SPOTLIGHT ON BUILDING THE WORKFORCE OF THE FUTURE
Speedy technological advances and expandingglobalization have created a powerful challenge to workers and their managersalike. This month we look at new and adaptive approaches to employee trainingand education, performance appraisals, and talent acquisition.
Managing Organizations
Why Leadership Training Fails—and What toDo About It
Michael Beer, Magnus Finnström, and DerekSchrader | page 050
U.S. corporations spend enormous amounts of money—some $356 billion globally in 2015 alone—onemployee training and education, but they aren’t getting a good return on theirinvestment. People soon revert to old ways of doing things, and companyperformance doesn’t improve. To fix these problems, senior executives and theirHR departments should change the way they think about learning and development:
Because context is crucial, needed fixes inorganizational design and managerial processes must come first.
The authors have identified six commonbarriers to change: (1) unclear direction on strategy and values, which oftenleads to conflicting priorities; (2) senior executives who don’t work as a teamand haven’t committed to a new direction or acknowledged necessary changes intheir own behavior; (3) a top-down or laissez-faire style by the leader, whichprevents honest conversation about problems; (4) a lack of coordination acrossbusinesses, functions, or regions due to poor organizational design; (5)inadequate leadership time and attention given to talent issues; and (6)employees’ fears of telling the senior team about obstacles to theorganization’s effectiveness. They advocate six basic steps to overcoming thesebarriers and achieving greater success in talent development.
HBR Reprint R1610C
Assessing Performance
The Performance Management Revolution
Peter Cappelli and Anna Tavis
page 058
Hated by bosses and subordinates alike,traditional performance appraisals have been abandoned by more than a third ofU.S. companies. The annual review’s biggest limitation, the authors argue, isits emphasis on holding employees accountable for what they did last year, atthe expense of improving performance now and in the future. That’s why manyorganizations are moving to more-frequent, development-focused conversationsbetween managers and employees.
The authors explain how performancemanagement has evolved over the decades and why current thinking has shifted:(1) Today’s tight labor market creates pressure to keep employees happy andgroom them for advancement. (2) The rapidly changing business environmentrequires agility, which argues for regular check-ins with employees. (3)Prioritizing improvement over accountability promotes teamwork.
Some companies worry that going numberlessmay make it harder to align individual and organizational goals, award meritraises, identify poor performers, and counter claims of discrimination—thoughtraditional appraisals haven’t solved those problems, either. Other firms aretrying hybrid approaches—for example, giving employees performance ratings onmultiple dimensions, coupled with regular development feedback.
HBR Reprint R1610D
Managing People
AT&T’s Talent Overhaul
John Donovan and Cathy Benko
page 068
AT&T, which built the U.S.communications infrastructure in the past century, could once claim to be thecompany “where the future was invented.” But now its legacy businesses arebecoming obsolete. With its industry moving from cables to the cloud, AT&Tis in a race to reinvent itself. As part of that transformation, it hasinitiated a massive effort to help its workers acquire new digital skills.
In this article Cathy Benko, vice chairmanof Deloitte, and John Donovan, AT&T’s chief strategy officer, offer a lookinside the company’s ambitious program, dubbed Workforce 2020. The challengesare sizable: The firm employs 280,000 workers, and their average tenure is 22years (not counting people in call centers). At least half the workforce hasbeen assigned a new role and is expected to get the credentials or training tofill it.
To manage the talent overhaul, the companyhas revised its performance metrics, raised performance expectations, andredesigned compensation plans. It is also providing workers with a host oftools for training and development through an online self-service platform,courses in new technologies, tuition reimbursement, and even online master’sdegrees in computer science, developed with Georgia Tech and Udacity.
HBR Reprint R1610E
The Future
Globalization, Robots, and the Future ofWork
Former CEO of ManpowerGroup JeffreyJoerres, interviewed by Amy Bernstein | page 074
When Jeffrey Joerres first joined Manpower,in 1993, the labor market was relatively stable and the company still focusedlargely on traditional office, clerical, and industrial staffing. But sincethen globalization and rapid advances in technology have dramatically reshapedthe employment landscape. During his 15 years as CEO, Joerres expanded thecompany’s international operations and moved into the increasingly competitivemarket for IT, finance, and engineering professionals.
In this interview with HBR’s editor, hedescribes how micromarket analysis reveals “geolocated pools of skills” thatbusinesses can tap—until competitors muscle in, deplete the skills pool, anddrive up wages. So companies must acquire a “nomadic mentality” that will allowthem to establish more-temporary, smaller operations as well as large ones. Heacknowledges that “when full-scale robotics and artificial intelligence arrivein a broad-based, affordable, easily justifiable way,” hordes of workers willbe displaced, with little or no preparation for very different jobs. Joerresadvises companies that want to develop a workforce strategy to put multiplework models in place—crowdsourcing, distant manufacturing, temporarycontractors moving to full-time—and truly practice them. “When are we done withthis efficiency thing?” he says. “The answer is never.”
HBR Reprint R1610F
The Big Idea
DecisionMaking
Noise
Daniel Kahneman, Andrew M. Rosenfield,Linnea Gandhi, and Tom Blaser | page 032
Organizations expect to see consistency inthe decisions of their employees, but humans are unreliable. Judgments can varya great deal from one individual to the next, even when people are in the samerole and supposedly following the same guidelines. And irrelevant factors, suchas mood and the weather, can change one person’s decisions from occasion tooccasion. This chance variability of decisions is called noise, and it is surprisinglycostly to companies, which are usually completely unaware of it.
Nobel laureate Daniel Kahneman, a professorof psychology at Princeton, and Andrew M. Rosenfield, Linnea Gandhi, and TomBlaser of TGG Group explain how organizations can perform a noise audit byhaving members of a professional unit evaluate a common set of cases. Thedegree to which their assessments vary provides the measure of noise. If theproblem is severe, firms can pursue a number of remedies. The most radical isto replace human judgment with algorithms. Unlike people, algorithms alwaysreturn the same output for any given
input, and research shows that theirpredictions and decisions are often more accurate than those made by experts.
Although algorithms may seem daunting toconstruct, the authors describe how to build them with input data on a smallnumber of cases and some simple commonsense rules. But if applying formulas ispolitically or operationally infeasible, companies can still set up proceduresand practices that will guide employees to make more-consistent decisions.
HBR Reprint R1610B
How I Did It
Strategy
The CEO of Popeyes on Treating Franchiseesas the Most Important Customers
Cheryl Bachelder | page 080
During her career, Cheryl Bachelder hadbeen a senior executive at two other food franchising companies, Domino’s andKFC, and she’d learned to love the model. But when she took office at Popeyes,in 2007, which was struggling from a lack of strategy and too much short-termthinking, she found that the company’s relationship with its franchisees wasseverely strained. As she and her team worked to turn Popeyes around, theywould have to both regain the owners’ trust and fire up their enthusiasm forthe future. They would also have to create an arsenal of brand-building ideasand a national advertising campaign to build consumer awareness.
In talks about how they should lead andwhich stakeholders should be their primary focus, the team members settled on amodel called “servant leadership,” in which the people of an enterprise comebefore self-interest. And they agreed that Popeyes franchisees should be theirmost important customers: “No one,” Bachelder writes, “has more skin in thegame.” The company conducted its first in a series of franchisee satisfaction surveysand began measuring what matters most to owners, namely restaurant-levelprofitability. It launched a number of winning new products and acquiredsophisticated software to help franchisees choose the best locations for newrestaurants. The result has been eight years of steady growth.
HBR Reprint R1610A
Managing Yourself
Don’t Let Power Corrupt You
Dacher Keltner | page 127
A paradox of power is that people gain itthrough virtuous behaviors such as collaboration, openness, fairness, andsharing, but once they enjoy a position of privilege, those finer qualitiesstart to fade. Research shows that the powerful are more likely to engage inrude, selfish, and unethical behavior. This tarnishes their reputations,undermining their influence, and creates stress and anxiety among theircolleagues, dragging down their teams’ engagement and performance.
Dacher Keltner, a psychology professor whohas studied this phenomenon in a variety of professional settings, describeshow executives can avoid succumbing to this syndrome. The first step isdeveloping awareness: being attentive to the feelings that accompany a rise toleadership, practicing mindfulness, and looking for warning signals in yourbehavior. The second is to remember and try to practice the three ethics ofgood power—empathy, gratitude, and generosity—in your interactions, meetings,and communications every day.
HBR Reprint R1610K