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Like a Powerful Magnet, Great Cultures Attract Great People
by Mark Brenner - December, 2006
U.S BUSINESS REVIEW

North America is facing a talent and leadership shortage driven by three factors. The first two are demographics and never-before-seen levels of competition. In the next several years, the number of management jobs in North America is expected to increase by 3 million, while the 30- to 50-year-old demographic "sweet spot" from which managers and leaders emerge is expected to decline simultaneously by 3 million people.

It adds up to a 6-million-person deficit (see The War for Talent by Ed Michaels, Helen Handfield-Jones and Beth Axelrod, which was based on a McKinsey Co. study). At the same time, boards and financial markets are pressuring top executives to deliver more, better and faster as the lifecycles of products, technologies, strategies and even business models grow ever shorter.

The third factor driving the war for talent is the ever-deepening understanding that profitability is about performance, and performance is about people. Research has clearly demonstrated that when an enterprise has the right people and when these employees are engaged, then, among other desirable outcomes, revenues increase and turnover costs decrease. Why? Because engaged employees are measurably more motivated to work hard and go the extra mile for the customer (2004-2005 National Study on Workforce Engagement, Performance Assessment Network Inc.).

The components for building a talent portfolio are talent attraction, targeted recruiting, high-accuracy hiring, proactive on-boarding, talent identification, performance enhancement, career acceleration and succession management. Because talent is fundamental to value creation, winning the war for talent begins with attracting people who truly fit with the strategic direction of the enterprise.

A Strategically Branded Culture

Finding and identifying the "best-fit people" and placing them in the "best-fit roles" are basic and intuitive imperatives, but they are far from simplistic. There are only two tactics that will deliver on that score: one, having a strategically grounded "culture brand" for attracting and recruiting the best fits; and two, being able to carry out high-accuracy hiring to identify best fits.

The foundation of a strategically grounded culture brand requires crystal clarity about the organization's reason for being (its mission), its idealized future state (vision) and its fundamental cultural principles (core values). With those in hand, the enterprise can craft a compelling call to action (a strategy map and a blueprint for execution).

On this bedrock, a strategically branded, alluring culture evolves. It recognizes, responds to and incorporates the cultural elements that employees at all levels of the company find the most inspiring and motivating about any corporate culture:

  • Competent and caring leadership

  •   Industry leading business processes that add a "we're elite" message to the culture's brand
  •   A performance environment that reveres empowerment and accountability
  •   A recognition and rewards system based on contribution
  •   The opportunity to develop and advance
  •   Talented people surrounded by other talented people, with the right people in the right roles

    With all these moving parts operating smoothly, the culture's brand generates a power that far exceeds the sum of its parts. It exerts a very real force that attracts talent like a magnet.

    The Culture Brand in Practice

    Sound too good to be true? There are companies that are already putting it into practice. Take Excel Polymers LLC, a manufacturer of elastomeric products and services for the global industrial marketplace. When the Solon, Ohio-based company separated from parent Poly One Corp. two years ago, it set on a path of creating its own cultural identity.

    "Being a market leader in our industry is a value proposition that is important not only to our customers, but to candidates for employment," explains Florian Kete, vice president of human resources. "As a privately held company, we also have a flexible, entrepreneurial culture that attracts candidates who want to join a growing, market-focused, global organization that is an incubator for developing talent at all levels. That flexibility translates into an unconventional approach to career development.

    "For example, we may put a manufacturing employee into a sales role, or someone from finance into marketing," Kete continues. "Performance is one of our company values and we are willing to risk some of our results by challenging our people in ways they may not be accustomed to. People are not locked into one function; rather, their career path is determined by opportunity and their interests and past contributions."

    Excel Polymers began developing its culture brand at an offsite retreat for its top-80 leaders. Participants began by defining the values and behaviors that had made the company successful so far. "We then defined the new components we needed to add to our culture to be successful in the future," Kete says. "Finally, our senior management team met to distill the input of our total leadership team into five core company values: customers, people, performance, profit and teamwork."

    Excel Polymers then proceeded to codify an environment of respect, integrity and diversity; a safe and secure workplace; a learning organization; and a culture of accountability and responsibility. "Our last value - teamwork - ties it all together," Kete explains. "Our environment fosters teamwork to deliver customer-focused goals without internal boundaries.

    "We embrace trust and create respect among team members, and we strive to communicate effectively, which will result in enhanced teamwork."

    At its very core, a strategically branded culture is about a frame of mind rather than a set of tactics. If a top executive team can genuinely view the world and the competitive landscape through a strategic set of lenses, then the path to real-life and pragmatic implementation of the critical drivers is clearly visible.

    United by the belief in the power of strategic action, the top executive team, HR and various thought leaders come together with common purpose to devise and roll out potent branding mechanisms for the corporate culture. This is by far the most streamlined and efficient way to develop a culture brand that is highly attuned to attracting talent. "You've got to have a talent culture mindset," Kete notes. "If you treat talent as a commodity, you probably won't survive long-term."

    Culture was one of four primary areas that distinguished winners from losers in a five-year study of 160 companies ("What Really Works," Nitin Nohria, William Joyce and Bruce Roberson in Harvard Business Review, July 2003). The winners in this study had a serious imperative to develop and maintain a performance-oriented culture.

    The results? Over a 10-year period, investments in the winning companies multiplied nearly 10-fold, with total returns to shareholders of 945 percent.

    A New Perspective

    In a definitive study by consulting firm DDI (Leadership Forecast 2005-2006: Best Practices for Tomorrow's Global Leaders), "improving and leveraging talent" was the second highest of 14 business priorities for 4,500 executives worldwide. Just five years earlier, this same study found "talent" to be well down the list of priorities at No. 10.

    This dramatic change in perspective among leaders is a positive development, but acting on it is another matter. As the war for talent heats up - driven by this new perspective along with demographic and competitive pressures - the best weapons for winning it are in the arsenal embedded in the people value chain.

     
     
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