Employment contracts don’t work. Organisations can’t recruit the very best people if this is all they offer. And they can’t retain these people effectively either. The opportunity is to be a partner with a highly desired employee – and to offer them a relationship over their career.
- Recruited and onboarded at a point which is appropriate for both the individual and the organisation
- Supported and developed whilst in employment
- Exited at a point at which their development needs or career or personal interests require a move
- Kept close to the organisation during the period during which they are working elsewhere (ready to be re-recruited and onboarded again at an appropriate point).
Jon,
Thanks for addressing the comments below.
Since the 'head farming' piece is an E&Y concept, do you suppose it is more likely to match the needs of an advisory firm like theirs? I see the reason why they would want people to go out and get 'real world' experience and then to come back.
What specific hurdles do you think need to be passed to get other companies to see this as being a valuable approach too? Are there incentives required within HR like a headhunter might get for bringing in great talent? How might the change of mindset most easily be achieved?
Thanks,
David
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Jon,
Let me just add my voice to those saying this is a great approach, and one that seems to be gaining credibility -- at least in my anecdotal experience -- over the past decade.
I was very impressed when I joined McKinsey & Co. in 2002 and saw how they reacted to people who announced they were leaving the firm. There was no touch of resentment, no desire to marginalize them. The reaction was more like, "Terrific! Where are you off to? Let's have lunch as soon as you're settled in." I'm generalizing, and individual managers' reactions vary. But the culture there takes a very open approach to the departure of good people. Some of them come back, no doubt wiser for their stints in other places.
I did pause on your point in the Challenges section about organizations needing to "put their employees' interests first, or at least equal to their own." I may be a bit of a pessimist on this. Individual managers may be more sympathetic, but I expect companies to keep thinking of the organization's interests first and supporting this program only so long as they understand that nurturing the employees' career, in and out of the organization, benefits the organization overall.
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Critical topic and discussion! Thanks! In thinking about David's comment and your offerings here, Jon, I agree that a very different kind of approach would be needed to put employee's interests first. Like it starts with one leader at a time, and then requires doable metrics ( http://twurl.nl/brk42x) to ensure it's working.
In January, I'll be teaching an MBA course (Lead Innovation with the Brain in Mind) and I plan to tackle this topic full force - with delightful expectations. First, I plan to model the approach - and I also plan to reward application of leadership that escalates innovation MBAs can measure.
The five core areas also happen to be triggers for movement from leadership that puts an organization first, to one that puts people first.
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Thanks for the additional comments. David K - I'll deal with yours first.
Yes, there may be some particular benefits that professional services firms like E&Y, and McKinsey, can gain from this approach - for example by sharing people with their clients. But then this benefit could potentially be gained by any B2B organisation (I've recently talked about something similar with a software vendor as a way to gain further engagement with their user community).
Perhaps it's just that professional service firms are good examples of people based organisations (which I would define as ones in which people are a high proportion of the costs and also account for a high proportion of competitive opportunities - or you could look at the BCG definitions of people businesses). It's easier to see this sort of arrangement being used in people; knowledge; service focused organisations that say in construction. But even there I wouldn't rule it out.
I think it's just that the precise form of the arrangement would vary. So for example you might see a group of leading B2C organisations coming together to share people across these organisations (a new form of keiretsu / chaebol perhaps).
I also think this would mean that the specific hurdles organisation could face would change across instances of this approach as well. Some organisations / groups of organisations may want to pay 'commission' ( a bonus) to their internal head farmers, and others pay a straight salary - just as is found with sales staff and in recruiting departments today. However, I think given the increasing focus on relationship vs transaction would mean that it would make even more sense to link any variable payment to the long-term success and retention of hired individuals not just their recruitment into the organisation.
Secondly, all three of you refer to the change in mindset that would be required to put people's career interests first. And David (S), yes, I do agree that this would be a change. Which is of course, what a management 'hack' needs to be - I hope I'm not describing anything that any organisation, even McKinsey, is doing in practice now - and if they are, would certainly encourage them to submit it as a 'story' here.
But actually I don't see this as that much of a challenge. It's mainly a decision. Yes we do or no we don't. And if we do, it's then just a case of designing a new approach and architecture around this - a fairly traditional change management sort of challenge.
It's making the decision that's hard. Not because it's a daft decision to make, but because it's a decision to do something differently to the way everybody else does it now. Which is why I hope the mavericks reading this may be particularly interested in picking this up.
I should point out that I don't think putting employees' career interests first should mean that the organisation's employment interests will suffer. I'd use the same argument Vineet Nayar uses for employees first, customers second ie that an organisation's customers will benefit from putting their employees' ability to perform first, Here, organisations will benefit by putting their career partners' long-term development interests first - ie by doing this they should be able to gain the various benefits that I've already described above.
Ellen, that sounds great, and i hope you'll let me know how it goes. You're also right in suggesting that organisations will need a new set of metrics to support a career partnership approach. Most of these are going to be long-term which I think would make doing any form of ROI analysis almost impossible - and so the decision to invest in career partnership would probably need to be a strategic / philosophical decision rather than being based on financially justified business case.
But it should be possible to review progress against some metrics quite early - for example the perception of the organisation (employer brand) by its key talent internally / key target recruits externally.
Please do keep your comments coming - you're giving me plenty to think about as well. For example, David (K), your earlier comments have helped me get clearer about the exit process being the key part of a career partnership approach. Head farming can exist on it's own, and is already being done - it deserves to be a 'story' told here (by E&Y, Mckinsey, others?). A proactive exit process or PEP (for the best vs the worst performers!) can't exist on it's own - it only makes sense as part of a career partnership. I've been starting to see this a bit like the keystone in a bridge. The bridge doesn't exist without the keystone but the keystone doesn't help you until it's part of a bridge. Similarly a PEP isn't helpful as an independent process, but it's the vital piece that with head farming, delivery of the deal and alumni management etc, holds the career partnership together.
So, I look forward to further comments. However, I hope you'll understand if I don't make any further responses here myself until early January.
Jon.
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Thanks Doug, much appreciated, and good to know it seems I'm on the right track.
Readers may like to see these two recent blog posts on a workshop which led to the development of a career partnership-like solution, and build further on David's comment below:
http://strategic-hcm.blogspot.com/2011/01/do-you-need-employee-retention...
http://strategic-hcm.blogspot.com/2011/01/exit-as-keystone-to-retention....
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Jon - has the concept of 'portfolio careers' fallen out of usage? I really buy into the idea that individuals with experience of different roles and companies are of greater value to employers. Very few organisations can offer this - barring a few exceptional individuals fast-tracking through global corporates.
My question is whether this approach is ideal of all individuals (and their employers). A definition of 'talent' is individuals who identify the most promising job opportunities in terms of development and reward. It takes brains to work out what these are and to succeed in them. Not everyone wants the risk and challenge of new roles. Many people value stability and certainty in their working lives. This suits companies, who I believe need a balance of core contributors and 'talent' to be sustainably successful.
In summary, the traditional employment contract is useful for some people while a career partnership approach meets the needs of others - but I'd suggest this is a smaller group of talented individuals.
Thanks for a though-provoking article Jon - excellent as ever
Dom
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Hi Jon, it is always refreshing to hear your ideas and to participate on these discussion. You have great points and makes me wonder how long will be this road to the brazilian companies, which mostly, still have such an old business model and our battle as consultants is to help leaders to open their minds for what is happening on the new business trends. Sometimes it amazes me how wonderful, successful organizations are still living from past successes without really tackling the new world. Yes, more and more, relationships matter!
It is good to have you and the MIX to keep me on my toes!
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Hi Jon, it seems to me that there is so much work required to align management thought processes with career partnerships to make the concept work. Even today, the difference between management approaches from one executive to the next could mean that career partnerships could be supported, developed and successful under one executive and destroyed by another. There is far too little understanding of corporate culture and supportive human capital development concepts taught in management schools. I completed my MBA in 2005 at a good quality Australian university and there was no discussion of corporate culture and its role in finding, developing and retain top talent.
Thanks for championing this issue.
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Thanks everyone. Dom, I think portfolio careers are still current - but without this approach, there is little opportunity for them to be managed like this. And yes, I also agree that career partnership is likely to suit just a small group of people, or rather a small group for each employer that wants to use this approach. I don't think the group of people necessarily corresponds to a typical talent pool that well. For career partnership, an equally important factor to contribution and potential is motivation. Whether what inspires the individual is the same thing that has the focus of the organisation. And of course, as long as each organisation has thought this through effectively, this should mean the factors an organisation will be looking for will be unique from organisation to organisation too.
Samara, absolutely. I think this is why there's been little progress in the implementation of career partnerships over the last decade, even if there has been for head hunting aca social recruiting. But more and more organisations now realise, as you say, than relationships are key. And if this is the case, then this approach is clearly what is needed. So I do personally expect to see this taken up, at least in some leading organisations, over the next 10 years. And hopefully in Brazil too!
Patrick, yes, there's a lot to be done, and the manager role will be vital too. But I think that can be tackled. Many organisations have already done this, to an extent, with customer relationships. OK, actual behaviour and performance will still vary, but at least managers in most organisations generally understand the need to satisfy and retain customers. And if it can be done for customers, it can be done for employees too.
By the way, there is a analogy here, that I forgot to mention before, to lifetime customer value in marketing. Again few marketing or sales people will just try to get a customer to spend as much as possible in one transaction. Instead, they'll try to maximise satisfaction with the transaction, so that the customer will come back and buy again. The value of the lifetime custom is much, much greater than that from one single spend. Same here.
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Employment contract is a problem for employees always because they have to continue with the same job in spite they got some best offers. Such contracts can deteriorate the employer and employee relationship. The solution to the problem is a partnership instead of a contract that can be maintained with the most valuable employee. It will have a positive impact and attract the best employees.
http://www.reginafasold.com/
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Great ideas here, Jon, and I am unfamiliar with the programs you mention, but I like the communication these programs evoke. People feel devalued in too many workplaces, and your relationship ideas certainly raise people to valued human capital. Love the idea of partners, and that also allows for the mutual coaching which could be healthy for ongoing growth in any organization.
Lately I've been seeing the downfall of so many HR departments - because leaders there have given up, morale is low and relationships are weak.
Well stated and you give us lots to think about.
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Very interesting post. Personally would love to work in an organization that implements this philosophy.
One niggling thought though about the practical implementation - the deal (or relationship) is actually between two individuals (the manager and the employee) ... since the manager is also an employee and may actually follow the time slices little differently - there might be clashes of interest here since he needs the employee to reach his own objective. So would this framework work at all in a hierarchical organization or would we have to change the organizational structure first before we can implement this ?
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Thanks for submitting this hack, John. I liked it very much.
Is part of this idea to turn HR into a scouting team, of sorts? In other words, should those recruiting human capital be spending a majority of their time looking for excellent people who are employed elsewhere now, but, who could make great additions to the team even if there isn't a specific job open for them now?
I have an acquaintance who works with companies to identify potential board members long before they are nominated to join the other directors. They are then groomed to be ready for the time they are finally nominated. I realize that this is a bit different than the concept above, but the idea is to be proactive in finding human capital, not transactional, like you describe above.
Also, it seems you may be suggesting that HR (HC?) people may find it valuable to be following their alumni on LinkedIn groups (such as "ex-ABC Company Employees" or "ABC Company Alumni") to spot those who have really bloomed since their departure.
I welcome the chance to hear more of your thoughts on the idea of changing from transactional relationships to partnerships. It seems to have a lot of merit.
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Thanks Ellen, Dave, Diganta and David.
David, yes, that's the head farming piece of this, which developed at E&Y. It's a crucial part of career partnership, although this also needs to involve much more. I think the key piece, and the newest and most challenging for existing paradigms is the exiting process: encouraging your best people to leave. This is the part of the career partnership arrangement that I really want to emphasise. But then this doesn't make sense unless all the other pieces are in place as well.
Diganta, the role of the manager is absolutely vital and is going to need work in most organisations to support career partnership. However, I don't see conflicting objectives between manager and employee as that much of a challenge - the relationship is going to be about give and take anyway - the whole relationship needs to be based on mature, adult to adult conversations. As long as this is the case, anything is possible.
I actually think the bigger test will come when organisations need to loose a lot of people again eg if we enter a 2nd dip in the recession. But again, as long as their is trust (which does need to be built up over time first) then I don't see why career partnership could not survive it (indeed, it may make the exiting process a bit easier).
Dave - I totally agree.
Ellen - I've added a glossary to the end of my submission so you can find out more about each of the different 'programmes' or parts of the career partnership arrangement I mention (eg head farming, social recruiting, deal management, alumni management etc).
I just wanted to comment on one other point as well which is your comment on raising people to valued human capital. I'm sure this is just semantics, but I think it's important, so just to say that I'm always very careful to talk about people as providers of valuable human capital, not as the human capital itself. People are people and need to be treated as such, not just labelled differently (as human capital vs human resources) for this sort of programme to be made to work.
I reference human capital because I believe it is a useful concept. Here, it helps match the sort of people that could most easily benefit from a career partnership with an organisation (ie where the human capital they can offer is the human capital the organisation needs).
Also, I agree about the role and importance of coaching. This enables honesty and so supports disclosure, feedback and effective action planning all of which are vital here.
Thanks again for the comments.
Jon.
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