Accountancy & Management: If you've got talent, look after it: Roger Trapp looks at an attempt to encourage managers to nurture their staff
Tuesday 20 July 1993
But as with anything, the truth can be very different from the image. Cynics would not be surprised to learn that the US company most admired seven years running by a jury of more than 8,000 senior executives, consultants and financial analysts is one that has spent little time telling the world about its values and beliefs.
The pharmaceutical company Merck has clearly impressed its peers and observers through its performance rather than a message. It is a lesson that some of Britain's bigger-spending organisations might bear in mind.
It is also a lesson Sir John Harvey-Jones seeks to convey in his latest book, Managing to Survive, when he notes that almost every company refers in its annual report to its workers as 'our greatest resource' but does little to make them feel that way.
If this is a problem in general terms, it is much worse when the people concerned are especially talented. Then, according to Philip Sadler and Keith Milmer of Ashridge Management College, people are indeed the key assets - and in such organisations talent is 'the only available source of enduring competitive advantage'.
By only paying lip service to such ideas most top executives are erecting a formidable obstacle to a strategic approach for managing talent, and hence to the success of their firms.
But not everybody has such a limited view. The two men have conducted an extensive international study that has found a few beacons in the dark.
In their report, The Talent-Intensive Organisation: Optimising Your Company's Human Resource Strategies, recently published by the Economist Intelligence Unit, they seek to change overall attitudes through examining best practice as exemplified by the likes of National Westminster Bank, the Anglo-Dutch consumer products group Unilever, the Japanese-owned UK computer company ICL and the US electronics company Motorola.
The report looks at the correct ways of recruiting, motivating and rewarding people through case studies. Particular attention is devoted to organisations, such as drug and computer companies, where there is a high proportion of highly trained specialists.
But, as the authors make clear, this is not the only kind of talent. The ability to manage and lead is a valuable talent in itself, as is the knack of getting business - as one company acknowledged by paying its sales director well above the norm because his loss could lead to a sharp reduction in sales.
The fourth category of talent is the 'hybrid', the individual who is perceived as having the potential to cross over from a specialism to general management. The most valued - but hardest to come by - hybrid is the person who can move from being an engineer, say, to building the business as a whole.
All of which makes it vital to be able to spot the high-fliers, or those who are going to add some sort of value. And, though the talent itself may be elusive, the Ashridge team has nailed down a number of techniques for identifying it, which should appeal to most companies - not just those like Glaxo and ICL with a high population of 'rocket scientists'.
For instance, the UK hotels and restaurants group Forte is credited with bringing a 'distinctive approach' to the problem of predicting individuals' career paths.
It is based on a procedure developed by the Brunel Institute of Organisation and Social Studies at Brunel University, which is itself based on the management thinker Elliot Jacques' idea of how organisations work. One of the central ideas is to link pay to the time span during which the consequences of a decision become known. Since this lengthens as an individual moves up the organisation, the pay gets better as the responsibility and the risk grow.
Forte uses the concept to give an indication of where managers in their 30s will be in the future. It can also be used to demonstrate why some managers will never reach the top or will take longer to get there than the high-fliers. At the same time, the process produces a lot of information about the organisation that has helped Forte change from a tightly controlled company to a more flexible, market-led operation.
This is a vindication of Mr Sadler's view that the way to meet the challenges of the next century is to nurture talent. With the market for such 'gold- collar workers' rapidly becoming more international, 'there is no doubt that superior competence in managing talent provides a significant and sustainable competitive advantage - and chief executives ignore this at their peril'.
Mr Sadler is leading a seminar on this theme at Ashridge in October. But in the meantime, he and Mr Milmer offer a number of pointers for success.
Talented people need a 'sense of mission'. More than pay, security and the opportunity to develop their skills, they want a cause that is satisfying.
Companies should seek to develop an organisational structure that does not stifle creative talent but channels it into productive paths.
High potential should be identified and talented individuals given the chance to develop their skills through challenging work.
The chief executive must describe the connection between the economic aims of the enterprise and the desire of the talented people to excel in their chosen profession or vocation.
At Merck, ICL and elsewhere this last requirement is assisted by the chief executive's rising from the specialist ranks rather than being a professional manager. But before John Birt's beleaguered BBC or the City's professional firms think that this is the only way of going about raising morale among staff unused to the pressures of a true business environment, the report points out that there have been some notable successes where the chief executives have not progressed through the companies they run.
The key, though, seems to be not to brag about it. Some years ago Merck commissioned an outside consultant to find out whether the company had shared values in spite of them not being stated. The same four or five issues came up time and again. And it was recommended that they should not be emblazoned over everything - but left implicit.
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