How Can Multinationals Find Talented Candidates? Go Where Firms Don't Hire Many Women

Suppose you are a multinational company searching for highly talented candidates.  You are finding it difficult in certain markets to attract the best people.  Where might you have an easier time finding top notch talent?   HBS Professor Jordan Siegel, MIT's Lynn Pyun, and Hanshin University's B.Y. Cheon have conducted a fascinating study titled, "Multinational firms, labor market discrimination, and the capture of competitive advantage by exploiting the social divide."   These scholars find that global firms can enhance profitability by recruiting and hiring women in countries that traditionally do not have ample opportunities for females to achieve leadership positions in business.  

Siegel and his co-authors focused their research first on South Korea.   According to this article on HBS Working Knowledge, South Korea makes a great setting for this research because, "Universities in South Korea are highly meritocratic about accepting and educating women. Hence, the country sports a large number of highly education, highly qualified women with advanced degrees in business, engineering, economics, and foreign languages - all useful in corporate management."   Unfortunately, the opportunities for these talented women are limited in many traditional Korean companies.   

This research focused on multinationals who were taking advantage of this talented pool of candidates that were not being given sufficient opportunities by domestic firms.  "Even after accounting for unrelated variables, the researchers found that a 10 percent nominal increase in the percentage of female managers (at the level of the then-prevailing glass ceiling) was associated with a  1 percent nominal increase in ROA."  

The researchers are focusing on Japan next, a country that also does not provide wide opportunities for women to assume senior leadership positions in business.  (I just read yesterday that only 1% of Japanese chief executives are women, though 1/2 of university graduates in the country are women).  Interestingly, Siegel's research in Korea suggests that Japanese multinationals might be providing more opportunities for women abroad than they are at home.  His work looked at 37 Japanese firms hiring in Korea, and he found that many of them were hiring female mangers there, but not at home in Japan. 

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Rethinking the Action Learning Project

Many executives push hard for leadership development programs to deliver a strong return on investment.  They want the programs to be "practical" and "applied" in nature.  As a result, many companies have embedded action learning initiatives in their leadership development programs.  They sound like a great idea.  Bring a group of highly talented managers together for a leadership development program led by faculty members, consultants, and/or company executives.  Then, put the participants in teams and have them work on real projects back at work for the next few months.  Those projects provide an opportunity to put their learning into action, to apply the principles and techniques that they discussed during the program.   After several months, the teams present to senior executive sponsors of these projects, and hopefully, some of their recommendations become reality.  Hooray - we have demonstrated ROI!

Ok, that's the ideal...what's the reality?  The reality is that many of these action learning initiatives do not deliver the intended results.  Why?  It begins with the fact that you have overburdened some of your best talent.  You bring them off-line for a week, perhaps several weeks, for a leadership program.  They are now already feeling behind about work.  Then, you ask them to take on this new project on top of everything else they are doing.  Moreover, you ask them to collaborate on a team with members who may not even be co-located with them.   Executive sponsorship often doesn't materialize as promised either.  Senior leaders commit to serve as champions for the projects, but then they offer little guidance, support, or resources.   I have seen this scenario play out on numerous occasions.   Yes, applying what you have learned on a project can be a powerful development opportunity with tangible results for the business.  However, these types of projects require far more preparation, support, and resources than we usually find in companies.   For that reason, I would argue that many companies should re-think their action learning initiatives.  

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Attracting Creative Talent

Charles Day, CEO of The Lookinglass, has written a good article for Fast Company about attracting top creative talent.  He offers eight suggestions.  I want to highlight several of them here.

First, he notes that mission-driven businesses are more likely to attract top creative talent.  People want to make a difference.   Second, people want to work for an organization that does not support underperformers forever.  Nothing is more deflating than watching managers retain people who are not contributing.   Third, you have to be transparent.   Day writes:

"Transparency is essential to attracting and retaining great talent. We define transparency as this: telling what you can and explaining what you can’t. Sharing openly encourages your people to give you the benefit of the doubt. Critical to building loyalty."

I think it's critically important to note the point about explaining what you cannot share.  At times, certain issues cannot be disclosed, or at least must wait to be shared.   That does not mean managers should remain completely silent. They need to explain (repeatedly) that more information will be shared moving forward, and you have to describe why certain information cannot be shared.   Employees will fill a vacuum of information with gossip, rumor, and lots of time-wasting water-cooler talk.  Don't let that vacuum exist.  Fill it with a steady stream of communication. 

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Leadership Development is for Top Executives Too!

Building on the last post, I think it's important to address one other problem with leadership development programs.  In many firms, high potentials and mid-level executives attend leadership development programs, receive 360 degree feedback, work with mentors, and receive coaching.   Companies invest a great deal at times to groom these mid-level executives for more senior positions.  However, they do not make a similar investment in members of the top management team. 

What's the problem with that approach?  First, it presumes that people do not need further learning and development once they reach the top level of the organization.  It suggests that they "know it all" at that point.   In fact, members of the top team often can use a break from their day-to-day work to think about broader strategic and leadership issues.  Investing in their development may not only improve their skills and capabilities, but it may help shake the conventional wisdom and groupthink that can emerge from an intact and cohesive team that has worked together for a long time in a particular company.  

Second, mid-level executives receive the wrong message.  They see top executives as not "walking the talk" regarding leadership development.   Somehow, what's good for the troops is not good for the top team.  That can't be the right message to send to future leaders of the organization.  

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Retaining Top Talent by Making People More Attractive to Outside Firms

Elizabeth Craig, John Kimberly, and Peter Cheese have written a good column for the Wall Street Journal about how to retain your top executive talent.   They argue that we ought to be investing in leadership development, even if it means that our people become more attractive to other companies.  We might lose some people because we've made them more employable by outside firms.  However, in many cases, that type of investment in our people will actually increase retention.  Here's an excerpt:

That's why it's crucial that companies get serious about retention now. And that means giving executives opportunities to take on greater responsibility, broaden their skills and cultivate a network of relationships with their peers. These are the things that executives we have surveyed consistently say they want most from their jobs.  Of course, executives want these opportunities largely because the skills, experience and relationships they acquire make them more valuable on the job market. So there is always the risk that a company may invest in building its executives' talents only to see some of them take those talents elsewhere.  But our research shows that executives intend to stay longest with those companies that offer the greatest opportunities to enhance their employability. On balance, a company will keep more talent by helping its executives grow than it would by denying them these opportunities. And as a bonus, its executives will be more valuable to the company itself.

I agree wholeheartedly. I would simply stress that companies cannot simply put efforts into leadership development without actually delivering exciting opportunities that come with increased responsibility.  If someone gets mentored, sent to executive education programs, and assigned a coach... but has to wait and wait for that chance to take on new responsibility... well, then they are likely to leave.   People want to know that their efforts at self-improvement are going to yield opportunities to practice their new skills and capabilities.   They want to learn by doing.   Moreover, employees don't just want more responsibility.  Promotions alone won't do the trick. They want exciting opportunities.  They want to tackle new challenges and explore new aspects of the business or of their discipline.  Meaningful work is key, not just a new title and more direct reports. 

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The Promise and Peril of HR Software

Michal Lev-Ram wrote an interesting article this week in Fortune magazine.   Lev-Ram examines new HR software systems being sold by the likes of IBM, Oracle, and SAP.   These systems, among other things, attempt to improve the performance review process.   The systems attempt to make goal-setting and performance review a year-round process, as opposed to an event that occurs once or twice per year.  The software includes virtual rewards, as well as methods for distributing real rewards.  The systems also enable employees to set goals throughout the year and track progress, as well as to solicit feedback throughout the year. 

The key question:  Will employees actually USE these types of systems to enhance performance evaluation and constructive feedback?  Or, will employees view these tools as cumbersome, time-consuming, and distracting?  Such systems only create value if employees invest the time to use them.  Moreover, they only help drive talent development if they become more than an evaluative tool.  They have to be formative/developmental tools as well.   If employees view them as strictly evaluative, they aren't likely to enjoy using the systems.  Moreover, they may simply not take the time necessary to obtain optimal value from them. 

In the end, talent development and performance evaluation only will improve if such systems are implemented along with a broader systemic change in processes, norms, and leadership behaviors.  Without such systemic change, new software alone won't have the desired effect.

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Retaining Talented New Hires

Jim Newman has written an excellent article for Fast Company regarding retention of talented new hires.  He focuses on the on-boarding process, arguing that an ineffective approach can do irreparable harm.   New hires may be gone in a very short period of time if firms mishandle those crucial days and weeks.  He argues that firms should focus on three things:

1.  Initiate Dialogue Before Orientation

In a number of instances, a significant period of time exists between the date when an individual accepts an offer of employment and the date when they actually start work.  Companies need to keep the lines of communication open with that individual during that time.  They must provide a steady stream of communication, in different forms and from different people. 

2.  Create Executive Leadership Interactions

Giving new hires, even young people joining the company, an opportunity to hear directly from senior leaders can be a powerful retention tool.   People want to know the big picture, and they would like to know that senior leaders are interested in providing development opportunities for them.  Everyone, from the front lines to senior executives, wants to understand how they can contribute to the accomplishment of the organization's broad vision and goals. 

3.  Prioritize team-based on-boarding opportunities

Newman argues that it is crucial to make "employees feel productive as quickly as possible."  Therefore, he recommends quick action to provide "team-specific opportunities that engage recruits in their areas of specialization while testing and expanding their knowledge about the company."   Companies don't want to focus only on the HR nuts and bolts (benefits, policies, etc.).  They also don't want to only focus on generic skills applicable to all employees.  They need to get specific early, so that people understand the skills htey need to be successful in their particular job, and so that they begin to form relationships with key experienced employees who can serve as mentors.  Newman provides a good example:  "For example, sales recruits might spend a week or more cultivating their sales pitches and testing them in simulated client meetings. Over the course of the week, recruits can present to sales managers or learn how to improve their performance based on actual case studies."  

I would add one other thought here.   Firms need to provide a series of early "check-ins" to insure that a new hire's on-boarding process is on track.  Some check-ins should be with the person's direct supervisor.  However, other check-ins might be useful with an HR representative, a peer in their work group, and perhaps a mentor at some higher level in the organization.  These check-ins should be vehicles for two-way communication.  The individual should receive some early constructive feedback and advice, while also being provided an opportunity to offer input on how to make their on-boarding process proceed more smoothly.  

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Hire for Excellence... in any field

Fast Company has a terrific interview with Oren Jacob, former Chief Technical Officer at Pixar.  Jacob describes some of the key attributes of the Pixar culture and processes.   Among the many great tidbits, Jacob explains a crucial facet of the Pixar hiring process.  He calls it "hire for excellence." Here's the explanation:

When Pixar is evaluating potential hires they look for three traits: humor, the ability to tell a story, and an example of excellence. These aren’t unique qualities to assess in applicants, but how excellence is defined is not that common. It doesn’t matter what you are excellent at, just that you have reached a level of excellence. It’s important that you know what excellence feels like and what it takes to achieve it. It could be gardening, jujitsu, or cooking. The main thing is you’ve had a taste of excellence and will know how to get there again.

I really like the concept of hiring for excellence.   Developing mastery in a particular field or endeavor demonstrates self-discipline, work ethic, and perseverance.   It also means that individuals have probably engaged in the kind of deliberate practice that is required to excel.  Familiarity with that process of learning and development will suit them well when they have to develop new skills and capabilities.   Finding people who have achieved excellence in a range of endeavors also creates a workforce with incredibly diverse perspectives and experiences that they can bring to bear on any problem.  

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Why are you losing employees?

Have you lost some valuable employees in the past year?  Does your firm understand why those employees are leaving?   If you are like most companies, exit interviews serve as a mechanism for unearthing the reasons behind these departures.  I learned something quite interesting this week though.  In talking with a group of human resource executives, I discovered their frustration with the traditional exit interview.   Many executives expressed concern that departing employees are "too nice" in those exit interviews - they simply don't offer a candid assessment of why they have chosen to leave the firm.  Several HR chiefs offered a solution to this problem.  They described how their firms have eschewed the traditional exit interview.  Instead, the companies have hired a third party to conduct confidential surveys/interviews of these individuals several months AFTER they have left the firm.  The executives reported that these interviews yielded much more valuable insights... and much more candor, than the traditional exit interview.  

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