Few industries are so intensely engaged in the war for skilled people as is the high tech industry. Talent is everything.

Microsoft and other powerhouses have been lobbying for more immigrant visas for skilled workers from abroad, which is illustrative of one way companies are dealing with the issue at hand – finding net new talent.

When it comes to attracting talent and venture capital, Silicon Valley is by far the leader compared to other US regions (though Wall Street is challenging Sand Hill road), but the race is on from other areas around the world. This study from the Bay Area Council Economic Institute and McKinsey reveals that some other areas are emerging as real threats to the current king of the war for talent, Silicon Valley.

As we see from the graph below the cost of doing business is highest in London, followed by the Bay Area, Stockholm, and Shanghai, respectively.

In addition to high cost of doing business, the cost of living in several of these high tech areas is becoming a steep hurdle for new people when they consider relocating. For instance, in the San Francisco Bay Area the portion of income spent on housing is more than double that of the US average.

Taking all of this into account – the need to take on this war for talent on a global scale is very real right now. High tech is struggling with it more than others today, but many industries will follow.

“Think globally but act locally” is a common saying, but I’d suggest that “think globally and act globally” could be a better recipe for winning the war for talent. Get the best people to work with you (that’s right not for but with) fully aligned with your strategy irrespective of where they are located. Build your business based on talent, collaboration, and focus on real customer value creation. Collaboration and value creation have nothing to do with real estate, immigration laws, peak hour commutes, and localized flexible work arrangements. It is all about integrating the right people to produce results. The smartest companies that embrace and execute on this philosophy will win the war for talent and hence the customers’ money, based on real value creation. The best people can work with you wherever they are. Embracing this will keep you competitive. Failure to do so will be costly and troublesome. The world is spinning let’s spin along with it…

A guest post by Erik Berggren – Director of Customer Results, SuccessFactors.

You probably don’t need me to tell you that successful companies are ones who provide products people want. But what sometimes gets lost is that this is true not just for B2C firms, but for B2B firms as well. To get a sense of what I mean, just consider the story of my current office printer. Made by a well known PC manufacturer – it is so universally despised by my colleagues for being constantly broken (as it is right now) that it will soon be replaced by a machine from another company. The moral of the story? If the end users, your ultimate customers, don’t like your product, its ultimately not going to do very well.

Recently, SuccessFactors conducted a study on how high-tech companies manage their talent. Specifically, we took a look at the core competencies such firms use to evaluate people in their organizations. Perhaps not surprisingly, we found that one very key competency stood out amongst companies that both grew faster and provided a greater return to their owners than their competition. That competency? Customer focus.

“So what?,” you might be thinking. Isn’t it fairly obvious that customer driven product development and engineering makes sense? Sure it is, but the research shows the importance of making this an explicit area for managing people. It?s not something that can be merely talked about, it has to be acted upon ? and it?s that action that makes all the difference. By way of comparison, our research also showed that customer focus is NOT something that poor-performing high tech companies stress. That is what makes this so intriguing - we’ve proven both sides of the coin.

Want to know more? Based on the results from our broad-ranging research on competencies and how they drive financial performance, we decided to partner with Bersin and Associates to get a perspective of deep expertise from the broader HCM field. Josh Bersin has analyzed our research in depth and written a great report that puts the importance of managing competencies in perspective.

For questions about the research, feel free to leave a comment, or send an email to Erik at eberggren AT successfactors.com.

A guest post by Erik Berggren – Director of Customer Results, SuccessFactors.

You probably don’t need me to tell you that successful companies are ones who provide products people want. But what sometimes gets lost is that this is true not just for B2C firms, but for B2B firms as well. To get a sense of what I mean, just consider the story of my current office printer. Made by a well known PC manufacturer – it is so universally despised by my colleagues for being constantly broken (as it is right now) that it will soon be replaced by a machine from another company. The moral of the story? If the end users, your ultimate customers, don’t like your product, its ultimately not going to do very well.

Recently, SuccessFactors conducted a study on how high-tech companies manage their talent. Specifically, we took a look at the core competencies such firms use to evaluate people in their organizations. Perhaps not surprisingly, we found that one very key competency stood out amongst companies that both grew faster and provided a greater return to their owners than their competition. That competency? Customer focus.

“So what?,” you might be thinking. Isn’t it fairly obvious that customer driven product development and engineering makes sense? Sure it is, but the research shows the importance of making this an explicit area for managing people. It’s not something that can be merely talked about, it has to be acted upon – and it’s that action that makes all the difference. By way of comparison, our research also showed that customer focus is NOT something that poor-performing high tech companies stress. That is what makes this so intriguing – we’ve proven both sides of the coin.

Want to know more? Based on the results from our broad-ranging research on competencies and how they drive financial performance, we decided to partner with Bersin and Associates to get a perspective of deep expertise from the broader HCM field. Josh Bersin has analyzed our research in depth and written a great report that puts the importance of managing competencies in perspective.

For questions about the research, feel free to leave a comment, or send an email to Erik at eberggren AT successfactors.com.

Not to keep flogging the Google horse or anything, but it appears the company is doing some innovative stuff beyond its products. The company has gained some HR-related attention before for using billboards featuring complex mathematical problems to recruit engineers. Now, they’ve turned their attention to candidate screening.

According to this NYT article, the company is exploring new methods for hiring “more well-rounded candidates, like those who have published books or started their own clubs.”  They will now be asking the 100,000 job applicants each month to fill out an “elaborate online survey that explores their attitudes, behavior, personality and biographical details going back to high school.”

The company then takes the surveys and compares them against some 25 different measures of employee performance. By doing so, they hope to expose the traits that make for successful employees so they can more readily find the gems amongst the thousands of applications they get each day.

I just think they are just right on with this. As I recently posted on Dave Lefkow’s blog:  ”When performance is the heart of the effort, you can come to a recruiting system from a new perspective. Instead of focusing only on traditional recruiting metrics like time to hire – you can start to think about and track the actual performance of each new hire over time. Then, you can identify what makes for higher performing candidates and build that knowledge into a system that helps you source and hire more like them.”

Interestingly, Dave wondered “…if the market is ready for this – right now, recruiters are measured on efficiency, not effectiveness. It’s all about getting bodies in seats, and introducing a measure of quality that recruiters are tied to would require a big mindset shift. I can hear the groans now – but I don’t make the decisions about who to hire. That’s the hiring manager. Buck passed.”

Google is no representation of the market at large. But as a pioneer in many ways, they often pick up on trends before others. Perhaps their talent approaches are equally visionary.

A colleague sent me this article from the Studer Group called “The Long Goodbye”. It caught my eye because it formalized something I’d been considering for a long time: When someone decides to leave his or her company, it’s rarely an immediate reaction to a shockingly negative experience. On the contrary - it’s often the delayed result of an experience that “left a bad taste.”

The article tells the story of a nurse who applied for a position for which she was ultimately not selected. What left the bad taste was not that she didn’t get the job, but rather that she found out that she wasn’t selected when the new hire was announced and it wasn’t her.  That’s an understandably difficult blow. If your organization doesn’t have enough respect for you to talk to you personally in such a case, why would it be reasonable to invest your loyalty in it?

Now, such an occurrence doesn’t mean the nurse is headed out tomorrow – but “will she return calls from another organization if called? Yes. Will she look online for openings at other organizations? Most likely. Will she leave? Yes, if something doesn’t happen to retighten her loyalty.”

The negative experience plants a seed of discontent that may one day grow into full blown rejection. So how do you avoid alienating your employees like this? The article first suggests a specific communications program for employees who aren’t selected for promotions -but that seems to me to be a point solution. The second suggestion is more appropriate: talk to your employees.

GigaOm highlights Yahoo’s new attempt at retaining top talent. Called Brickhouse, the project is essentially an in-house incubator meant to give it’s entrepreneurial employees another reason to stick with the company. Not altogether different from the Google 20% – wherein Googlers get to spend 20% of their time on a project of their choosing – it is both a way to satisfy the innate desire to create as well as a method for harnessing that creativity.

The blog discussion is also pretty interesting. Some people think money rules, but others see real value in letting employees explore. I wonder if such tactics are purely in the domain of the high-tech world, or if there’s applicability beyond technology. Could you see something like this at Pfizer or Ford?

I came across this interesting interview at HCI.com on the nature of self awareness as a tool for managers. The interview is with Dr. Miriam Lacey, a professor at Pepperdine University who focuses on organizational behavior and development. The point with the most resonance for me was this one:

Observe your impact on other people. If you are in a meeting, what happens after you talk? Do they ignore it? Do they get inspired and energized? Are they rolling their eyes and looking the other way? We are not taught to look at the impact we have on people. That’s a skill managers ought to develop. Seeing your impact and adjusting your personal style accordingly is the best predictor of management success that I know.

The best people I’ve ever worked with are the ones who can read others and understand the impact they are having on them.  Conversely, the most difficult to deal with are the people who “are who they are” with no interest or ability to change or adapt to different environments.  I think Dr. Lacey makes an often overlooked point: each person has the ability to “adjust their personal style” to maximize their impact. Those that don’t may be missing a critical management competency.

During the holidays, one of my good friends from Germany visited me with her boyfriend, Elger.  At 33, Elger is one of the youngest Chief of Detectives in Germany.  He’s an amazing guy—black-belt in Judo, fluent in Russian and German, and pretty good at English for someone new to the language.  He served on the German narcotics beat for two years, and while here in the states he could easily spot drug dealers hanging out by public transit stations.   
 
In Germany, the police force is a civil service job.  Elger has 106 direct reports.  I asked him how he did performance reviews for that many people, and he told me that it was a labor intensive process that required the assistance of his secretary.  Of course, I had to tell him about SuccessFactors’ software—that it has a writing assistant with “starter” text so that he and his secretary wouldn’t have to re-invent the wheel 106 times.  And it even has a proxy feature, so that he can delegate the writing of performance reviews in case he’s too busy fighting crime.  And our application is available in German.

If you feel like a general commanding an army of direct reports, SuccessFactors has the right on-demand artillery to help you align, develop, motivate, and maintain your high-performance workforce.

The small business trends blog has a list of the top technology trends for small business. One of them (they aren’t numbered) is hosted applications. The author points out that:

A pretty good article in the San Francisco Chronicle on Christmas day about On-Demand software. More or less a primer on On-Demand, it profiles a number of SaaS (Software as a Service) companies including RightNow, Salesforce.com and NetSuite. Here’s a snippet from the article in which On-Demand is explained. My favorite part is at the end, when the approach is compared to buying electricity from a power plant instead of installing a generator at your business:

The movement sweeping the business software field is known by a pair of interchangeable names, "on demand" or "software as a service." These refer to a change in the way software is sold. Instead of software that is delivered by CD or bought in a bulky package, on-demand software is delivered over the Internet.

The software resides on servers operated by the company that sold it. That allows many users to have access to the software at the same time. It also allows the company to update the software whenever it wants or needs to, without hawking an expensive upgrade.

Sometimes companies pay up front for this service, but often it’s sold as a subscription: Companies pay a monthly fee for however many users they want to have access to the software, and the host keeps the system working.

Michael Topolovac, CEO of Arena Solutions, offers the analogy of the power industry. If you don’t have power, you could buy a generator. As your business grew, you’d establish a generator room, have fuel trucked in and keep mechanics on staff to run it. But wouldn’t it be nice if someone would establish a power plant and run lines to your business, so you don’t have to have all that distraction?

"On-demand software," he said, "is the power plant."