Generational Babel - New Voices for Talent Strategies

As a parent (and, for that matter, a son), I am confronted daily by the need to adjust to differences between generations. On a more expansive scale, companies face this too. And it gets even messier when you factor in the challenges of being a rather large multinational parent.

There is a substantial body of research on the topic of national cultures, and quite a lot of analysis of western generations, but not much that compares generations across the globe. This makes it difficult for global corporations to find credible guidance that will help them formulate their talent strategies.

At one level it’s easy to assume that the current ‘igeneration’ or generation ‘Z’ is much more homogenous (and, therefore, easier to understand) than previous generations, given the role of the internet and its ubiquitous social networking tools like Facebook and Twitter. But we humans have a persistent urge to identify ourselves with more localized cultures (whether it be Kpop fans in Korea, punk rockers in the UK, Texan secessionists, the Ryukyu independence movement in Okinawa, or 2^nd generation immigrants to the US west coast).

Also, given the varying political, economic, social and technological events that shape the culture and outlook of people around the world (wildly different, but still hugely impactful on a generation's outlook e.g. the fall of the Berlin Wall, France in May 1968, the opening up of China, Vietnam, Margaret Thatcher’s premiership, etc. etc.) it seems rather remiss, possibly arrogant, to assume each generation is the same across countries, and trite to universally apply western labels such as Gen X, Y or Z. Yet, all around us are talent strategies predicated on the generational and cultural characteristics that exist in the domestic talent markets of corporations.

So, as pointed out in a recent article by colleagues of mine, it's not much of a stretch to assume that any talent strategy needs to take account of these differences - particularly in regions outside a company's domestic market where it may be toughest competing for local talent. But, the payback for getting this right is to gain access to foreign labor markets where indigenous companies often have an advantage.

Over time, we have seen (particularly in some Western societies like the UK and US) an erosion of reasons why individuals would be loyal to a company, and we see increasingly transactional relationships developing between employer and employee.

In these more transactional environments, individuals must develop strategies to maximize their chances of survival in the corporate world. But the strategies may well be different by generation and by country. This may be a function of timing, so we might see similar patterns emerging but at different points in time as social and economic development occurs (e.g. views on the role of corporations in society might differ in Germany from Russia and be reflected in different generational expectations). Or it may operate at a more tactical level depending on the level of self reliance that a given generation might have developed. Some people might tie their career to the coattails of a successful mentor, while others may rely more on impersonal institutions (in France this might be the strong labor laws, in Japan it may be the expectation that the company will find alternatives).

In an attempt to provide a sufficiently attractive 'exchange' between employee and employer, many companies proclaim their commitment to 'employee engagement' or seek out a compelling 'employee value proposition' (EVP). But, what they do in practice is often at odds with what is espoused and communicates exactly the opposite message to the one intended (e.g. 'Watch out for yourself when the market takes a turn for the worse!' versus ‘Join us and build a long and successful career’). For prospective or actual employees, the only rational point of view is ' I give up my time and expertise to you in exchange for a set of intrinsic and extrinsic rewards that are meaningful to me and sufficient. So tell me, what will I get out of this?'.

It's a complex situation, but seeing the differing talent markets around the world as different sets of transactional relationships may help us to get practical about how to frame a talent strategy. In that regard, we might find some social science theories helpful - in particular two of them: social exchange theory and equity theory. Both theories hypothesize that a rational process is at play that leads people to seek some form of balance in the 'perceived' value of exchanges between individuals. (I am, of course, ignoring the more complex issue of what exactly constitutes a generation which can lead you through some mathematical thickets if you start down that path.)

Talent strategies need to reflect generational and cultural differences around the world if they are to have any relevance to the transactional calculations going on in the labor market. Our HR executives need to develop strategies that reflect the nuances of differing generational expectations. After all, there are several layers of generations that most large companies have to cater to. There is a risk of being seduced into thinking the many similarities between them represent the whole, but building an EVP based on the differences will allow one company to outshine another in the talent market. This is surely the only route to them gaining access to the most talented people in any economy in which they are operating. It is not an easy task, but those companies that understand this and take steps to respond specifically and differentially will have an edge over those that don't. That's an edge that will be hard to overcome for those who seek a more simplistic way to do business around the world.

Developing Superbosses and Superperformers

A very interesting article in a recent edition of The Atlantic (Orchid Children by David Dobbs) describes new thinking on the old conundrum concerning how much of what we become is the product of nature versus nurture. In genetic research the prevailing view, known as "Stress Diathesis" or "Genetic Vulnerability", has been that 'bad' genes make some people more susceptible to things we'd probably rather avoid like depression, ADHD, violence and other anti-social behaviors, if triggered by some kind of trauma or accumulation of stressful experiences .

However, as a result of some fascinating research initially on primates, but apparently corroborated by follow-up research on young children, it seems the 'bad' gene may actually be a 'good' gene, under the right circumstances.

The research found that monkeys with a neurotic disposition will tend to become more nervy in an insecure environment, but be totally normal in a secure environment. Further, those 'neurotic' monkeys given to monkey 'supermoms' (i.e. skilled nurturers) turned out normal, while normal monkeys given to neurotic mothers became neurotics themselves. So far, so unsurprising - especially if you favor the nurture side of the equation.

More interesting has been the finding (in monkeys and human children) that those who have the genetic variants ("risk alleles") that make them susceptible to neurotic or anti-social behavior, if placed into the right kind of supportive environment, can actually out-perform on a wide range of dimensions those without these kinds of gene variants . (This is called, among other things, the "plasticity hypothesis".)

Although the article does not discuss the extent to which this finding translates into similar effects in fully formed adults, this must be worth consideration. If the same effects do indeed manifest themselves in adults (which doesn't seem a totally unreasonable assumption, does it?) then why not consider what this might mean to us in the business world.

In corporations, typically, developmental attention and the best opportunities go to people who are seen to be good performers (using conventional criteria). Meanwhile, poor performers come under increasing scrutiny (and therefore, stress) until they either shape up or are shipped out.

However, if we applied the plasticity hypothesis to the world of organizations, we might instead focus more attention on identifying and developing 'superbosses' who are willing to develop a more nurturing environment. If we identify the right qualities in these 'superbosses' we could move more of our underperformers (at least those who seem to fit a set of relevant behavioral patterns) to work for them, hoping that the payback will be significantly better than we would get from a conventionally defined high performer.

I rather like the idea of challenging our preconceptions about employee potential, and forcing us to be more careful about how we define a 'superboss' (a bit like schools in affluent neighborhoods compared to schools in more challenged areas, it's not difficult being an outperformer, as a school or boss, if you are given all the people who come ready made to perform well). Even more compelling, in business terms, is that it might just give us a bigger ROI than the conventional approach we typically follow.

Talent management is a hot topic right now, so with all the attention being focused on the subject, maybe it's time to look further afield for some new ideas and to actively seek to challenge our preconceptions.

Corporate Values: Say What You Mean, Mean What You Say

There is a lot of talk about values in the corporate world. There are also a lot of corporate webpages (the new form of corporate poster) listing the values that purport to underpin the culture of many an esteemed institution. For something so important, it's remarkable how varied are the interpretations of what a value actually is. For example, a quick look at a few companies in the upper end of the Fortune 500 shows how loosely the term is applied and a confusion between outcomes, behaviors and values: 'relationships', 'boundarylessness' (sic!), 'responsibility', 'partnership', 'performance', 'diversity', and 'respect', to name a few examples.

If behavior change, or at least the alignment of behaviors around a few core themes, is the point of most lists of corporate values, then it might be useful if there was a little more consistency in our understanding of what they are and how we applied them. I came across two definitions of values recently that are useful:

• 'The criteria people use to select and justify actions and to evaluate people…. and events' (SH
Schwartz, 1992)
• 'Principles for ordering consequences of alternatives according to preferences' (Hambrick & Brandon, 1988).

If these definitions were used in practice, it might encourage people to think harder about choosing values that have a clear connection to specific behaviors that, in turn, will drive towards a desired end result. Once you have that idea in mind, it's much easier to see the importance of ensuring values are understood and internalized by leaders and employees, and embedded in HR performance management processes, rewards, training courses and other corporate shapers of behavior. There is a natural relationship between, and flow across, values, people processes, behaviors and performance. If these connections are not made then there will be no impact on performance, and if no impact on performance, then why bother in the first place?

As I dug into the topic further, I asked myself if there is any evidence that some values are more effective than others. Jia, Lee, Moon and Li (2009) in one study and Lado, Boyd and Hanlon (1997) in another showed three important considerations which we should take into account when deciding what values our company should declare itself to be pursuing:

1: a focus on self enhancement tends to drive short term performance (for example individual ambition, competition, independence)
2: values that focus on wider stakeholder interests tend to enhance longer term performance and innovation (e.g. helpfulness, loyalty, citizenship)
3: combinations of co-operative and competitive values increase the impact on performance.

But do these lists of corporate values actually achieve anything? Do they ever drive any hard business decisions in practice? There are a few outstanding examples of companies responding to product failures in ways that reflected their core values and others who have shown impressive persistence in their commitment to a particular value, for example customer service. So, rare they may be, but these examples show it really is possible to mean what you say. Maybe all those centuries ago the stoic philosopher Epictetus gave us the right guidance when he said: First learn the meaning of what you say, and then speak. Not the other way around.

Visionary or No Place to Hide - Which Would You Get Out of Bed For?

I was struck by two contrasting styles of leadership as described in two different articles in the NY Times this weekend.

Alan Mullally current head of Ford Motor Company talks in the Corner Office section of the paper about what Collins and Porras would call a BHAG (Big Hairy Audacious Goal), but in the tamer language you would expect of a CEO running a $100bn+ company, he says "…the higher the calling, the higher the compelling vision that you can articulate, the more it pulls everybody in."

On the other hand, in the cover story of the business section an article about Lego quotes Jorgen Vig Knudstrop, CEO since 2004, talking about the way he manages people: "…there's no place to hide if performance is poor. You will be embarrassed, and embarrassment is stronger than fear."

Now, there is no doubt that Knudstrop has seen success - toy sales in the US dropped by 5% last year, but Lego sales increased by nearly 19%. That's pretty amazing by most standards.

But, who would you rather work for, the visionary or the 'no place to hide' guy?

When we think of leaders who generated massive followership, we tend to name the likes of Churchill, Martin Luther King, Gandhi, Abraham Lincoln, Genghis Khan. I don't think our history books give the non-visionaries much of a look in. And, I think that's because getting out of bed is a lot easier when one feels part of some grand vision, whereas 'no place to hide' is probably more of a reason to stay under the duvet covers. Leaders, more vision, please!

Designing Organization Structures - A Question of Principles or Metrics?

Ever been presented with two equally attractive but mutually incompatible choices? Of course you have. It's all part of the human condition. In the demotic lingo of our time, there is no doubt that it sucks to be in this situation. It particularly sucks that it doesn’t restrict itself to one manageable compartment of our lives. We see it all around us. Take organization design (it took a while, but now I'm on topic) for example.

Every book on the topic and every management consultant's process involves an early stage calling for the establishment of some design ‘principles’ or ‘criteria'. To quote Jay Galbraith, a leading figure on the subject, these should be ‘concrete statements about how the organization will behave.’ Having been involved in organization designs many times over the years, I can tell you that there are typically two frustratingly non-complementary outcomes from this exercise:

1. A sense of exhilaration at the level of ambition and expectation being placed on the result of the soon-to-be-designed structure ("Cool, this is going to sort out everything, once and for all."). The problem with this is that the expectations are quickly dashed by the second outcome….
2. A sense of hopelessness, given that the list of design principles is long and, you guessed it, has many incompatible expectations ("Cripes, are you kidding me? How do we achieve all of this?"). This is problematic. The statements are, all too often, so generic (i.e. anything but concrete) that, coupled with the length of the list, post-design practically any action could be rationalized as having met some element of the criteria - without necessarily doing anything useful.

A friend who is a senior executive in what might be loosely called the technology industry called me recently to chew over some design issues. He described his list of principles. In essence, they were: position for growth, cut costs, be flexible and able to respond to changing circumstances. Yes, and I want to be able to work a short week without any pecuniary disadvantage, eat and drink all I want, and be fit and healthy all at the same time. Sorry, but if it's that important, then choices have to be made so that you are not stuck with aforesaid equally attractive but incompatible goals. Is cutting costs the priority or gearing up for growth? Can you really afford to build in organizational redundancy to achieve the flexibility you are seeking?

I hear you mumbling something along the lines of 'We can all pick holes. Have you got a better idea?' Well, let me try one on you. Maybe we need to start design from a different perspective, borrowed from all those shareholder value enthusiasts. Ask yourself, which metrics have to show improvement, and by how much, in order to justify the disruption of re-organizing. Then take those metrics and figure out what changes would be needed in the organization structure to have an impact on them. You might find that it's not a structural change that's needed. By focusing on the metrics you may well find that the most appropriate response should be a small specific change, rather than risking a big upheaval through restructuring. It might be just a question of making talent choices: who needs to sit where and what type of people need to be hired. It might tell you that deploying a new set of goals is sufficient, or different mechanisms are required for integrating activities across the company.

But even if you do decide that a restructuring is required, you’ll have a much clearer conception of what needs to change. For example, if the metrics show that you need a higher rate of product development then you will work on the innovation centers of the company, if you need more sales, you might need to work on both product development and the sales force organizations. The more specific you get, the more likely any restructuring will be both effective and efficient.

In my friend's case, a merger was driving the need for redesign. Obviously, you cannot avoid a re-organization in this situation, but the metrics based approach still applies. You still need to figure out the specific changes that will lead to performance improvements and justify the merger.

Numbers almost inevitably help you to be more specific and be set in reality, not theory. The more specific you are, the more realistic the list will be (less exhilaration maybe, but less of a downer as well). The more realistic, the more likely you are to achieve the outcomes for which you were hoping. Less effort wasted on generalizations, plus measurably improved outcomes are things that might even bring a smile to the faces of our shareholder value friends.

My Cultural Stereotypes OK, Your's Not OK

Whenever I visit Asia, it never ceases to amaze me how many of the regional operations of European and US companies are managed by people from the parent company's domestic market. The arguments for this that I hear are usually of the, 'We cannot find the local talent' or 'We need to ensure consistency of parent company culture and processes around the world', variety. However, given that many Asian owned companies operating in Europe or the US reflect the same phenomenon in reverse, the argument over lack of local talent seems a little weak.

These days all markets are a mix of local and global, but it is the local differences that represent a huge opportunity for differentiation, as well as the need for thinking that goes beyond the presumptions developed in the parent company market.

Undeniably, there will be challenges in persuading local talent to join a foreign brand, unless it has the kudos (and willingness to pay above the going rate) of a Goldman Sachs or suchlike. However, being a suspicious type, I'm guessing that there is also an underlying cultural parochialism at play, which results in a preference for the use of home grown expatriates, despite the huge costs involved. Cultural differences in problem solving, selling styles, business relationships, and languages are seen as frustrating complications, rather than opportunities to increase effectiveness. One senior manager of a services company recently complained to me that they could not find decent sales folk or senior management in their East Asian markets because local candidates tended to lack aggression, creativity and leadership aspirations. That's quite a list of things for a nation to have in short supply. Any country that has been involved in the trade of goods and services for centuries probably has a reasonable number of people who know how to chase a deal or think new thoughts or organize others, albeit they may do it differently from the way it's done back home.

Research on cultural stereotypes tends to fall apart somewhat once you get beyond the obvious extremes of the collectivist (e.g. Japan) and individualist (you can guess) cultures. Individual differences so often outweigh the effects of broader cultural differences, that we need to get better at dismissing stereotypes. The reality: different management and working styles are effective in different markets. So let's raise a glass to the wonders of diversity and give a thumbs down to cultural presumptions. Try harder to understand the different models that can lead to success in different markets, be more persistent in seeking out local recruits and maybe take a little more risk along the way. It really doesn't sound like more than we would expect of someone entering our own domestic market.

Compassionate Capitalism?

There is a whole industry devoted to trying to figure out if companies that treat their people well do better over the long run than those who apply themselves less assiduously to this saintly cause. It's quite fascinating how much attention is given to this subject, particularly in the U.S. where we have the double whammy of a political system that provides relatively paltry social safety nets compared to many other developed economies (particularly continental Europe) and a business culture that is immensely, ahem, 'flexible' (i.e. layoffs are a common early response to any downturn in revenues).

One book, Firms of Endearment does a nice job of making the case for the linkage between looking after your people and financial success, but it's notable that of 28 companies that made the 'Final Cut', only 4 of them hailed from outside the US, presumably as a sop to non-U.S. readers. Oh please, are we really saying that in a world as globalized as ours is these days, we cannot do a better job of recognizing that we might do well to learn more about what others are doing, and spend a little less time on comparing and contrasting what is happening inside one, albeit major, part of the world economy.

So, it's nice to see some recognition that companies outside the US with a focus on the welfare of employees do actually exist. In the NY Times on Sunday an article described a German machine tool manufacturer, Trumpf, that tries very hard to avoid layoffs during hard times. They don't always succeed, but they do try any number of creative alternatives before resorting to layoffs, including banking overtime hours during good times that can be called upon during tough times. Of course, Trumpf exists in a system that is the direct opposite of the US: in Europe, government supported social safety nets are substantial and employment law makes it hard for companies to layoff people unless they have a powerful case for doing so.

In the seventies we used to obsess about Japanese management systems, with many companies paying substantial amounts to learn about the Toyota Production System or something similar, but there seems to have been much less interest in hearing about, for example, the Scandinavian versions of social capitalism that have been so successful or about the strength of the German Mittelstand, or the effects of Confucianism on the success of many Asian companies.

Notwithstanding the different political and social choices that societies east and west make that result in these different systems, with long term unemployment creeping ever higher is this not the perfect time to broaden our horizons and look more deeply at the choices we make and revisit the question of the role of a company in society, it's obligations to the communities on which it depends for it's success and, indeed, our definitions or what constitutes 'success'?