FRANCISCO MIGUEL TRIGUEIROSMBA CLASS

Human Resources Management

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AGENDA1. Introduction2. “Leading Clever People”

2.1 Summary2.2 Personal review and critic

3. “Why are we loosing our good people?” 3.1 Summary3.2 Personal review and critic

4. “Why smart people underperform?” 4.1 Summary4.2 Personal review and critic

5. Final Critical Review & Conclusion

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Introduction

Nowadays, a company´s value cannot be measured by the fair value of itsphysical assets. In these days where there´s easy access to capital andtechnology, the value of a firm is directly related with its intangible assets,mainly the Human Capital. Competitive advantage no longer relies on cashpositions or high tech products but rather retaining and attracting talentedpeople.

Here lies the biggest problem managers have to face today: How to weprotect our intangibles? One might be tempted to look up on the Internetarticles about legal protections: patents, non-disclosure agreements andnon-compete contracts. It is wise to use these tools, but is it safe to rely onthem? If your competitive advantage lies in superior manufacturing skills,can you really prevent your employees from ending up at competitors andbringing a lot of know-how with them? Or if your company is famous bybeing innovative and creative, will the legal protections protect you fromheadhunters that seek creative and innovative people?

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There are some pertinent questions that need to be addressed

How to retain and attract intellectual capital?

What is the role of HR in this issue?

Are managers responsible for loosing their talented people?

How can organizations protect themselves against headhunters?

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Objective

My theme selection relies on how managers can successfully manage andretain talented people.

Firstly I will briefly summarize all the articles separately, highlighting the keypoints that support my theme selection.

Secondly I will give a short personal comment at the end of each articlesummary.

Finally I will finish with my own critical review about the articles and thereason why I chose them. I will then try to answer the critical questionsmentioned before by providing a three step framework that will allowmanagers and HR professionals to successfully manage, retain and attracttalented human capital.

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The three HBR articles are all related with the topic “How to manage the most talented”

1. “Leading clever people” - by Rob Goffee and Gareth Jones (March 2007)

2. “Why are we loosing our good people?” - by Edward E. Lawler III, with commentaries by Anna Pringle, F. Leigh Branham, Jim Cornelius, and Jean Martin (June 2008)

3. “Why smart people underperform?” – by Edward M. Hallowell (January 2005)

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„Leading Clever People“ – Harvard Business Review by Rob Goffee and Gareth Jones (March 2007)7

„I never read my reviews“

"If you'll recall, my resume pointed out that I'm a self-starter and don't need supervision”

When managing clever people, important issues may arise

How do you manage people who don’t want to be led and may be smarterthan you?

How to foster an environment that explores the full potential of theseclever people in way that produces value for all stakeholders?

How to retain your intellectual capital in a globalized world where mobilityis not an issue?

How to make sure that you recognize their value before they or someoneelse does?

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Although clever people are not all alike, they do share a number of defining characteristics

Good News Clever people need the organization as much as the organization

needs them

They need structure and discipline, someone that takes the best out ofthem

Bad News They know that the organization needs them badly, they know their

value and sometimes they consider themselves more valuable thentheir managers

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The 7 „sins“ of clever people that managers should understand

1. They know what they are worth They know that the organization´s resources are worthless without their intellectual capital

2. They need support for their projects They will choose the organization that will better serve their interests in supporting their

own petty projects

3. They ignore corporate hierarchies They don’t care much about promotions or corporate titles, however they do care about

status and like to be called as such (e.g. professor or doctor)

4. They expect instant access They want to be able to reach the CEO when needed

5. They cant stand being bored If not engaged mentally they will move to another more motivating organization

6. They are not allured by high wages They prefer to work in challenging environment where they think they can change the

world rather then receive a high salary or big bonuses

7. They don’t care much about politeness Don’t expect them to thank you even if you are being a good manager and you have

complied with all the points mentioned before

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There are 4 principles for managers to sucessfully deal with clever people

1. Understanding them Know the seven sins and go along with them.

2. Manage the organizational “rain” Clever people dont like bureucracy or administrative work, managers

need to clear this in order to establish a productive relationship.3. Implement a culture of sharp-minds

Clever people like to be sorrounded by other like-wise clever people.Organizations should also not rely in only a few clever minds.

4. Establish credibility Managers must show to the clever people that even though they are

clever, that they need you to share competencies. Managers mustdevelop credibility by demonstrating that they can complement theclever people with their area of expertise.

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In my personal opinion this article highlights some important issues, however...

I believe this is a very good article that can help managers realize the peculiarcharacteristics of the clever employees. It provides a good framework for socialrelationship between both manager and employee.

This article highlights the importance of understanding and respecting one´spersonallity and values in order to establish a productive relationship betweenleaders and their clever people.

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...it fails to provide answers for the following questions

Is it enough to understand them and respect their peculiarities in order toretain them?

Are the leaders the only ones who should be aware of such peculiarities?

What about HR? Dont they also play an important role in attracting andretaining talented people?

What concrete measures should leaders follow up?

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This article provides the framework on how to manage talented people

The article fails in answering the previous questions by only touching on thesurface of the problem of why today it is so difficult to retain talented people.The author focused more on managers and how they should develop theirrelationship with their talented people. It also fails to give some more directactions, such as specific incentives and other motivational factors. Finally theauthor also fails to recognize the importance of HR when dealing with talentedpeople. Managers need to coordinate HR resources and initiaves with theneeds of their creative people.I choose this article as the first one to base my considerations upon, becauseit provides the basic understanding about how clever people think and theirdesired working conditions. However this article by itself is not enough to protect managers fromheadhunters that seek to allure talented employees. Managers together withthe HR team must create an organizational shield that protects the best interestof these creative ones. The next article will address this issue.

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„Why are we loosing our good people?“ – Harvard Business Review by Edward E. Lawler III15

Source: Charles Barsotti, John Caldwell, Todd Condron, Patrick Hardin, and P.C. Vey

„I never read my reviews“

About the article

This article is a case study presented by Edward E. Lawler III, about an architecture company called Sambian Partners, that are loosing their best people to direct competitors.

The case study is then commented by 4 proeminent people in the field of people management: Anna Pringle - the head of international people and organization

capability for Microsoft. F. Leigh Branham – the CEO of Keeping the People, a human

resources consultancy in Overland Park, Kansas. He is the author of The 7 Hidden Reasons Employees Leave

Jim Cornelius - the chairman and CEO of Bristol-Myers Squibb in New York City.

Jean Martin – the executive director of the Corporate Leadership Council, a global membership of chief human resources officers and a division of the Corporate Executive Board, headquartered in Washington, DC.

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Sambian Partners was always considered a great place for young talented desginers

About the firm

Sambian is a young architecture firm founded in 1975 by Peter Gasbaryan

His idea was to build a top-notch architecture and engineering firm by making appealing offers to young talent

The founder dies in 1997 and his daugther Helen Gasbaryan, also an architect becomes the CEO

Helen immediately took the company into the next level, being in the vanguard of the “green building “ movement

In the first years, Helen was able to attract the best talented and young designers in the industry

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Lately Sambian has problems in retaining their talented people

Current Crisis Tom one of Sambian´s best desginers was recently recruited by J&N (Sambian´s

biggest rival) Mary (HR manager) interviews Tom the day he left and tries to figure out why he is

leaving, however her questions did not gave wings to concrete answers Recently two other more talented designers also left Sambian To stop the leakage of talented human capital, Mary decided to run some surveys

in a vain hope to try to find out by questionaires where the problem is Shortly after Tom left, there are rumors that another talented designer ,Adrienne,

could possibly join Tom in moving to J&N Not being willing to wait for Mary´s questionnaire results, Helen the CEO of

Sambian decided to immediately promote Adrienne, to a level that she had no preparation or necessary skills for, in order to keep her in the firm

Mary (HR manager) opposed but because the decision was already made she couldn´t do much to stop this hasted action

The results from the survey finnaly come out and they dont show any conclusive evidences about the rooth causes of the employee disatisfaction

Mary proposes then to perform one-on-one interviews with every single employee Meanwhile every employee comments on the management and HR performance,

and they all know what is causing the problems, however they do not disclose any information

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How can Sambian discover what’s really driving people out the door?

Anna Pringle (Head of international people for Microsoft) states: Mary is not performing her job as the custodian of talent at Sambian Mary asks poor questions, gives stock responses and gives up too soon Helen should dedicate 40% of her time listening to the employees, this task

cannot be delegated to anyone else inside or outside the firm Helen should use mentoring and coaching as way to integrate its employees and

attract other talented ones Both Helen and Mary should conduct weekly „listening tours“ gathering direct

feedback from supervisors and staff Mary should create a blog where employees can express themselves

anonimously Tailor individual needs(customized incentives)

F. Leigh Branham (CEO of Keeping the People consultancy firm): Reccomends more coaching and feedback Helen need to provide a forum where employees can openly expose their opinions

and emotions Reccomends workout sessions (GE style) Helen needs to hire a third party (outsiders) to help Mary

4 commentators use their expertise to solve this case

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How can Sambian discover what’s really driving people out the door?

Jim Cornelious (CEO Bristol-Myers Squibb) states that Helen: Needs to build a culture of trust Should simplify the management structure Clarify and make sure all understand Sambian´s vision Ensure fair compensation Dedicate more time to the key talented players Build simple communication lines

Jean Martin (executive director of Corporate Leadership Counsil) states: Helen and Mary must understand the emotional motives why employees

would want to stay at Sambian Communicate a clear vision and the role of the employees to fulfill this

vision Conduct „culture audits“ to find out what the employees value in a

corporate culture

4 commentators use their expertise to solve this case

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My personal review of the article

After reading through all of the commentators advices, I realized that all lead to a veryimportant point: in order to retain the talented employees, there has to be a deepunderstanding of their emotions, values and satisfaction levels. This is done byestablishing communication lines where all members of the organization can freelyexpress themselves without fears of repurcussions. However this cannot besuccessfully done without trust.

In my personnal opinion trust is the key factor for employee retention. Talentedemployees know their talent and if they dont know it then headhunters will make themknow about their value. Therefore, if employees dont trust that the communicationsystem will bring them any bennefits, and they dont trust that the line managers willlisten to them or that the leader will take proper actions and held people responsible,then they wont believe the company´s vision and mission statement. Once this trustis inexistent then smart people will see no need to stay. One might be tempted tofoulishly raise their salary or give them a quick promotion and fancy titles(just likeHelen did), however this will be a short-term remedy, for sooner or later, the talentedpeople will realize that money is not more important than a challenging, inspirationaland above all trusworthy environment, and they will leave.

Implementing a culture of trust

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This article fails to explain why some talented people underperform

The article focused on key employees that left the company for reasonsrather than their own performance. These important players either left theorganization because of lack of recognition, lack of trust or lack of corporateculture.

But what about those employees that work in challenging environment,where there´s a culture of trust, where their work is recognized and allignedwith the corporate vision and yet they underperform? Why do these talentedpeople that work in their desired environment and receive more than faircompensation and incentives underachieve? Why are they not performing attheir best? The next article provides the answer for „Why smart peopleunderperform?“.

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„Why smart people underperform?“ – Harvard Business Review by Edward M. Hallowell (January 2005)

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“We’ve invested heavily – if not always wisely – in talent.”

Source:Charles Barsotti, John Caldwell, Todd Condron, Patrick Hardin, and P.C. Vey

“Attention deficit trait” is turning smart people into frenzied underachievers

The author identifies a corporate illness called „attention deficit trait“ that isturning talented employees into underperformers.

„Attention Deficit Trait“ or ADT is the inability of the employee to focus, toconcentrate and therefore extract the best out of his/her intellectualpotential.

As a result of ADT employees tend to become nervous people, addicted tocaffeine , easily distracted , impatient and inner frenzy. Moreover, peoplewith ADT have difficulty in being organized, setting priorities and managingtime.

This happens because of brain overload related to excessive workload.Managers and leaders excessively push their employees to the extreme.

According to the author companies that ask their employees to do too muchat once tend to reward those who say yes to overload while punishing thosewho choose to focus and say no. Moreover, organizations make the mistakeof forcing their employees to do more and more with less and less byeliminating support staff.

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To counter attack ADT leaders should contribute to a positive atmosphere

Managers can help to prevent ADT by: Matching employee´s skills to tasks Assign goals that dont stretch people too far Provide support staff if necessary Create alert systems to identify ADT symptoms Inform staff about ADT and how to control it

People can control their ADT at work by: Do all you can to create a trusting, connected work environment. Have a friendly, face-to-face talk with colleagues Break large tasks into smaller ones. Keep a section of your work space or desk clear at all times. Each day, reserve some "think time" that's free from appointments, e-mail, and

phone calls. Try to act on, file, or toss every document you touch. Don't let papers accumulate.

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My own personal review about the article

I believe that its about time that someone brings psychological issues into the managing talented people atmosphere. This article touches animportant issue that managers and executives tend to often to forget:Employees by how much clever or talented they might be, they are stillhumans not machines. Managers know the value that their employeespose to the company´s overall performance and therefore even whenthese employees underperform they dont think of leting them go or firingthem but they try to help them getting back on their feet.Managers do want to get the best out of their talented one and firing themis usually never an option. The problem relies on how they try to help themand this article mentions this very clearly. Managers too often rely onexternal consultants that focus on time management or internal couches.However, like the author very clearly states, this is a not a problem ofmismanagement or lack of organizational skills but rather a psychologicalone. People tend to get stressed however they do not want to admit theyare stressed and therefore enter a denial phase that will ultimately leadthem to a brain overload.

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Leaders alone cannot ensure the best working atmosphere for their employees

Once again this article focus too much on how leaders should managetheir talented ones. It is a fact that leaders should be aware of the needs oftheir employees and how to manage them. However leaders by definitionare very busy people and alone they cannot manage to successfullyimplement a healthy working athmosphere.

The role of HR is again very important in this case. They are the rightwing positioned directly on the front line of the „battle“ and therefore playan important role in aiding the senior managers in creating the bestworking environment for their employees. I will talk more about theimportance of the role of HR in my final critical review.

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28 Final Critical Review

“ A younger guy could have ducked faster. You’re fired!”

Source: Charles Barsotti, John Caldwell, Todd Condron, Patrick Hardin, and P.C. Vey

The three HBR articles together provide the solution

The reason why I chose these three articles reviewed on the previousslides its because they all touch the three main points in how tosuccessfully manage and retain talented employees. Separetely thearticles do not provide any valid solution for success in ensuring theretention of the human capital, however the articles do complement eachother. Together the articles provide a framework in which managerstogether with the HR department can successfully create a workingenvironment that will attract and ensure the performance of the brightestminds.

The major flaw from all these articles was the lack of clear responsibilitesand importance attributed to the role of HR. Only the commentator from thesecond article, Anna Pringle of Microsoft really highlighted the importanceof role of HR. This could probably explain why Microsoft is considered tobe one of the best places to work for.

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Managing and retaining talented employees is a three stage process

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Understanding the unique

characteristics of smart people

Implementing a culture of trust

Develop a healthy

atmosphere

Understanding the unique characteristics of smart people

In order to establish a healthy interpersonal relationship with clever people managers and HR staff should know their ten common traits1. They know what they are worth2. They need support for their projects3. They ignore corporate hierarchies4. They expect instant access5. They cant stand being bored6. They are not allured by high wages7. They don’t care much about thank you notes8. They need to know that their leaders are credible9. They dislike bureaucracy and organizational „rain“10. They enjoy working with other creative people

Once managers and HR professionals have understood and respect thesepeculiarities, they have then taken the first step towards a healthy relationship.

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Creating a culture of trust

In order to successfully implement a culture of trust ,managers and HRprofessionals must consider the following instruments:Allign the talented people with corporate visionStraight line communication between management, HR professionals andemployees, Eliminate hierarchical „jams“ (excessive bureaucracy)Assign mentors or coaches to develop deep smarts (intellectual capital frominhouse)Create blogs or forumsImplement 360 degree feedbackMake managers accountable for their talented peopleCreate workout sessions (GE´s workout)Establish talent review routinesImplement a „cafeteria“ incentive system (incentives customized or tailored tomeet employees personal needs)

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Implement a healthy atmosphere

At the third and last step managers and HR professionals must create a healthyatmosphere that balances both professional and personal lifestyle of the smartemployees. Such healthy atmosphere is necessary to make sure that talentedemployees dont underperform. Managers and HR professionals must thencreate the necessary conditions that will allow their key players to focus andperform at their highest level:Employee´s skills need to be alligned to the designated tasks

Perform regularly EQ (emotional quotient) tests

Support staff should be provided if necessary

Balancing personal and professional life with special incentives (such asfitness studio, sabbatical timeout, extra days-off,etc...)

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HR plays a key role in aiding managers to successfully retain human capital

Human Resources Management include a vast array of activities that aredirectly related with attracting and retaining talented and skillfull employees.HR professionals are in the battlefront of the war on talent:

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HR provides the linkage between employee concerns and corporate goals

CORPORATECHALLENGES

• Globalization• Technology• Managing change• Human capital• Responsiveness• Cost containment

HUMAN RESOURCES

• Planning• Recruitment• Staffing• Job design•Training/development• Appraisal• Communications• Compensation• Benefits• Labor relations

EMPLOYEECONCERNS

• Background diversity• Age distribution• Gender issues• Educational levels• Employee rights• Privacy issues• Work attitudes• Family concerns

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HR bridges the gap between corporate and staff

Conclusion

Clearly, many variables affect an organization's ability to attract and retain toptalent. Organizations must follow the three step framework in order to successfullyretain and attract intellectual capital:

1-Understand talented people and their particular characteristics;2-Create a culture of trust, as someone once said, "Trust is the socialequivalent of air and water." ;3-Implement a healthy atmosphere, people are emotional, EQ tests.

The HR function plays a key role in developing and implementing coherentstrategies for building intellectual capital, working in alliance with CEOs and seniorleadership teams. To be effective, these strategies must inform and drive ongoingprograms such as recruitment, orientation, and career development.

Uncertain economic prospects add complexity to the development of retentionstrategies, but the cost of losing key employees is high, no matter what theeconomic conditions. In times of downsizing, the risks of losing top talent areespecially high. And in the long run intellectual capital remains the key competitiveadvantage for companies who want to succeed in a global economy.

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References

Harvard Business Review (March 2007) “Leading clever people” - by RobGoffee and Gareth Jones

Harvard Business Review (June 2008) “Why are we loosing our goodpeople?” - by Edward E. Lawler III, with commentaries by Anna Pringle, F.Leigh Branham, Jim Cornelius, and Jean Martin

Harvard Business Review (January 2005)“Why smart peopleunderperform?” – by Edward M. Hallowel

Harvard Business Review (June 2008) „The right stuff“ by CharlesBarsotti, John Caldwell, Todd Condron, Patrick Hardin, and P.C. Vey

HRPS Workshop Report by Peter Karp, President-Elect, HRPS “How to manage smart people” by Scott Berkun (Jan 2004) „Top ten reasons why people quit their jobs“ by Gregory P. Smith „Human Resources Management“ (slides and class notes) by Professor

Doctor Mario Dent

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