Yesterday I listened to a webinar on Growing Better Talent Faster produced by Rypple. It was presented by Marc Effron, author of One Page Talent Management: Eliminating Complexity, Adding Value (Harvard Business Press) Growing Better Talent Faster!
You can see the slides and recording through this link: http://rypple.com/webinar/marc-effron. The key message of this (taken from the book) was that over engineered performance management systems don't work for anyone. Looking at the related Rypple blog site the report they mention 2010 Study on the State of Performance Management (by World at Work and Sibson Consulting)
58% of HR executives gave their performance management systems a grade of "C" or below. A grade of "C" or below means "not effective." And…only 3% of HR executives gave their performance management systems a grade of "A" (meaning "extremely effective at achieving desired results"). The result of this is that leaders are not 'grown' through the performance management system.
Last week I listened to another webinar. This one by Bill Pasmore of the Center for Creative Leadership. It had some overlaps in that it too tackled some questions around what leadership skills are needed to compete in an environment that is becoming increasingly more "volatile, uncertain, complex, and ambiguous" It was offered through the Organization Design Forum and is available free to members or $49 to non members. Bill's point was that the organizations successful at growing leaders have certain characteristics. For example, they:
• Create attraction by making work fun and interesting
• Eliminate many of the barriers that exist in role-bound, hierarchical structures
• Embrace leaders with a love for what they do
• Hire and retain like-minded individuals
• Create constant challenge and welcome innovation
• Invent killer business models and products that generate revenue that sustains the energy and fun
• Build attractive places to work and attractive cultures to work in; a place that's a vessel for the human spirit
• Allow people to achieve their dreams
This means growing leaders who are capable of working in that style of environment. It seems a chicken and egg situation. Which comes first the leaders who develop that kind of culture or the culture in which that type of collaborative (rather than back stabbing, political, turf protector) leader can thrive?
So I was amused when a friend drew my attention to one of Lucy Kellaway's column in the Financial Times a couple of weeks ago Don't give hiring a moment's notice. Kellaway picks up the on the idea that 'Promoting people at random makes companies more efficient." She had found some research
developed by three Italians at the University of Catania who used mathematical simulations and game theory to make their point. If they are right, with one bound they have overturned everything we ever thought we knew about [performance] management.
She makes the point that the corporate world
has developed a raft of complex promotion systems, all based on merit. We compile long lists of "competencies" and draw matrices and give people scores. We do psychometric tests, give interviews, role plays, simulations. We have industries of HR people and headhunters to agonise about "skillsets" and "cultural fit". But even with the best will in the world, we often don't know what sort of merit we are looking for or recognise it when we see it.
A further trouble is that the people making decisions don't usually have the best will in the world. Instead we are swayed by all sorts of things we shouldn't be swayed by. How tall someone is, or how good looking they are. What school they went to. We compare them to ourselves and either hire people just like us or, under extreme duress from our chief diversity officer, we hire people because they are not like us at all.
She suggests that
"promotion and hard work aren't closely linked anyway. The random system would boost morale by eliminating petty politics and resentment. It would save acres of time. It would mean the dreaded word diversity was never heard again. It would be the end of HR and executive search.
Indeed the new system might even make the average person work harder. If I knew that I might suddenly become CEO tomorrow I would look sharp today, as I wouldn't want to disgrace myself. "
Just to confirm I looked up the research by Alessandro Pluchino, Andrea Rapisarda and Cesare Garofalo in it they show
by means of agent based simulations, that if the latter two features actually hold in a given model of an organization with a hierarchical structure, then not only is the Peter principle unavoidable, but also it yields in turn a significant reduction of the global efficiency of the organization. Within a game theory-like approach, we explore different promotion strategies and we find, counterintuitively, that in order to avoid such an effect the best ways for improving the efficiency of a given organization are either to promote each time an agent at random or to promote randomly the best and the worst members in terms of competence.
I'm now waiting for the research that proves that any performance management system – simple or over engineered – is promoting people at random anyway, and no-one can predict until they're in position whether or not they will be capable of steering the organization successfully in the "volatile, uncertain, complex, and ambiguous" world, and even if they can for a while they may not be able to in the longer term.
Naomi Stanford 