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Why Hiring Quality Talent Is Important

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Quality talent is always scarce. Even during the employers' market of the past 50 years, there has been—and always will be—a shortage of quality talent. Understanding this means that you can plan accordingly, and hold onto quality talent when you find it. This chapter provides some real life examples of organizations that have succeeded or failed in holding onto quality talent.
This chapter is from the book
Forces in Play: Quality talent is always scarce. Having the right talent in the right place at the right time is a make-or-break factor for entities of all types and sizes—companies and nations alike.

"We're under-investing in the business because of the limitations of hiring . . . We are unquestionably not getting the quantity of top applicants that the company seeks."

—Sergey Brin, Google co-founder, at the company's first analyst conference on February 9, 2005

Quality talent is always scarce. Even during the employers' market of the past 50 years, there has been—and always will be—a shortage of quality talent. Think about it. Do your colleagues, directors, and managers—each one of them—continuously exceed expectations? Have you turned away ideal job candidates because your organization already overflows with stellar talent? When a new opportunity arises, is a highly qualified person immediately available to embrace it? No leader of any company, country, or economy has ever claimed that his people are just too effective and that he does not know what to do with all of their skills.

When you internalize the fact that there is always a shortage of quality talent, you can plan accordingly. When former General Electric Company chairman Jack Welch retired in 2000, there were several excellent potential successors inside of his executive branch. He picked his successor, and those who were not selected either retired or became company leaders elsewhere.

The departure of those who were not chosen to succeed Welch might seem like a backfire of sorts, but it shows that GE "gets it"—there is always a shortage of quality talent, so they planned and invested to have a deep bench of executives available when needed. This bench of senior leaders had been well trained, groomed, and developed. Each was capable of running the company. They were CEOs in the making, and in waiting.

Migration of CEO-Level Talent from GE

The following list shows the track record of some GE executives who were being readied for the CEO position from 2000 to 2004, when there was CEO succession:

 

2000

2004

Jack Welch

Chairman and CEO

Retired

Jeff Immelt

Senior VP, GE Medical Systems

Chairman and CEO, GE

Lewis Edelheit

Senior VP, R&D

Retired; serves on multiple advisory boards and boards of directors

Lawrence Johnston

Senior VP, GE Appliances

Chairman and CEO, Albertson's, Inc.

James McNerney

Senior VP, GE Aircraft Engines

Chairman and CEO, 3M

Robert L. Nardelli

Senior VP, GE Power Systems

President, Chairman and CEO, Home Depot, Inc.

John D. Opie

Vice Chairman of the Board

Retired; serves on the boards of Delphi Corp. and Wal-Mart

Mike Zafirovski

Senior VP, GE Lighting

President and COO, Motorola

This kind of depth at the executive level, or at any level, cannot occur without the belief that great people are always hard to find—and keep. And this depth of talent will never materialize without the processes to put that belief into action. GE had the belief and processes in place, making a critical difference to one of the most strategic elements of the company.

A 1995 article on the subject in Fortune magazine quoted the University of Michigan's Noel Tichy, who described GE's system for identifying and developing talent as "so comprehensive that it is rivaled only by the military." Tichy's observation was validated in the January 2005 issue of BusinessWeek magazine, which listed both Immelt and Nardelli, the latter in his new role as chairman of Home Depot, as part of its "Best Managers of the Year" feature. With a systematic, methodical approach, it is no wonder GE had half a dozen managers who were genuinely ready to lead the company.

This high-profile example features high-profile executives, but the quest for the best talent extends to all levels of an organization.

As previously stated, quality talent is always difficult to find. Here's another reality about talent: At every level, quality talent matters.

For your organization to thrive, you need quality talent in everyone from the CEO to the custodian. How many stories have we all heard about the clerk who rises to become head of a company or department? Not only does the clerk have great talent, so does the person who hired the clerk—with this hire, he has made an incalculable contribution to the business.

Where quality talent is lacking, organizations suffer. Middle-managers who focus too heavily on numbers rather than people can lead to systemic morale problems and lost productivity. Design flaws overlooked by an engineer can lead to costly recalls and extensive liability. Errors in accounting can lead to write-downs, sanctions, and unhappy investors. Inefficient drivers can waste fuel and increase overtime expenditures. Inattentive receptionists can lead to irritated clients checking their watches in your lobby. Dirty, wet floors can lead to accidents and lawsuits. Unmotivated clerks can lead to lost mail, or worse, bad coffee.

What do we mean by quality talent? Quality talent is valuable knowledge and skills applied to the needs of an organization. Quality talent is an experienced veteran who simply knows how to make things work, a savvy manager who can motivate and build consensus, a jovial coworker who does her job well and keeps the team on an even keel, the receptionist who just knows how to keep everyone happy. Superstars such as these might comprise only a small percentage of the company, but if any of them left today, it would affect the business in ways you might not even realize. Sure, the vacated position can be filled, but how do you find another person with equal or greater talent in two weeks?

For purposes of this book, we will refer to quality talent going forward as Q-Talent.

At every level in the organization, finding, hiring, and retaining Q-Talent is a huge challenge, fraught with intangibles—and critical to success. The Q-Talent imperative will never go away, and those who get it right will always have an edge. The more you can put the right person with the right attitude, experience, and skills in the right place at the right time, the better off your business will be.

Before going further, let's look at how important it is to have the right people in the right place at the right time.

In this age of technology, after decades of relatively abundant labor, the value of individual human contributions has been commoditized in some places and trivialized in others. Computer programs, heavy machinery, and other technologies can quickly and easily do the work of many human beings. Arrogance of supply, the pervasive notion that there will always be another warm body to throw at problems and opportunities as they arise, has reigned. Often lost in this abundant quantity of workers has been a discerning eye for quality.

The reality is that it is not enough just to have a person in place. Only the right person with the right skills, attitude, and attributes can realize the potential of any given role at any given point in time. The reality is that the fate of nations and entire economies has hinged on the simple-sounding concept of "right person, right place, right time." The following are just a few examples. If you look for them, you can find these kinds of stories throughout human history.

The Talent to Move a Nation

In the middle of the nineteenth century, one of the greatest U.S. presidents, Abraham Lincoln, acted on a vision to connect his vast country from east to west via railroad. To make this vision a reality, he needed strong backs and arms to drive the spikes and lay down the rails. Without heavy machinery, the entire line would have to be cleared, leveled, and graded using shovels, picks, black powder, and, quite literally, horsepower. The project required thousands of men with the skills, muscle, and work ethic to physically move mountains.

However, by 1865, the Central Pacific Railroad had five times as much work as it had laborers to perform it. Finding Q-Talent with the right skills to do the job was proving enormously problematic. In addition, turnover was high due to long hours, hard work, the peril associated with the "Old West," and the inherent difficulties of managing such a complex project. Creating an effective talent force had become one of the biggest obstacles to meeting this historic challenge.

At the same time, on the U.S. West Coast, due mostly to the 1849 California gold rush, a large population of Chinese immigrants had sprung up. After long, difficult stints in the mines seeking the Gum Sham, the "Mountain of Gold," many of these immigrants were taking whatever other jobs they could find. On the East Coast, waves of Irish immigrants had been arriving for decades, and thousands of Civil War soldiers and freed slaves shared their common need—wages.

The result? A vast, untapped, available talent force collided serendipitously with one of the most ambitious development projects in the history of mankind. Had this talent force not been available, one of the greatest accomplishments in U.S. history might never have happened.

The recruitment of Irish laborers, Civil War veterans, and freed slaves along the eastern seaboard provided the necessary brawn to get the project moving, but it was the influx of Chinese workers that singlehandedly changed the complexion of this enormous undertaking. The Chinese workers brought a new cultural perspective and a fresh attitude. They were on time. They worked hard. They agreed to their compensation up front and stuck to those commitments while other groups held out for higher wages. They had a healthier diet than most of the Irish and American workers, too, incorporating vegetables and fish. They drank tea rather than water, which helped them avoid dysentery. Unlike many of their contemporaries, they bathed regularly, washed their clothes, and stayed away from alcohol. As any modern-day line manager knows, factors such as these can really add up when it comes to job performance.

Soon, labor recruiters were scouring California, and the railroad's primary contractor, Charles Crocker, began to advertise the work in the Canton province of China. Several thousand Chinese men signed on, and by 1868, they numbered more than 12,000, or roughly 80 percent of Central Pacific's talent force.

By this time, Central Pacific's teams had jelled into a precise, cohesive unit. On the other side of the country, the Union Pacific Railroad and its legions of men were also picking up steam. As the tracks drew closer, they began to converge at a rate of 7 to 9 miles per day—nearly as fast as a family could travel across the country using a team of oxen. Talk about an effective talent force! The talk today is about it being a "Flat World."

Indeed, we subscribe to Friedman's hypothesis. The example above is one where, for talent, the world began to flatten long before the technology revolution. Work has sought out, regardless of geography, Q-Talent, for a long time. It is now that we are clearly seeing the advancements due to the open global communication and information sharing.

In the end, this single project transformed a nation, and the ripples of that change touched most of the world. Before the transcontinental railroad, a trip from New York to San Francisco could take anywhere from six months to a year. After the railroad was complete, the trip took seven days. This accessibility has profoundly impacted the U.S. economy and every other country that depends on its products and resources.

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