Warren Buffett – Not your average billionaire

This blog will be the first in a series of posts profiling some of today’s most successful business leaders. Each leader is recognised as a trailblazer in their own right; entrepreneurs and visionaries who have dared to challenge the status quo and write their own rules.

This series will explore their different leadership styles and approaches and look at how this has shaped their success.

I decided to kick off with a name you might recognise as being one of the wealthiest and most business savvy people on the planet.

USA International Trade Administration Public domain, via Wikimedia Commons

Warren Buffett is the creator and CEO of Berkshire Hathaway, a holding company with interests in the likes of Apple, Costco and Coca Cola. [1]

Buffett has been a regular on the Forbes 400 Richest People in America list since 1982, and in 2008 was officially crowned the richest person in the world with a fortune of $62 billion.

Warren Buffett is the stuff of legends and has a cult-like following of investors that hang on his every word. But for me, it is not so much his financial prowess that I’m interested in, but rather how his distinctive leadership style has contributed to his celebrated status in the world of business.

Laissez Faire Management Style

Numerous books and articles written about Warren Buffett refer to his laissez-faire approach to management. A French term, laissez-faire loosely translates to “let them do” -basically let people do as they choose. This label seems fair given what I have come to learn about Buffett’s hands-off approach.

When Buffett buys a business, he leaves the managers alone to run the company the way they would have had he not bought them. Unlike other CEO’s, he doesn’t seek to exert control through traditional corporate plans or strategic meetings, and generally only communicates through his annual letter to the board. [2]

So how has Warren Buffett managed to successfully build an empire with assets worth $621 billion [3] whilst all the time remaining at arms length?

Adapting the Situation to Suit the Leader

Perhaps the secret lies in the corporate culture and operating environment he has carefully cultivated over the last four decades.

Engaging Top Talent
Warren Buffett has been quoted as telling his children “If you want to soar like an eagle in life, you can’t be flocking with the turkeys”. His personal philosophy is to surround yourself with good people whose behaviour is better than yours so that they inspire and challenge you. When hiring managers, Buffett looks for integrity, intelligence, and energy. [4]

Autonomy and Accountability
It stands to reason then that by choosing highly motivated and capable leadership, Buffett has been able to entrust his businesses to the stewardship of others. Handing over full autonomy is fundamental to the way Buffett operates. [2] (For more on the benefits and challenges of autonomy see A Sensible Discussion about Autonomy)

Meaningful Communication
Though Buffett’s communication with his people may be infrequent, his words have impact. He showers praise on the people who work for him in his annual letters but is also generous with advice. He breaks down complex financial concepts in a way that anybody can understand him.

Values-Driven Culture
In Part II of my blog Aligning People I discussed how a group united by values will achieve far more than one that’s driven by other agendas. Interestingly, Buffett only acquires well-led, profitable companies that share his values. He believes that a values-driven culture translates to strong business performance and credits a strong culture with the ability to attract and retain outstanding employees. [5]

If you want to soar like an eagle in life, you can’t be flocking with the turkeys

Authentic Leadership – Living the Values, Walking the Talk.

An ‘aha’ moment for me in my research into Warren Buffett was when I realised that the values he pursues in business he practises in all aspects of his life.

Thriftiness

Berkshire Hathaway only acquires firms with low debt and strict cost control. This reflects Buffett himself who is renowned for his frugal nature. He still lives in the same house he purchased in 1958 for $32,500 and drives himself to work everyday. [6]

Hard Work and Discipline

Lawrence A Cunningham in his book Berkshire Beyond Buffett wrote that,
“Buffett’s own success has been built through hard work, discipline, a no-nonsense acquisition strategy and unwavering adherence to core values”. [2]

Buffett demands the same level of discipline and commitment from his leaders. He asks only that they stay true to their core business and values. In other words, he expects them to keep doing what they know how to do and to do it well. No more, no less. [2]

Integrity and Humility

Cognology has found extensive evidence to suggest that integrity is a key attribute of exceptional leaders. Buffett is passionate about maintaining a reputation for doing the right thing and instructs his leaders to “zealously guard Berkshire’s reputation.” [7]

Buffett is admired for the humble manner in which he openly admits his failures and his willingness to share the lessons he has learnt. In turn he encourages his business leaders to “face up immediately to bad news” and not let problems fester. [7]

But Warren Buffett is not as warm and cuddly as he might seem. He has shown that he is also a man prepared to deal with any leader that has breached what he holds sacred. A Buffett biographer once noted that “when a leader violates corporate values or generates reputational damage, the axe falls swiftly.” [2]

Letting Go

At 87, Warren Buffett has no plans to retire. People will remember Buffett for his extraordinary ability to pick good investments. But in truth, a lot of his success has been due to his ability to identify talent and retain top performers for the long term.

His leadership style has been shaped by his own personality: his honesty, his integrity, his humility, and his other deeply ingrained values. He has succeeded in demonstrating that you don’t have to maintain tight control over your people to do well in business. Success can in fact come from letting go – so long as you have laid the right groundwork to begin with.

References

  1. CNBC, [Online]. Available: http://www.cnbc.com/berkshire-hathaway-portfolio/.
  2. L. A. Cunningham, Berkshire Beyond Buffett : The Enduring Value of Values, Columbia University Press, 2014.
  3. Market Watch, “marketwatch.com,” [Online]. Available: http://www.marketwatch.com/investing/stock/brk.a/financials. [Accessed 09 03 2017].
  4. Vintage Value Investing, [Online]. Available: http://vintagevalueinvesting.com/wp-content/uploads/2017/01/Warren-Buffett-University-of-Florida-Lecture-Vintage-Value-Investing.pdf.
  5. L. A. Cunningham, “The Philosophy of Warren E. Buffett,” The New York Times, 05 02 2015.
  6. A. Mohr, “www.investopedia.com,” 22 07 2016. [Online]. Available: http://www.investopedia.com/financial-edge/0412/the-everyday-lives-of-frugal-billionaires.aspx.
  7. W. Buffett, “berkshirehathaway.com,” 31 12 2014. [Online]. Available: http://www.berkshirehathaway.com/letters/2014ltr.pdf.

An Exceptional Person Has Arrived On My Team. What Do I Do Next?

Jon Windust

“An exceptional person has arrived on my team. What do I do next?”

Talented people are few and far between. You have been blessed.

The first thing to know is that treating them well is not going to be enough. Talented people aren’t into coming to work, doing a job, going home and collecting a regular pay check on a repeat cycle. They don’t like doing the same thing each day and your company’s career development program for high potentials won’t make up for this.

Talented people are talented because they’ve stretched themselves, they’ve dedicated much of their time to learning and challenging themselves in greater and greater ways. This is not a one-off process. Your team and role is another step in this process for them. The best thing you can do is to help them continue this process and be part of it.

How do you do that? Stretch them with ideas that will move your group forward. Ideally let them come up with their own ideas and take maximum ownership. Much of the time a talented team member will get frustrated with the way things work. They aren’t complainers, that’s a different thing. They’ll come to you with ideas or suggest areas for improvement on existing processes. This isn’t to say let any idea go ahead, but equally don’t destroy your talent by being a roadblock.

But what about the regular day job? It easy to become engaged in new shiny projects and let the regular job slip. The answer here is to have KPIs, goals, measures or some form of expectations for the regular job. Talented people can self-manage given measures or expectations they own. And if they don’t, measures will help you re-align your team member.

A talented person won’t be with you forever, but you can help them in their journey and their legacy will leave a lasting influence.

Promoting High Performers to their First Leadership Role

What does promotion mean to you? A step up the ladder, expanding your skill set, a pay rise? At some point, promotion is likely to mean a move to a management position. When hiring for management roles, senior leaders typically gravitate towards high performers, assuming those who have mastered their current role are the perfect choice for leadership. In reality, great workers don’t always make great managers, and turning your high performers into spectacular leaders requires more than a promotion.

The Challenges Facing New Leaders

New managers have to stop focusing on their own performance and become an inspiration to others, delivering results at a team or even organisational level. For many, this involves developing an entirely new skill set.

Australian Managers leadership survey

Motivation and Alignment

The ability to influence, motivate, and inspire a team is essential for managerial success¹. Without it, poor performance, disengaged individuals, and low staff retention are the inevitable result.

Managers play a pivotal role in ensuring employees are invested in their work, aligned with organisational objectives, and productive². If new managers have no understanding of employee engagement, top-down communication, or alignment strategy, they lack the tools to get the best out of their team

Need a refresher on aligning employees to organisational goals? Check out my article, Aligning People P2: The Role of the Manager.

Feedback

Delivering feedback is no easy task, it’s a skill that took many of us years to master. Imagine how much more nerve-racking it is evaluating individuals who were recently peers?

With potential trust issues to navigate, little experience of goal setting or managing different personality types, providing actionable feedback is a potential minefield for new managers.

Looking for tips to master performance conversations? Check out my article on the psychology behind workplace feedback.

Delegating

Tasked with succeeding at a team level, new managers have no individual control over their goals for possibly the first time in their careers. For high performers used to exceeding expectations, the desire to micro-manage is a difficult one to fight³.

Those that are comfortable delegating have yet more problems to face. With no previous management experience – and in some cases knowledge of their team – judging attainable goals and knowing which individuals are capable of delivering autonomously is all but impossible.

Planning and Organising

Critical thinking is crucial to managerial success¹, but it is not a skill that’s common in junior roles. Suddenly required to establish priorities, streamline workflows and think autonomously, many new managers struggle to identify the best strategy for success at a team level. Without these skills, new managers often feel as though they are underperforming, leading to poor team productivity at best and, at worst, an exodus of high performers.

How to Promote to Leadership

A leadership role is completely different to any other. Creating confident, able managers begins long before promotion.

Training

Individuals with the possibility of promotion are more engaged and committed to their employer⁴. Providing management training is a great way to reward high performers, encourage loyalty, and increase managerial competency. In fact, those given developmental assignments before promotion have been shown to make much better leaders in the long run⁵.

Training can take many forms. Those of you who caught my article on managing freelancers will know I’m a big fan of facilitated learning. By providing employees with the opportunity to take on new responsibilities, you give them the freedom to develop their skills organically, solving problems and adjusting their strategy to create an approach that works for them.

Of course, self-learning has its limits, and there are situations where having someone with experience on-hand to offer advice is invaluable. Assigning a mentor to help an individual develop their managerial skills is a great way to ensure they are ready when the time comes to take on a leadership role.

Mentors are facilitators rather than instructors. They provide advice and guidance, but it is the mentee who takes responsibility for the outcome. Encouraging future managers to own a solution boosts their confidence, promotes critical thinking and encourages high performers to move from an individual ‘what do I need to accomplish’ mentality to a wider, team perspective.

Experience

Exposing potential managers to leadership situations means that, when they do make the jump, they have a thorough understanding of what is expected of them. It also gives individuals the opportunity to identify which skills they need to work on and where their strengths lie.

Enabling promising candidates to shadow other leaders is one of the best ways to deliver this perspective. Placing them in departments outside of their own offers a number of other advantages, broadening individual understanding of wider organisational goals and strengthening interdepartmental relationships.

Providing cover during a leader’s absence is another way for potential managers to hone their skills and gain much needed experience.

Discussion

Open discussions of employees’ long-term goals, strengths and weaknesses feature highly in all the best performance management systems. If, with experience of management, individuals are still keen to move up, then place them in a team leader or junior management role. If, however, an individual decides leadership is not suited to them, help them expand their role to make the best use of their strengths and skills.

Don’t forget, even with the appropriate groundwork, a promotion does not create a leader. New managers need ongoing coaching and development from senior staff to help them succeed in their new roles⁵. Check out my article on the seven skills all exceptional leaders need for an in-depth look at what it takes to make a manager.

To Sum Up…

Leadership is not a natural progression; it takes time, training, and support to turn high performers into fantastic managers.

What did your career progression look like? Feel free to share your experiences, I’d love to hear your take on management training and progression.

References

¹Muller and Turner, 2010. Leadership competency profiles of successful project
managers. International Journal of Project Management, 28. pp. 437- 448.

²Cartwright and Holmes, 2006. The meaning of work: the challenge of regaining employee engagement and reducing cynicism. Human Resource Management Review, 16. pp. 199 – 208.

³White, 2010. The micro-management disease: symptoms, diagnosis and cure. Public Personnel Management, 39 (1).

⁴Kosteas, 2011. Job satisfaction and promotions. Cleveland State University (Thesis).

⁵Dragoni et al., 2009. Understanding managerial development: integrating developmental assignments, learning orientation, and access to developmental opportunities in predicting managerial competencies. Academy of Management Journal, 52 (4), pp. 731-743.

Talent Management Rankings: Our Kind of Olympics

With Rio in full swing and the country getting competitive, what better time to take a look at the all-stars dominating our favourite sport, Talent Management? Time to find out who won big in the categories that really matter; Onboarding, Performance Management, and Learning Management.

 

Talent Management rankings - Medalllists

Gold

Those of you who read my article on onboarding and employee success will know that well-designed onboarding practices are key to ensuring new hires integrate quickly and perform at their best. Amazon-owned retailer Zappos took the gold in this category for its focus on protecting and promoting company culture above all else.

Landing a job at Zappos isn’t easy. The retailer puts the same emphasis on personality and cultural fit as skills and experience, applicants have a 1.5% chance of receiving a job offer¹. But an offer doesn’t mean new hires can breathe easy. Whatever their level or department, everyone goes through the same four week course, receiving extensive training in customer service and company values².

At the end of the four weeks, new hires have two options; head to the office and get started, or take a $2000 payout and leave if they don’t fit the company culture. Less than 2% opt to take the money and run³, with 98% starting work on Monday engaged and committed, knowing exactly what to expect.

Silver

Facebook scooped silver for an onboarding process that is fast and engagement focused. New hires arrive to find their requested PCs, personal devices, and systems all set up and ready to go; but it’s the developers’ boot camp that really won the day for the social media goliath. Developers aren’t hired for specific teams and departments. Instead, they spend six weeks training at HQ and get to choose which department to work in when they graduate⁵, cherry picking the projects that most excite them.

Bronze

These guys are secretive, but rumour has it Apple is a find your own feet kind of employer. New hires are greeted on their first day by any specialist tools they need, a new iMac, and a t-shirt with ‘class of’ and the year of joining. They are expected to dive right in, set up their own computers and introduce themselves to co-workers⁵. It isn’t for everyone, but this ‘do-or-die’ approach certainly means employees hit the ground running.

Talent Management rankings - Medalllists

Gold

I’ve spoken before about Google’s performance management process, so it should come as no surprise that it romped home in first place. This well-deserved gold was awarded for the search giant’s extensive research and the resulting unbiased, 360-degree performance management processes.

Google’s research into employee performance identified two main factors influencing success; clearly written goals, and frequent conversations between individuals and managers⁶. These findings form the basis of a complex, 360-degree feedback cycle that begins with self-evaluation before peers review an individual’s fit with the company culture (a.k.a Googleyness), analytical abilities, execution, thought leadership, leadership, and presence. Peers grade based on strengths, weaknesses, and contributions⁷.

This feedback is used by managers to provide a draft grade, a non-numerical evaluation on a five point scale that ranges from ‘needs improvement’ to ‘superb’. All performance data then goes through a calibration stage, where heavy-handed or lenient graders are identified and employee scores adjusted⁷; giving employees an accurate, unbiased view of their performance.

Silver

Beauty subscription service Birchbox has a dedicated People & Culture team that manages the complete employee experience, with a focus on aligning individuals to organizational goals⁴.

Bi-monthly pulse checks and two yearly, quantitative studies mean they can guide managers and board members on how best to align employees and skills to developmental strategy and initiatives⁴. This integrated approach to business growth and performance management was well-deserving of a silver medal, don’t you think?

Bronze

Goldman Sachs is breaking the mould with its recently overhauled performance management system. Designed to improve staff retention, the Wall Street stalwart has swapped its traditional numerical grading system (complete with automatic layoffs for the bottom 5% of performers) for a qualitative approach almost unheard of in the financial sector⁸.

Now, the focus is on providing high-quality, continuous feedback. Reviews are conducted earlier in the year, giving individuals a chance to improve before bonus time⁸. To reduce grading bias, the new system even uses a similar calibration method to Google⁷.

Talent Management rankings - Medalllists

Gold

Global consulting firm Cognizant was streaks ahead of the competition and landed gold for its Millennial-friendly approach and focus on integrated learning.

With a predominantly Millennial workforce⁹, many who work on-site with clients, the Cognizant learning and development (L&D) strategy needed to be agile, mobile and engaging. The company rose to the challenge, producing multiple learning platforms such as blogs, customized portals, live webcasts, and discussion forums⁹. But the jewel in its L&D crown is ‘One Cognizant’ an app store boasting over 50 learning apps. From gamification to ebooks and progress planners, individuals can choose the tools best suited to their learning style⁹.

Recognising that L&D is an essential element of organisational grown, Cognizant’s ‘5D’ approach to content focuses on aligning learning with long-term objectives. The senior team establish organisational goals first, identifying potential impediments and their solutions, and provide a mix of informal, formal, and collaborative learning initiatives that enable staff to deliver on those goals⁹.

Silver

Like Cognizant, silver medal winner Hilton Worldwide delivers a suite of learning tools to a global workforce. Its L&D strategy is focused on maximising employee performance with self-guided tutorials, interactive workshops, one-to-one training and courses. Learning is typically tailored to the needs of the individual, with employees identifying their own skills gaps and receiving the training and support they need to address themⁱ⁰.

Bronze

Healthcare provider Virgin Care has recently been shortlisted for the Employee Engagement Award thanks to its ‘People Flourish’ learning management system. In a sector known for its apathy to learning and development, this revolutionary program provides staff with leadership training; delivering four modules on people, personalities, and behaviours that are designed to help individuals progress to management positions. It’s an investment that’s paying off, with the program delivering a 22% increase in employee retention¹¹.

To Sum Up…

The tech sector dominated our talent management competition, scooping gold in both the learning and onboarding categories. However, we’re already starting to see Silicon Valley’s innovations trickle into more traditional sectors, as demonstrated by both Goldman Sachs and Virgin Healthcare. These guys are rejecting the typical model of Talent Management in their industries and are already reaping the rewards. Let’s hope more employers follow suit – by 2020 this is likely to be a far more hotly contested race!

Any ideas here you could borrow? I’d love to hear your thoughts on these approaches. Would any work in your office? See an Onboarding System your new hires will love.

References

1Michelle, J. 2011. The Zappos Experience. Inc.com
2Zappos. 2016. Onboarding Fact Sheet. Zappos
3Reynolds, 2016. 3 Companies With the Most Unique Employee Onboarding Process. TinyPulse.
4Doshi and Gregor. 2015. The secret to an ideal work culture. Time Magazine.
5Bhattacharyya, 2016. Employee Onboarding at Facebook, Google and Apple. The Qustn Cafe.
6L&D, 2016. How performance feedback is evolving. L&D.
7QCulture, 2015. Google’s Performance Management Practices. QCulture.
8Shen, 2016. Goldman Sachs is about to make life a bit less stressful for employees. Fortune.
9Meister, 2014. Cognizant Academy: Lessons from a 2020 Learning Organisation. Forbes.
10Association for Talent Development. 2014. Hilton Worldwide. ATD.
11Virgin Care, 2016. Virgin Care Shortlisted for Employee Engagement Award. Virgin Care.

Talent Management Talk #5 – The talent management that powered Outware’s rapid rise

In this edition of Talent Management Talk I chat with Eytan Lenko. Eytan is a Founder and Director at Outware Mobile, an 110-person mobile development company that builds apps for many of Australia’s biggest brands (ANZ, Google, Visa, AFL and Coles to name a few).

In this interview we discuss:

  • Eytan’s transition from software developer to director (0:22)
  • How Outware selects and develops technical staff as leaders (4:35)
  • Building high performance teams at Outware (5:59)
  • How Outware has developed its own version of agile performance management (8:25)
  • Outware’s vision, and what’s next for the company (11:14)

Subsequent to this interview being filmed, Outware was acquired by Melbourne IT in a transaction valuing the company at up to $67 million. That’s pretty impressive for a five-year-old company of just over 100 people!

You can watch the full 12-minute discussion or read the transcript below.

Jon Windust: 

Hello everybody, I’m here today with Eytan Lenko who is a director at a fast growing Australian start-up company called Outware Mobile. Outware are leaders in mobile software development. Welcome Eytan.

Eytan Lenko: 

Thank you.

The journey from developer to director of Outware

Jon Windust: 

Could you tell us a little bit about your journey? I understand you started as a software developer and now you’re leading a fast growing company of 110 people. What has that journey been like?

Eytan Lenko: 

Sure. I studied engineering at university and went on to become a software engineer. I guess from pretty early on in my career, it wasn’t so much about sitting at the computer and coding, it was also about that human element. So I moved into consulting. I did a lot of freelance and contract work where I was working closely with the people that I was building the software for: like trading systems, working with traders, that sort of thing.

Around 2009 we started Outware. I got together with a couple of old friends and we saw a big opportunity in terms of mobile. The iPhone was out. The app store had just opened up and we saw that there was a big opportunity. At that point everyone was talking about kind of gimmicky apps and fast apps.

But we could see that the apps were going to be a pretty serious thing in the corporate world. We thought if we could work to build a great team, a local team based in Australia that could build great apps and satisfy that need, then that would be a good niche to get into.

I remember sitting around early with the two guys. In the early days, we were doing the coding ourselves and we were doing everything ourselves. We kind of had this vision that we’d get to become a boutique company of maybe 10 people. We weren’t quite expecting at that point that we’d grow within five years to be over 100 people, in five years.

So in terms of my journey within the company, I started off programming when I needed to but also going out and pitching to customers. I really was just wearing lots of different hats.

What encouraged Outware to build a HR department?

Eytan Lenko: 

I think for the first two and a half to three years of the company, we had almost no staff turnover. Everyone was really involved and passionate working closely with the founders. We had a few people leave just because they were going to live overseas but basically there was effectively no turnover.

Then we kind of got to the point where we had a spate of people that had been with the company for a while, two or three or four of them leaving in a similar time. That was really a big moment for the directors. Obviously they’re people that we used to spend a lot of time with, and we don’t spend as much time with them anymore because the company’s grown and we’re so busy. We don’t go out for lunch with the team every day, so our finger is not on the pulse in terms of the culture and what people are doing and how people are feeling.

Also there was a whole lot of other stuff that we were interested in. As we were growing and we were winning bigger pieces of work, we needed to make sure that we had a more aligned skillset to what we were trying to achieve. Basically we were becoming more structured as a company and we needed to have a bit more structure in the way that we did our HR.

That was really kind of the trigger, was around making sure that we were doing something about retention and guaranteeing the continuation of our culture but also structuring HR a little bit better so that not every salary review is kind of ad-hoc, the negotiation with the director is done one-on-one, that we have pay scales and that sort of thing.

How did Outware create a unique culture?

Eytan Lenko: 

I remember when we were about 10-15 people, we all sat down and did one of those sessions where we work out what the values of Outware were…. what it means to be someone working at Outware. That was the point where we were really starting to accelerate growth. We could see we were going to have a lot of new people joining the team, and I guess we had this core early team that really wanted to put their stamp on what the culture of the company was going to be.

How do you identify potential leaders in a group of software developers?

Jon Windust: 

How do you go about identifying leaders within that group… we’re talking about people who like sitting there thinking about their code all day. How do you identify people within that group that actually want to be leaders and who are suitable to be leaders?

Eytan Lenko: 

It wasn’t a massive challenge for us I think by the nature of our work. Because it’s project based and there’s a lot of client interaction, it was pretty easy to see the developers that were really great technically but also the ones that were better at interacting with the clients and able to communicate what they were doing.

There are developers that they’ll encounter a problem and they’ll sit and write an email or a message or not do anything, and there are developers that will pick up the phone and have a conversation and try to work something out and be proactive on the communication front. I think those were the guys that kind of naturally became leaders in the development team.

I think that it was a bit of self-selection there as well. You put a bunch of developers together and somebody will generally come up as the lead and start organising people and taking the lead on stand-ups and things like that.

Purpose – the secret to building high performance teams

Jon Windust: 

Let’s move onto the subject of building high performing groups within the organisation. You are a high performing company and you’ve grown incredibly fast. Tell us about how you actually have gone about building those high performing groups.

Eytan Lenko: 

Yes, I think there are a few things. Obviously the key thing is really aligning everybody so they all understand where you’re going. I think any company, particularly a company that’s growing fast, obviously is going to have humps.

There are points of high pressure and points where it’s a bit more relaxed but to get people over the humps and to keep morale up and have everyone do it with good spirits, it’s really important they understand why, why they’re being asked to push hard and what the purpose is. Is it really just about this one project and this one client or is it about a bigger vision?

Jon Windust: 

Is there a bigger vision?

Eytan Lenko: 

When we were a smaller company, it was pretty easy. Because the directors were visible, you could talk to them, you could have lunch with them [and talk about the vision].

Then I think last year, we started getting a lot of feedback from the team that they were losing sight of what that vision was and why they were being asked to go in a particular way. Or people might disagree with why we were doing one project and not another project. They didn’t see how it all fitted together.

So we did a piece of work where we got everyone’s input around building a new vision for the company. I guess the directors had to kind of think do we do a big seminar and say, “This is Outware’s vision that we’ve come up with and these are the words and that’s what it is?”

We’ve got a very smart team of people and we just knew that we had to get buy-in from everyone. Everyone had to input into the vision.

Then the flipside of that was, when we started that process and we started with a survey, asking people questions about the way they think about the company and where they think it could go, there was feedback along the lines of “Don’t you guys know where we’re going? Why are you asking us?”

So it was finding that mix between this is the area we want to play in the market that we’re playing in but within that we’ll give you guys the freedom to think about where we want to go and why we want to do it. Obviously that was kind of a to and fro conversation.

How does agile software development works and how is it guiding best practice performance management?

Eytan Lenko: 

Software historically has been quite a messy business because you say, “I’m going to do this piece of work in six months,” and then six months later you discover you’re only half way through it, all of your assumptions are wrong and everyone’s upset and it’s a big mess.

I guess Agile and Scrum came out of a desire to make that whole process a lot more transparent and a lot more trackable, and also giving a lot more flexibility to kind of change path along the way. I think the idea is basically that you break the requirements of the project down into as small a chunk as possible – that’s called a story, and then you gather together a bunch of stories into a two week period of work that’s called a sprint or an iteration, and then your see how far they get through that. Then after a few sprints, you get a good idea of how many stories you can complete.

Each story has a level of complexity, is given a number of points, and you add those number of points up and you get a velocity for your team. What that means is that every two weeks you’ve got a check point, you do a showcase where you can show, “This is our progress,” because each story should be, from a user’s perspective, a functionally complete piece of work. You should be able to show that you’ve gone from there to there and get the feedback. At that stage if the product owners or the stakeholders aren’t happy they’ve got the opportunity to change direction a little bit going forward.

What that means for developers and feedback is that every day they’re kind of standing together, they’re talking about the work they’re going to do that day every two weeks, they’re having a review of their progress. You’re getting a constant feedback loop of how you’re going. You can see if one person’s kind of struggling with their stories and nobody else is, there’s a bit of feedback there about that person and how they’re facing the project. If you’ve got someone that’s kind of vocal and talking at stand-ups and getting really passionate about it, you’re getting a bit of feedback there about what they enjoy.

Jon Windust: 

It really narrows that whole loop. If I think of performance … if you think of how you can develop performance, there are really two key ingredients, I think. One is the expectations of setting out the expectations in the first place, and then that feedback mechanism or feedback loop, and that sort of continuous cycle.

Scrum sort of seems to be an almost perfect example of that because you’ve got the expectations come in the form of a story, in the form of a user’s story, that’s given to the developers so they know exactly what the expectations are, it’s a really well written expectation, and then everyday they get that feedback loop and every fortnight at the end of the sprint, they have the retrospectives to talk about process improvements and maybe even personal improvements.

What’s next for Outware?

Jon Windust:

It sounds like you’ve covered a lot of bases, in particular HR bases, in those first five years. What’s the next challenge for you?

Eytan Lenko: 

A few challenges now. We’re expanding our services to include strategy. That’s going to bring its own HR challenges as we kind of build up a new highly skilled team.

We’re also expanding geographically. We just recently opened an office in Sydney. We have a GM in Sydney that’s starting up. I think in terms of HR, one of our key challenges is going to make sure that our culture is represented in the new office that builds up in Sydney, and that the values and the way that they do things has a similar feel to the way it’s done in Melbourne. Obviously they’re kind of free to do stuff differently where it fits but we really want it to be a really good culture for the organisation.

Jon Windust: 

Look, it’s been a great discussion. I look forward to hearing in a year’s time how the business is growing.

Eytan Lenko: 

Great, cheers. Thanks for having me.

Jon Windust: 

Thanks Eytan.

This transcript has been edited slightly for readability.

Jon Windust

Jon Windust is the CEO at Cognology – Talent management software for the future of work. Over 250 Australian businesses use Cognology to power cutting-edge talent strategy. You can follow Jon on Twitter or LinkedIn.

Talent Management Talk #4 – The CEO perspective on talent management (featuring Graeme Strange)

In this edition of Talent Management Talk I’m joined by Graeme Strange. Graeme is Managing Director at Readify, a large and fast growing Australian software services company.

I was excited to get Graeme on Talent Management Talk to explore the CEO perspective on talent management. The interview doesn’t disappoint, with some great insights from Graeme on:

  • What the CEO is really looking for from HR
  • How Graeme recruits and manages his leadership team
  • How Readify recruits technical staff
  • How you drive your own development as a CEO

Toward the end of the discussion we also dive into some fascinating thinking about organisational culture and the importance of storytelling. If you’d like to jump straight there, you can find that discussion at 8:32 in the video below.

You can watch the full 10-minute discussion or read the transcript below.

Jon Windust:

Welcome to Talent Management Talk. I’m here today with Graeme Strange who is the Managing Director of Readify, a multi-award-winning, global-award-winning software services company. Welcome Graeme.

Graeme Strange:

Thank you.

Jon Windust:

I think we’ve got something really special to offer our viewers here today as HR people. And that is to hear from a CEO just exactly what they think about HR and how they see HR fitting into the organisation.

What does the CEO want from the HR group?

Jon Windust:

What does the CEO want from the HR group?

Graeme Strange:

Our people and culture area is extremely important to us because there are times, particularly in high growth organisation that you need to accelerate your hiring process.

You’re so reliant on your people and culture to turn their attention to hiring, and then be able to turn their attention back to retention. Then the dial goes back to hiring again. It’s one of those things that goes through waves.

You’ve got a business pipeline and all of a sudden you might have won a whole bunch of new work. The message goes over to people and culture very rapidly to say, “Right, we need you to fire up your hiring engine”.

Equally, turnover in professional services is fairly high. So the other really important aspect of people and culture for us is to keep that churn rate down. To make sure people are happy, that they are not only performing well but they’re happily performing well.

Jon Windust:

Yes, it seems to me like you see HR as a really key determinant of the organisation’s success?

Graeme Strange:

Absolutely. It’s fundamental to our success.

Jon Windust:

Which will be good news to a lot of our viewers out there.

How does Readify recruit technical staff?

Graeme Strange:

We’re a technology firm. We have the advantage of being able to say, “You know what, let’s build some really smart technology to start filtering the people as they come in and apply for work with us.”

Jon Windust:

Right.

Graeme Strange:

We have this great little system called Knock Knock, and when you come onto our website to apply for a job, you have to hit Knock Knock first.

What Knock Knock does is basically asks a whole bunch of technical questions – we’re talking about the technical people here – to determine that you actually know what you’re talking about.  Because we’re trying to hire just the very, very best in the industry, that’s a high bar to get over. They’re code puzzles and questions that you should know the answer to.

The next step being that you will go on to a technical interview if you get through. We set the bar for Knock Knock, that if people don’t get over 75% they typically don’t go on to the next phase. But we could raise that bar to 90%.

We typically never drop that bar so it’s a great early filtering process. There’s a whole bunch of things that we want to do with that system but it effectively means that your people and culture area is not going to have to deal with 600 resumes.

Jon Windust:

You’ve automated a lot of that process.

Graeme Strange:

The filtering process is automated, yes.

How does the CEO of Readify recruit his leadership team?

Jon Windust:

We’ve got the advantage of having the Managing Director here, so let’s talk about the senior leadership group.

What involvement do you have in the recruitment of that group, and how do you go about sourcing great candidates for that leadership group?

Graeme Strange:

Clearly I have a lot of involvement in that. That’s not something you can actually take a hands-off approach to.

We do tap into our network, so people we know and therefore are in the industry. We do use recruitment firms as well to try and get to those people we don’t know or don’t necessarily know. But it’s a pretty involved process.

Because we’re in a high-growth business, we’ve had double digit growth for the last eight years, which means that you’ve got to hire someone at a level above where you are today.

Saying I want an executive for exactly where we are today means that they’re on the same development curve as the company. If you hire above, you’re getting better value from them as you’re growing as an organisation as well.

Jon Windust:

Yes.

Graeme Strange:

So it’s really important that we hire people that are more experienced than probably what we believe we might need at the time. And that are capable of growing as the business grows because otherwise they’ll get left behind.

The CEO perspective on managing a leadership team

Graeme Strange:

I would like to think that in every executive team member that I have, they are better at their job than I’ll ever be at their job.

I look at myself as becoming more and more of a generalist and hiring people that are far, far smarter than me. I think that’s a great way to hire, and then you can just trust them.

Jon Windust:

It’s a peculiar thing about being a CEO. It’s a strange thing having everyone else in your leadership team actually smarter than you are or better at what they do.

Graeme Strange:

I like that. It gives me a lot of confidence.

Jon Windust:

Yes, and I’ve heard someone say that you actually should, as a CEO, feel like you’re the dumbest person in the room!

Graeme Strange:

Yes. Your value then is bringing the view of the entire company to the table.

So you’re getting a picture across the entire organisation. Whilst your executives are looking at things through a sales lens or a people and culture lens or a marketing lens or a finance lens, each in their own right very important parts of the business.

How do you develop as a CEO?

Jon Windust:

When you get to that Managing Director or CEO role, there is no longer anyone above you to actually look at and learn from. How do you actually go about developing yourself?

Graeme Strange:

Look outside. Mentorship is still a really important part but you’re looking outside the organisation.

Jon Windust:

Right.

Graeme Strange:

So maybe looking within the industry at someone that you’ve seen be successful or go where you’d like to take your career already.

Connecting with those sorts of people, that’s really important. In fact, I almost think it’s better to have a mentor outside the organisation.

Jon Windust:

Right.

Graeme Strange:

I mean people on the board or board of directors that you can bounce ideas off, that’s actually important as well for them to help you.

Jon Windust:

It’s not quite a mentorship relationship is it with the board?

Graeme Strange:

No, it’s not at that stage. It could still be a development thing but yes, the relationship is different to a mentor for sure.

Jon Windust:

Yes. Okay, great.

Graeme Strange:

And they change. The reality is that you can find someone that you really like and they’re a fantastic mentor to you and that relationship might last for a few years – but there’s also a point where they might not be the person for you anymore. You might need something else in order to develop further.

Where does culture come from?

Jon Windust:

I definitely think culture comes largely from the CEO. It’s amazing how much influence the CEO and the type of CEO that they are has over the organisation.

Tell me about Readify and how your culture has developed?

Graeme Strange:

I sort of agree and disagree. The bit I disagree with is that I think it comes from the wider leadership group, so not just the executive. They definitely do set a tone for a culture. I think that is very true.

There’s a guy called Stan Slap wrote a book called I Left My Heart in Conference Room B. It’s a book on leadership and there’s a passage in there where he talks about leadership culture. Without explaining the whole thing, he talks about how culture is set from the staff telling stories about the leadership.

If you see the relationship between culture and the stories they tell, then it’s your behaviours at the leadership level that are important. It’s not what you say, it’s what you do. Because what you say… people can go, “Yeah, yeah, a bit like a mission statement, a bit like a value statement but do you live the values? Do you really embrace the mission?” If you’re not seen to be actually living it and doing it, then it lacks credibility.

What Stan says in his book is pretty much, as a leadership group, you’ll never hear any of those stories. They will be telling stories about you and what you’ve done but they won’t be telling you.

So even at the office Christmas party with photos of them that they don’t want to get around in one hand ,and a pay rise in the other, and cornered at the back of the car park, they will not give up those stories to you. So you’ll never actually know them but you’ll feel them come from the staff.

Jon Windust:

All right, look, I think we’ll finish off there today Graeme. Thank you very much for your time.

Graeme Strange:

Thank you for having me.

This transcript has been edited slightly for readability

Jon Windust

Jon Windust is the CEO at Cognology – Talent management software for the future of work. Over 250 Australian businesses use Cognology to power cutting-edge talent strategy. You can follow Jon on Twitter or LinkedIn.

Talent Management Talk #3 – Talent management in the NFP sector (featuring Tania Hannath)

In this week’s Talent Management Talk I’m joined by Tania Hannath – Director at People Axis. Tania has worked across both not-for-profit and for-profit companies. So she’s perfectly placed to compare different approaches in talent and performance management in the two sectors.

Tania’s extensive experience and strong opinions made for a great discussion around culture and behaviours, 360 feedback, setting goals and performance reviews. She’s also recently done some really interesting work in performance management for boards. We dive into that topic at 7 minutes 30 seconds.

Watch our 10-minute discussion or read the transcript below. If this is an area you have experience in or you have questions about, let me know via the comments or on Twitter; @cognology

Talent Management talk

 

Jon:
Hey everybody and welcome to Talent Management Talk. I’m Jon Windust, the CEO of Cognology, and I’m here today with Tania Hannath who is an expert HR consultant and who also happens to do a lot of work in the not-for-profit space.

Culture and behaviours in not-for-profit organisations

This is going to be really interesting because… culture: how do you actually build that culture? How do you start to instil that in the organisation?

Tania:
We know that there are many things that impact culture. For me, two of the greatest levers are leadership – the quality of leadership – and then also your performance management system. But ultimately where you want to start is to define what does this culture look like?

So if I am working in this organisation, what does it feel like? What does it look like? When people are working at their best with colleagues. When they’re working at their best with the people we are servicing. What are they doing? What are their key behaviours? And defining those.

Jon:
So one of the first things you’re doing is creating that set of behaviours, defining that set of behaviours? To me, one of the things I find really useful about behaviours and one of the reasons I think they’re such a good tool. Apart from being a very clear description of an expectation, they can be used by managers as a tool in everyday conversation or in a one-on-one with a team member. Yes, I think they’re really critical as a tool for leaders to help them in managing their staff.

Tania:
Very much so Jon. The other thing is that people are joining these not-for-profits because they’re passionate about the purpose and mission. So it’s fundamental that the organisation helps them to see how that culture fits the purpose and the mission. But also how the work that they do and their department does, fits that culture and the mission. Because if they can’t see that… They’re not joining for the money! They don’t have the short-term and the long-term incentive benefits that you have in the for-profit world.

They’re joining really for that purpose of the organisation. And when they can’t see how they contribute and how the organisation is inwardly replicating what it’s doing externally, from a cultural perspective, they are disillusioned far quicker than in a for-profit world.

Jon:
Okay, that’s really interesting.

How to deliver 360 feedback in NFPs

Can we talk a little bit about 360? You’ve mentioned 360-degree feedback and I’m just sort of wondering, is there something about 360-degree feedback in the not-for-profit world that’s different to the for-profit world? It sort of seems that it might be a more difficult thing to implement in the not-for-profit world or am I sort of missing something there?

Tania:
I think there is a barrier. I don’t know that the not-for-profit world sees it but there is a barrier around “we are different, we have a very philanthropic purpose.” If it’s a faith-based not-for-profit: “we don’t want some standard 360,” or: “we need to really customise because we are so unique.” Well, we have many for-profit clients who also tell us, “We are very different from other organisations,” but definitely I think where we start to get into faith-based not-for-profits and the whole philanthropic aspect of not-for-profits, they see themselves as very different.

So 360’s, in particular the Cognology tool, is highly customisable. So with those clients, I can have that conversation to say, “You can help me design these questions,” or “you have a go at the questions you want and I’ll look at them and make sure they’re behaviourable based and simple and written in verbs and things that are rateable.” I think once we get over that hurdle…

I mean the other thing I think sometimes, because we’ve got people in not-for-profit space who are very relational, the feedback is sometimes nicer… than in the for-profit [world], so maybe not always as honest!

The importance of setting goals

Jon:
What do you think about the argument that some people use: “Well, goals, they’re just too difficult and you shouldn’t set them in the first place.”

Tania:
It’s a total copout!

Jon:
Okay. That’s that!

Tania:
I mean accountability! It’s probably one of the things that frustrates me: “We want more participation. We want more engagement. We want more consultation in organisations” – but we won’t be accountable.

Jon:
Yes.

Tania:
Those two things go hand-in-hand.

Jon:
The other thing that some people might miss about goals, one of the benefits of them, is being able to give people a lot more autonomy in their roles. Essentially what you’re doing through the goal is giving them accountability, and that then allows you to give those people a lot more autonomy in their roles. It should lead to a much happier work place if people have got more control over how they do things.

How performance reviews differ in NFPs

The other thing that interests me here is that generally around review time every year, here in Australia being July/August, you start to see articles calling for the end of the performance review. I find this really curious because here you are saying, “This is one of the key tools that you’re using to improve accountability and culture in not-for-profit organisations,” what are you doing right that other people are missing?

Tania:
It would be interesting to actually know or have a look at those performance reviews that those writers are talking about Jon, and we don’t have perhaps an insight into that. I’m saying that because a really close friend of mine the other day, we were sitting having a coffee, and she said, “Oh, I’ve got my performance review in a few hours. I thought you’d be interested to have a look.” She gave it to me because she knows the work that I do in organisations, and it was a tick-box exercise.

Jon:
Oh, ouch.

Tania:
I looked at her and said, “But I know that you have different portfolios and different responsibilities, so how [is that] reflect[ed] in this document and where are you going to talk about what you’ve achieved?” I looked at my friend and I know what she does and I know how much she gives to her organisation and I looked at this document and there was a big disconnect.

Jon:
Yes.

Tania:
So if those writers are talking about those processes, they are not beneficial. They may be a HR process where you can tick it off from a risk and a compliance perspective but I’m not convinced that they add to that.

So [I’m] obviously a big advocate for tailoring questions. If we’re going to ask questions on behaviours and culture and values – that those are   tailored, they have been co-designed, that there’s communication around those in the organisation and they sit in the review.

Jon:
Yes, and you do something with the end results.

Tania:
Yes.

Can 360 feedback work for boards?

Jon:
So tell me about this 360 feedback for boards. That just seems… I mean board performance, we don’t normally think about it do we? And actually managing the performance of boards. How do you actually do that?

Tania:
For me it’s also been very exciting because for… let’s just call it 20 (it’s more) but for 20 years working in organisations, in terms of performance management and 360, through the CEO and then to the top of that organisation chart which is the board itself.

It’s pretty exciting to see the whole gamut of that organisation embrace these things because the paradox has often been (and here I’m talking about boards generally) that we’re going to hold the executive management accountable. We’re going to assess their performance but we are quite quiet about what we have been doing.

Jon:
But often you can get really massive issues with boards, can’t you?

Tania:
Yes. So post the GFC, we do see a whole lot of movement around requirements of boards. Out of that GFC, issues in terms of corporate governance, issues around executive remuneration.

The ASX, in terms of their governance recommendations and also principles – basically in July 2014 have put out some additional principles. And one of those first principles is around wanting (so we’re talking about ASX boards) to actually report on how they’re evaluating their boards…

Jon:
Right.

Tania:
And the board, the individuals, the directors on the board, and also the board subcommittees. So that gives you a flavour for what is happening in the for-profit space and I think it’s a great opportunity in the not-for-profit space, given the things that we’ve talked about, given the money that’s been entrusted by donors, given the money that’s been given by government to this particular sector, there is a great opportunity for the sector to build stronger relationships with these donors. To show greater transparency by saying, “Look, this is one of the ways in which we do good governance. We are prepared to evaluate ourselves as individuals and the work we’re doing, and our subcommittees and the board as a whole.”

Jon:
Alright, look, it’s been an absolutely fascinating discussion. I really thank you for sharing your expertise with us today. Thanks.

Tania:
Thank you.

Does talent management drive share price performance?

Why investors should care about talent management

Here at Cognology we love data that supports the importance of great people management. Today we’ve got some particularly interesting data from Glassdoor that all managers (and investors) should pay close attention to.
We’ve dug into Glassdoor data to understand the impact of employee happiness and satisfaction on share price performance.

If you’re not familiar with Glassdoor

Glassdoor is a website where employees and former employees anonymously review companies and their management. The data and reviews are then made publically available.
Here we’re using Commonwealth Bank as an example:

CBA Ratings and Trends chart

As you can see, it’s gives a quick feel for what it’s really like to work at the company on a number of measures.

But deeper than just employee happiness, Glassdoor is also a pretty good indicator of management capability. As we showed in our recent piece on Management Capability, Glassdoor ratings sit broadly in line with the Australian Institute of Management’s capability index.

What do these ratings say about Australia’s largest companies?

At an aggregate level, every company gets a rating out of five stars. We collected these Glassdoor ratings for the ASX100. You can see the results below:

Glassdoor ratings chart

Note that we’re only including companies with reviews on Glassdoor (which is why there’s 68 companies listed here instead of 100). Due to size or industry, some companies don’t have enough ratings to show data.

As you can see above, most companies tend to cluster somewhere between a rating of 3 and 4.

What’s particularly interesting here are the seven Australian companies that have scored ratings of 4 and above. As you can see from the chart, it’s quite rare to achieve a rating at this level. For comparison, some of the international companies with ratings above 4 include:

What has this got to do with share price performance?

One of the big questions about Glassdoor is always “does the rating really mean anything?”. Anonymous reviews sound awfully like they could be gamed by a company that wanted a quick ratings boost. Or just as easily destroyed by a particularly bitter ex-employee.

So, in aggregate, do these ratings actually tell us anything meaningful about the companies listed?

Perhaps the most impartial way to look at overall corporate performance is the share price. There’s a lot of nuances that share market misses – but there’s no disagreement that it’s a very clear public indicator of performance that all stakeholders care about.

So how does aggregate share price performance look when we chart against Glassdoor ratings:

Glassdoor ratings chart

 

It’s clear that the past 12 months has seen outperformance by those companies with a glassdoor rating of 4 or above. Just to highlight, these companies with employee reviews averaging above 4 are:

  • CSR
  • Fortescue Metals
  • Toll Holdings
  • Wesfarmers
  • Seek
  • Ramsay Health
  • Orora

Whilst it’s easy to make the argument that employee engagement and management capability is causing share price outperformance, let’s not get too carried away and start the “Glassdoor ratings >4 hedge fund” (although we did very briefly consider it before publishing this article).

To be very clear, I’ve always believed that there’s a relationship between great talent management and company value. But before we say this is definitive proof of the huge value of talent management, there’s more research required. Do companies that are achieving stronger share-price growth just have happier employees? It is possible that the causation works in the other direction?

In any case, it’s fascinating data that requires more attention and thought. It’s safe to say you should expect more questions from investor relations about your talent management strategy in the near future. 

Please note: Clearly, this isn’t investment advice. And for the sake of full disclosure, nobody involved in the publication of this article holds shares in any of the outperformers referenced.

What does a crisis in MIDDLE management mean for TALENT management?

Middle management matters

Middle managers have it tough. They’re facing an environment with increasing workloads and constrained resources. The Australian Institute of Management (AIM) understands the challenges. They recently released a discussion paper called Engaging Middle Managers For Positive Organisational Change.

As part of this report, AIM asked senior managers how critical middle management are to well-run organisations:

  • 89.3% of senior managers agree that middle managers are the linchpin to effectively communicate the needs of senior management to their teams. 
  • 92.7% of senior managers agree empowering middle managers is key to effective implementation of organizational change.

For the majority of Australian executives, there’s no doubt about the critical role of middle management for communication and driving organizational change.

The expectation gap for middle management is getting wider

What’s most interesting from a talent management perspective in this report is the gap between the perceived and actual performance of middle management:

  • 64% of senior managers rate the skills of middle management as “below average”. 
  • However, only 27% of middle managers think middle management is underperforming.

You don’t need to be a talent management expert to understand the issue here! Middle managers are failing to meet the expectations of senior management, and they don’t even know it.

Talent and performance management done well is all about making sure that everyone’s on the same page. Everyone knows whether they’re on track and what success means. From this data, it’s evident that there’s a major expectation gap. Middle management and senior management clearly have very different ideas about what is expected from middle management.

Understanding the expectation gap: Middle managers think they need more soft skills, everyone else thinks otherwise.

This chart shows the different perceptions around the skill gaps for middle managers. You’ll notice middle managers (light blue) place more emphasis on soft skills, whilst both senior management (red) and direct reports (dark blue) emphasize technical skills:

Expectation gap chart

These charts make the expectation gap very clear. Middle managers are focusing on soft skills, and that’s reflected in how they are perceived by both managers and their direct reports.

Whether this skill mix is right or wrong, it’s easy to see how these different perspectives lead to disaster when it comes to performance review time:

  • Middle management are being evaluated on the competencies that senior management and their reports think they SHOULD have.
  • Middle management are evaluating their own performance based on the competencies that they think they SHOULD have.
  • But because these competencies are unclear, there’s a major gap between perceived and actual performance.

Setting clear expectations and objectives are critical for all employees (including middle managers)

The aim of great talent management is always to minimise the expectation gap. If you’re doing performance management well you should never have the scenario where an employee thinks they’ve done great work, only to be told otherwise in a 6 monthly review.

Everyone from direct reports to the C-suite should read AIM’s discussion paper, it articulates why it’s so critical to set clear expectations and objectives for everyone in the organization. Everyone benefits when the scoreboard is visible and plain to see.

Have you read the discussion paper yet? Have anything you’d like to add? You can reach me on Twitter @cognology or jump on the comments below.

 

Talent Management Talk #2 – The skills crunch (Featuring Hannah Jacques-Jones and Con Sotidis)

In this week’s Talent Management Talk I’m joined by Hannah Jacques-Jones from The Faculty and Con Sotidis from LearnKotch to talk about the skills crunch (and all things learning and development).

This is a fascinating discussion about the impending skills crunch from a number of perspectives. Both Hannah and Con give their unique insights into how employers can use training and the right L&D approach to combat the coming skills shortage.

You can watch the discussion and read the full transcript below. If you have any further insights you’d like to share, jump on the comments below or reach me on Twitter at @cognology.

Watch the highlights below (or see the full 30 minute discussion here)

Talent management talk 2

Jon Windust:   
Hi everybody and welcome to Talent Management Talk. I’m Jon Windust CEO of Cognology, and with me here today to talk about skills and capability and development is Hannah Jacques-Jones from The Faculty, and Con Sotidis from LearnKotch. Welcome.

Con Sotidis:              
Thanks.

Hannah Jacques-Jones:    
Thank you. Thank you for having us.

Jon Windust:            
Thank you. Okay, so what I’d like to do is start by exploring who The Faculty is and what their connection with skills and capability and development is.

Hannah Jacques-Jones:     
Sure. The Faculty is a management consultancy but in a very niche industry. We operate purely in procurement and supply chain. There are three main sections of The Faculty. There’s a networks and round tables element, there’s consulting and there’s the training and capability section which fits in with you at Cognology. Through that we run a lot of skills assessments, capability assessments. We have a long history of doing that over 10 years.

Jon Windust:    
I find it fascinating that you’ve got this organisation that specialises in one space. I wonder if this is actually part of the future. We’re going to hit a skills crunch in maybe 10 years’ time, some might argue we’ve got a skills crunch now, and whether what you’re doing at The Faculty is part of the answer. Tell me about the capability frame works that you guys have developed and how you guys actually use that with your clients?

Hannah Jacques-Jones:     
One of the things we see a lot of is that technical skills are really important, absolutely, but it’s the softer skills, leadership, the influencing skills that really set people apart from normal.

Jon Windust:     
Right.

Hannah Jacques-Jones:    
Our frameworks are based upon competencies that are made up of those technical skills but also commercial skills and leadership skills. So we’re finding a nice balance, or that sweet spot between all three and we really focus on developing commercial leaders.

Jon Windust:           
Right and how did you actually go about developing this framework? How did it come about?

Hannah Jacques-Jones:     
So the competencies themselves, we did a lot of research looking at the future and where the future of procurement was heading. Then actually breaking that future down into procurement skills and also commercial and leadership skills.

Jon Windust:     
Con, you’re an expert in learning and development, what do you think of the skills crunch? Is it real now? What’s it going to look like in 10 years’ time?

Con Sotidis:       
Look Jon, what we’re seeing in current research is that there’s definitely going to be a skills crunch in the next 10 years. Employers are already saying that they’re finding it hard to find appropriate employees with the right skills. Mainly it’s because of the digitisation of the economy and also because we’re moving towards social media usage in business like Hannah touched on before.

I think it’s crucial that we get more development happening because the area is still very much lacking, and we find that investment in that area is still not meeting the investment in our technical skills.

Jon Windust:           
Right, and actually if there’s one thing that’s not going to change over the next 10 years, it is that crucial need for leadership, right?

Con Sotidis:         
That’s right.

Hannah Jacques-Jones:    
Absolutely, and it will just become even more necessary.

Jon Windust:       
Yes. We won’t name the clients, but you’re going to work with a particular client’s procurement group, how do you work with them? How does the sort of capability framework fit in there?

Hannah Jacques-Jones:     
We have a standard framework that we use but in order to make it meaningful and sustainable for the client, we suggest that we actually tailor it to them and what their specific needs are. We run a lot of workshops as well and that really helps with the change in management to any assessment because the people automatically get a bit nervous or scared when they hear about assessments.

If they’ve actually been part of the build and really inputted into it, it helps a lot and we have a great success rate. Even when assessments are non-mandatory, it’s actually getting 100% uptake on that.

Jon Windust:        
Right, okay. So you go in there, you develop these capability frameworks, and then what happens there?

Hannah Jacques-Jones:
Then we have the assessment. We partnered with Cognology to house our assessments. We have a manager assessment and a self-assessment normally, that’s the standard. But we’re also, as part of the round table networks that we’re doing, doing some research this year and we’ve set some benchmarks, across industry benchmarks, for what “good” actually looks like.

Because it’s all well and good having a self-assessment or manager assessment in numbers but what does that relate to and what should you be aiming for and striving towards? So those benchmarks really help to ground those results.

Jon Windust:    
I think what you guys have done with benchmarks is actually really interesting, and how you arrived at those benchmarks. Can you share how that happened?

Hannah Jacques-Jones:     
One of the difficulties, and this happens in a lot of industries but in procurement especially, is that job roles in one organisation to another look very different, so how do you actually compare one person from one organisation to another, even if they have the same job title.

Jon Windust:          
Right.

Hannah Jacques-Jones:    
The first thing we did was looking at job roles across the procurement industry and what are they actually called… actually defining the responsibilities and forming a description of that role. Then based upon those descriptions, those outputs, getting our round table members to say what level of capability is required based on the outputs only for those different competencies. That’s how we set about producing that benchmark.

Con Sotidis:          
And in the learning world we visualise that, or we call that a know-do-be framework. So it’s what you need to know, what do you need to be able to do, and what are you aiming to be like?

What you do is you go in there, Jon, and you set up a conversation with the business about that know-do-be perspective, and then you find what the minimum is that people need to know, and then you build on that for different levels. Say if you’re a leader in that procurement area, you also need some soft skills. If you’re a more technical operative, you probably don’t need those same soft skills but you need some other skills about business acumen or something like that.

The other thing, just quickly Jon, that Hannah talked about is that collaboration, that co-design. When you co-design with business you get a lot more buy-in, and when you get a business involved and is part of that process which The Faculty is doing, you’ll find that when you roll out, people are very much able to adapt and also embrace the learning because they know they’ve been part of the process That’s what The Faculty is doing.

Jon Windust:         
Okay, so we’ll do this assessment process, and then what happens with that information then?

Hannah Jacques-Jones:   
Well, good question. What should happen is that the manager should sit down and have a very good conversation with their employees, sit down and discuss the report and the outputs because it’s all based upon development and what they need, then coming up with some development options to actually meet those gaps.

Another thing I think is really important, especially in the skills crunch, is to do the succession planning, because gone are the days where people are invested in their organisation and their waiting for their 40 year gold watch. It just doesn’t happen anymore.

People are invested in their careers, their development, and as an employer, if you’re able to show them a career path in your organisation and make it clear and transparent, people are more likely to want to stay and invest back into the organisation as much as you’re investing in them.

Jon Windust:     
Yes, this is one of the things I really like about your capability framework, you can see a clear path.

Hannah Jacques-Jones:   
Absolutely.

Jon Windust:      
So you’re at this level here, you can see what’s required there.

Hannah Jacques-Jones:     
And then it’s empowering. It’s up to you to drive that forward.

Jon Windust:    
Right, yes.

Con Sotidis:          
That’s what we find with the skills crunch. What businesses are finding is that because people are leaving because of better options, then they haven’t got the right people to come up to that level.

Jon Windust:  
Right.

Con Sotidis:        
So identifying that talent via the capability framework or via management observations, by other processes, is very key to business sustainability going forward.

Jon Windust:     
Right, all right, let’s move on to now the learning development side of things. We’ve done assessment. We’ve worked out that, “Okay, these are the gaps that we’ve got and we need to develop.” Perhaps Con, can you talk about what are best practices …

Con Sotidis:  
I think just quickly there, what Hannah said is “people perceive assessment in different ways”. I think you’re right. I think we all come from that traditional learning environment. We went to school and we did our exam, we got assessed.

There is a perception with our probably more mature workforce that, “I’m going to be assessed. If I’m not good enough I’ve got to go back and get retrained,” this or that. How we position assessment is part of the ongoing development. That’s why you find these days we don’t have the traditional pass or fail, it’s about competent, not yet competent and so forth, moving up to that next level.

Assessment is important, like Hannah said, sit down with your manager and frame a learning plan about a process, “that I am currently here. I need to get to here. What are we going to do about it?” And not just the formal stuff. There’s a lot of informal stuff, the coaching, the mentoring on the job, but also support the individual to undertake some of their own learning.

In the previous organisation I was with, the graduates, they were keen to do their learning outside normal hours. They would say to me, “Con, where’s my tablet? Where’s my iPad? I want to be able to do this,” We don’t support that at the moment. So we’ve also got to be in tune with our workforce and how they want to learn, and support them in that learning journey.

Jon Windust:    
Yes, I kind of have this sense that coaching, mentoring, and something more akin to what an apprenticeship is going to start becoming the norm in organisations.

Con Sotidis:     
Yes, that’s a big thing. Coaching and mentoring is becoming more effective because it’s got the experiential aspect too, so it’s about learning on the job. We find in that formal classroom, it’ll give you that knowledge and also might give you a bit of that what we want you to do, but if you want to start bettering the behaviours, it’s that coach, that mentor that works with you on a day to day basis.

Hannah Jacques-Jones:     
We’re finding that trend as well. I mean everything that we recommend is through that 70/20/10 framework. So 70% on the job, 20% in coaching and mentoring, and then 10% in the classroom. We really see that coaching and mentoring is the trend moving forward but what it requires is some training to begin with because you have to have a base level because otherwise the coaching and mentoring is just almost one-on-one training. You’re not going to get the return on investment then, so you need to make sure that …

Con Sotidis:              
That’s where a framework that Hannah talks about, gives you that benchmark about what is the minimum knowledge you need to have.

Hannah Jacques-Jones:   
Yes.

Con Sotidis:  
So develop a program which gives that and whether it’s formal, it could be an E-learning product that gives you that knowledge, it could be a quick guide, something like that, maybe a two or three page document. There’s a variety of ways we can do it. We don’t always think about a formal classroom. As you know, there’s a variety of ways to get that knowledge.

Jon Windust:  
Yes, that’s one of the things I like about a good quality capability framework, is that it actually first tells you what you need to know but also in a sense it teaches you if it’s a good quality framework.

Con Sotidis:     
True.

Jon Windust:      
So we were talking just a moment ago about baseline development. How do you actually go about doing it? What is the baseline development?

Hannah Jacques-Jones:     
In terms of training, is that what you’re referring to?

Jon Windust:  
Yes.

Hannah Jacques-Jones:     
We develop a lot of tailored training for organisations and again a lot of those going in and workshopping it to see what their needs actually are. And then making sure that whatever training it is that we are building for them, aligns in some way back to the business objectives and their overall strategies. It’s helping the business and the organisation move forward as well.

Jon Windust:     
Yes, we mentioned before 70/20/10. Con, what is 70/20/10?

Con Sotidis:
Okay, well 70/20/10 has been around for a while. I probably don’t know the author’s name off the top of my head but it’s… basically like Hannah said, it’s about how we find learning is most effective and how we find that the knowledge transfer occurs. So we find that as individuals we get 10% of our learning from formal scenario, it could be online, it could be a classroom.

Jon Windust:  
So is this the training course?

Con Sotidis:     
Yes, the training course. The other 20% occurs from other activities. So it could be …

Hannah Jacques-Jones:  
Coaching or mentoring.

Con Sotidis: 
Coaching, mentoring, all that sort of stuff.

Then the 70% is the actual on the job. It’s actually learning on the job. More and more we find that’s more that sort of social interaction, the social media, we become more and more play in the space, the enterprise social networking, the Yammers, the SharePoints are playing a major role in that sort of learning on the job.

Jon Windust:   
Why does that work? Why does social learning work?

Con Sotidis:      
Because, again, it’s basically the way our DNA works, Jon. It’s how we’re made up. As individuals, as human beings and as a race we learn better by talking actively to each other. The water cooler conversations, “Did you know blah, blah, blah?” You think, “Oh, I never thought of it that way.”

Hannah Jacques-Jones:    
It’s also spoken so it resonates with you, to kind of really embed in the thinking.

Con Sotidis:   
Plus because it’s stayed in a social atmosphere where there’s no fear of observation or there’s no fear of being assessed. You are, I suppose, more prone and able to acquire that knowledge and learn from someone. I know, for example, when I go to the training course, you do the training course and then once you’ve finished the training course you go back to the work and when you get stuck, what do you do? You don’t go to the manual. I’ll tell you what I do, “Hey George, did you remember that at the course?” That’s what we all do.

Hannah Jacques-Jones:    
That goes right back to why the coaching and mentoring we’re seeing is a real trend, because that’s the bit that embeds the training you learnt in the classroom. It’s like, “Okay, I’ve come back and here’s my manual, what do I do with this?” It’s, “Okay, let’s workshop how that would work in reality and let’s work through some real examples.”

Jon Windust:    
I think it goes back as well … it’s something you said earlier that was pretty important though that the whole coaching and mentoring picture cannot work unless we’ve got the leaders there.

Hannah Jacques-Jones:   
Absolutely.

Jon Windust:       
So how do we develop leaders to actually be able to do that?

Con Sotidis:      
It’s skilling those leaders to be able to play that role. When I found the organisation we were at, we put a lot of … you’ve got to put effort into that. It’s the old “feed a man a fish, you feed him for the day, teach him how to fish” …

Hannah Jacques-Jones:     
Feed him for his life.

Jon Windust:        
Feed him for life, yes.

Con Sotidis:              
So it’s teaching those managers how to be able to undertake that process. You need to invest and the holy grail of any learning in an organisation is a middle manager.

Jon Windust:  
Right.

Con Sotidis:      
The holy grail of any learning event is not the senior manager, the senior manager is for buying. But it’s that middle manager who actually interacts with the individuals, the staff, that play a major role in how a good organisation progresses, because they’re the ones that are going to influence the subordinates and also up.

So invest in your middle managers as much as possible in relation to leadership training, coaching skills, mentoring skills, workshops.

Jon Windust:     
How are you guys doing it at The Faculty? How are you training the leaders to actually do this coaching?

Hannah Jacques-Jones:     
Well, one of the training programmes that we’re running at the moment, I mentioned earlier that it’s technical and leadership skills, we’re actually partnering with known business schools and the executive school. We do the more technical side and they’re really upskilling the leaders in those softer skills.

Jon Windust:   
Right, that makes a lot of sense.

Hannah Jacques-Jones:     
A lot of what we do is around stakeholder engagement. Whether that’s within the business or whether it’s external, its suppliers, and how you actually get them on board and sell the value that you can offer, a lot of that is to do with personality profiling, understanding what makes people tick and how you’re actually going to connect with them and communicate with them. We’ve found that that partnership with MBS has been really successful.

Con Sotidis:   
Can I add here that we also find it’s maybe more about the L&D space. We find that if we can invest in in that space, that coaching and mentoring space, us as L&D professionals need to also be aware of what we need to do. So we find that a distribution L&D practitioner needs to now expand their suite of offerings to be able to undertake that role, to be able to coach a leader on how to mentor, how to be a coach.

Hannah Jacques-Jones:     
Yes.

Con Sotidis:         
We find that L&D people need broader business acumen skills, and need broader communication relationship manager skills, because traditional L&D people are now meant to move out of their just purely structural design.

Hannah Jacques-Jones:  
Another thing that we’re finding helps is with the coaching and mentoring is “train the trainer”. So in terms of embedding something and making it sustainable for an organisation, we go in and maybe do the first few workshops. We’ll get people along and that we’re actually mentoring in delivering the training, and then they take that forward.

Jon Windust:    
Yes, and what we were talking about before about social learning, I actually think that’s a sort of fact there as well.

Con Sotidis:    
It is. It’s a big factor.

Jon Windust:     
You’re teaching someone else what you’ve actually learned yourself.

Hannah Jacques-Jones:    
Yes.

Con Sotidis:           
There’s a lot of power, Jon, in what I call the user generated learning. There’s a lot of evidence to suggest now that we, as learning professionals, we’ve moved more from the creation to the curation.

Jon Windust:       
Right.

Con Sotidis:    
And what curation means is by supporting individuals to be able to have a conversation, and us as learning professionals facilitating that and curating the gems in a way where we can then offer them to the broader cohort of learners. Does that make sense?

Jon Windust:   
Yes.

Con Sotidis:      
So it’s about taking what the gems out of the conversation and curating and providing them as part and parcel of a more, I suppose, formal offering or whatever the case may be.

Jon Windust:      
Yes.

Hannah Jacques-Jones:   
It’s come from a meaningful background. It’s come from real life.

Con Sotidis:  
Exactly, people that have got their eye on the job.

Jon Windust:       
There are some big changes, isn’t there at the moment, happening in the L&D space? The roles are changing a lot.

Con Sotidis:  
The role is changing enormously. We’re finding now that … and I’ll just read you the recent ASTD, they do an industry report every year. We find that somehow or other, classroom learning is still number one, which is good. I always say to people, “We’re not going to see the end of classroom learning. We are humans. We need interaction. We need to be able to have a coffee and a biscuit and learn from people.” But we also find that there is a lot more invested in self-paced learning but unfortunately the thing we all thought was going to be big: the e-learning part, the mobile learning, we’re not seeing much take up.

Jon Windust:         
Right, interesting.

Con Sotidis:              
I think about 1.7% … 1.7% from memory reported that they were using m-learning, as in tablet, mobile. We find that there’s a lot invested in e-learning and I’ve been able to say that I think we need a bit of an e-learning craze. That’s okay but unfortunately that’s not expanded down to m-learning. T

he other thing we’re finding, Jon, is things like MOOCs are very popular. MOOCs are massive open online courses for those who are not aware.

Basically they’ve come from places like Harvard University and Stanford got into certain various arrangements and partnered up with Ed-Ex and Udacity, Coursera. So they are massive, they’re big, they’re open, they’re free, they’re online and you learn.

Hannah Jacques-Jones:  
Is it just like tuning into a lecture?

Con Sotidis:   
Yes but it’s more structured, it’s more modularised. You’ll have a video, you’ll have some content, you’ll have assignments, you can actually study towards a certificate saying you’ve done this course. And that can lead to some sort of RPL or recognition for a degree or course with Stanford or with Harvard or something like that.

Hannah Jacques-Jones:  
Do you think they’re effective?

Con Sotidis:         
Well look, there are two sides to this story. I think with MOOCs, I think in the higher education sector yes they can play a major role. I know someone like my son who is at Uni, never went to any lectures, just podcasted everything. These days they don’t go to any lectures. So a similar MOOC would have been really good for him to have but I think in a corporate environment, I think we still need to assess what role they can play.

There’s been some traction and that with certain organisations where they’ve done some trials of it. I’ve not yet seen any major evidence around effectiveness of MOOCs in a corporate environment. I think there’s a role for them to play as supporting some of the learning, maybe even supporting some of the coaching and mentoring. I just don’t think they’re the fad that was sold to us as one of the solutions we really had to have… So Jon, do you have a view on that?

Jon Windust:   
Well, I do have a view on that. The thing I like about MOOCs is … I think there’s a long way to go. I think there’s a lot of development that’s going to occur with them but the thing I do like about them is that you get the best quality teachers and they’re the ones doing the teaching. So it improves the quality of the presentation of the learning. There’s still the question about coaching and tutoring but I think that’s probably where the old role of teachers changes.

Hannah Jacques-Jones:     
Sorry, is there any interaction between the lecturer or the teacher and those that are tuning in?

Jon Windust:    
I think the way they try and do it, perhaps you can talk about this Con, is to get people to peer up and work with each other, which is the other thing that I think is great about it.

Con Sotidis:   
There are things called C-MOOCs they interact with each other on social networks and they interact with each other on assignments and things like that. One of my friends, a plug in for Helen Blunden, she’s a real firm believer of the C-MOOCs. I can see why because it’s about connecting. It’s about not only learning but also tapping to people …

Jon Windust:   
Just tell us about the C-MOOCs…

Con Sotidis:  
C-MOOCS are about, they’re called connectedness MOOCs. It’s more the connected MOOCs where you’re connected with individuals while you’re also learning.

Hannah Jacques-Jones:
It gets back to the social …

Con Sotidis:  
Exactly. It’s not just a course you do and, “Thank you, see you later.” You’re also connecting, interacting, continue to learn, post events on what’s been presented. So they are, I suppose, more effective, and probably that’s where I think it’s going to move into the connected MOOCs rather than the stable MOOCs. But again, on MOOC, I think they’re finding there’s research there. We hear a lot about the dropout rates. Thousands of people join these MOOCs, I mean you can’t follow them down to completion.

Jon Windust: 
I actually heard one of the courses had over 300,000 people sign up for it.

Hannah Jacques-Jones:     
Wow, how many are tuning in but are actually busy typing doing something else.

Con Sotidis:      
That’s what I find too. There’s more offline. So you get the lectures there, you can do it offline.

Hannah Jacques-Jones:
Okay.

Jon Windust:        
Is that actually an issue though, people dropping out? If 300,000 people that sign up for a course, if only 50,000 finish, is that actually an issue? Is it a case of try before you buy, “I don’t like it, I’m going to drop out and do something else?”

Con Sotidis:      
Look, you make a very good point Jon and it’s a point that’s made quite a bit. The way I approach this is like any new intervention, we need some sort of measure. Every intervention is a measure in relation to completion.

Hannah Jacques-Jones:     
A measure of success.

Con Sotidis:     
Yes, assessments, transfer the learning and all that. Unfortunately, one of the measures that’s been associated with MOOCs is the sign-up rate and the completion rate. Look, it’s gone through a number of iterations with people and the conclusion we’ve all reached is, “Look, success is not really based on completion.” I’m okay with that but what happens with MOOCs is we find that the majority of people that are signing up have already got one or two or three degrees.

The vision for the MOOCs was to teach those people in Africa, Uganda, give them a chance to learn. Although there is signup from them, we find the majority of the signup is the people that already know this stuff, and to find that people already have one or two or three degree.

As one author quoted, “We are teaching people how to do something which they probably already know and are just looking to make some additional connections online.”

The other development that’s happening around learning is gamification. Gamification, I don’t know if you’re using it yet but gamification is really going big guns. Honestly, unlike e-learning which hasn’t picked up, I think gamification will continue to pick up. Gamification is about … we’ve all probably seen our teenage kids of friends or nephews and nieces, they play these games and they really get excited. It’s because they get to what? They get to move up. They get recognition.

Jon Windust:     
It’s instant feedback.

Con Sotidis:     
Exactly. They get recognition by peer. They get instant feedback. So things like badges, things like … even via LMS courses completing a course you get a little stamp on your little record. I can go in and say, “George has done that.” It gives me to go and do it too. It also creates motivation they say in most people to continue to develop, to keep up with the Joneses.

Hannah Jacques-Jones:     
We have an online procurement based industry networking site called Procurious and we have online learning there. Once you’ve completed the learning it goes on your profile so then people can see you’ve completed X module or what have you.

Con Sotidis:        
They get the recognition, credibility.

Hannah Jacques-Jones:   
Yes, it’s like creating your CV as well.

Con Sotidis:  
That’s right. So if you think about things like badges which is part of the gamification, and things like getting stars or unlocking a particular part of the next part of the learning process, really very popular. I think it’s going to be an area that’s going to take off.

Jon Windust:          
Yes.

Hannah Jacques-Jones:  
People like recognition. They like those gold stars.

Con Sotidis:  
We all do. We all like to be recognised, and Jon hit the nail on the head, Jon said instant feedback.

Jon Windust:    
Instant feedback, yes. I think that’s a large part of it.

Con Sotidis:      
It is.

Jon Windust:   
Let’s talk about Procurious because this fascinates me. What is Procurious and why did you guys actually create it?

Hannah Jacques-Jones:     
Procurious is an online social network specifically for the procurement industry. The Faculty mantra, if you like, is empowering procurement and actually bringing the procurement profession together. We see this really culminate in social media or social networking.

Jon Windust:    
Right.

Hannah Jacques-Jones:     
So it’s a place you can go and connect with likeminded people. You can ask questions that are specific to the industry. You can filter out all the noise that might be in LinkedIn or somewhere else.

Jon Windust:        
So it’s like LinkedIn but it’s sort of learning and development as well?

Hannah Jacques-Jones:     
It’s LinkedIn plus learning and development but specifically for procurement. So everything that goes on there is relevant to you as opposed to scrolling and scrolling to find something that means something.

Jon Windust:      
Yes.

Hannah Jacques-Jones:    
And yes, a part of that is online learning as well.

Jon Windust:            
Right, is recruitment part of the picture there as well?

Hannah Jacques-Jones:     
It isn’t at the moment. We’re trying to keep recruitment separate to that but you never know how things will evolve. We’re building it for the profession so if people want that, we’re very open to it …

Con Sotidis:              
Sorry Jon, you said earlier on in the piece about the skills crunch, I see what Hannah is doing in the Procurious sphere is developing specific areas for particular areas and specialisations, to be able to interact with each other, is going to be a way to go forward in relation to developing that particular skill set.

Not only to develop the particular skills but also their soft skills. Having separate little areas where individuals feel safe because they know the other people on there, they know these people are likeminded, they know what they’re talking about. I might throw a few acronyms out there and they know what that means.

Jon Windust:      
Yes.

Con Sotidis:            
It gives me that confidence to interact with these people and I feel comfortable.

Hannah Jacques-Jones:   
It’s also people are far more comfortable with recommendations as opposed to marketing or media. They trust what a peer says versus what an advert says.

Jon Windust:        
Yes.

Hannah Jacques-Jones:   
So that’s another thing.

Jon Windust:   
That’s right.

Con Sotidis:       
We’re finding also that at the moment through tweet chats, where people get together with a common purpose and have a conversation online via Twitter. In the conversation, you might have some experts on there too, you’re learning, what people do is archive that and have it as a resource to go back in later and tap into it.

So it’s, again, specialised little areas, like I run one around L&D and we have people that contribute to that. We talk on a variety of issues, then we archive it and you’ve got a little bit of a thread that people can tap in later on. And also make connections with people they trust, people they know. So that’s the way I think learning … it’s about that network, and that’s going to occur a lot more.

Jon Windust:            
Let’s switch gears and talk about 10 years’ time. What do you think the skills crunch is going to look like in 10 years’ time because on one hand we’ve got this aging workforce and then on the other hand we’ve got all these jobs that are expected to be automated. What do you think it’s going to look like?

Hannah Jacques-Jones:   
I think first of all we need to be worried about it now, not in 10 years’ time.

Jon Windust:          
Right.

Hannah Jacques-Jones:     
Absolutely prepare for it. I think, yes, the aging workforce, I think the workforce becoming ever more transient, the world becoming smaller. We’re going to have a lot more cultural issues and so cultural awareness, emotional intelligence become critical.

Con Sotidis:      
Remote working in Australia, teleworking, catering for work life balance…

Jon Windust:    
Right.

Con Sotidis:  
I’ll give you an example. We’re finding already Telecom New Zealand already allows their people, certain people to work from home in different shifts, so people are able to pick up their kids. Where I see that going Jon is that we’ll have a lot more ability for people to work when they want to work, how they want to work, and tap into their skills in that way, and organisations will change in that way.

Hannah Jacques-Jones:    
I totally agree. I think at the moment with work life balance, we’re already at 24/7, so how much can it increase by?

Jon Windust:     
Not by much.

Hannah Jacques-Jones:     
But I think that 9 to 5 will change. I think that’s the aspect, so those eight hours in a day might be two hours here and four hours there, depending on which time zone you’re in or you’re communicating with.

Jon Windust:       
Another thing I think might be part of this as well is we’ve just recently, in the last week, hired a retired guy and he wants to do 10 hours a week of work. Beautiful, perfect, we’ve got an experienced person that we can bring on board for those 10 hours of the week.

Con Sotidis:      
I think you’re right. Tap into the mature workforce. Also I believe that also if we tap into the disabled workforce, there is opportunity for those people who can continue to add to the workforce, who are available and got the skills we can tap into. I think that’s also important; that untapped workforce that’s out there.

Hannah Jacques-Jones:     
Yes.

Jon Windust:         
Yes, okay. Actually, that makes me think about freelancing sites as well. When you’re actually recruiting someone from a freelancing site, all you’re really concerned about is what skills does that person have and how well have they actually been rated against those skills, what their previous feedback is, and nothing else actually matters.

Hannah Jacques-Jones:     
It’s all the rating, back to the rating again.

Con Sotidis:     
If you’ve got a capability framework, you can put them through that and get an assessment on them, and straight away you’re laughing because you’re already there. You know what they need to know, what they need to do, what they need to have and need to be.

Hannah Jacques-Jones:     
I think those technical skills, those core skills that are required, are almost your license to come to the party.

Jon Windust:    
Right.

Hannah Jacques-Jones:     
Then it’s those recruiting on those softer skills, the kind of cultural fit is where I see HR and recruitment heading as well.

Con Sotidis:     
You’re right, we’re going to see a lot more of the freelancing occur. I think, like Hannah said earlier on, the relationship of individuals within the organisation is not going to be as strong in the years to come. It’s going to be more about me rather than the organisation. But having said that, they’ll committed and dedicated to what they’re doing.

Jon Windust:        
I think so and particularly if there’s a rating or reputation badge or something like that at stake, feedback.

Con Sotidis:  
Yes, reputation.

Hannah Jacques-Jones:     
I think employers can really invest, really invest with their staff and their development. They can earn the employer of choice status, then that will give them a competitive advantage.

John Windust:   
Well I think as the workforce is aging, there won’t be any choice. I mean you’ll die if you don’t make that investment, advancing … helping people advance their careers.

Hannah Jacques-Jones:     
They’ll just go to somebody else.

Jon Windust: 
Yes. All right, well look, thank you very much Con and thank you Hannah. It’s been an absolutely fascinating discussion.

Hannah Jacques-Jones:  
No problem, thank you.

Con Sotidis:      
Thanks for having us Jon.

Hannah Jacques-Jones:   
Yes, thank you.

Jon Windust:    
Thank you.