Your Organization Needs an Open Talent Culture – Here’s Why
Some time before Jamie Dimon Bank One acquired JP Morgan, then Morgan CEO Bill Harrison described himself as the cultural manager. But culture hasn’t protected Morgan despite its 200-year history. In fact, it’s Morgan’s culture of slow and reluctant change that has made the company such a vulnerable acquisition target.
Culture was not the friend of Enron That is. His leadership created an environment that encouraged rampant greed and fragile business ethics, ultimately leading to the destruction of Enron. GM’s 2008 crisis was also culture-related. As the NY Times wrote“Having such a dysfunctional culture had direct and disastrous consequences for the quality of decision-making, perhaps most notably the way the company had collapsed from a financial cliff.”
Earlier in my HR career, the culture was regularly described as a secret sauce for business success. This view persists, as a recent article pronounced: “A work environment that has an organizational culture is driven by a clear purpose and expectations. This motivates and inspires employees to become more involved in their work tasks and interactions with others. It also leads to high levels of workforce engagement, which boosts productivity.
But culture becomes a limitation, not the solution, when leaders create a closed talent culture. According to Bertalanffy, the father of general systems theory, closed systems do not learn or adapt well to external events and trends. They are inwardly focused and do not listen or react effectively to changes in outside forces. In a closed talent system, there is too little movement of talent, not enough coming and going. For example, I joined Exxon as a young professional. It was then the most valuable company in the world, famous for its “cradle to grave” employment culture; senior external hires were unknown. And, as a result, the Exxon echo chamber filtered out growing public concerns about climate change. The closed talent culture has helped turn a highly respected company into a social pariah, which has significantly hurt its ability to attract future talent.
Bruce Henderson, founder of BCG explained the problem of a closed talent culture this way:
“All organizations, like all organisms, must adapt to changes in their environment, or die. All Organizations To do change when subjected to sufficient pressure. This pressure must either be external to the organization or result from very strong leadership. It is rare for an organization to generate enough internal pressure from the ranks to produce a significant change in direction. Doing so is likely to be seen as a form of dissatisfaction with the management of the organization.
Like Morgan et al learned, a closed talent culture worsens as the speed of change accelerates. And, its acceleration faster than ever. the half life of medical innovation has shrunk to 18-24 months. Knowledge of nanotechnology doubles every 12 months. Stanford researchers recently announced that before 2012, AI results followed Moore’s Law, with the calculation doubling every two years, but “after 2012, it was doubling every 3-4 months.”
Yet most organizations, even those that are changing rapidly in domains, remain attached to a traditional workforce model – the permanent employee – which can no longer keep up with the magnitude of the informational and technical changes it must face. respond, how fast it needs to respond.
This is a deep mistake. Organizations are more likely to remain responsive to external challenges and more innovative when they implement a flexible, mixed workforce – an open talent culture – that keeps windows wide open and talent flowing. Here’s why:
1. An open talent culture opens the organization to a new way of thinking. An open talent culture is adaptive change by learning from its temporary members. She can’t help it, she’s constantly immersed in the new information, best practices and innovations that her newcomers bring with them. A closed talent culture challenges newcomers to respect internal history and hierarchy: don’t rock the boat. In contrast, an open talent culture encourages freelancers to share what they know and have learned elsewhere. As Lee and Lai point out in their influential article, an open talent culture recognizes, seeks out and values insights from new permanent and temporary members on organizational learning and performance.
2. More inclusion means better talent selection. A closed talent culture too often leads to a workforce made up of people who have gone to the same schools, studied the same subjects and have similar backgrounds. We need not look far for examples. A recent HBR article found that organizational culture often stood in the way of greater opportunities for women and other marginalized groups. This happens much less in open talent cultures because the stakes are lower. Freelancers are brought in to do a job, and the requirements of the project rather than the selection drive the culture. And, because freelancers are temporary, leaders are more likely to let go of their biases and turn on the tap to greater diversity.
3. Open talent cultures are more agile and dynamic. Why don’t most organizations invest in continuous agile experimentation of their products and processes? According to recent research by Stefan Tomke, the problem is a closed talent culture. He writes, “As companies try to increase their capacity for online experimentation, they often find that the barriers are not tools and technology, but shared behaviors, beliefs and values. For every experiment that succeeds, nearly 10 fail, and in the eyes of many organizations that emphasize efficiency, predictability, and “winning,” those failures are a waste. In contrast, open talent cultures are rich in suggestions and experiences from freelancers who, as a global community, offer a Johnny Appleseed approach to sharing new tools and methods, for example, the Stanford Fast approach to product design and prototyping.
4. Open talent cultures support strong performance management. HBS Professor Gary Pisano pointed out that innovation demands high standards of performance and skill. But, he writes, most organizations don’t rise to the challenge of leaving employees who don’t meet the requirements: “A senior manager told me that unless there are ethics violations, the company rarely fires anyone in R&D for below average performance. When I asked why, he replied, “Our culture is like a family. We are not comfortable firing people. This is a problem because the requirements change. Open talent cultures avoid this problem by engaging more professionals in project work and reducing permanent employment relationships.
5. Open talent cultures encourage greater collaboration with external organizations. A to study government and business research labs have found that research organizations with open talent cultures encourage more cross-organizational cooperation and are more successful in driving entrepreneurial success. It’s no surprise that organizations that appreciate and welcome outside experts are more open to joint ventures and benefit from a greater network of opportunities.
6. Open talent cultures are better able to refresh their abilities. The most difficult problem for any leader is recognizing what skills their organization will need in the future, what will become obsolete, and how to ensure that the required skills are deployed where they need to be. An open talent culture, driven by a flexible and mixed workforce, solves this problem. Legacy functions are fewer and smaller, so the organization does not have to wait for the crisis to plan for change. Additionally, many marketplaces provide the talented professionals needed by businesses around the world, on demand. In many cases, the project can be managed remotely by freelancers, saving time and money. As the Fieldengineer.com Blog commented, mobilizing resources for the project rather than full-time, hiring professionals with the exact skills and experience needed, and mobilizing the right resources in weeks rather than months, an open culture of talents leads to a better solution.
the open talent culture is not new in concept. But the drivers of the open talent culture are allowing the mixed and flexible workforce to evolve at a pace that hasn’t been possible until now.
Long live the revolution!