How to play the right game to win in talent
For an organisation's talent activity to be effective, you need to choose, and then play, the right game.
There isn’t a single play book that is relevant everywhere, at all times. Managers are smart and managers are busy. If they do not think something is relevant to them, they will ignore it and won’t take part. They won’t play the game.
Good Talent management can learn from marketing. All good marketing starts by understanding the needs of the customer and segmenting them into groups, who you can then serve.
Only then can you play the game the customer wants. The game that grabs, their attention, engage them and fulfil their needs in a way that works in an attention poor world.
There are many ways to look at segmenting any market. We see that segmenting by the stages of the organisational life-cycle gives at least 3 different games that talent teams want to play. We split these into games for Start-ups, Scaleups and Optimisers. We can plot these along the category life-cycle curve.
Figure 1 – The category lifecycle
How the three stages are different
Start-ups – the searchers
Start-ups are an organisation that is in search of a sustainable business model. It doesn’t have assets yet apart from the energy of its people. Success is about flexibility, risk, pivoting, betting the firm and getting customers to spend time and money. Founders, and their close team, deliver this success.
These organisations are opportunity led, young and often not managed at all, in a conventional hierarchy sense.
They are normally on the edge of an existing category and are trying to establish a new one.
The people challenges are around attracting people who will take the risk on working for them, meeting payroll, having enough process to keep legal and, as they grow, getting the culture to be lived and not just a glossy playbook.
As people are the only thing a start up has they are a big focus for the founding team. Everyone knows everyone and sees each other’s work so the founder and their team can manage talent across the business. Process is light touch and focused around aligning activity as the organisation pivots.
Scale-ups – The Generators
Scale-ups are epitomised by the dynamic entrepreneurial firm which is growing fast. The scale-up has identified a working business model, and is flat out building the new assets which grow value and grow their category. They generate huge value.
These are typically idea or product led, newer, smaller and with the strong influence of a charismatic founder or founding team that sets the tone. They are not always fun and can be brutal in their quest for growth. Above all they are growing fast.
Some have become large, some giant as the winners can win big. They have created fast growing categories and have dynamic market positions which become more fixed over time. The market leader is normally by far the largest.
For Scale-ups the challenge of talent is about growing fast by finding people, integrating small acquisitions, staying true to the founding culture of what made them great, incorporating new people and global expansion.
They value technical experts who bring their skills and can hit the ground running.
Progression is not a challenge, as the business is growing so fast that opportunities emerge continuously. The business is happy to take risks as it has vacancies to fill. Managing and tracking potential is not a priority, as talent is clearly visible to the line.
Finding Leaders is not a major challenge as the “crucible nature” of the journey highlights the people who can lead and the others fall away quickly.
The fast-growing nature of the organisation means the scope of leadership roles grows whilst leaders are in them. Leaders grow bigger in growing roles rather than being promoted into something bigger.
Where these leaders do need help is in how to manage, as they are normally doing the job for the first time. Working with them as leadership teams is less impactful as the teams change to rapidly.
In these companies, talent is driven by the line supported by a central team. The task is to facilitate flows and act on problems as soon as them emerge.
Optimisers – The squeezers
Optimisers are different. They have inherited a successful business model. They exploit existing assets, be those natural resources, capital resources, human resources, brands, intellectual property, market power or, of late, peoples’ data.
To do this the optimiser uses the tools of control, process, and replicability to allocate those resources. This is delivered through top down hierarchies and process. They squeeze. They even call people Human Resources.
These corporates are financially led, larger, older and managed by professional managers.
They work in mature categories where the relative market positions are very well established. These markets often turn into oligopolies with a group of similar, large firms, based in different countries, competing.
For squeezers that challenge of talent is about creating flows and removing blocks. These firms are normally growing profits not headcount, so they ossify.
At the extreme they are characterised by long service and tenure. People waiting around for a redundancy pay-out or their pension.
They value understanding of the organisation, it processes, its human networks and “how to get things done around here” above new technical expertise. Joining these organisations is hard as the rules are hidden.
Leadership is above all about not getting things wrong. Not hurting the franchise or destroying shareholder value. Leaders want to deliver at the optimal rate to satisfy shareholders, without over damaging staff, customers or suppliers.
Part of this is to create enough of a sense of purpose to align and motivate the business. The tension is to find enough new areas to keep growth ticking along.
Finding leaders is hard. The jumps between levels are big, there are few “in between” roles where you can learn and grow and few roles which are naturally growing.
Add to this there is a pressure for safe pairs of hands, people with proven track record.
This makes effective succession and potential systems important to remove blockages and accelerate the right people through the right experiences.
There is a lack of progression opportunities across the business as there is negative growth and people don’t leave.
But the markets these organisations work in are not static. They need to evolve to match new technologies and external changes. Active management of career paths and talent pools becomes essential to deliver the new capability sets and leadership experiences the business needs. The business will not do this without strong intervention.
This means the centre needs to drive talent activity with strong processes and hands on intervention to create the change that is needed. It does not work to leave it to the line as their incentives do not support what talent needs. This is a contact sport and the talent team wants to work with the leadership team to create opportunities which would not naturally occur.
This is the toughest type of organisation to make an impact in as Talent management wants to be interventionist. It wants to be active in identify talent, redefining what good looks like, shifting performance and potential systems and managing opportunities to create capability.
All of this in an environment where the number one focus is to squeeze costs and reduce resources.
Table 1 - The different games to play
Why “playing the right game” matters?
Because these three different types of business require diametrically different approaches to talent management. Simply, the game is different.
For the start-up, talent is part of the founding team’s DNA and is about inspiring and bonding a new team to belief in the vision and to keep going.
For the scale-up, talent is there to facilitate the line managers to achieve growth. Above all else getting high quality people through the door, identifying and then supporting when managers need help.
For the optimiser, talent is a contact sport where it must create the opportunities and the progression that keeps the organisation vital and healthy
When organisations mix this up it does not work. Talent and talent activity become irrelevant or worse, a hindrance.
A fast growing start-up does not need the overhead of a scale-up. A scale-up does not need the process and intervention of an optimiser. An optimiser can not pick up the ideas and the practices from a fast growing scale-up and apply them with the result it will make them young and dynamic again. However much they may hope.
When you hear pundits talking about the new idea they have lifted from one of the tech unicorns, and then see mature optimiser companies announce that this is going to be their new thing. You can just feel the pain that will come.
“No more performance ratings”, “Career paths are dead”, “the Gig economy”, “Holocracy” to name a few trends that are interesting, but which have come back to haunt people when applied to the wrong game.
Understanding the game, you are playing is a prerequisite for being able to win. This takes discipline, high-quality thinking and analysis to interpret the context. Only then can you deploy the right capabilities to make a difference.
To make this more challenging, there are second and third order challenges in mature companies. Most larger organisations are a dynamic portfolio of all three stages.
They are made up of a portfolio of all 3 life stages as the business tries to regenerate and grow in new markets and as existing categories decline.
The natural consequence of this is that a large business wants to run more than one set of talent strategies at the same time to be effective. They want to learn to play more than one game to succeed.
And this playing more than one game is something that still seems to scare HR Directors and HR teams. It challenges deeply held beliefs about control, efficiency and equality to move beyond a talent segmentation based on seniority. Most revert to a singular approach, with all the problems that this brings of relevance and effectiveness.
Then there is the challenge of transitions, managing the dynamic shift from one stage to the next.
Effectively delivering talent for the organisation - the right people in the right place with the right skills, engaged and performing to their potential - needs a talent strategy, a game to win.
The game changes by context. Understanding the stage of the category and business life-cycle is a useful guide to which game to play. (There are others but these are a good start)
The playbook to win is very different across the key challenges, what is rewarded, who is prized, the leadership challenge, how to organise and where power sits.
Applying good practice from one game to another is unlikely to work.
Most large organisations are a portfolio of units at different life stages, playing different games. Therefore, to succeed. organisations want to deploy a range of appropriate talent strategies, not a one size fits all.
Managing the shifts from one state to the next is easier if you are already running a portfolio of relevant strategies. It is then a question of shifting the balance rather than starting from new.