong, a great deal of confusion can occur.
9. Openness reduces the confusion over who should be a role model — if employees are aware of the HiPo designations that have been made by management, it will be much easier for them to select “the right individuals” to emulate and copy as their role models. If employees are also seeking a mentor, they now have a strong list of individuals to approach.
10. Reinforcing your communicated values and skills — you powerfully reinforce the existing messages that you have sent to all employees and managers about what behaviors they should copy, when you designating employees with those same skill sets, behaviors, and results as high-potentials.
11. Releasing the names reinforces the message of openness — if your organization espouses of the value of “openness” and transparency, having an open high-potential list will enforce that value.
12. An open list increases the likelihood of diversity — having a closed list can unfortunately lead to speculation about favoritism, however when the list is open, everyone can see if you have actually practiced diversity.
13. Openness can reinforce employees’ faith in management decision-making — if the high-potential selection process is fair, open, and accurate, it will likely select individuals who employees already admire and respect. The net result will be that your employees’ faith in management decision-making, and rewards for performance will be significantly reinforced.
14. It can eliminate speculation by managers — in some cases, being secretive extends to most managers, who will not be told who is high-potential. Not knowing for sure may cause some managers to treat those who they presume to be HiPos differently. Taken together, being open can eliminate this inaccurate speculation, wasted time, resources, and effort.
15. Openness will encourage managers who develop employees — with an open list, managers who have successfully developed high-potentials in the past will be rewarded as other employees gravitate toward them in the hopes of also being developed.
16. An open list may improve promotion decisions — unless managers are provided with a HiPo list, they cannot know for sure who should be considered for a promotion. By providing every manager with a list of high-potentials, you make it much more likely that managers will include these HiPos in their interview process for promotions and development assignments. Widely distributing the list also increases the chances that they will interview “lesser-known” individuals from other business units or regions who otherwise a manager might not have known about.
17. Knowing the high-potentials who are likely to be targeted makes it easier to focus your retention efforts — openly designating high-potentials can make them likely targets of external recruiters. However, in the same light, knowing that these individuals will be targeted may allow you to focus your retention and blocking efforts on these individuals, so that the net result may actually be a decrease in the turnover of these key employees.
18. If you periodically remove individuals from the list, you help to reduce an entitlement mentality — having a high-potential list can help to develop a two-class mentality between HiPos and the rest. However, if employees see that individuals are periodically removed from the list, there is less of a likelihood that they will see this as a permanent class distinction. If individuals in lower job levels are also included on the high-potential list, more employees will feel that they have an opportunity development.
19. Customers and vendors might feel more valued — openly designating HiPos will likely mean that your firm’s major customers, strategic partners, and vendors will become aware of who is on the list. If they have the opportunity to work directly with these HiPos, they are more likely to feel valued as a customer and partner.
20. Transparency may improve your employer brand image — the fact that you have an open process and are direct and honest with your employees may build your external employer brand image and help with recruiting as employees spread the word on their external social networks.

Final Thoughts

Obviously the decision between having an open or closed list has historically been a difficult and complex one. As the practice of management and HR progresses, there has been an increasing emphasis on openness and transparency. This is partially a result of growth of the Internet and internal and external social networks, which make it incredibly easy to spread “secrets.” In addition, it has been widely reported that new generations entering the workforce have come to expect (or even demand) a dramatically higher level of transparency.

As a result of these factors, most organizations should reconsider their decision to keep most elements of their succession plans secret. Obviously there are some drawbacks to openness but I have found that all of them can be overcome if you commit your best thinkers to the problem. The pendulum is steadily shifting toward the time where the succession planning variation of “don’t ask, don’t tell” will become an historical footnote.