This Week in Leadership (Nov 22 - Nov 28)
Surging COVID cases have leaders debating their return-to-office plans. Plus, business books for the holidays and tips for launching a second career.
Wanted: Talent that can change the world. That’s the proposition in what might seem to be an unlikely business sector—industrials. Increasingly, industrial companies large and small find themselves uniquely positioned to take on the planet’s most pressing problems, such as food supply, clean water, energy, transportation, the environment, sustainability, and security. But tackling such world-changing challenges requires far more than just best-in-class research and development and efficient production processes. More than ever, industrial organizations need world-class talent motivated by a bigger vision—talent that can easily find a home in other business sectors, especially technology.
To attract this top talent, industrial companies must tell a more engaging story as they redefine their value propositions as employers. Fortunately, industrial enterprises are gaining an edge: In a world seemingly obsessed with new digital tools and gadgets, industrial companies are already producing the real “killer apps” that have the potential to improve life on the planet.
This paper will address how industrial companies can and must become highly desirable destinations for talent that is motivated to address the world’s toughest problems. To engage these individuals, these organizations must define and project compelling “employer brands” as formidable as the challenges they seek to solve.
In recent years, attracting and developing game-changing talent took a backseat at many industrial companies. During the global financial crisis of 2008-2009 and the most severe economic downturn since the Great Depression, these organizations rightly put most of their efforts toward doing more with less: reducing production costs, cutting energy consumption, lowering risk, and scaling back innovation—in short, surviving. At the same time, they faced more stringent environmental regulations and adopted a compliance mentality, particularly around risk. With cost-cutting came downsizing and the loss of many industrial jobs. This led to the departure of some of the better workers and leaders with unique experience, knowledge, and skill sets. Some who remained often were not the most strategic or best suited to move their companies forward in a new, growth agenda.
Traditional industrial companies also have long suffered from stereotypes largely of their own making (e.g., encumbered by heavy assets and slow to change) that contributed to a particular leadership profile. Many of these organizations simply have not faced the same competitive pressures that have forced other sectors to become more agile and customer-centric. In much of the industrial sector, once a customer committed to buying large, expensive, and long-term products, components, and other assets from a particular supplier, the cost and disruption to change made it arduous to buy from another supplier. This allowed significant portions of the industrial marketplace to become complacent with innovation and the talent strategies to drive it.
Today, the competitive landscape in industry is changing. Supply chains are shrinking and customer demands are intensifying—all within a 24/7 information environment. Cutting-edge industrial firms “put themselves out of business,” eliminating old ways of doing things and committing to constant reinvention, innovation, and agile processes.
An analogous example can be found in the fashion industry—nimble and ever-changing as it responds to at least four full cycles each year. More industrial businesses will face compressed cycle times. Consider the example of a valve company that formerly updated its product line every three to four years but now must market new valves every six months to meet demand from new applications and markets and to respond to regulatory changes.
Across industrial product lines, the process from drawing board to market has accelerated, measured in months instead of years. “Industrial businesses are becoming more like consumer businesses in their pace of change, speed to respond, and improved user experience,”said Scott A. Buckhout, president and CEO, CIRCOR International.
To keep pace, companies need talent and leadership that can drive change in a rapidly evolving marketplace. The problem, as many executives admit, is that companies often do not know their talent well enough—the full capabilities of their existing talent or how and where to apply it in a rapidly changing business environment. “Perhaps the biggest challenge for many industrial leaders is they aren’t sure of their talent—who they have to do what,” Buckout added. “The CEO has to spend the majority of his or her time as the chief talent officer, becoming personally involved.”
Attracting, developing, and retaining talent that can envision, make, and market life-changing solutions to real-world problems starts at the top with a CEO who acts as “chief evangelist officer.” Industrial CEOs must become messengers everywhere as they meet and speak with potential talent on a personal and regular basis.
It is crucial for CEOs to be visible as guest lecturers at universities—and not just engineering schools, as usual. As those who are already engaged on campuses are seeing, there is a direct correlation between outreach at a variety of colleges and an increase in applications from graduates across many disciplines. “CEOs must use personal touch with schools to recruit the very best and brightest,” said John M. Ballbach, operating advisor, Clayton, Dubilier & Rice. “They also must be extremely well networked across their industry and personally involved in identifying where the very best talent resides.”
A strengthening U.S. economy and a booming tech sector have improved employment prospects for engineers. A decade ago career paths for graduates led to traditional industries (including chemicals and materials, electronics hardware, manufacturing, and biomedical). Today, engineering schools are seeing many of their graduates going into business-related careers, including consulting and finance. Technology firms (including all the big names) angle for computer science majors. With stiff competition for talent from other sectors, industrial companies must present a compelling vision.
As “chief evangelist,” the CEO establishes a vision to appeal to an audience broader than investors and Wall Street analysts. Employer brands that attract best-in-class leaders and talent at every level must address such questions as: Is the company perceived as market leader or follower? What is unique and different about the organization, its products and processes, and its go-to-market strategies? As industrial companies shift from the traditional “time in grade” to meritocracies, how quickly can talent advance in the organization to achieve success? How committed is the organization to embracing a bigger purpose of tackling critical issues on a global scale? Answering these questions with a compelling story helps to recruit, retain, and develop talent aligned with the business strategy. “Company success comes from having the right people. Get this right and the growth will come,” Ballbach added. “To attract that talent, industrial leaders must become more open, listen differently, accept less control, and become more agile. ... This is especially important for attracting top millennial talent that wants to have a personal connection with their leaders.”
As the No. 1 developer of talent from inside and outside the organization, the “chief evangelist officer” also needs to be a facile communicator in all forms across a digitally driven environment. Whether by emails, blogs, snap chats, town hall meetings, or one-on-one conversations, leaders should be comfortable communicating across geography, time zones, cultures, and generations through various channels.
The CEO’s talent agenda also needs to emphasize diversity and inclusion as strategic advantages for tackling global problems that must be solved in a local context. With greater diversity of all types (gender, ethnicity, race, culture, as well as experience, geography, background, and more) discussions become more robust and lead to greater collaboration, innovation, and creative problem-solving. There’s no such thing anymore as the “know-it-all” CEO; diversity of thought and experience are critical.
Increasingly, industrial leaders have a mandate to develop talent that can address global problems, discover and develop new markets, and expand the competitive advantage. There is no easy growth; top talent needs to create opportunities and win in a zero-growth environment.
Individuals are increasingly in charge of their own career development. (The days of 30 years with a company that managed promotions through time-in-grade are long gone.) Developing talent means putting people in assignments before they are fully ready to stretch their capabilities and gain new skills and experiences. This doesn’t happen magically. Companies need to scrutinize their success in attracting the talent they want to keep long term.
Consider the automotive industry: With tight regulation, more demanding consumers, greater use of technology, and complex global market challenges, automakers and suppliers are gearing up new talent strategies, especially to identify and develop leaders equipped with the requisite skills and capabilities. As Korn Ferry has found, that talent strategy must be clearly aligned with a company’s strategic objectives and the organizational culture. (Donkin and Binvel 2015)
Meanwhile, Big Data is being brought to bear on talent, with robust measures and metrics to identify and develop leadership capital, especially those who are or have the capacity to become high-impact contributors. Talent and leadership development requires best-in-class assessment and development tools, which can have a direct, positive impact on an organization’s long-term growth and success. As Korn Ferry has found, participants in leadership development programs show 35% performance improvement within two months.
Building a strong talent pipeline requires organizations to determine who has the motivation to lead. By identifying high-potential candidates early, they can be put in key developmental experiences to acquire competencies they will need to achieve success as they progress in positions of increasing responsibility. A valued trait among high potentials is learning agility, which Korn Ferry research identifies as a valid predictor of long-term leadership potential.
But only 15% of the global workforce is “learning agile,” Korn Ferry research suggests. When these individuals can be identified and developed, the payoff for the company is significant: Korn Ferry has found that companies with highly agile executives have 25% higher profit margins than their peer group. (Lewis 2013) Executives with high levels of learning agility, tolerance for ambiguity, empathy, and social fluidity also are five times more likely to be highly engaged. And individuals with high learning agility are promoted twice as fast as individuals with low learning agility. (Dai et al July 2014) Across multiple industries and positions of influence, the power of learning agility has been shown to promote flexibility and innovation, while helping executives adapt to the new and become catalysts for change within their organizations.
The reality is there is no shortage of executives and talent. Where the shortfall exists is in talent that truly stands out, people who might be described as ranking one standard deviation above the average. This talent demonstrates it can innovate, take initiative, and create value for all parties. The battle for high-impact talent is intense and complex on the global playing field.
Industrial companies cannot take for granted that they automatically will attract the talent they need—not even standard-issue engineers from top colleges and universities. Just as financial capital has no borders, increasingly leadership capital will operate in a borderless economy. Talent today gets courted globally for positions in Shanghai or Sydney, Mumbai or Milan. CEOs and other senior executives who present a compelling story of how their organizations successfully take on global problems will stand a better chance of winning the war for high-potential talent. These firms will have the vision, innovation, and highly motivated leaders and talent to create the high-impact solutions that can literally change the world.