1. Q2 2009Linking Behaviour to Bottom Line PerformanceLeadership, Intangibles & Talent Q2 2009Welcome to 2009s second quarter roundup of all thats going on in the fields of talent management, innovation andleadership. Articles are included from the likes of the American Society for Training & Development, Aviva, Deloitte,Institute of Employment Studies, Professor David Guest, Towers Perrin and Watson Wyatt.Summary for Q2 2009Reading through this quarters articles, there were plenty of pieces rehashing practical tips on how to deal with the reces-sion. However, there are a number of interesting ideas and themes lurking beneath the surface. Intangibles such as engagement, networking and collaboration are hot topics but managing these issues is easier said thandone New technologies have the potential to revolutionise the way we understand organisational behaviour, although theappetite for this information is as yet unclear Line managers can play a pivotal role in developing engaged employees and this has implications for how organisationsapproach talent management Firms are waking up to the importance of engagement, in these recessionary times, once costs have been stripped out, theneed to do more with less is paramount Knowledge is key to value creation but how we educate and train for working with this often intangible and unpredictableenvironment is unknownComments and feedback are of course welcome.Engagement in the Spotlight wider issue of talent management. Thesion as a great opportunity for HR toone thing that is clear however is that, make its mark on the business andFollowing from Richard Beattys wither- despiteBeattys comments,anthere is no denying that the currenting comments1 on the lack of quantita-acknowledgement that these issuesstate of flux points to opportunities fortive evidence to support investment inare of paramount importance in the the brave. On the other hand, there isengagement back in January, engage- current economic climate remains. Yet, considerable evidence for poor moralement remains one of the hot topics forgiven their intangible nature, control and low levels of engagement in HRdiscussion amongst HR and OD profes-and mastery of these areas remains departments.sionals. Interestingly, articles and blog elusive.posts are increasingly blurring the linesbetween specific discussionsonSo where does this leave HR? Manyengagement and how this impacts the commentators are signalling the reces-

2. Leadership, Intangibles & Talent Q2 2009 Better Understanding of Tag CloudOrganisational BehaviourIn previous editions of this update Ihave noted an increasing trend in thenumber of people focusing on the roletechnology is having on our under-standing of the complexities and sub-tleties or organisational behaviour. Thispiece2 by Marina Gorbis succinctlysummarises the direction which ourunderstanding oforganisationaltance of amplified individuals a con-human brain and principles of engage-dynamics is evolving and the possible cept discussed in previous updates.ment will make us rewrite many of ourchanges that it will bring. In it, she dis- These are key people who are in a posi management books and manuals. Docusses a forthcoming book by Douglastion to influence and shape the behav- not be surprised to find many moreRushkoff3.iour of others and who derive theirneuroscientists and game designerspower not from their position in the among the human resource profes-Gorbis states that in viewing organisa- organisational hierarchy but from theirsionals.tions as complex ecosystems, we can connections and informal networks,start to understand the influence ofoften bypassing traditional organisa-On a similar theme, the changinggroups on individual behaviour. Thistional structures. nature of the organisation and the skillsmay lead to a more relevant and holis- required to thrive is discussed in a talktic understanding of the way organisa-Increasingly, new tools are beingby Daniel Pink4. In particular, the roletions function and perform. As Gorbis brought to market that facilitate theof change and how we as individualsstates, identification of these individuals andare trained to deal with this raisesprovides organisations information onsome interesting new challenges.In fact, we are making the invisible not only the brightest and most ablevisible through use of data. but also on the more intangible aspectsPink argues that the organisation of theof organisational behaviour. future, in the developed world at least,The practical implications being thatwill require employees capable ofthis understanding enables organisa-Clearly this has implications for howextended right-brain thinking. Thistions to be better informed, able toorganisations go about their talentrequires Artistry, empathy, inventive-achieve strategic goals and able to management processes. More on this ness, big-picture thinking rather thanalign their people to long-term objec-later. Perhaps the most interestingleft-brain skills such as logical and ana-tives or outcomes. Of course, this also aspect of this article, to me at least, is lytical processes. The big question Pinkimplies that businesses and HR depart-the discussion on engagement and raises is how to train or develop thesements in particular are going to have tohow an appreciation of what engagesskills through the education systemacquire new skills and understandingon a neurological basis is slowly beingand into the workplace? In Pinks visioninto organisational behaviour. As Gorbisrevealed.of the future, the routine and mundanestates, organisations are going to bewill be outsourced and only things thatrecruiting not just from business So much of our organizational prac- cant be automated will remain inschools but from university depart- tices and processes, however, have developed economies.ments such as anthropology, ecology orbeen based on simplistic carrot-and-zoology.stick approaches. In the next decade,much greater understanding of theGorbis also notes the growing impor 3. Leadership, Intangibles & Talent Q2 2009 Defining Engagement emphasis and accounts for the wideWhile there is consensus on the impor-levels of variability in engagementMoving back to engagement, despitetance of engagement, how to measure throughout the organisation. The articleProfessor Beattys comments in January, it is another challengeentirely.argues that the key levers of engage-there is considerable consensus on role Employee engagement surveys are one ment lie in the team or at the microof engagement as key to organisation- area that has fallen under the spotlightlevel. By being sincere and developingal performance, however, the difficulty recently, the IES HR report goes on toan environment of trust, managers areof clarifying what engagement actuallysay;ableto encourageincreasinglyis and how it is measured is an ongoing engaged employees. In particular, thecause of debate. In a solid round-up of There are a variety of measures of article states that recognising and prais-the engagement field5, the IES HR engagement available. However, theing in a sincere and informal mannerNetwork, describe engagement in the lack of a clear definition of employeecan accelerate productivity and per-following terms;engagement and the differing require- formance.ments of each organisation meansEngagement is consistently shown asthere is likely to be considerable varia- An article by Julie Gebauer of Towerssomething given by the employee tion in what is measured in these sur-Perrin8 focuses on another requirementwhich can benefit the organisationveys.for engagement, namely the whole-through commitment and dedication,hearted support of senior leadership. Inadvocacy, discretionary effort, using The IES report also raises another inter- the article she emphasises the need fortalents to the fullest and being sup- esting topic, namely the role of person-selling the business case for investingportive of the organisations goals and ality in engagement, stating that extro-in engagement, rather than some-values. Engaged employees feel averts are more likely to be engaged thing nice to do that only HR is cham-sense of attachment towards their than introverts. On the face of it, I think pioning. Again, the problem here isorganisation, investing themselves notthat this is an over-simplification, how- that this is easier said than done.only in their role, but in the organisa-ever there may well be some correla-However, by focusing on business out-tion as a whole. tion between positive attitudes to work comes and how engagement can helpand personality type. align the organisational strategy, aPerhaps the reason why engagement iscompelling case can at least be made.such a hot topic right now relates to the Human Resources magazine6, debatesunderlying economy and how it is like-the value and the way engagementEvidence for increasing focus on thely to affect morale and performance.surveys are structured, with researcher importance of engagement is growing,Companies are struggling to cut costs Peter Hutton claiming that two of the indeed in the UK, July will see the pub-and in many cases this necessitates most popular surveys in the UK, the lication of a government review on thehaving to do more with less. ClearlyGallup Q12 and Best Companies lacksubject undertaken by David McLeod. Inonce all excess costs have been statistical integrity. The search for anthis People Management article9, prac-stripped out, doing more with lessaccurate way to measure engagementtitioners are calling for some practicalrequires an engaged and committed is likely to continue.advice and actions into improvingworkforce willing to go the extra mile. engagement, whilst acknowledgingGenerating this in a climate of job loss- Line Managers in Engagement that it is not what it could be at thees and economic uncertainty onlymoment. Given the intangible andmakes engagement more elusive.A Towers Perrin survey7 points to the unique nature of engagement in everyFurthermore, in order to capitalise onrole of line managers in the engage-organisation, it will be interesting toany economic recovery when it comes,ment equation. Given the emphasis onsee how much influence governmentorganisations will need to have anorganisational-wide initiatives and tak-can have on this area.engaged and motivated workforce toing a big-picture view of engagement,make the most of improving conditions.this is a topic that has not had sufficient 4. Leadership, Intangibles & Talent Q2 2009 The Ongoing Talent Management identified as languishing moving intoDebatenew roles and thriving.The second Deloitte report also high- lights dwindling morale in many organ-Its impossible to view engagement in Taking a broader approach and focusing isations over the first few months ofisolation without discussing the wideron the many may make more sense in this year, again a sign that employeestalent management perspective. Again, terms of networks, collaboration, pro- are becoming less engaged at the exactas with engagement, a standard defini-ductivity and succession. Whether theretime that organisations need them totion is elusive, however the ASTD is any appetite for this inevitably more increase their levels of engagement.(American Society for Training &expensive approach is questionable.Development) came up with a catchy Interestingly, these issues are at oddsepithet10.Talent Management in the Current with Deloittes own research last yearClimate14 under the catchy title The Chemistry Talent management is a holistic of Talent. The report focused on theapproach to optimizing human capital, An interesting series of three articlesneed for companies to develop theirwhich enables an organization to drive(first one here12) from Deloitte seek to own bespoke talent management solu-short and long term results by building examine the evolving attitude to talenttions and in particular use technologyculture, engagement, capability, andmanagement in the current climate. Into develop more flexible and sophisti-capacity through integrated talentparticular, the diverging pressure to cutcated career planning techniques. Oneacquisition, development and deploy-costs whilst continuing to invest in peo-year on, there seems to be little evi-ment processes that are aligned tople. This is a timely series of reportsdence of this investment from Deloittesbusiness goals.and throws into sharp relief the tricky if own research having an impact andnot impossible balancing act of min- given the worsening economic condi-This article also raises one of the key imising costs in the short-term andtions, this situation is unlikely tocontradictions or inconsistencies in tra- effective workforce planning. Without achange.ditional talent management practice,systematic means of quantifying thenamely by focusing on key high poten- benefits of a strong commitment to tal-Leadershiptial employees or senior managers, tal- ent management, it is always likely toent management becomes a self-fulfill-fall down the agenda.Moving on to leadership, there haveing prophecy that also runs the risk ofbeen a couple of interesting articlesbeing perceived as elitist. By focusing This is evidenced in the second Deloitte that have brought together some ofinvestment on the gifted few, their suc-report13 that also highlights the deci-underlying themes above and howcess and advancement through thesion of many organisations to focusthey are likely to impact the top of theorganisation is all but guaranteed. their talent management efforts on the organisation. A slideshow from MaryThere is also the danger that these few. The figures quoted show that 37%Adams at Intellectual Capital Advisorsstars will be enticed away to other of those polled expect to increase focus 15 echoes many of the same concerns organisations and the investment in on high potential employees. While in the Pink article above. Principally,their development is only ever partiallyincreased investment in this area is tothat intellectual capital or knowledge isrealised. be welcomed, this information plus the the foundation of the organisation andassertion that despite the increased should be the focus of value creation.One organisation appearing to haveavailability of advance analytical tools,The challenge facing leaders as shesome success with a broader approachorganisations are not making use ofputs it is;to talent management is financial serv- these services leads to the view thatices company Aviva. In a short piece11, companies, at least at the moment, are most managers dont have explicitby taking an approach that benefits not becoming more sophisticated in models for the role of knowledge ineveryone has so far led to 45 per cent their identification and development oftheir business. They know its there.of employees that had previously been talent.They know what to do with it. But they 5. Leadership, Intangibles & Talent Q2 2009 are dealing with it all on a gut level. teams. By displaying typical manage-vated or not valued?But you dont want to rely exclusivelyment behaviour, it can be argued thaton your gut to manage your business. line managers are simply goingTo further emphasise the perceptionsthrough the motions and neglectingthat need to be overcome, a HRA further article focusing on leadershipsignificant opportunities to challengeMagazine article19, cites a survey byalso draws parallels with the Pink arti-not only themselves but also their peo- Endaba, which claims more than acle. On the Leadership Now blog16,ple. The question that arises is how canquarter of employees do not trust theMichael McKinney revisits the age old organisations better equip line man-HR department.distinction between leadership andagers to develop these behaviours?management. In this piece, he bringsAnd will this go some way to improvingFurthermore, a Taleo report20, cites aback the distinctions between the two engagement? McKinsey survey which asked both HRareas by referencing Bennis 12 distin- and line managers Does HR lack theguishing points in his 1989 book On The HR Conundrumcapabilities to develop talent strategiesBecoming a Leader.aligned with business objectives? OnlyWhere does the HR profession stand in one-quarter of the HR participantsThe behaviours that Pink describes as all of this? Quite clearly, it should beagreed with this statement, while theright brained thinking are quite clearlyfront and centre. All these issues, majority (58%) of line managersanalogous to what Bennis describes as whether dressed up as engagement, agreed. typical management skills. Whereastalent management or leadership allPinks reference to left brain thinking call for bold and imaginative HR-centricClearly, these attitudes do not exist inare much more closely aligned tosolutions. As if to emphasise this, sup-every organisation but where they do,Bennis description of leadership.port from an unlikely source comesthey will not changeovernight.McKinney further echoes Pink by from Benjamin Zander, conductor of theHowever, if HR can gain confidence andemphasising how the current educa-Boston Philharmonic Orchestra17.trust, there is an opportunity to drive ational system is geared towards man-Harking back to engagement, Zandernew agenda. This is the argumentagement rather than leadership. claims that HR is responsible for the made by Duncan Brown at the Institutespirit of the organisation but that it is of Employment Studies21. In this wide-In his piece, McKinney argues that in occasionally downtrodden. ranging piece, he puts forward theorder to be successful, both disciplinesargument that recent events are lead-are necessary within the organisation I think Zander hits the nail on the heading to an underlying shift in the way inbut points out that most businesses are with one of the key issues facing HR at which rewards are distributed. Focusingcurrently geared towards excessivethe moment. Namely that HR is in the- on fairness and the perception of fair-emphasis on management rather thanory well positioned to have a significant ness as a way of improving organisa-leadership. impact on nailing down these crucialtional performance, Brown also weighsyet intangible problems. However, the into the engagement debate.Managementis basedonthebig question is whether there is enoughresponse to the questions we had yes- confidence, credibility, vision and tech- Professor David Guests researchterday. Today, some of those respons- nology to pull this off. On the face of shows that perceived fairness and rec-es are still valid, many are not. things, morale in HR departments is not iprocity, alongside of trust, are at theLeadership is needed to address the good. In this HR Magazine article18, thecore of a positive, engaging and highquestions of today and bring us to aresults of a Baddenoch & Clark survey performance generating psychologicaldifferent place. This is especially true in claims that only 57% of HR employeescontract in the workplace.times of great change. feel valued. Without reading too muchinto these results, the obvious questionHR needs to be in a position to deliverAs we have already seen, real engage- is how is HR going to engage the rest ofthe strategy but also ensure that condi-ment takes place at the level of smallthe organisation when feeling demoti- tions are conducive to line managers 6. Leadership, Intangibles & Talent Q2 2009 generating enthusiasm or engage-ment. HRs responsibility is to track andmeasure strategy but most importantly,ensure that managers have the capabil-ities to execute the strategy andengage others, ensuring that peopleare actively working towards team andorganisational goals.The Last WordA quick word on M&A, in particular theannouncement of the merger as equalsof Towers Perrin and Watson Wyatt.Two of the largest consulting firms inthe HR sphere. Given the circumstancesunderpinning the merger, namely chal-lenging market conditions, it will bevery interesting to see how these twomasters of integration manage theprocess! Four Groups Ltd 5 St. Johns Lane London EC1M 4BH, United KingdomTel: +44 (0) 20 7250 4779 Email: contact@fourgroups.com http://www.fourgroups.com 2009 Four Groups Ltd, 5 St. Johns Lane London EC1M 4BH, United Kingdom.All rights reserved. No part of this document may be reproduced without Company Number: 4650494 express written permission from Four Groups Ltd. Image credit http://sxc.hu VAT Number: 817 7962 85 Registered in England and Wales 7. Leadership, Intangibles & Talent Q2 2009 Footnotes and References1. http://fourgroups.com/link/?582. http://fourgroups.com/link/?593. http://fourgroups.com/link/?604. http://fourgroups.com/link/?615. http://fourgroups.com/link/?626. http://fourgroups.com/link/?637. http://fourgroups.com/link/?648. http://fourgroups.com/link/?65Written by Michael Folkman, Director9. http://fourgroups.com/link/?66michael.folkman@fourgroups.com10. http://fourgroups.com/link/?67 About Four Groups(opens as a pdf) Four Groups have developed a new11. http://fourgroups.com/link/?68 approach called 4G to understand behaviour, relationships and culture. 4G12. http://fourgroups.com/link/?69 provides its users with insight into per- sonal characteristics, how relationships13. http://fourgroups.com/link/?70 develop within teams and groups and(opens as a pdf) how culture can be best defined and managed.14. http://fourgroups.com/link/?71 4G provides organisations with infor-15. http://fourgroups.com/link/?72 mation on how best to deploy and opti- mise the performance of their people.16. http://fourgroups.com/link/?73 It also enables preventative measures to be taken which minimise the less17. http://fourgroups.com/link/?74 productive aspects of interaction and group dynamics such as friction and18. http://fourgroups.com/link/?75 misunderstanding between colleagues.19. http://fourgroups.com/link/?76 4G represents a systematic approach to managing the previously intangible20. http://fourgroups.com/link/?77 aspects of organisational life. The methodology is easily replicable and21. http://fourgroups.com/link/?78 can be implemented quickly and effi-(opens as a pdf) ciently.