The lost opportunity of parting well

25 02 2010

McKinsey and Co famously have an “up or out” policy for their consultants. You might think that this would lead to a world populated with disappointed ex-McKinsey-ites who would leap at the chance to get even. In which case, how does McKinsey survive such hostility?

The answer is of course that they don’t have to. Instead they are one of the few big name firms that understands the power of helping their people secure their next great job OUTSIDE the firm. Being a McKinsey Alumnus has some meaning and goodwill attached to it – in both directions.

This is a lost opportunity for most employers. We can blame employment law and the danger of being seen to engage in constructive dismissal – but only so far. A key part of managing the flows of talent in your organisation is being able to see when the next step this person needs is not one we can offer them; so let’s help them find it! The goodwill generated by such atypical behaviour has the power to do both sides good for years to come.

And who knows, one day we may have just the opening to bring them back, augmented by experience gained at someone else’s expense!

Common Denominator

23 02 2010

Managing the flows of talent through your business should be as rational as managing the flows of cash.

Financial management means that by looking at the numbers you can tell what kind of a quarter you are having, what kind of scenarios you might need to be preparing for and, should things not be going well, you can trace the numbers back to identify the problem. Saying that managing finance is rational is not to say there will never be surprises or challenges, just that by using a consistent denominator (money per time period) to manage your finances in an end-to-end manner you remove a lot of the potential mystery from the process.

Imagine trying to manage your finances if every part of your business was denominated differently – R&D by the IQ of the developers, marketing by the glossiness of the brochures, production by the timekeeping of the workforce, sales by variance from plan and finance by … well, money in the bank at the end of the month. If the money in the bank was wrong, how would you ever trace the problem – are the developers not smart enough or was it that the brochures were not glossy enough?

Sounds ridiculous. But how are you managing talent in your organisation? Using a consistent denominator, end to end (from shortlisting during recruitment, through every stage of engagement all the way to eventual departure)? More likely, you have a different set of tools and processes for every step of the journey.

A common denominator means that you can collect data about Sharon before you appoint her as the office junior, and use that same data to coach her when she joins the C-level suite a decade later. More fundamentally, it means that at any point in time you can look at any individual or team and say “this is why we hired them, this is why they have been able to deliver the performance they have to date, this is why they are currently assigned to this role on that project and here’s why we should be investing in them to prepare them for the next level of their responsibilities”. Or “we probably can’t offer them the next step they should be taking inside this business, let’s help them find their way to the next big thing and enjoy their goodwill even after they have left us.”

That is rational. And when surprises and challenges arise, we don’t have to improvise, we just look at the data and trace the problem. Just like when we manage that other valuable resource, cash.

The cost of hiring the wrong person

22 02 2010

I guess most of us have worked out that hiring the wrong person as the new CEO or CFO is an expensive business. Most of the hiring we do isn’t that critical – we think. Of course we might want to bear in mind the following three facts:

  1. Most of our customers don’t meet the CEO. Their experience of our service is often down to the hourly waged person behind the desk or in the call centre
  2. The wrong person in the wrong place doesn’t just reduce effectiveness or productivity – they can destroy value by driving away good staff as well as valued customers
  3. If you hire someone on minimum wage and they stay three months (quite a modest timeframe for discovering we have genuinely made a mistake in hiring), then on average the total cost (direct + opportunity) will be at least one year’s wages

(Contact me if you want to see the working on that last one.)

In which case it might be worth treating every hire as if it mattered; it probably does.

Travelling blogista

20 02 2010

I only came to WordPress because of blogger cancelling ftp, but I have to say that open source is doing better than the (new) software monster on the hill. Love this blackberry app.