The Economic Times of May 22 carries a story titled ‘Talent Magnets’. The subtitle is ‘Top drawer talent from large corporates is available for the picking …’ It begins with the case of Jesons Industries, a Rs. 200 Crore which picked up ten managers from some of its larger competitors for senior and middle management positions; Bhupinder Singh has joined as Senior GM from Pidilite.
A number of companies are hiring top executives in what they call a ‘strategic move’ to acquire talent. The expectations are that they will improve performance of the organisation. Such actions have always created heated debates in HR circles.
These actions seem to be based on some debatable assumptions as pointed out by Pfeffer and Sutton in their book so appropriately titled ‘Hard Facts, Dangerous Half truths and Total Nonsense’. They contend these actions of recruiting talent, as in the case of Jesons, are based on ‘dangerous half truths’. In the subsequent part of this post I have relied on and often quoted verbatim from the book.
Pfeffer and Sutton argue that underlying assumptions are:
a. Individual ability is largely fixed and invariant – there are better or worse people.
b. People can be reliably sorted based on their abilities and competence.
c. Organisational performance is, in many instances, the simple aggregation of the individual performances; what matters is what the individuals do, not context or system in which they do it.
These assumptions are not completely true; one cannot base organisational success on their validity. What the research points out is:
Talent isn’t so easy to perfectly identify
– The most powerful predictor of job performance is IQ but it often does not correlate more than 0.4 with performance.
– Performance naturally varies with time. We have seen this in the ‘form’ attained by cricket players. So assessment depends on when you are assessing the ‘player’. Selection based on one interview may be wrong.
– Human bias interferes with assessment.
Talent isn’t fixed
– Talent is not completely fixed at the time of birth. Ericsson’s research shows that exceptional performance does not happen without approximately ten years of nearly daily, deliberate practice, for about four hours a day by people who somehow have access to the best techniques. [See also Chapter 2 ‘The 10,000-Hour Rule’ of Malcolm Gladwell’s best seller book ‘Outliers – The Story of Success’]
Great Systems are often more important than Great People
– Toyota’s success stems from its systems, not stunning individual talent. One study showed that Toyota was the only major automobile company where a change in CEO had no effect on performance.
– Deming has emphasised it for years
– There is a tendency to over-attribute success and failure to individuals. What matters is locating and dealing with systemic causes of performance issues.
In a nutshell, recruiting top performers of other organisations to improve overall performance of your organisation is based on faulty logic; research does not support those assumptions. Moreover how they fuse together as a team is another aspect that determines the performance of the team.
As Pfeffer and Sutton say ‘The best evidence indicates that natural talent is over-rated, especially for sustaining organisational performance’. That sums up the story well.