Moments of Truth

If you ask any top-level executive what they think is the most valuable asset in their organization, they almost certainly always answer, “It’s our people.”

“They do it almost reflexively as if it’s something they teach them the first day of CEO school,” says Mark Allen, practitioner faculty of organizational theory and management at the Graziadio School of Business and Management. When asked if their organizations behave every day as if they believed that were true, Allen found that most employees confess they do not.

In his latest book, Aha Moments in Talent Management: A Business Fable, the former director of executive education at the Graziadio School and leading expert of organizational behavior, outlines 13 principles to help organizations understand how to manage talented employees in order to maximize their value. The book is told through fables— incidents that take place at a fictional company based on real cases and actual organizational practices he has witnessed or had described to him by colleagues, students, and friends.
Here, Pepperdine Magazine highlights seven of those talent management principles that people at any level of an organization can use to combat ineffective and counterproductive talent practices.

Talent Management Principle Number 1

People are your organization’s most valuable asset. Behave as if you believe this to be true every day.

While Allen claims that most CEOs actually agree with the first statement, he explains that, in reality, they focus more of their attention on the company’s financials or product. The most literal example is when companies lay off employees.

“They always do it in the spirit of cutting costs, but if you truly believe people are your most valuable asset, you have to acknowledge you’re cutting assets, as well,” he explains. “You hear a lot about downsizing for cost cutting, but you never hear it called asset cutting.”
Allen explains that companies have to acknowledge that there is a cost to employing people, a cost to losing good people, and a cost to losing knowledge and skills, which is what happens when companies lay off valuable employees.

“If were to realize that some of their talented people are superstars, and deliver two to four times the value of regular performers, then maybe they would manage them in a way that would ensure they keep them engaged, which would mean they’d keep them employed,” he asserts. “They’re not an asset from an accounting standpoint, which means their companies don't own them. They're free to leave. This means that organizations need to do a better job of treating them as if they truly value them to stay.

Talent Management Principle 2

Having better people is the best source of competitive advantage, so attracting top talent is a top priority. Be willing to do whatever it takes to bring in top talent. Do not let your own policies prevent you from hiring exceptional people.
Allen developed this principle after hearing stories from employees of a company who became frustrated when rigid, outdated policies stood in the way of an attempted hire that had the potential to make a great difference in the organization.

While the company was enthusiastic about hiring this person, they were restricted by rules about listing the position to the public, going through the lengthy paperwork process to get the position approved, and keeping the position open for a certain number of days. The entire process took many weeks and, by the time they reached the end, the candidate was no longer on the job market. In fact, he had been hired by a direct competitor.

“These policies were put in place for a good reason–you can’t just hire people willy-nilly,” Allen says. But this was a highly experienced person who was well respected in the industry. This new hire would have benefited the organization, and the only thing that prevented that from happening was the company’s own rules.”

Allen calls these “Talent Prevention Rules” that companies create for good reasons, but, in practice, interfere with smart decision-making. He suggests that for each rule and policy in place, a company’s leadership should ask, “Why do we have this rule?” and “Is this helping us or hindering us?”

Furthermore, Allen recommends that organizations give executives the ability to be flexible within the rules. “If a senior executive has a good reason for wanting to make an exception to a rule, there should be some flexibility in the system to permit this.”

Talent Management Principle 3

The job of manager requires specific skills and abilities. Promotion should be based on the ability to do the next job, not performance in the current job. Good performance should be rewarded appropriately, but promotion should not be a reward for past performance.

Allen explains that companies will often reward their best performers by promoting them to managerial positions. “Promoting someone who doesn’t have managerial skills to a management role is setting them up for failure,” he says.

Allen insists that promotions should not be rewards for performance in the previous

job. In addition to creating a manager out of someone who doesn’t have the skills for it, an organization is subtracting their best employee in that particular field.

“You’re taking someone who is performing at a high level at that job and telling him or her to not do that job anymore,” he continues. “You would never hire someone to be an engineer when they don’t have training and experience in engineering. Would you hire someone to be a manager who had no skills or training to be a manager? We do it all the time and every company falls victim to this. We know the skills and competencies that good managers have, and we need to fill our manager jobs with people who possess these skills and competencies.”

Talent Management Principle 4

Employees are smart and know how to pursue rewards. If you want to see certain behaviors and results, hold employees accountable. It’s irrational to expect employees to deliver outcomes if we do not hold them accountable.
Allen argues that, while organizations task managers with hiring, developing, engaging, and retaining talent, they are typically held accountable for more traditional business results, such as sales, revenue, profit, and customer satisfaction.

“The best path to achieving those business outcomes is to hire good people,” he says. “We typically don’t hold managers accountable for those vitally important talent principles, because measuring those talent practices is very difficult.”

He explains that organizations need to do a better job at measuring a manager’s ability to hire, develop, engage, and retain talented people. “If we can measure it, we can hold them accountable. If you can, you must provide clearly articulated standards.
There is no accountability without measurement.”

As far as rewards go, the oldest and most common—and most popular—ones employees seek is money. But while research shows that money is an important tool in attracting people to the organization, it’s not one of the most crucial elements in getting them to stay or determining whether they leave. “Employees also value recognition and doing interesting, challenging, and meaningful work. They will stay in your organization for that.” Others include opportunities for development, both in terms of learning and advancement in one’s career, and flexibility in the workplace and around work assignments.
Talent Management Principle 5

The wealth of an organization lies in the knowledge and skills residing in its people. The ability to manage, collect, and share that knowledge can be a competitive advantage and an opportunity to leverage value without bringing additional resources into the organization.

During a conversation with a colleague, Allen learned of a company that enlisted the help of an executive search firm to find an employee who possessed highly specific expertise.

The good news was that, after an exhaustive search, the firm found the world’s leading expert. The bad news was that he already worked within the company.

Allen explains that most organizations don’t do a very good job of cataloging the knowledge and expertise they already possess, and instead build or buy a database tool to collect, house, and share data about their employees. He goes on to say that while information technology is helpful in classifying information, organizations must learn to value their employees not only for what they know, but also the application of their knowledge. “We need to understand what our people know

and motivate them to share their knowledge,” he insists.

Many companies, however, incentivize the hoarding of knowledge, the opposite behavior of what they want. “Employees think that if they know something that no one else knows, they have job security,” says Allen.

His suggestion is for organizations to set up a rewards system through which employees are incentivized to share and not hoard knowledge.

Talent Management 6 Principle Number

People tend to resist change, and this resistance is often based more on emotion than reason. Individual conversations can speed the change process more than making a business case. The successful implementation of change initiatives usually takes more time than you originally anticipate.

It is well documented that most change efforts in organizations are met with resistance. Allen claims that much of that resistance stems from emotional rather than logical or rational reasons. “People have an innate fear of the unknown, and when you say something is going to change or be different, that triggers people’s fear of the unknown,” he says. “Employees who have been around for a

while have seen change initiatives come and go and the next thing they know, they are laid off or their friends are laid off, so they’ve almost been conditioned to fear change in organizations.”

Other fears include changes in work life, time and place of work, and compensation. In order to successfully facilitate change, Allen says organizations need to acknowledge that their employees have these fears and address both the emotional and rational levels of their concerns.

“It’s going to take time,” he says. “These are not large group interventions, but individual conversations. Most change efforts fail and even those that succeed take a lot longer than we anticipate. It is worth the investment and time if we want our change initiatives to succeed.”

Talent Management 7 Principle Number

Being at the top of an organization does not make someone a leader. Positional authority makes you a manager; leaders can be anywhere in an organization. Delivering results makes you a good manager; getting people to willingly follow you makes you a good leader.

“The first key is that we use words like ‘leader’ and ‘leadership’ without any thought to what they really mean,” insists Allen. “The terms ‘management’ and ‘leadership’ are not synonymous.” The topic is one that relates directly to Allen’s teachings in his leadership and management courses at the Graziadio School.

Allen says that a person’s ability to be a good leader does not depend on where their position lands on their company’s organizational chart, but on the behaviors that they demonstrate.

“When you talk to people in the organization, they’ll tell you some of the people at the top of the chart are great leaders, some are so-so, and some are poor leaders. Meanwhile, they have some people at the middle or lower levels who are exemplary leaders.”

Companies can change this pattern by defining what good leadership means in their organization. “It doesn’t necessarily mean delivering the numbers,” he explains. “That’s good management.”

“Good leadership involves the ability to inspire employees, to motivate them, and to get them to care,” he continues. “Once an organization defines what leadership means to them, they can then define what the actual leadership behaviors are that they want to see. Then they can measure whether the people at the top, middle, or bottom of the organization are demonstrating them.”

Talent Management EXPERT

Beyond his impressive credentials as an educator and author, Mark Allen is also an internationally recognized speaker and consultant who has published and presented research on corporate universities and nontraditional higher education.

As a private consultant, he provides consulting services to a variety of small, medium, and large corporations in the areas of corporate university creation, corporate university management, leadership, and the evaluation of corporate learning.

At the Human Capital Institute, an organization for talent management leadership, Allen teaches live and online classes providing research and education in the field of human capital management for members and corporate clients of the membership- based organization.

He works with clients to provide services and classes in the areas of leadership, communication, and organizational change at The Kiely Group, a consulting firm specializing in organizational effectiveness.

Allen teaches courses at Vatel University, and is a faculty member at the American Management Association, where he teaches executive leadership courses to national and international audiences.

He also serves on the Board of Regents of the University of Farmers, the award- winning training program at Farmers Insurance Company, and Board of Advisors of the Global Council of Corporate Universities.