Models for managing talent and innovation in organizations

Estimated reading time: 12 minutes

Editor’s note: Enrique Dans (@edans) has let us republish this article from his blog where he talks about how do companies manage talent and innovation?

Here’s an interesting question: how do companies manage talent and innovation, and what models can we use to map them? Working on the basis that any organization needs to attract new people of varying ages and experience on a regular basis, we can identify a range of variables that affect their ability to do this.

On this basis we can see a number of models, which I tend to categorize thus:

Sparta

Companies that tend to attract younger talent, and then create mechanisms whereby said talent is only happy when performing at the highest level. Demanding organizations, they tend to be constantly measuring and evaluating their team, and normally end up creating something of a performance cult, which means that those who stay do so because their merits are beyond discussion. We’re talking here about a culture that recognizes and rewards effort: if you’re not up to the job, you will soon feel excluded and uncomfortable, and be obliged to leave. These companies are sometimes known as up or out operations.

The Dead Sea

The very opposite of the previous model, and much more widespread than is generally recognized. They tend to attract talent in different phases of development, but after a period of adaptation, employees realize that there are too many obstacles for them to express themselves, leaving them the option of adapting to a poorly functioning system, or having to leave in search of a company where they can better develop their talent. Generally, those who stay are less motivated and ambitious, which, coupled with poor training policies, ends up converting them into people with little motivation to find a another position of similar responsibility in another organization; they end up becoming a kind of sediment that often ends up putting off new talent from joining. Such organizations are usually highly bureaucratic, working along civil service lines, and where the goal is tenure.

Work your way up through the ranks

Organizations that tend to attract very young people, and where promotion is either a question of filling dead men’s shoes, acquiring experience, or having filled a certain post for a period of time. These types of companies are dying out, based as they are on the concept of a “job for life”. They share some characteristics with the previous category.

Nursery

Such companies seek to provide as comfortable an environment as possible, allowing employees to focus on their work with as few obstacles as possible. They seek to hold onto their talent, which is not easy, because the idea of having to organize all the factors that the company provides is not an attractive one. These companies offer perks in the form of bonuses, mentoring, and coaching, share plans and evaluation systems that guarantee that those who are incentivized to stay are those that should stay, given that staying with an organization is seen as the natural thing to do, and which therefore occasionally have to “invite” those who do not meet expectations to leave.

Ajax

The name comes from the Dutch soccer club famous for its youth team program that provides a constant source of new, in-house trained talent. The problem here is that it is difficult to retain said talent, as there are so few opportunities for promotion. People do not leave because they are unmotivated, but because they are attracted by the opportunity to further develop their skills in other organizations, which in turn will likely offer better salaries or working conditions. Leaving such a company is not seen as failure, and more often a rite of passage, a mark of success in moving on to a new phase in one’s career. In some cases though, staff are obliged to move on: in many prestigious US universities, for example, the rule is: “We don’t eat our own shit,” meaning that graduates of doctoral programs are never hired.

Mecca

This model is based on Islam’s holiest shrine, a place of pilgrimage that everybody should visit at least once in their life. These companies have no problem attracting talent, but only the best need apply. Such organizations offer a high level of cross-fertilization, of information sharing, teamwork and the opportunity for considerable personal and professional development. In some cases, these types of companies are able to offer low salaries at entry level, aware of their ability to attract the best for other reasons. Salaries may increase over time, or may not, so as to encourage rotation based on the models outlined above. This is typical in companies with a first-class reputation that will look good on a CV, offering young talent the opportunity to work with professionals of the highest standards, and to join a highly valued work culture. Examples would be Johnson & Johnson or Procter & Gamble, or some of the prestige tech firms.

Hotel California

As the Eagles song says, “You can check out any time you like, but you can never leave.” These are companies that like to retain links to former employees, directors, or teaching staff and alumni of all levels with the goal of creating a huge network of talent to draw on. On occasions this can be used as a complement to other strategies: somebody may leave and be highly successful, yet they not only maintain their link to the organization, but may think of returning later on in their career. These are typically professional services organizations that use their network of former employees as a way into other organizations.

There are many others, and these are simply examples of the ones I find most interesting when discussing the subject. The way that companies address these questions have a huge influence on their in-house culture, in generating innovation, and on many of the aspects that make them successful or sustainable: they are aspects that tend to be difficult to change, requiring considerable commitment, and that can set in motion unpredictable consequences. But that doesn’t mean it isn’t worth thinking about…

Enrique Dans (@edans) is Professor of Information Systemas at IT Business School and blogger at enriquedans.com.