The Talent Advantage: How to Attract and Retain the Best and the Brightest

CHAPTER 1

Why Leaders Must Fight the Battle

Human Resources is to Talent Search as Airplane Food is to Fine Dining

The fundamental reason that leaders must lead the talent wars is that no one else is doing so within the organization. The acquisition of talent is not analogous to finance, or property management, or legal affairs, or public relations, which can justifiably be delegated to specialists.

Many organizations make the fatal error of entrusting talent acquisition and development to human resources, which is a fatal error. This function was once personnel, or even industrial relations, and dressing it up with the contention that people are resources that need managing from specialists is neither honest nor helpful.

Here’s a quick test: Name five human resource executives promoted to CEO of Fortune 500 organizations in the last ten years. Assign that task to someone, and now let’s get on with the rest of this chapter.

STRONG LEADERS ATTRACT STRONG PEOPLE

What do strong leaders do to attract top talent? Strong people are confident enough to surround themselves with strong people, and weak people surround themselves with weak people.

Years ago, we were brought in for the first time to Burlington Industries, at the time run by a CEO named Klopman. At the very first meeting, he revealed himself as a belligerent, nasty brute, ordering people around with obscenity-laced demands. At the end of the morning, as we resolved not to return, a colleague asked, Why would his people take that kind of treatment on a daily basis?

Because he has surrounded himself with weak people who will accept that treatment, simple as that.

We believe that the readers of this book are healthy and confident and eager to build strong teams and cohorts. Here is some advice right from the outset:

1. Build your personal brand in your industry—people want to work with people who are well-known in their field.

Nancy MacKay worked as the executive coach with the newly appointed president of a division of a global transportation company to develop his 90-day action plan for his new role.

I’m curious, why did you leave your big job at the competition to take on this new role with a much smaller company? she asked. And, you had to move away from your family and commute on weekends to see them as a result of taking this new job. Why did you do it?

To be honest with you, I come from a wealthy family so I don’t need to work and it’s not about the money. I’ve been watching this company grow exponentially over the past eight years since the new CEO was appointed. I’ve heard him speak at industry conferences, and I’ve bumped into him a few times at many industry events. When he approached me to join this company, I was ready to say yes because I know I’ll learn a lot from him and one day I’ll be the CEO of this company, said the president. Within six months, the newly appointed president was listed on the CEO succession plan, and Nancy worked with him on his development plan to be CEO ready-now within two years.

You want to serve as the magnet that attracts the metal and the mettle you need.

2. Hire people who are smarter than you are. Your success is based on getting results through others, so why not put world-class people on your team.

As input to a 360-degree executive coaching program, we interviewed all 12 board members of a large global manufacturing company to identify the strengths and opportunities for development of the CEO. This company was considered to be the world leader in the industry.

Talent Search

People are attracted to follow those setting an enviable example. They are repelled by those expecting people to do as they say, not as they do.

The greatest strength of our CEO is that he is not afraid to put people on his executive team who are smarter and better than he is. He goes after world-class people, and he doesn’t settle for anything less, said the chairman of the board. Every single board member identified this as the top strength of the CEO. And, every single direct report identified this as the top strength of the CEO. As a result, the entire company focused on attracting world-class people, which enabled the company to achieve extraordinary results.

Roy Vagelos, the now-retired CEO of Merck in its heyday, told us once after an executive council meeting, I’m tough, maybe the smartest guy in the room. But what I look for are people who are smart enough and tough enough to challenge me. I always respect a good argument, and will change my mind as a result.

3. Build long-term relationships with your stars. Always maintain relationships with your outstanding people whether they are in your own organization or not because you never know when they will come back to you.

Nancy facilitated a three-day succession planning workshop with the eight-person executive team of a large financial institution. Now that you’ve identified your top 12 list of potential successors and their development plans, how are you feeling about the strength of your leadership talent pool? asked Nancy.

To be honest, I’m not very impressed. If these people are going to be running this company in the future, I’m not sure I would want to invest in this company, said the COO. There is no way we’re going to meet our high growth strategy targets with this talent pool. I can’t believe we haven’t developed our people.

We say our competitive advantage is our people, but clearly we’re not walking the talk, said the VP of human resources.

Nancy challenged each member of the executive team to come up with a list of all the star performers they’d worked with over the past five years. Over the next six months, the executive team attracted five new external high potentials to the organization to strengthen their leadership talent pool.

In a consulting firm in Princeton, New Jersey, that was undergoing some bad years, Alan sat down with the senior managers with a list of 12 people. They are all gone, noted a vice president. How is this supposed to help us?

It’s quite simple. If these dozen people had remained with the organization, we’d be three times our size today, because they are all doing spectacularly well themselves. The key is not to let this happen again, and to find the all-stars and make them productive and loyal.

4. Success follows success—people want to work with successful people, and they will follow you forever.

Nancy worked as the executive coach with the new CEO and executive team of a mid-sized, privately held retail company. The new CEO, who was previously the division president of a very large retail company, was brought in as a hired gun to take over from a family-run business. His mandate was to double in size over the next five years. Over the past five years, with the existing executive team, the company had experienced very little growth.

You’re going to have to build a new executive team if you want new results. Given your success track record with your previous company, you know where to go to get your new team, Nancy pointed out.

They won’t want to follow me here. It’s a mid-size private company, and I won’t be able to offer them the compensation that they want, said the CEO.

They will follow you because they know you’ll be a huge success in your new role and success follows success, said Nancy. Over the next six months, he replaced all but one member of the existing executive team with someone from his previous executive team. As a result, he exceeded his first-year business targets and was prepared for accelerated growth in year two.

It’s not unusual for entire teams to follow their boss to new surroundings. There is nothing intrinsically wrong with this, so long as the team has a great track record and can adjust culturally. Blending imported talent and existing talent is a key leadership goal, and obviously not one that an HR department can be entrusted with.

5. Get to know your competition. Build relationships and hire people who have been there and done that before at the competition.

Alan works with many consulting firms around the world. When they need key resources, he asks whether there are people anywhere who have done what they need to have done. If the answer is yes, his advice is to go out and hire them, since we know that they can do it. If the answer is no, then the advice is to make sure that the expectations are reasonable to begin with.

Nancy worked as a strategy consultant with the president of a division of a large global company, who had seven direct reports. The previous year, the division was rated number one in the industry on all measures of success. What’s your secret to success? asked Nancy.

Over the past five years, I’ve recruited every single person on this team from one of our competitors to ensure that we beat the competition. We went from being rated top 20 to number one in our industry, said the president.

We’ve told our restaurant and hospitality clients: If you want to move from number 20 to number one, find the people who are working for the organizations ahead of you on the list. Don’t try to reinvent the wheel. But you have to make sure you are attractive to them in more ways than mere compensation.

6. Build long-term relationships with external recruiters. Short lists are getting shorter due to a worldwide shortage of leadership.

If you build long-term relationships with external recruiters, you will get better service within shorter timeframes; make better cultural fits with candidates; make better decisions in selecting the best available top talent; and get top talent when you least expect it.

One of Nancy’s CEO clients got a call from his external recruiter at a time when he was not looking to recruit anyone. The top sales person in the industry has approached me to express an interest in working for you, said the recruiter.

I’m not looking to hire anyone right now, said the CEO.

He wants to make a move, and if you don’t hire him I will have to send him to the competition. And, there might not be any top talent available when you’re ready to hire someone, said the recruiter. After an extensive interview process, the CEO decided to hire the top sales person in the industry, which resulted in doubled sales in the first year.

Attracting top talent is a process that can’t be confined to specific needs or organization chart vacancies. You want the best available athletes to come to you first.

THREATENED SUBORDINATES SINK THE SHIP

Weak subordinates are the first to run from trouble, to blame others, and to steal credit. They are invidious. The difficult, contingent action is to fire them, which is increasingly difficult and legally hazardous. The effective preventive action is never to hire them in the first place.

Here are the signs that you’re losing this battle.

• Create a fear-based culture. You cannot allow executives and leaders in key positions to maintain a command and control leadership style. This sounds obvious but unless you create a sense of urgency for change, the shift to an empowering leadership style that attracts top talent will never occur.

Nancy was asked by the CEO of a large global company to work with his COO to help him build a more empowered leadership team and to attract top talent to the team. The CEO felt that the COO was very defensive and threatened by any comments from the CEO; a B-player with brilliant technical competency; a person with that command and control leadership style that created a fear-based culture that resulted in his inability to attract top talent to his team.

As a result, there were no potential successors for the COO. And, both the CEO and board felt the company was at risk given the declining operational results over the past year. Nancy suggested a six-month, 360-degree executive coaching program for the COO as a starting point. With significant pressure from the CEO, the COO reluctantly agreed to engage in the program. As input to the coaching program, Nancy interviewed the CEO, peers, and direct reports of the COO, which validated the CEO’s perspective on the COO.

At the start of the first coaching session with the COO Nancy said, Are you aware of your strengths and opportunities for development?

I’m the best person in the world for this job. I know I need to make a shift to empowering my team and let go of my command-and-control style now that we’ve grown to such a huge size. I know I don’t have the right people on my team, but these people have been with me for a long time. I know I have to change, but I don’t know how to do it and I’m going to need your help. Over the next six months, Nancy worked with the COO to attract both internal and external top talent to his team, to build an empowered team culture, and to develop strategies to improve operational results.

At a division of Hewlett-Packard, Alan was introduced to a notoriously tough executive in his last year of work prior to retirement. He was successful in terms of hitting his goals, but infamous for an authoritarian rule that left bodies along the road.

Once he retired, after making his plan one last time, there was no one within the entire division to replace him, because the strong people had intelligently transferred out long ago, the weak people stayed and followed orders exactly, and he had bothered to groom no one as a successor. He was a tactical success but a strategic disaster.

• Hang onto under-performers—because they don’t have the right mindset, skills, success behaviors, and experience to take on new challenges and attract top talent.

Alan spent months with the president of a manufacturing operation in North Carolina convincing him that he had to fire his engineering vice president. The president felt that no one should fail on his watch, which is a phrase that makes you wonder what the executive is watching—the psychobabble good feeling books or the business results.

After 90 days the resignation/termination was finally agreed upon, and both the president and vice president felt as if a weight had been lifted. The former went on to pursue his strategic goals, and the latter took a job with another firm where he was far more comfortable and appropriate.

If an executive is not firing poor performers, no one else is either.

Nancy was the leadership development and team effectiveness coach for the executive team of a newly appointed division president of a major financial institution who wanted his division to be ranked number one in the country. At the end of a two-day workshop, Nancy asked the president and each VP to commit to achieving the individual and overall team objectives that were set during the workshop. Everyone on the team made the commitment to deliver the results with the exception of the most senior VP. I’m not sure I can commit to these targets given the uncertainty in my market, and my team is already working too many hours,