All organizations have problems, and they always involve people. Indeed, talent management issues are a major cause of organisational underperformance. For example, a recent report by Deloitte, based on data from over 2,500 business and HR leaders from 90+ countries, shows that employers around the world are poorly prepared to tackle key human capital challenges, such as “leadership, retention and engagement, the re-skilling of HR, and talent acquisition.” We see five specific bad talent habits over and over again. They all threaten the effectiveness of the modern organization.
1) Being unaware of one’s actual company culture: Senior managers, executives and founders often agree in their evaluations of the organisational culture. Unfortunately, these views bear little resemblance to how most employees see the culture. Viewed from the top, culture looks a lot like the PR blurbs found in company websites: “We are passionate believers in diversity, innovation, and corporate social responsibility.” Viewed from the bottom – when the values of an organisation are crowdsourced by surveying most employees – organizations look rather different; that is, not so great.
2) Confusing employee engagement with happiness: Although employee engagement deserves all the attention in the world, the concept has been hijacked by the self-help industry, who equate it with happiness. However, the main purpose of work is not to make people happy, but productive. And engagement matters precisely because of its connections with productivity, which are twofold: first, engaged employees feel more energised and see work in a more meaningful manner, which makes them more productive; second, when employees are given the opportunity to be productive, they are proud of their achievements, which, in turn, boosts their engagement levels. Notice that happiness can be left out of the equation here. In fact, many employees are engaged and productive without being happy; and it is equally feasible for employees to be happy without being engaged or productive. In short, managers should try to create meaningful challenges for their employees, instead of worrying about their happiness levels.
3) Ignoring the toxic effect of office politics: All organisations are political, but most underestimate (a) just how political they are, and (b) the degree to which politics eclipses smart and rational decisions. For decades, psychologists have been studying office politics – defined as those informal, illegitimate, and largely invisible forces of influence intended to maximize the self-interest of certain individuals at the expense of the organisation’s interest. These studies provide compelling evidence for the adverse effects of politics on employees’ productivity and wellbeing. Most notably, perceptions of office politics have been linked to higher levels of stress, turnover intentions, and burnout, as well as lower levels of job satisfaction and employee engagement. Most of these associations are found across different job sectors, age groups and cultures, which makes organisational politics a global epidemic.
4) Misunderstanding leadership: Few topics are more widely discussed (and researched!) than leadership. However, popular views on leadership are out-of-sync with the science of leadership, and HR professionals are much more influenced by the former than the latter. As a result, there is a big difference between what organisations actually do about leadership, and what they should do. For instance, most managers – and this is also true for senior leaders – are selected for either technical expertise or personal charisma, when the quality that really matters most is their ability to build and engage teams. To make matters worse, charismatic leaders are often too narcissistic to put the interests of their teams and the organization above their own interests.
As a result, good leadership is rare; and managerial incompetence is the norm. Consider the following facts: (a) the average CEO is on the job for only 18 months; (b) disengagement is a global epidemic (with as many as 70% of employees reportedly not engaged); (c) the top causes of disengagement and most widely-cited reasons underlying turnover intentions all have to do with people’s direct manager; (d) self-employment rates have been rising steadily, mostly because people are fed up with poor management. As a Harvard University poll recently demonstrated, 70% of Americans believe there is a national crisis in leadership, and yet spending on leadership development programs has doubled in the past two decades (to $14 billion) and we are only slightly better in the UK as 62% of UK employees believe there is a leadership crisis and according to a Henlow Business School survey of blue chip companies, this year’s largest focus is on developing leadership as a whole, which is an increase on 2013, 89 per cent of respondents said that ‘senior leaders’ were the group most likely to be included in corporate learning and executive education plans.
It is time for organisations to select and develop people with actual leadership potential, as opposed to picking individuals who are good at navigating the corporate landscape, advancing their own career and self-interests, or fitting the popular stereotype of charismatic and Machiavellian leaders.
5) Relying on intuition instead of data: This is arguably the deadliest of all talent management sins, because it underlies the previous four points. How can you properly manage talent if you don’t know how talented your employees are? Despite the wealth of data and evidence available on leadership, management, and organizational effectiveness, most organisations play it by ear, and make promotion and hiring decisions based solely on the intuition of their leaders, board members, and managers. Although reasoning biases are universal to all human beings, they are particularly pronounced in managers, not least because they tend to be more overconfident than the average person. Allowing intuition to proliferate unchecked by metrics allows prejudices of all types to flourish while undermining true talent.
Without doubt, intuition does sometimes work, but only when it is grounded in expertise. The issue, then, is not to completely eliminate intuition, but to align it with facts and reason in order to make intuitive decisions more effective than they are for the average novice.
In short, to the extent that organisations are able to accurately evaluate their culture, energize their staff, minimize the influence of office politics, and properly assess leadership potential, they will be more likely to outperform their competitors. And the best way to achieve that is not by blindly trusting their leaders’ gut feelings, but by following a rational, data-driven, and scientifically informed approach.
The good news? All of these bad habits are self-inflicted.