Hiring and Acquiring – Two Sides of the Same Coin?

Hiring and Acquiring - Two Sides of the Same CoinIt is hard to imagine two organisational activities that result in more high profile, costly failures and reputational damage than corporate acquisitions and senior level recruitment (although culture change probably comes close). Situations where high hopes and strong rationale underpinning an acquisition or senior level hire can quickly give way to the realisation that a big mistake has been made are all too common. At first glance they may not seem to be too similar; yet both activities share some of the same fundamental problems and issues. Given that failure in these activities is hugely damaging to businesses, isn’t it time businesses changed their approach to hiring and acquiring?

Let’s start with the obvious; both senior level recruitment and acquisitions are notoriously hard to get right, failure rates for recruitment are estimated to run at around 40%, whilst anything between 50% and 90% of M&A transactions fail to deliver on planned outcomes. Interestingly, these high failure rates seem to be consistent over time and despite new understanding and advances in knowledge of organisational behaviour there has been little change or innovation in the way businesses approach these activities.

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HR and Big Data; Jumping the Gun?

HR and Big Data

Despite tangible benefits in other areas, the value of HR and Big Data is unclear.

Much has been written in recent months about the potential for HR and Big Data (here) to transform the way HR can influence a business. Meghan M. Biro wrote a piece at Forbes (here) about how some forward thinking, predominantly tech focused businesses are investing in sophisticated data mining technologies in order to uncover the hidden behaviours and characteristics that lead to successful performance.

Big Data’s greatest HR value may well be as a predictive tool. By analyzing the skills and attributes of high performers, Big Data allows organizations to build a template for future hires. HR and leaders can learn what to look for with incredible precision.

Big Data is undoubtedly a buzz word in the wider economy. The use of new database analytics capable of crunching huge amounts of data, offers up the tantalising prospect of being able to uncover hidden patterns, trends and relationships that have until now remained unknown. Given the escalating amount of #hr247 information we generate every day of our lives, it seems to make sense to try and use this information to gain genuine insight.

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Rethinking the War for Talent

Despite advances in technology, selection methods and years of cumulative experience; organisations continue to struggle squaring the recruitment and talent puzzle. Arguably, with all the tools currently available to them, businesses are no better at recruiting than they were 20 years ago. Whilst new technologies and social media have widened the net, there is little evidence to suggest that decision making is improving or that organisations are better at understanding what makes a successful hire. Maybe it is time that we re-frame the talent question and look at recruitment decisions through a different set of filters?

Recruitment and talent management has traditionally focused on the individual; most notably track record and aptitude or ability, in other words the tangibles that can be relatively easily measured and compared. Undoubtedly, organisations are adept at assessing the aptitude or capabilities of potential recruits. However, individual characteristics and capabilities are only a relatively small part of the overall performance of a new recruit at any level in the organisation.

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3 Barriers to Adaptability and Change

AdaptabilityThere are 3 barriers to adaptability and change.
  1. Prioritising Short Term Profits
  2. Short Term Thinking
  3. An Addiction to Core Revenue Streams

Building on a post from Gary Hamel on the Hacking HR site, the 3 barriers typically serve to undermine or stall attempts at creating adaptability and change. Let's examine each of these three factors in turn, how they feed off each other and how they create barriers to adaptability.

Adaptability Barrier 1. Prioritising Short Term Profits

Many of the highest profile companies are also public companies and public companies have always been held accountable by their shareholders every quarter. The rise of the 'shareholder value' movement, the demands of banks, investors and analysts, the increasing speed of information flows and the desire to continually improve economic performance have all played their part in creating an environment in which short term results are deemed more important that long term performance.

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Can You Predict Team Performance?

Team PerformanceFollowing on from a discussion on Linkedin, Steven Forth, co-founder at Nugg recently asked the following:

Are there also analytics than can let teams know, in advance, that a project is likely to fall behind or fail?

This question gets to the heart of the recent ideas around predictive team analytics and the notion of a 'Physics of People'. It also follows on from another piece from Steven where he wrote:

Emotions matter and teams need to have some form of empathy. Not something software is generally good at, so we need to find ways to compensate for this.

In addition to the points raised by Steven is research from Harvard, MIT and others, pointing to the fact that 10 - 40% of team performance is determined by psychological factors such as empathy, relational cohesion and the nature of interpersonal communication.

Predicting Team Performance

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The Complex Drivers of Performance

A recent post by Om Malik (here) sets about dissecting the recent departure of JC Penney CEO Ron Johnson after only two years in the job. Formerly the head of retail for Apple; clearly it was expected that he would be able to bring some of the Apple retail magic to JC Penney. Malik's assertion that spectacular success is as much down to the collective efforts of groups and contextual factors as it is the ability of key individuals to drive things forward reminds me of Bill Taylor's HBR article (here) questioning the emphasis organisations place on "superstars". At the time Taylor's article generated a huge (mostly negative) response. However, I'm starting to think that the unquestioning belief in the "we only hire the best" mantra is rapidly losing its allure.

The notion of the superstar is a beguiling one but unfortunately for corporate HR departments, it is an overly simplistic view. Surely, success has far much more to do with more complex variables such as; working environment, culture, relationships and other contextual factors than with the brilliance of a few key employees. As Boris Groysberg wrote (here) we really are fooling ourselves if we think that success can attributed to the abilities of talented individuals. In short, to transform any poorly performing group or organisation, requires far more than the parachuting in of someone with a great track record in a completely different environment.

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Actionable and Predictive Team Analytics

Predictive Team AnalyticsI've been thinking a lot about the value of actionable and predictive team analytics recently and a post from Naomi Bloom struck a chord.

From her piece:

Analytics — what types of actionable, embedded, and/or predictive analytics with what types of visualizations, e.g. network analyses is becoming quite prominent when organizations try to figure out what roles and individuals have the greatest business impact? And I should emphasize here that this is about getting real insight to decision-makers in a form they can use when they’re in the middle of making that decision rather than just having a wonderful report-writer or business intelligence solution with which they can figure out the questions and search for the answers. Please note that I haven’t treated so-called “big data” as a separate topic (although everyone’s calling anything big data at the moment) because the real goal is actionable, ideally predictive, analytics, for which the management of big data is a necessary but not sufficient capabilities.

The significance of actionable and predictive team analytics cannot be understated. Tools that offer decision makers simple, actionable, valuable and consistent advice is key. Additionally, these capabilities have arguably been missing from the practice of anyone wanting to improve the engagement, well-being and performance of their staff or team members.

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A Physics of People and The 5 Criteria to Transform Business

Physics of PeopleBased on the recent comments from Stowe and Justin, the idea of a Physics of People is both valuable and represents something potentially unique. Given that the idea has the potential to transform business, the following post outlines the five criteria by which any transformation might take place.

A Starting Assumption

Although there is no shortage of models, assessments, psychometrics and techniques that help raise self awareness and provide insights, none offer predictions about people that are either regular or reliable enough to be used on a widespread basis.

The large number of tests, models and approaches is evidence of this. If a particular tool did provide useful and reliable predictions that improved understanding and decision making, then it's usage and popularity would increase over time. Given that the vast majority of techniques and approaches have been on the market for 20 or 30 years plus, this is ample time for a consensus or market leader to have emerged with these qualities.

The other example that illustrates this assumption is the perception that HR doesn't add value to the business. There is no shortage of commentary around this and in many cases, this line of reasoning has persisted since the Personnel Department was renamed Human Resources. The fact that HR can't call on any widely used method or approach that offers reliable and actionable predictions and insights about people is probably one of the reason's for this current perception of HR.

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Socialogy and Social Business – An interview by Justin Kirby

Socialogy and Social Business - An interview by Justin KirbyI was interviewed by Justin Kirby on the subject of Socialogy last week.

Justin and I had previously collaborated on Collaborative Innovation on behalf of Nesta.

The interview runs to about 20 minutes and the main topics we covered were as follows:

  • Four Groups’ 4G methodology and human capital management software platform
  • The 5 factors required for business transformation, i.e.
    • Simple to explain
    • Scalable and predictable
    • Changes to people’s jobs
    • A return on investment (ROI)
    • External validation
  • The use of these 5 factors of existing innovations versus Social Business
  • Stowe Boyd’s ‘Physics of People’ and the holy grail of predicting behaviours

Listen to the interview below.

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Peopleware and Social Business – A Missing Piece?

PeopleWare and Social BusinessDespite the fact that the term 'peopleware' was first coined in 1977 and a book by the same name was published in 1987, there is little contemporary mention of peopleware today in social business circles. With this in mind, there was an interesting call for the need to balance the software tools of social business with 'peopleware' via Jamie Notter recently.

From Jamie's piece:

Today’s environment requires speed, which, in turn, requires the people and departments in your organization to collaborate effectively. Friction there slows everything down. We put up with that in the past and did okay, but the same won’t be true moving forward for a real social business. So I think as leaders start paying attention to what “social business” means, they will start to employ tools that enable better collaboration, both inside and outside the organization.

As the use of social business tools increase the speed of change, interactions and collaboration, previously hidden inefficiencies and communication problems are going to be discovered. It doesn't matter how these inefficiencies are discovered (social network analysis, project delays, employee feedback etc.), the point is what to do about them.

Jamie believes that organisations will turn to more software tools but that the software tools themselves won't resolve these frictions.

But I have a prediction: [companies] will over-rely on technology to solve this problem. The tools are becoming increasingly sophisticated and easy to use. So by all means, jump into those tools, but also recognize this: online tools won’t solve your silo issue. Collaboration software alone is not going to resolve conflict.

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