1

Francisco Digitally signed by Francisco Trigueiros

DN: cn=Francisco Trigueiros, o, ou, FRANCISCO MIGUEL TRIGUEIROS
Trigueiros
[email protected], c=PT
Date: 2009.07.08 21:58:49 +02'00'

MBA CLASS

Human Resources Management

 2

AGENDA
1. Introduction
2. “Leading Clever People”
2.1 Summary
2.2 Personal review and critic
3. “Why are we loosing our good people?”
3.1 Summary
3.2 Personal review and critic
4. “Why smart people underperform?”
4.1 Summary
4.2 Personal review and critic
5. Final Critical Review & Conclusion
 Introduction
3

 Nowadays, a company´s value cannot be measured by the fair value of its

physical assets. In these days where there´s easy access to capital and
technology, the value of a firm is directly related with its intangible assets,
mainly the Human Capital. Competitive advantage no longer relies on cash
positions or high tech products but rather retaining and attracting talented
people.

 Here lies the biggest problem managers have to face today: How to we
protect our intangibles? One might be tempted to look up on the Internet
articles about legal protections: patents, non-disclosure agreements and
non-compete contracts. It is wise to use these tools, but is it safe to rely on
them? If your competitive advantage lies in superior manufacturing skills,
can you really prevent your employees from ending up at competitors and
bringing a lot of know-how with them? Or if your company is famous by
being innovative and creative, will the legal protections protect you from
headhunters that seek creative and innovative people?
 There are some pertinent questions that need to
be addressed
4

 How to retain and attract intellectual capital?

 What is the role of HR in this issue?

 Are managers responsible for loosing their talented people?

 How can organizations protect themselves against headhunters?

 Objective
5

 My theme selection relies on how managers can successfully manage and

retain talented people.

 Firstly I will briefly summarize all the articles separately, highlighting the key
points that support my theme selection.

 Secondly I will give a short personal comment at the end of each article
summary.

 Finally I will finish with my own critical review about the articles and the
reason why I chose them. I will then try to answer the critical questions
mentioned before by providing a three step framework that will allow
managers and HR professionals to successfully manage, retain and attract
talented human capital.
 The three HBR articles are all related with the
topic “How to manage the most talented”
6

1. “Leading clever people” - by Rob Goffee and Gareth Jones (March 2007)

2. “Why are we loosing our good people?” - by Edward E. Lawler III, with
commentaries by Anna Pringle, F. Leigh Branham, Jim Cornelius, and
Jean Martin (June 2008)

3. “Why smart people underperform?” – by Edward M. Hallowell (January

2005)
 „Leading Clever People“ – Harvard Business Review
7
by Rob Goffee and Gareth Jones (March 2007)
„I never read my
reviews“

"If you'll recall, my resume pointed out that I'm a self-starter

and don't need supervision”
 When managing clever people, important issues
may arise
8

 How do you manage people who don’t want to be led and may be smarter
than you?

 How to foster an environment that explores the full potential of these

clever people in way that produces value for all stakeholders?

 How to retain your intellectual capital in a globalized world where mobility

is not an issue?

 How to make sure that you recognize their value before they or someone
else does?
 Although clever people are not all alike, they do
share a number of defining characteristics
9

 Good News
 Clever people need the organization as much as the organization
needs them

 They need structure and discipline, someone that takes the best out of
them

 Bad News
 They know that the organization needs them badly, they know their
value and sometimes they consider themselves more valuable then
their managers
 The 7 „sins“ of clever people that managers
should understand
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1. They know what they are worth

 They know that the organization´s resources are worthless without their intellectual capital
2. They need support for their projects
 They will choose the organization that will better serve their interests in supporting their
own petty projects
3. They ignore corporate hierarchies
 They don’t care much about promotions or corporate titles, however they do care about
status and like to be called as such (e.g. professor or doctor)
4. They expect instant access
 They want to be able to reach the CEO when needed
5. They cant stand being bored
 If not engaged mentally they will move to another more motivating organization
6. They are not allured by high wages
 They prefer to work in challenging environment where they think they can change the
world rather then receive a high salary or big bonuses
7. They don’t care much about politeness
 Don’t expect them to thank you even if you are being a good manager and you have
complied with all the points mentioned before
 There are 4 principles for managers to sucessfully
deal with clever people
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1. Understanding them
 Know the seven sins and go along with them.
2. Manage the organizational “rain”
 Clever people dont like bureucracy or administrative work, managers
need to clear this in order to establish a productive relationship.
3. Implement a culture of sharp-minds
 Clever people like to be sorrounded by other like-wise clever people.
Organizations should also not rely in only a few clever minds.
4. Establish credibility
 Managers must show to the clever people that even though they are
clever, that they need you to share competencies. Managers must
develop credibility by demonstrating that they can complement the
clever people with their area of expertise.
 In my personal opinion this article highlights some
important issues, however...
12

 I believe this is a very good article that can help managers realize the peculiar
characteristics of the clever employees. It provides a good framework for social
relationship between both manager and employee.

 This article highlights the importance of understanding and respecting one´s

personallity and values in order to establish a productive relationship between
leaders and their clever people.
 ...it fails to provide answers for the following
questions
13

Is it enough to understand them and respect their peculiarities in order to

retain them?

 Are the leaders the only ones who should be aware of such peculiarities?

What about HR? Dont they also play an important role in attracting and
retaining talented people?

 What concrete measures should leaders follow up?

 This article provides the framework on how to
manage talented people
14

The article fails in answering the previous questions by only touching on the
surface of the problem of why today it is so difficult to retain talented people.
The author focused more on managers and how they should develop their
relationship with their talented people. It also fails to give some more direct
actions, such as specific incentives and other motivational factors. Finally the
author also fails to recognize the importance of HR when dealing with talented
people. Managers need to coordinate HR resources and initiaves with the
needs of their creative people.
 I choose this article as the first one to base my considerations upon, because
it provides the basic understanding about how clever people think and their
desired working conditions.
 However this article by itself is not enough to protect managers from
headhunters that seek to allure talented employees. Managers together with
the HR team must create an organizational shield that protects the best interest
of these creative ones. The next article will address this issue.
 „Why are we loosing our good people?“ – Harvard
15
Business Review by Edward E. Lawler III
„I never read my
reviews“

Source: Charles Barsotti, John Caldwell, Todd Condron, Patrick Hardin, and
P.C. Vey
 About the article
16

 This article is a case study presented by Edward E. Lawler III, about an

architecture company called Sambian Partners, that are loosing their best
people to direct competitors.
 The case study is then commented by 4 proeminent people in the field of
people management:
 Anna Pringle - the head of international people and organization
capability for Microsoft.
 F. Leigh Branham – the CEO of Keeping the People, a human
resources consultancy in Overland Park, Kansas. He is the author of The
7 Hidden Reasons Employees Leave
 Jim Cornelius - the chairman and CEO of Bristol-Myers Squibb in New
York City.
 Jean Martin – the executive director of the Corporate Leadership
Council, a global membership of chief human resources officers and a
division of the Corporate Executive Board, headquartered in Washington,
DC.
 Sambian Partners was always considered a great
place for young talented desginers
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 About the firm

 Sambian is a young architecture firm founded in 1975 by Peter

Gasbaryan
 His idea was to build a top-notch architecture and engineering firm by
making appealing offers to young talent
 The founder dies in 1997 and his daugther Helen Gasbaryan, also an
architect becomes the CEO
 Helen immediately took the company into the next level, being in the
vanguard of the “green building “ movement
 In the first years, Helen was able to attract the best talented and young
designers in the industry
 Lately Sambian has problems in retaining their
talented people
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 Current Crisis
 Tom one of Sambian´s best desginers was recently recruited by J&N (Sambian´s
biggest rival)
 Mary (HR manager) interviews Tom the day he left and tries to figure out why he is
leaving, however her questions did not gave wings to concrete answers
 Recently two other more talented designers also left Sambian
 To stop the leakage of talented human capital, Mary decided to run some surveys
in a vain hope to try to find out by questionaires where the problem is
 Shortly after Tom left, there are rumors that another talented designer ,Adrienne,
could possibly join Tom in moving to J&N
 Not being willing to wait for Mary´s questionnaire results, Helen the CEO of
Sambian decided to immediately promote Adrienne, to a level that she had no
preparation or necessary skills for, in order to keep her in the firm
 Mary (HR manager) opposed but because the decision was already made she
couldn´t do much to stop this hasted action
 The results from the survey finnaly come out and they dont show any conclusive
evidences about the rooth causes of the employee disatisfaction
 Mary proposes then to perform one-on-one interviews with every single employee
 Meanwhile every employee comments on the management and HR performance,
and they all know what is causing the problems, however they do not disclose any
information
 How can Sambian discover what’s really driving
people out the door?
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4 commentators use their expertise to solve this case

 Anna Pringle (Head of international people for Microsoft) states:
 Mary is not performing her job as the custodian of talent at Sambian
 Mary asks poor questions, gives stock responses and gives up too soon
 Helen should dedicate 40% of her time listening to the employees, this task
cannot be delegated to anyone else inside or outside the firm
 Helen should use mentoring and coaching as way to integrate its employees and
attract other talented ones
 Both Helen and Mary should conduct weekly „listening tours“ gathering direct
feedback from supervisors and staff
 Mary should create a blog where employees can express themselves
anonimously
 Tailor individual needs(customized incentives)
 F. Leigh Branham (CEO of Keeping the People consultancy firm):
 Reccomends more coaching and feedback
 Helen need to provide a forum where employees can openly expose their opinions
and emotions
 Reccomends workout sessions (GE style)
 Helen needs to hire a third party (outsiders) to help Mary
 How can Sambian discover what’s really driving
people out the door?
20

4 commentators use their expertise to solve this case

 Jim Cornelious (CEO Bristol-Myers Squibb) states that Helen:
 Needs to build a culture of trust
 Should simplify the management structure
 Clarify and make sure all understand Sambian´s vision
 Ensure fair compensation
 Dedicate more time to the key talented players
 Build simple communication lines
 Jean Martin (executive director of Corporate Leadership Counsil) states:
 Helen and Mary must understand the emotional motives why employees
would want to stay at Sambian
 Communicate a clear vision and the role of the employees to fulfill this
vision
 Conduct „culture audits“ to find out what the employees value in a
corporate culture
 My personal review of the article
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Implementing a culture of trust

 After reading through all of the commentators advices, I realized that all lead to a very
important point: in order to retain the talented employees, there has to be a deep
understanding of their emotions, values and satisfaction levels. This is done by
establishing communication lines where all members of the organization can freely
express themselves without fears of repurcussions. However this cannot be
successfully done without trust.
 In my personnal opinion trust is the key factor for employee retention. Talented
employees know their talent and if they dont know it then headhunters will make them
know about their value. Therefore, if employees dont trust that the communication
system will bring them any bennefits, and they dont trust that the line managers will
listen to them or that the leader will take proper actions and held people responsible,
then they wont believe the company´s vision and mission statement. Once this trust
is inexistent then smart people will see no need to stay. One might be tempted to
foulishly raise their salary or give them a quick promotion and fancy titles(just like
Helen did), however this will be a short-term remedy, for sooner or later, the talented
people will realize that money is not more important than a challenging, inspirational
and above all trusworthy environment, and they will leave.
 This article fails to explain why some talented
people underperform
22

 The article focused on key employees that left the company for reasons
rather than their own performance. These important players either left the
organization because of lack of recognition, lack of trust or lack of corporate
culture.

 But what about those employees that work in challenging environment,

where there´s a culture of trust, where their work is recognized and alligned
with the corporate vision and yet they underperform? Why do these talented
people that work in their desired environment and receive more than fair
compensation and incentives underachieve? Why are they not performing at
their best? The next article provides the answer for „Why smart people
underperform?“.
 „Why smart people underperform?“ – Harvard
23 Business Review by Edward M. Hallowell (January
2005)
“We’ve invested heavily – if not always wisely – in talent.”

Source:Charles Barsotti, John Caldwell, Todd Condron, Patrick Hardin, and P.C. Vey
 “Attention deficit trait” is turning smart people into
frenzied underachievers
24

 The author identifies a corporate illness called „attention deficit trait“ that is
turning talented employees into underperformers.
 „Attention Deficit Trait“ or ADT is the inability of the employee to focus, to
concentrate and therefore extract the best out of his/her intellectual
potential.
 As a result of ADT employees tend to become nervous people, addicted to
caffeine , easily distracted , impatient and inner frenzy. Moreover, people
with ADT have difficulty in being organized, setting priorities and managing
time.
 This happens because of brain overload related to excessive workload.
Managers and leaders excessively push their employees to the extreme.
 According to the author companies that ask their employees to do too much
at once tend to reward those who say yes to overload while punishing those
who choose to focus and say no. Moreover, organizations make the mistake
of forcing their employees to do more and more with less and less by
eliminating support staff.
 To counter attack ADT leaders should contribute
to a positive atmosphere
25

 Managers can help to prevent ADT by:

 Matching employee´s skills to tasks
 Assign goals that dont stretch people too far
 Provide support staff if necessary
 Create alert systems to identify ADT symptoms
 Inform staff about ADT and how to control it

 People can control their ADT at work by:

 Do all you can to create a trusting, connected work environment.
 Have a friendly, face-to-face talk with colleagues
 Break large tasks into smaller ones.
 Keep a section of your work space or desk clear at all times.
 Each day, reserve some "think time" that's free from appointments, e-mail, and
phone calls.
 Try to act on, file, or toss every document you touch. Don't let papers accumulate.
 My own personal review about the article
26

I believe that its about time that someone brings psychological issues in
to the managing talented people atmosphere. This article touches an
important issue that managers and executives tend to often to forget:
Employees by how much clever or talented they might be, they are still
humans not machines. Managers know the value that their employees
pose to the company´s overall performance and therefore even when
these employees underperform they dont think of leting them go or firing
them but they try to help them getting back on their feet.
Managers do want to get the best out of their talented one and firing them
is usually never an option. The problem relies on how they try to help them
and this article mentions this very clearly. Managers too often rely on
external consultants that focus on time management or internal couches.
However, like the author very clearly states, this is a not a problem of
mismanagement or lack of organizational skills but rather a psychological
one. People tend to get stressed however they do not want to admit they
are stressed and therefore enter a denial phase that will ultimately lead
them to a brain overload.
 Leaders alone cannot ensure the best working
atmosphere for their employees
27

Once again this article focus too much on how leaders should manage
their talented ones. It is a fact that leaders should be aware of the needs of
their employees and how to manage them. However leaders by definition
are very busy people and alone they cannot manage to successfully
implement a healthy working athmosphere.

The role of HR is again very important in this case. They are the right
wing positioned directly on the front line of the „battle“ and therefore play
an important role in aiding the senior managers in creating the best
working environment for their employees. I will talk more about the
importance of the role of HR in my final critical review.
28 Final Critical Review
“ A younger guy could have ducked faster. You’re fired!”

Source: Charles Barsotti, John Caldwell, Todd Condron, Patrick Hardin, and P.C. Vey
 The three HBR articles together provide the
solution
29

The reason why I chose these three articles reviewed on the previous
slides its because they all touch the three main points in how to
successfully manage and retain talented employees. Separetely the
articles do not provide any valid solution for success in ensuring the
retention of the human capital, however the articles do complement each
other. Together the articles provide a framework in which managers
together with the HR department can successfully create a working
environment that will attract and ensure the performance of the brightest
minds.

The major flaw from all these articles was the lack of clear responsibilites
and importance attributed to the role of HR. Only the commentator from the
second article, Anna Pringle of Microsoft really highlighted the importance
of role of HR. This could probably explain why Microsoft is considered to
be one of the best places to work for.
 Managing and retaining talented employees is a
three stage process
30

Understanding
Develop a
the unique Implementing a
healthy
characteristics culture of trust
atmosphere
of smart people
 Understanding the unique characteristics of smart
people
31

In order to establish a healthy interpersonal relationship with clever people

managers and HR staff should know their ten common traits
1. They know what they are worth
2. They need support for their projects
3. They ignore corporate hierarchies
4. They expect instant access
5. They cant stand being bored
6. They are not allured by high wages
7. They don’t care much about thank you notes
8. They need to know that their leaders are credible
9. They dislike bureaucracy and organizational „rain“
10. They enjoy working with other creative people

Once managers and HR professionals have understood and respect these

peculiarities, they have then taken the first step towards a healthy relationship.
 Creating a culture of trust
32

In order to successfully implement a culture of trust ,managers and HR

professionals must consider the following instruments:
Allign the talented people with corporate vision
Straight
line communication between management, HR professionals and
employees, Eliminate hierarchical „jams“ (excessive bureaucracy)
Assign mentors or coaches to develop deep smarts (intellectual capital from
inhouse)
Create blogs or forums
Implement 360 degree feedback
Make managers accountable for their talented people
Create workout sessions (GE´s workout)
Establish talent review routines
Implement a „cafeteria“ incentive system (incentives customized or tailored to
meet employees personal needs)
 Implement a healthy atmosphere
33

At the third and last step managers and HR professionals must create a healthy
atmosphere that balances both professional and personal lifestyle of the smart
employees. Such healthy atmosphere is necessary to make sure that talented
employees dont underperform. Managers and HR professionals must then
create the necessary conditions that will allow their key players to focus and
perform at their highest level:
Employee´s skills need to be alligned to the designated tasks

Perform regularly EQ (emotional quotient) tests

Support staff should be provided if necessary

Balancing personal and professional life with special incentives (such as

fitness studio, sabbatical timeout, extra days-off,etc...)
 HR plays a key role in aiding managers to
successfully retain human capital
34

Human Resources Management include a vast array of activities that are

directly related with attracting and retaining talented and skillfull employees.
HR professionals are in the battlefront of the war on talent:
 HR provides the linkage between employee
concerns and corporate goals
35

HR bridges the gap between corporate and staff

CORPORATE HUMAN EMPLOYEE

CHALLENGES RESOURCES CONCERNS
• Globalization • Planning • Background diversity
• Technology • Recruitment • Age distribution
• Managing change • Staffing • Gender issues
• Human capital • Job design • Educational levels
• Responsiveness •Training/development • Employee rights
• Cost containment • Appraisal • Privacy issues
• Communications • Work attitudes
• Compensation • Family concerns
• Benefits
• Labor relations
 Conclusion
36

Clearly, many variables affect an organization's ability to attract and retain top
talent. Organizations must follow the three step framework in order to successfully
retain and attract intellectual capital:
1-Understand talented people and their particular characteristics;
2-Create a culture of trust, as someone once said, "Trust is the social
equivalent of air and water." ;
3-Implement a healthy atmosphere, people are emotional, EQ tests.

The HR function plays a key role in developing and implementing coherent

strategies for building intellectual capital, working in alliance with CEOs and senior
leadership teams. To be effective, these strategies must inform and drive ongoing
programs such as recruitment, orientation, and career development.

Uncertain economic prospects add complexity to the development of retention

strategies, but the cost of losing key employees is high, no matter what the
economic conditions. In times of downsizing, the risks of losing top talent are
especially high. And in the long run intellectual capital remains the key competitive
advantage for companies who want to succeed in a global economy.
 References
37

 Harvard Business Review (March 2007) “Leading clever people” - by Rob

Goffee and Gareth Jones
 Harvard Business Review (June 2008) “Why are we loosing our good
people?” - by Edward E. Lawler III, with commentaries by Anna Pringle, F.
Leigh Branham, Jim Cornelius, and Jean Martin
 Harvard Business Review (January 2005)“Why smart people
underperform?” – by Edward M. Hallowel
 Harvard Business Review (June 2008) „The right stuff“ by Charles
Barsotti, John Caldwell, Todd Condron, Patrick Hardin, and P.C. Vey
 HRPS Workshop Report by Peter Karp, President-Elect, HRPS
 “How to manage smart people” by Scott Berkun (Jan 2004)
 „Top ten reasons why people quit their jobs“ by Gregory P. Smith
 „Human Resources Management“ (slides and class notes) by Professor
Doctor Mario Dent