The Shortlist: How to school yourself on talent

Our best ideas, quick and curated | June 28, 2019

This week: How realistic are leaders about their talent strategies? Plus, the CEO of Informatica on how data drives value, and reading picks from Tera Allas, a director of research and economics in London, who also happens to be a Commander of the Order of the British Empire. And speaking of Britain, the Shortlist is taking the July 4 US holiday off. We’ll see you back here on July 12.

Your organization recruits, trains, and promotes the best people. Your HR department is hard at work and the C-suite is engaged, confident that you have the right talent to maximize your company’s value. But could you be too confident—in the same, uneasy way that three of four drivers believe they’re above average?

McKinsey recently conducted a survey of 500 managers in the United Kingdom as part of a research project with the Confederation of British Industry. The findings suggest that CEOs and HR leaders may take a more rose-colored view of their talent practices than others in their organization.

Among CEOs and HR leaders, 64 percent said their companies were high adopters of 21 generally accepted talent practices—recruitment, employee engagement, team efficiency, and so on. Yet just 42 percent of other respondents from these same companies agreed with them. CEOs were twice as likely to say their companies excelled at knowing “who the best people are and put[ting] them to work on the most important business priorities.”

The problem is that even when best practices are well understood in the executive suite, the rest of the company might receive a far different message. Like, we don’t have time. Our management doesn’t value the practice. People who deliver continuous improvement aren’t rewarded.

One nugget that stood out: 37 percent of respondents said they have more important things to worry about than changing recruitment processes to improve workplace diversity—despite a growing body of evidence linking gender, ethnic, and cultural diversity to positive business outcomes.

And workers are paying attention. A 2018 survey found that poor management was the top reason UK employees weren’t happy in their current roles, and comparable US studies also suggest dissatisfaction with leadership is commonplace.

The good news: fixing the imbalance may not take a massive overhaul, if the people with the right skills are matched with strategic positions. At even the biggest companies, a tiny fraction of positions—50 or fewer roles in all—deliver the majority of value. Many of these people won’t all be at the top of the organization, with some key roles found several layers beneath the C-suite.

Companies that embark on a process of soul searching may find themselves long on talent—or short. Here are some good ideas on how to build talent, rent it, or redeploy it.

OFF THE CHARTS

The patient will see you now

Technology-driven innovation holds the potential to improve our understanding of patients, enable the delivery of more convenient, individualized care—and create $350 billion to $410 billion in annual value by 2025. That’s because the great bulk of the data generated by patients are related to societal and environmental influences, which determine 60 percent of overall health outcomes. In fact, there’s 2,750 times more data on those factors than on clinical care, which contributes only 15 percent to outcomes.

Power partnerships, retail-style exhibit

INTERVIEW

How to go deep with data

Anil Chakravarthy, the CEO of Informatica, one of the world’s largest providers of cloud-based services for managing data across multiple environments, talks about how new technical and organizational approaches can create value.

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WHAT WE’RE READING

Tera Allas

Tera Allas leads McKinsey’s research on government and business productivity, and serves as a trustee of the Royal Economic Society, the National Institute of Economic and Social Research, and the United Kingdom’s Productivity Leadership Group. In 2018, she was appointed Commander of the Order of the British Empire for services to economic policy.

While a little heavy going at times, The Book of Why: The New Science of Cause and Effect by Judea Pearl and Dana Mackenzie, is a clear exposition of how humans make sense of cause and effect, how statistics can help and hinder this process, and why artificial intelligence is more likely to complement people than take over from them. The science and techniques for separating correlation from causality should be foundational teaching at all schools. I certainly wish I had been taught this in my first year at university and encouraged to apply it again at every stage in my career.

The Path to Purpose: How Young People Find Their Calling in Life by William Damon offers a thoughtful analysis of the confusing reality facing today’s teenagers trying to figure out what to do with their lives. Many of us are familiar with the Japanese concept of ikigai, or a “reason for being”: the simple idea that a fulfilling life is likeliest if we find work that we’re good at, we enjoy doing, is valuable to society, and someone is willing to pay for. I wanted to go beyond a helpful framework, though, and the book was illuminating on two fronts. First, it emphasizes the plurality of purpose. Purpose doesn’t have to be noble—even just “putting food on the table” qualifies, as long as an individual finds it meaningful. I can see lots of children dismissing any discussion about purpose if it comes across as too theoretical. Second, role models and mentors—including outside the immediate family—are instrumental in helping teenagers find their way.

I’m frequently delighted by the breadth of insights in the Bank Underground blog posts written by Bank of England staffers. Most recently, I’ve learned a lot by reading blogs on the application of machine learning to central banking, an experiment on how fund managers approach risk taking (depending on their remuneration scheme) and a big data analysis of the link between unfilled jobs (vacancies), unemployment, and wages.

Hello World: How to be Human in the Age of the Machine by Hannah Fry is a terrific summary of all the different spheres of life where algorithms are already used to make decisions, such as healthcare, transport, finance, security, what we watch, where we go, and even who we send to prison. The stories with positive and negative examples, and the clear articulation of the challenges yet to be resolved, make this an informative, balanced, and entertaining read.

Even though I don’t buy into all the political views expressed in The Guilty Feminist, this podcast is hilarious and a nice antidote to more mainstream media. The women are impressive in their eloquence and wit, and the issues raised are thought-provoking, such as how the film industry might be perpetuating gender stereotypes, or the rights and wrongs of taking maternity leave when you are the prime minister of New Zealand. The podcast always includes a section where guests complete the sentence, “I’m a feminist, but …” illustrating the moral (but light-hearted) conundrums they find themselves in. For example, “I’m a feminist but … one time I went on a women’s rights march, and I popped into a department store to use the loo, and I got distracted trying out face cream. And when I came out the march was gone.”

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