Tuesday, 15 February 2011

Talent dilution

Talent. It's not too easy to define, but we all know when we see it.  The problem is, do we know when we lose it and do we know how to nurture it?

Let's begin with a young startup. Just a handful of people, sitting in a room creating something new. A company like this is rich with talent; entrepreneurial, technical, creative, imaginative. The repetitive tasks are minimal, and nearly every conversation is a rich cordial of talent that can create innovation and generate competitive advantage. For want of a better term, let's call them the 'talent group'.

Let's jump forward a few years. The startup has blossomed but that has increased the volume of repetitive tasks and so now they've had to employ new people. Because these are repetitive tasks, the new people are treated differently and don't  get invited to join the talent group. Where before we had a talent group making up 100% of the company it is now down to 50%. The cordial is watered down, but because the company is small it still appears innovative.

Let's stop for a moment and clarify. I have not said these new people are lacking talent. They have just been implicitly excluded from contributing talent because of the role they were employed to perform.

Now, jump forward a few more years. The company is even more successful and has new external investment.  The investors want measurable results, and as we all know, quantitative measures of success tend to focus on the repetitive tasks. Now our ever increasing underclass, already excluded from the talent group, are further disenfranchised by reducing their role to a list of instructions. Any that might have asked to be included in the talent group feel it's impossible and direct their creative energies to things outside the company.

The company is now made up of a large underclass of potential talent suppressed into automation, and our talent group is now even smaller, say just 5% of the company. Our cordial is decidedly watery.

So far, our increasing dilution has been gradual. So much so that it has gone unnoticed and been largely obscured by the increasing scale of activities. If nobody notices, it's not a problem, right? Wrong. We've scaled our operation on an ever decreasing asset and now it looks like an upside down pyramid. In this position we find it almost impossible to innovate our way out of the situation, worse still, when members of the talent group leave, the effect is disproportionate and significant.

At this point, the company culture has embedded the idea that one small group contribute ideas, a thin layer scrabble around the fringes and the majority sit in miserable servitude. This is an irreversible position in my opinion. A company in such a position will seek partnerships and mergers in place of innovation, and will ultimately be consumed into a larger group where similar problems exist, but where economies of scale allow profits to continue.

So is there an alternative? I believe the answer is yes. Here's how I'd do it:

  1. Explicitly look for talent in new employment candidates as well as skills.
  2. Create a culture and structures that actively promote ideas from all people about all things. This includes setting aside time.
  3. Train all people in skills for giving, receiving and considering suggestions (no, we aren't all very good at it)
  4. Reward people for contributing and participating.
  5. Create and stick to a manifesto that gives employees autonomy and responsibility.  

Companies begin by talent but gradually dilute to automation by treating people like machines. What's great about talent is it's unconstrained by class, role or salary. Great ideas can come from anywhere and all we have to do to find it is open our eyes and our meeting rooms.