Kevin Wheeler - Future of Talent Institute: The rising creative class, workforce sustainability, and other emerging workforce challenges

Steve

Hi, this is Steve Hunt with People Performance Radio. This week we spoke with Kevin Wheeler, who's the Chairman of the Future of Talent Institute, and Kevin has really focused on looking at what are the big waves and the changes in our society in the way organizations are run, this is really affecting the management of talent, and he shared a bunch of interesting things about the predominance of women in the workforce, the bingeing and purging mentality that we've had towards talent over the last years, and how that's likely to change, but we spent the most time talking about the rise of the creative class, and the challenges of building an organization that really encourages high levels of very rapid creativity, so really some fascinating stories of what companies are doing in trying to really wrestle with this challenge, so let's listen to Kevin Wheeler this week on People Performance Radio

Hi, this is Steve Hunt with People Performance Radio. Today we're talking to Kevin Wheeler, who's the Chairman of the Future of Talent Institute and Kevin, welcome to the show.

Kevin

Thank you Steve, glad to be here.

Steve

Thank you, can you tell us a little bit about what the Future of Talent Institute is?

Kevin

Sure, it's a membership organization that is focused on doing research into emerging trends and what we call game-changing issues that will have an impact on talent, whether that's recruiting, development of talent, leadership, succession planning, pretty much anything specifically in the talent space, including the evolution of work itself and what's going on there.

Steve

Wow, so some pretty major topics—how did the Future of Talent Institute get created, and who are the people that are participants in it?

Kevin

Sure, well it started five years ago, I started it really initially as an annual retreat, and because I had clients all over the world asking me what's going on from a futures perspective. One of the things that I did in my past was a researcher at the Institute for the Future in Palo Alto, and we do, at the Institute for the Future they do research on technology future primarily, but I wanted to take some of the same techniques and trends, and apply that to people in talent, so working with a couple of other people, Eileen Clegg, who's a researcher and a colleague of mine, she and I do a lot of this research together, and Susan Burns is the Executive Director of the Institute, and so together we constantly are working with clients and with people to see what are the pain points, and then try to figure out really what's causing the pain, and looking back and looking at trends and issues that are having an impact.

Steve

It's fascinating, so can you share some of the big issues that you're seeing right now? I know that you have a Future of Talent conference coming up in San Francisco in October, and what are some of the things that you see yourselves talking about at that conference?

Kevin

Well, I think we're going to talk about, there's a number of them, we have a whole host, and again one of the challenges is always to really narrow this down to what are the seminal four or five, but some of the interesting ones to me are the fact that women are now dominating the workplace pretty much globally, two out of three college degrees are going to women globally, women are for the first time in America now dominating the workplace, there's more women working than men, and this recession has been pretty much a "hecession"—it's only affected men for the most part, the vast majority of people laid off have been men, very few women, so this is going to have a major impact on the nature of work and dovetails very nicely into another trend which we're seeing, which is the rise of, what Richard Florida has called the "creative class", and I'll talk a little bit more about that in a minute. We also see that sustainability is a big issue, and we're not talking just about environmental sustainability or energy sustainability, but really a mindset around how do we build everything for sustainability—our organizations, how do we stop bingeing and purging on people, which we've done, particularly in America—we hire thousands and lay off thousands, seemingly without any concern, and I think that that's going to change pretty dramatically over the next decade, when we really are going to hire much more conservatively, and hire for sustainability. So I think we're going to see big changes there, and Gen Y, this 20 something year old worker, is a very very different person than we've had in the workplace before, so different that their value set is, and there's so many of them that their value sets are really going to replace current ones over the next 20 years in the workplace. So those are some of the big things we see, and all of those are really causing work itself to take on a very different shape.

Steve

Wow, I'm biting into my tongue on all the questions I want to ask right now, but there's just in those four there, well there's several podcasts alone of content, but I think the ones especially, like some of those observations about women are fascinating, and that binge/purge cycle, but I guess one we talked a little bit about before the show is that creative class, because I think that's another area—just because we have to pick one, let's just pick the creative class one to talk about a little more, and can you share some of the things, that when that group gets together at Future of Talent, when you talk about the creative class—what is it, and what talent management challenges does it pose, and why is it important?

Kevin

I'd say it's a huge topic, I think that the term itself is interesting, it was coined by Richard Florida, and Richard Florida is a professor, I believe he's in Canada at the moment, he was here in two or three different universities here in the United States, but he's written a couple of books, and one is called "The Rise of the Creative Class", and he's the first one that, in his research, sort of identified a new kind of worker that was emerging, probably started to emerge ten years or so ago, but clearly is becoming more and more significant. The characteristics of a creative worker, as opposed to other types of workers, and I guess we could talk about an evolution of workers throughout the world's history, we've sort of had agricultural workers, which transferred or transmigrated into industrial workers or manufacturing workers, and that obviously was the 20th century's dominant source of wealth, and then that sort of migrated into what we have referred to as the knowledge worker, and the knowledge workers are professionals with expertise in a particular area, and that's really kind of more or less the definition of a knowledge worker, and we had a whole lot of knowledge workers, but none of those are really what we're talking about here, we're really talking about this fourth group, this creative class, which is often characterized by people who are both analytical and creative, and it's really interesting, he calls them in many cases "bohemians"—these are the people who start companies like Facebook and MySpace and Twitter, they're generally not always young, but that tends to be where the most innovation comes from; these are people that are comfortable with technology, and probably have a good background in science or analytical areas, but that's not their total focus, their focus is on the bigger picture of, "What do I do with this technology, how do I use it", and they tend to be very creative and often they're musicians and artists and often have two sides to their personalities or character, not that people in the knowledge class or manufacturing class didn't have those two sides, but they kept them separate, and I think what's really different here is these people are finding ways to merge these things together, so you can be somebody who loves acting and music and you end up creating podcasts and webinars.

Steve

It's sort of like the artistic engineer?

Kevin

Absolutely, and so these are the people that are actually generating most of the wealth in the US today, and he's got some very interesting data in his books, he claims there are about 38 million people right now in the creative class in the United States, and they are generating more wealth, by his estimation, than any other group in the United States and in the world, and that it's a growing number of people.

Steve

I was going to say, so if you're looking at that with this creative class, and this hits at so many companies, leaders say, "We want entrepreneurial employees, we want creative employees"—if you're an organization that says, "OK, we want to have these people that are kind of coming in as an entrepreneur, looking at our new sources of revenue, making things happen"—what's the key to, not just attracting them to the organization, but really, if you had a group of entrepreneurs, entrepreneurs are famous for not really staying in companies, that's why they're entrepreneurs—how do you assemble a group of highly-entrepreneurial analytic creative people and get them to work together in a sustained fashion for a long period of time, because it seems almost inherently they're all going to want to go off and form their own companies?

Kevin

Well, I think that that would be an element of it, we're clearly seeing a real rise in independence and in networking together, but I think it's easy to confuse entrepreneurism with creativity, and they don't necessarily go together, there are plenty of creative people who are not entrepreneurs, and by an entrepreneur I mean someone who's probably focused on creating their own business and generating their own revenue stream, and having total control over their own output. I think there are plenty of creative people who are happy to channel that in other ways, and work within organizations and don't have that financial drive, so it's probably going to be a mix of the two, and certainly some of the creative class are entrepreneurial, and want to be that way, and will be, and I know in my own university teaching and other things, I find that very few of what I would call the most outstanding students want to go work for Fortune 500 companies, they want to go do their own thing, or they want to work in small, creative companies

So I think one of the things that we're seeing is, if you want to attract a creative class type of person, you're going to have to have an organization that meets some raw criteria, I think it's have to be, it can't be rigid, it can't be hierarchical, and it can't be rulebound, so I think that's a real challenge for many large companies where there's HR policies a foot thick, where everything is done in a certain way, and where you kind of "work your way up the ladder" etc, I think those organizations are going to be, and I think they already are, being very challenged with finding and being able to actually hire the very best of these creative people

So they're screaming for innovation and creativity, which is frankly the number one thing I hear from my clients—"We need to be more innovative, we need to be more creative", and then they go out and they hire someone who actually fits a rigid hierarchical world, and it's contradictory, so I think you cannot have your cake and eat it too, and what we're seeing is many organizations are really reflecting this creative class, and one design company that's quite well known is a very good example of this, here they employ all kinds of people, this is a company that designs primarily consumer products, although it does get involved in other types of design, but they design, or improve the design, of everything from toothbrushes to the shopping cart in your grocery store, so this is a group of people that's composed of engineers, technicians, artists, musicians, anthropologists, psychologists, sociologists—they've got an incredible array of people, and you're not really hired into a function, you're hired into, I guess I would call it, a "role", and your role might be, "Contribute your knowledge about people in society to what we're doing", or, "Contribute your knowledge about the past way people have lived and worked and contribute that knowledge", or, "Contribute your knowledge around crafting materials and welding and so forth to what we're trying to do here", so it's more of a role-based kind of employment thing

In fact they're working very hard to figure out how to get rid of job descriptions—there's some legal issues that they have to deal with, but they're trying to work with the various government agencies to find ways to get around some of what they're finding are very artificial barriers to working creatively with people; they want to really, you're not really assigned to work on the—well I'll take that back, you might be assigned to work on the toothbrush improvement team, but you could also, on your own initiative, go work on three other teams and give your input to those three other teams, so it's very fluid, very little micro-management, almost no hierarchy, three levels maybe in the entire organization, pretty much move for where you want when you want, but there are projects, goals that you have to achieve and the team has to achieve, and you collaborate on those activities.

Steve

How do they evaluate performance and give feedback on performance and look at like compensation in that sort of a culture, I see the obvious advantages of a culture like that, where people are really encouraged to collaborate, have input—the challenge is you could have a lot of people running around doing a lot of stuff that, it could be hard to say who's actually moving things forward?

Kevin

Yep, and they have struggled with that, and again I don't think anyone has, including them, have really completely solved the problem, if you want to call it a problem, but they do do team interviews, at the end of projects and during projects they ask people to say who's contributing the most, who's really done what on this team; they encourage a very open feedback environment. They're also very, again getting away from the formal, I call it manufacturing hierarchy of every six months you get a review, or once a year you'd get a performance review—as I was talking with them, they say, "Yeah, we give reviews our way", so if you're on a team and you're not contributing, somebody's going to say, "Steve, what the hell are you doing?—we need to get this done, or that done", so there's a lot of peer pressure, there's a lot of very interdependent working relationships, and they liken themselves to a beehive, where there's tremendous interdependence between all the pieces, but everyone has a role, and really, if you don't contribute to a team, and that happens for very long, you're not going to be accepted by a team, you're not going to be invited to come to a team - in a way it's a form of ostracism, and it's very interesting

So most of their performance management is done at that informal level, and they're struggling again back with, "How do we, and what do we need to do, and what's appropriate to do on a more formal basis?"

Steve

Yeah, I think it's fascinating, I think it's like the structures that allow you to say, OK, if the company needs to refocus its energy, can it get people realigned in a hard reward and recognition way will go against that ability to say, look, we want people to see if they can add value, they just go and add value, they don't say, "How's that tied to my goals?"

Kevin

Right, and I think if you take this logically out, a small company, a few hundred employees, working on some fairly significant and very tangible products to produce improvements and various products for big companies, the results of these teams is very obvious—if you don't make it in a certain timeframe, there's a big impact to your organization on that, so there's a tremendous motivation, a very clear line of sight, to what you have to do, when it has to be done, and what the impact is of not getting it done. Because you're so small, there's no place to hide, and it gets back to my sustainability comments earlier, and that if you don't overhire, if you've hired just really, maybe even have stretched the number of people a bit that you need, but they're happily engaged in really fun, creative work, I think you also get away from any, "I can't escape—I've got to be there today, because if I'm not there, this isn't going to happen or this isn't going to get done—there's nobody to back me up", there's very little other resource there to fill in, so I think it gives people, if they're chosen well for the role, a tremendous sense of belonging, it's part of being in a community, it's, "I'm a significant person to the success of this project", so I think all of a sudden a lot of the so-called performance issues that you have in traditional organizations kind of go away, it's like on a baseball team—if you're playing second base, and you step down and go to sleep, you're not going to do that, it's just not going to happen, because you've got a role, you know what you're supposed to do, and the outcome is very clear and obvious to everybody.

Steve

So I guess the challenge, I think I agree with you, if someone's in a smaller company, you can do that, and a lot of those companies sort of organically grow. What becomes really challenging is the company gets larger, and a few things happen: one, it would be easier for people to hide in the system, as the beehive gets really big, you can have bees sitting around doing nothing, just eating honey; it would be easier for that to happen in a larger system; and the other thing, so I'm curious is, with these questions to see if you've got some examples where you think companies have started to figure that out, how do we grow and scale that, yet still keep that culture; and the other one is, in the small start up companies where everybody's pulling in, working really long hours and all that, there's a time in people's lives, I think, where they want to do that, but as you get into a larger company, and people have longer careers, there's times where I think the reality is they say, "I have things going on in my life outside of work, I need to compartmentalize, I can't work every weekend every more", and what happens?—do you say, "Well, you're no longer a part of this company, people here work 24/7", or do they find some way to say, "We respect that, we want to keep you as a contributor, but we recognize we have to put boundaries around our expectations that you're always working 110%?"

Kevin

Yeah, I think you raise some great issues, and I'm not sure I have answers for everything, but I can certainly point out some bigger companies that I think are embarking, to some degree, are taking on the challenge, I think IBM is one of them, and I think again it's a matter of taking a large company and breaking it down into more autonomous, smaller units that have a lot of control over their own outputs and their own way of doing things, as long as it fits into a much looser and a much broader corporate framework. So I think that we're finding consulting companies, big consulting companies, offering—now there's four people that make up the IT consulting group, and they have projects, they're very tightly knit, they're very interdependent, and they have pretty much all the characteristics of this other company I was talking about, but they're under the umbrella of a very large organization

Now, my own prediction around organizational structure is, you're going to see it morphing into, first of all many smaller companies that will have no intention of ever getting big, and they will partner in collaborative ways, network kind of ways, with other small organizations that supply pieces of work that they need to have done, so you can see four or five companies collaborating together to produce a single output, so I think that's number one; number two, the bigger companies are going to get smaller, in the sense that they're going to break into, or spin off, interdependent P & L centers or independent working units, but may be under the big umbrella of the corporation, but are not anywhere near as uniformly consistently operated or run as they have been in the past, and we're in the morph from a manufacturing mindset, where absolute uniformity was essential, to a world where uniformity is actually a very negative thing, and you want individuality and creativity to emerge, so in the middle of that, we've got one foot in two worlds, and if you're a manufacturing type company, that uniformity, hierarchical world is going to be appropriate for you, but, as you move into consulting and services and design, all of those things become negatives.

Steve

It's interesting, I think that you see that, because I've worked with loads of companies, you definitely do see that, and I even think there's people whose personality types or life situations kind of attract them to one of those companies or the other. I'm curious to hear, one thing you talked about was this example of these small teams where they give hourly feedback and high peer pressure, and if we go with this supporting team analogy, I think when you have a small team, the best, the most effective teams, there's just a high level of constant feedback, peer pressure, but also that can really fall apart into bickering and infighting—it can go well, it can go really poorly, have you seen things in the companies that are trying to create that sort of, peer pressure is the way we get people to do things done, but positive peer pressure—do they provide training, do they have any systems, do they do things to say, "Look—there's good peer pressure and there's bickering, politics and infighting?—we need to create the good dialog and collaboration, do you see them really taking that head on and actually doing some things that are working, or is it more sort of luck of the draw?

Kevin

Now I think they're putting a lot more focus on up front selection, and I really think that what's going to change most in the equation here is, when you're only going to hire a limited number of people, and they have to work in this very close collaborative environment, you're going to be very careful that you hire people who are compatible, who will have the values, work ethic—whatever you want to call it—that you're going to want to have in this organization. So back to my earlier comments about bingeing and purging, I think we've had a really almost cursory analysis of people, we just look at superficial skills, have a quick interview, and say, "You're hired"; on the other hand we have absolutely no compunction about throwing them out the door six months or a year later, and I really think again that was a manufacturing mindset—lots of labor, pretty much all the same, and who you hire doesn't really make a whole lot of difference, bring ‘em in, and if they don't work, we'll throw them out

I think you're seeing a very different mindset emerge around these smaller companies, where they're really concerned and very focused on who they hire, and a company that's emulated that for a long time is Apple, and Apple has been quietly a very tough place to get hired into, and the primary thing that they're looking for is compatibility with the long-term goals and the design challenges of Apple. So I think you're going to see a lot more emphasis on the up front selection piece, a lot more focus on understanding and nurturing people within the organization, not in the touchy-feely kind of, oh you're wonderful type of HR mode that we may have had in the past, in a much realer way

The best way I can describe it, I guess, and I struggle with this a lot, is, I grew up in a small town in New England of about 900 people, and you knew everyone in that town, everyone had a role, so to speak, you had multiple roles: you had a civic role, you had a work role, you had a family role, and everybody knew what your role was, and everyone would help and work with each other, depending on your circumstances and your needs, so not always perfect, and yeah, bickering sometimes, and yes, certainly people were disliked or shunned by the group, but I think it's somewhat of an analogy to how some of these smaller companies work, and the difference being, in a small town you couldn't choose who lived there, in a company you can kind of choose who does live there, and that makes a big difference.

Steve

Wow, that's fascinating. Well Kevin, we're sort of coming to the end of our time, and boy, you've definitely piqued my curiosity, and we didn't even touch on the growth of women in the workforce and sustainability in Gen Y and the impacts of technology, so it sounds like a lot of great conversation happening at the Future of Talent Institute, if this any indication at all, boy, I could just keep talking about this topic, but wanted to thank you very much for appearing on People Performance Radio, see if there's any last thoughts or insights you can share with our audience before we sign off?

Kevin

No, I think it's a fascinating world, and I think all of these trends that I talked about and others are, they're all right in front of us, I call them the "sleeping gorilla", it's right there but we don't see them, so I think if you just look a little differently at things, kind of say, yeah, I've seen that, I've seen that, I've seen that—I wonder what that means? Suddenly you can begin to see patterns that emerge and so forth, and if I can shamelessly throw a little plug in here for the Institute, check out our website, it's just futureoftalent.org, and you can find out more about what we do, and we'd love to have you check it out and take a look at it.

Steve

Absolutely, and we'll have a link to that on the podcast site as well. Well Kevin, thank you so much for appearing on People Performance Radio.

Kevin

Well, thank you Steve, it was fun.

Speaker

If you would like to be a guest on the show, or sponsor, please drop us a line at podcast@successfactors.com, or you can leave us a message at 650-425-7474. This podcast is copywritten by SuccessFactors. The views expressed are the individual’s own, and do not necessarily represent those of SuccessFactors, SuccessFactors’ partners or customers. See you next week.