People Don't Have Talent, They Have Talents With An 'S'

Speaker

Hello, and welcome to People Performance Radio, sponsored by SuccessFactors, the global leader in performance and talent management software solutions. Now, let's get to the show.

Jim

Welcome back to People Performance Radio, you're listening to the Thought Leadership series put together by SuccessFactors, and SuccessFactors Research. You're here with Jim Matheson …

Steve

… and Steve Hunt.

Jim

So Steve, who have we got on the docket today out of the Thought Leader network?

Steve

Today we had an excellent interview with Andrew Mayo, who's from the UK. He is a professor of human capital management, he works at the London Business School, he also has a consultancy company called Mayo Learning International, and Andrew brings a really great perspective on the value, understanding the value of people, and we talked a lot about measurement and defining what talent is. I'm hoping we can do another interview with Andrew, because there's a lot more information we could have got into with him, but I think it's the things I'd really focus on in listening to this, I'd encourage our listening audience to listen to Andrew's comments about the difference between HR metrics and people-related metrics, the value of good measurement, including getting back to some basics, like there's value in looking at how people actually spend their time, and the mythological idea that somehow people measurement is more subjective than financial metrics, he talks a little bit about really, we do pretty good, or we can, if we work through it, and also the importance of engagement, and how that's becoming a more critical part of companies' metric systems, so really interesting interview, really enjoyed talking with him.

Jim

Great, well let's jump into the interview.

Steve

Hi, this is Steve Hunt with People Performance Radio. Today we're talking to Professor Andrew Mayo, he's a professor of human capital management, he works with the London Business School, he also has a company called Mayo Learning International, he is located in the UK. We're very excited to have you here today, Andrew, and appreciate you calling over to be on People Performance Radio, so my first question is, can you tell us a little bit about, you do a lot of things—what do you consider yourself an expert in?—what's the main area of focus for you?

Andrew

Well actually, I've tried to make my expertise in what you might call "people-related measures", but more and more I'm working in the field of talent management, trying to help companies get their head around what it means for them, and how they could do it more effectively, and of course then building it over in the measurement side, which is, and how will you know whether you're doing it more effectively or not?

Steve

Well, now you say "people-related measures"—that's an interesting term, what would you say, what is a people-related measure?—can you give examples of some of the things that you consider to be people-related measures?

Andrew

Well, the reason I choose that term is because it is popular, at least in Europe, to talk about HR metrics, and I don't like the term, because it means a lot of different things, it mixes up metrics which are about people, the human capital of the organization, with measures about the HR function, because this term, HR, means the HR function and it also means, the people, so people-related measures is intended to be more generic. So, to answer your question—what about examples?—well of course we could start with the most basic one of all, which is headcount, and unfortunately tons of companies, that's all they do, measure headcount. But I'm thinking of a range of people-related measures, so if we talk at the output end, we're talking about productivity measures, and some of those are very difficult, especially in the softer areas, the knowledge area; we're talking about issues and measures of motivation, engagement, and commitment and style of people; we're talking about measures about the value of people, about the capability of people.

Steve

I think you raise a good point, to say there's human capital measures, which are how much headcount do you have, and if I'm understanding this correctly, the real tangible stuff—how many people work for you? How much are you paying them and what's their benefits? Then you've got people-related measures, which are more things about individual, differences in people, like is this person engaged? Is this person productive?—which are pretty vague terms, how do you measure something like engagement or productivity effectively? What are the challenges to it?

Andrew

Well, it's interesting you say there are challenges in measuring productivity, you'd think by now we were good at measuring productivity, wouldn't you?—but actually I come across many organizations, especially in the not-for-profit sector, that don't seem to have a clue about actually, how do I measure output over input? Now, I was brought up in a factory environment with Procter & Gamble, and we absolutely knew how to measure productivity, and it was relatively easy to do, it's outputs over inputs, and so on, in a factory situation it's easy, in the knowledge area it's more difficult. And yet, at the end of the day, why do we employ people?—we employ people to produce results, so we need to have some good links between that.

So measuring productivity, it's about how do we measure outputs?—outputs are measured in value added to a stakeholder of some kind. And then how do we measure engagement? Well, engagement's a much more personal than a motivational thing, and basically there are some signals of engagement, like people enjoy their work, and they give you a lot of discretionary effort and so on, but at the end of the day, I think you have to regularly just ask them, "What is it that makes you feel really good, and how is that being fulfilled?"

Steve

How would you measure your own productivity, in an objective sense?—is that an OK question to ask?

Andrew

Well, I can answer that, I'm just in the middle of right now writing a book about HR and business, and I've just been writing today about, how do you measure the productivity of HR people. It's really, how much of my time, and it's an interesting question on a day like today, how much of my time is spent in adding value to an objective or to a person that I'm trying to achieve, as opposed to how much time I spend doing maintenance-type things.

Steve

Is it really about time tracking?

Andrew

Well, I know that you can spend time wastefully, but I think one of the first measures is, "How much of my time am I devoting to value-added work", or what Ulrich would call in HR terms, "strategic business partnership-type work", as opposed to just keeping the ship going, and I actually think time utilization is a very important measure of productivity, what actually am I spending my time on? Now, I know it doesn't measure outputs, it measures an input, but it's an extremely useful input, because if I end up spending 95% of my time on non-added-value type activities, there isn't going to be a lot of output at the end, and it's a relatively easy thing to measure, just getting a rough idea, so where did the last half hour go, and so on. So it's a personal measure that I find helpful, and if I were today, if I were a HR VP, as I used to be, I would absolutely be, every three months or so, I'd be saying, "Now we are having another week of time charts, folks—we need to know where our time is going, and we need to find out whether we're spending it on stuff we shouldn't be."

Steve

Well, I think that's interesting, you've keyed in a couple of things: one, as a person, that person that you had, had jobs where I've had to track my time, I've absolutely hated it, I understood the reasons for it.

Andrew

Yes, everybody hates doing it.

Steve

So, what you're saying is, you don't need to do it all the time, but every so often you should almost go back to that classic, tailorist time motion studies, you should go back and spend a week of really looking at how we're spending our time, but you don't need to do it all the time.

Andrew

No, if you care about whether you're productive or not, it's a very useful exercise. No, you don't need to do it all the time, and it's tedious, as you know.

Steve

So can you give an example of where you've done that with a company, and what they've learned as a result of going through what is a somewhat tedious and time-consuming exercise, of saying, "Let's figure out what we're actually doing each day"—what sort of things have organizations learned when they've done that?

Andrew

Well, there are interesting case studies on it. HR departments tend to be very reluctant to do it, because I think they suspect they're not going to like the answer! But it's not something I have done very specifically with companies, I'm afraid, because I know you're very keen to have case studies of what I've done with companies, I've spent a lot of time working with, well you might say, educating HR professionals, and I encourage them to do it very much, but I haven't actually gone in and done it for them, as it were.

Steve

So, really identifying this then, this is one metric that, the whole of measuring time is a very classic metric, and you're saying, we really need to revisit that, because ultimately that's about all we really have is time, as far as our input.

What other metrics do you see companies maybe, not using enough, or not using effectively, if you're going to tell our audience, "Hey, if you're thinking about people-related measures, these are the ones you should be doing, every company should be tracking these things"?

Andrew

Well, I have a real answer to that, and we were talking, we're going to talk about talent particularly, but my real answer is this, that we know all the costs of people, but we don't know their value, and the biggest gap of all we have, and it causes us to make wrong decisions, especially in bad times like we know are coming, is when we look at our human resource, we see it with cost eyes in front of us, we see it with dollars in front of us, but we don't actually have any counter action about the value of people. Now, individual managers know the value of their people, but eventually those people disappear into a fog called headcount and just a number on the accountants' charts, and that's something we need to figure out.

Now, I've come to the conclusion we can't actually figure out a financial value that's meaningful, now you can do it, there's a professor in California who's an expert on it, but at the end of the day it doesn't help too much. What we do need to do though is to quantify what it is that makes somebody valuable, what is it that makes somebody talented in our terms, whatever we decide that is, and how do we not just say ‘A' person or ‘B' person is talent, but we need to go to the next level, so what is it about them?—and the answer is, well, A just has a fantastic detailed knowledge of our business, there is nobody that knows this particular area of our business better than he does; or B is such a talented leader, they are so rare in the market, we have to hang on to this guy because he's going to become one of our top leaders. What is it—we need to go down to that distinction of what I call capabilities, and know how to put some labels on them.

Steve

So really you're saying, make the word, this a good employee, make the word "good" mean something?

Andrew

Well, yes, good means what?—it means this guy scores an A in this particular area of knowledge, he's a B in this area of skill, he's an A in this area of potential—whatever it is, some analytic framework.

Steve

Now, once you've identified those, how would you actually measure them?—because it's one thing to say, well, this company, we really value, detailed technical knowledge of our organization, well if I have thousands of people in my company, how can I really effectively measure who has that?

Andrew

Well, you've got to have a framework, and you don't want to make it too complicated, but if you take technical knowledge, which is one of the easiest ones, you can have a one to five scale, you can define what a real expert is, and you can define what the novice is and in between, and somebody just needs to make a judgement. It's like with a self-assessment, where do I fit in this scale? And yes, we're going to be subject to judgements and perceptions, but in the people area we have to be, that doesn't stop us making measures, it's just that we have to be clever at it.

Steve

I was just going to comment, I think that's really true, you often hear these people say about subjective versus objective measures, and I think, as you say, in the people area, the decision to hire somebody is a metric, and it's a subjective one at the end of the day, so ultimately a decision to make.

Andrew

Of course it is, and by the way, if the finance people think they're objective, what do you think a forecast is?

Steve

I totally agree, so I think HR needs to stop beating itself up on the subject of subjective, because I've sat in quite a few budgeting meetings and there's a heck of a lot of subjectivity going on into those estimates!

Let's pick a measure that's hard, so you said the technical knowledge is one of the easier ones—what about something that is hard to define, let alone measure, I think like, "We're a company that values highly creative people"—how do you measure something like creativity?

Andrew

How do you measure highly creative—because you want constructively creative people, don't you? Well, I think again it's a perception, I think you have to define the nature of high creation we're looking for is this kind of thing, and then you've just got to say, on a scale of one to five, how do you see this person? And the more people that make that estimate, who know that person, the better, because I sometimes say, collective subjectivity verges on objectivity. But once you get into personal characteristics, you're very much into perceptions of other people about what they see, but it's not that difficult, it can be done.

What is the really difficult area, I think, and it's very key to the talent area, is measuring potential. It's fairly easy to see the potential for people to go one step further, it's not so easy to say with any confidence, this 26 year old guy is clearly a chief executive of the future. Now, you wouldn't actually need to do that, but I think measuring potential means that you've got to measure something you can't yet see, you've got to make a judgement, not about how a person is today, but how you think a person is going to be in the future, and so we have assessments centers and all that stuff, don't we?—and it's quite sophisticated, the tools that are around, but I think that is the most difficult area to get right.

Steve

What do you think companies might be doing differently in that area? Do you think that we're making some progress on our ability to measure future potential, or are we still pretty much relying on the same techniques—if you look at like, personality measurement and assessment centers, those things date back to World War Two, in some cases World War One.

Andrew

I don't think there are that many new techniques around, to be honest. You're quite right that tests and assessment centers and so on go back, I think if there is something, well it's not new, but if there's something that I see getting greater emphasis which is very positive, it is more the analysis of observation on the job, and we could do more systematic observation on the job, which is potential-related, like set people tasks, which are a little beyond their job description perhaps, and really figure out how they tackle them, and so this is kind of job-based learning or job-based assessment, it's better than assessment centers, it's harder to do, but it's progress.

Steve

So it's really saying, look, once we have people in jobs, if we want to know if they can do other kinds of tasks, let's give them work samples or assignments that basically give them a trial period?

Andrew

Yes, in the public sector in the UK, they use very frequently the concept of acting appointments, so somebody will be sent off to be part of the committee or task force or something, and one of their subordinates becomes "acting", and that really is an excellent way to test people out, and everybody knows the game, it doesn't mean you've got the job or anything like that, it's an opportunity for you and for us, but I like that concept, it's action-based, it's reality-based, and provided you assess it well, I think it's very positive.

Steve

Yes, I think that's great to hear, it's not often that you hear good ideas and methods coming from the public sector, but in reality, I think that's unfortunate, because actually if you look at, also in the US, some of the most innovative talent management programs have come out of the military and some of the things the government does, they tend to be given the most boring titles ever heard of, but if you actually know what they're doing, they're interesting.

Andrew

Yeah, that's right. I think the other thing on this potential area is to see potential in a much broader way than just, who are the stars who are going to get to the top. There's a potential about depth, about professional depth, and for me there's a potential about breadth as well, those people who can really move across boundaries and be successful, maybe at the same level, but do lots of different things, it's a different kind of potential as well.

So we need to broaden our concept of potential, which is really the ability to do something bigger or broader or more demanding in the future, instead of this rather narrow, "Who's going to be our future stars?", because they're actually going to get there without us identifying them anyway.

Steve

That's an interesting point, so really what we need is not more measures to identify who are the future stars and help them succeed, it's really to idenfity the diamonds in the rough, so to speak?—the people that may have more potential than they realize?

Andrew

Well yeah, and really different kinds of potential is what I'm saying, broaden our concept of what potential is, but after all, most organizations, they do actually survive on having real quality technical professional and business capability, and we've got this over-emphasis in the west on leadership. Now, of course, we need great leaders, but we also need great followers, and great professionals, that's what I think really.

Steve

I think that's good, I have seen organizations too that do have this specific technical tracks, I know an organization where you become a "fellow" if you're a technical expert. You don't hear a lot about succession planning programs built around technical capability, they all seem to be built around executives.

Andrew

Well exactly, and yet actually, if you lose one of your real key technical people, it's a bigger loss than losing a manager.

Steve

So, just looking back, and we've covered a lot of things, we're really talking about the people-related measures, and I'm curious if there's any other things?—you've talked about, it's one: really important to define what people are actually doing and really think about productivity and you talked about, from looking at time, to getting objective, I mean subjective measures, and I love your phrase about, "collective subjectivity verges on objectivity"—that was a great phrase.

Andrew

Oh yes!

Steve

And then looking at measures of potential. Are there any other things, I'm sensitive to your time, I was thinking of the time studies, so sensitive to your time, thinking about wrapping this up in a second—are there any other things that you really want to share with our audience in terms of, "Hey, these are some things that I have really seen make a difference in organizations, and this is an area really where organizations could really move forward?"

Andrew

Well, I think engagement is critical, the number of research studies that positively link engagement and the performance, engagement and results, is enormous, and nobody's ever found a negative correlation between those two, so we got this term "engagement" from this guy, Marcus Buckingham, from Gallup in New York, which is a very popular book over here, I don't know if it is over there …

Steve

Yes.

Andrew

But he really transformed our thinking, that satisfaction is not what it's about, dissatisfaction needs to be got rid of, and then we can start work on engagement, and the measurement of engagement is very simple really, it has to be regular, and what it does is, it keeps us close to people, and you keep on asking them, "So how's it going for you?" in a disciplined way, and we are prepared as managers to do something about it, and really getting that right, and understanding every individual's formula is slightly different, is probably the biggest clue to getting maximum performance in our organizations, which of course, as the end of the day, is what people want.

Steve

Right, exactly. So really, it's interesting, the engagement has had such a big impact, at what point does that cease to become new, as it just becomes standard operating procedure—of course, we all measure engagement, the same way we all measure pay...?

Andrew

It's moving that way, and that's really good news, but of course for years and years we've measured satisfaction, and we've forgotten the fact that satisfied employees may be the least productive. We did a big study in the Post Office in the UK, my company did, and this was one of the things that was found out when we correlated loads of data on the office productivity, with office opinion surveys, we found to our horror that some of the most satisfied offices had got the worst results, and this is because they were having a really nice cool easy time!

Steve

They were being paid to do nothing, how more satisfied could I be?

Andrew

Do nothing, but if all the letters didn't get out every day—so what?

Steve

We have some good postal stories here in the United States as well, about loss of productivity! Well, that's fascinating, I think that's a really good observation, and really saying that, there really is a difference between satisfaction and engagement, and it's well worth knowing.

Andrew

Well, it goes right back to Herzbeg of course, in '64.

Steve

Yeah, I think so, a lot of this stuff, it's really re-learning stuff that's already been pointed out, but we tend to forget over and over again.

Andrew

Every generation doesn't learn from the other, they have to find it out for themselves, is my observation, but saying I'm over 60, this is something I'm saying, but why are you still trying to find out this?—everybody knows this, and the answer is—"Ah, but I have to find out for myself."

Steve

Yes, something that every parent goes through as well!

Andrew

Absolutely.

Steve

Well Andrew, really have enjoyed this conversation, it's been very interesting and enlightening, and you bring a great perspective on people measurement. Any last questions you wish we had asked, or last comments you'd like to share, before we wrap this up?

Andrew

Well, I think there's one question which is really exercising my mind, and it's the question, if we just come back to the talent management thing, the question about "what is talent?"—and I just think that most organizations have got a very restricted view of talent, and it relates really to the height/breadth/depth thing I was talking about, and I'm more and more moving to the word "talents" with an "s", and seeing talents with an s as, those people that have those capabilities which are critical to our success, and that's a much broader church than your high potentials.

Steve

I think that's a great observation, to say, talent is not one thing, there's lots of ways to be successful, there's lots of ways to be a great employee, it's not one single person we're trying to clone, that's a good observation.

Well Andrew, thank you very much for your time, hopefully we can have you back on again, because I think there's this whole other area you just touched on that would be worth a whole other episode in conversation, and for everyone, we'll be putting a link to Andrew's profile at SF Research, he's one of our Thought Leaders, as well as having information I imagine about the book that you're working on, Andrew, which you mentioned, before I started, and so thank you very much for your time.

Andrew

OK, you're very welcome, thanks Steven.

Jim

Thanks Steve, for that great interview.

Zoe

Hi, this is Zoe. Coming soon in the UK a new series of podcast interviews focused on talent in uncertainty. Tune in to find out more on how Cable and Wireless, Premier Farnell, Lloyds TSB and the Lancaster Hotel Group are using SuccessFactors to address their business challenges.

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