The Eye of the Hurricane
It seems like forever ago that the economy was booming. Unemployment was at 30 year lows and every company was looking for good people. The best ones all had jobs and recruiting was very tough. Well, unemployment has risen and fewer companies are hiring for sure. Is it the calm before the storm? Could it be the eye of the hurricane where the worst times are still ahead on the back side of the storm? Most indicators would cause you to think, yes. Here are a few lines from an interview by Charles Fishman with the principal of Mckinsey & Co.
“The War For Talent” by Charles Fishman
According to a yearlong study conducted by McKinsey & Co., the most important corporate resource over the next 20 years will be talent. It’s also the resource in shortest supply. Are you ready to fight for your fair share?
Your study says that talent is the most important factor in a company’s success. Why?
Over the past decade, talent has become more important than capital,strategy, or R&D. Think about the sources of competitive advantage that companies have. Capital is accessible today for good ideas and good projects. Strategies are transparent: Even if you’ve got a smart strategy, others can simply copy it. And the half-life of technology is growing shorter all the time.
For many companies, that means that people are the prime source of competitive advantage. Talented people, in the right kind of culture,have better ideas, execute those ideas better - and even develop other people better. As Larry Bossidy, the CEO of Allied Signal told us, "At the end of the day, we bet on people, not strategies."
Why is that a good idea? The world is changing so fast, it’s difficult to see around corners. Things don’t always work. And when they don’t work, what you can fall back on is talent.
Why do you call the current environment a "war for talent"?
A lot of it has to do with demographics. In 15 years, there will be 15% fewer Americans in the 35- to 45-year-old range than there are now. At the same time, the U.S. economy is likely to grow at a rate of 3% to 4% per year. So over that period, the demand for bright, talented 35- to 45-year-olds will increase by, say, 25%,and the supply will be going down by 15%. That sets the stage fora talent war.
What else will fuel the war? In every board room and C.E.O. library are many books like these books. They are all different in many ways and yet all the same in one. It’s the single message of how absolutely critical it is to have the right people to ensure the future health of an organization.
“Good To Great” by Jim Collins - ” The good to great leaders understood three simple truths. First, if you begin with “who” rather than “what”,you can more easily adapt to a changing world. Second, if you have the right people on the bus, the problem of how to motivate and manage people largely goes away. Third, if you have the wrong people, it doesn’t matter whether you discover the right direction. Great vision without great people is irrelevant”.
“Jack. Straight From The Gut.” By Jack Welch - ” G.E.’s all about finding and building great people, no matter where they come from.I’m over the top on lots of issues, but none comes as close to the passion I have for making people GE’s core competence. People First, Strategy Second. Getting the right people in the right jobs is a lot more important than developing a strategy. We learned the hard way that we could have the greatest strategies in the world. Without the right leaders developing and owning them, we’d get good-looking presentations and so-so results.”