In 1997 McKinsey famously published a book entitled ‘The War For Talent’ – a compelling look at talent as the key lever of competitive advantage, containing a series of recommendations around the mindset and practices needed to recruit and retain the very best. So compelling was it, that if you Google ‘The War For Talent’ the first thing that comes up is a Wikipedia page dedicated to the book and summarising key content from it. In fact, Google turns up links to dozens of articles on the subject – the war for talent is over (2003), the war for talent is back (2007), the war for talent is fiercer than ever (2009).
What the Wikipedia page doesn’t mention is KPMG’s 2014 study showing that of the 106 original adopters of ‘war for talent’ practices fully one third have disappeared entirely. There is of course a lot more to their disappearance than their talent practices alone – after all which business over the last five years has not felt the pressures of competitive disruption? Be that as it may, most modern articles on the subject talk about those original ‘war for talent’ practices as now obsolete.
What solutions do they propose instead? They seem to fall crudely into two camps: one advocating more enlightened approaches to developing the whole team (not just those at the top of the bell curve), the other pulsating with stories of how to woo new talent by dazzling them with the coolest and most inspiring culture possible (see Etsy or Zappos).
But is this focus on updating your core HR processes (attraction, recruitment, career pathing) really the key challenge facing businesses in the modern age? Will funking up your culture by opening an employee day spa and installing a Michelin starred tofu bar really prevent your business from becoming one of the disappeared? I would argue not. The problem with both these approaches is that they lack strategic focus.
The real problem facing most large businesses in 2015 is that their current business model is under wholesale threat, and they seem unable to respond with the behaviours required to meet that threat. The digital tsunami is dramatically lowering barriers to entry – and at the same time dramatically raising customer expectations. Sustained growth is harder and harder to deliver through scale and efficiency alone. The current generation of talent is unwilling to pour its full energy into simply following orders.
The processes and practices needed to industrialise in the first instance (an era one might term Business 1.0), or create perfect business efficiency (Business 2.0) – are not the same as those needed to reinvent (Business 3.0).
What’s needed desperately to meet this new challenge is ingenuity, agility, experimentation, collaboration and ruthless focus across the whole organisation on delivering the best possible service to customers. To meet the challenges of Business 3.0, organisations have got to find a way to ‘be’ 3.0.
Being 3.0 is not just about crafting an inspiring purpose statement – it’s about ensuring your people understand how your customers’ lives and the market are changing, and creating clarity and energy around the role your business will need to play in this changing context if it is to survive and thrive.
It’s not just about creating schemes to suck up the product or service ideas languishing in the heads of junior employees – it’s about instilling a new and more agile problem-solving habit that kicks in automatically whenever your people are confronted by a tricky or ambiguous business problem.
And it’s not just about fostering a more human and more inspiring culture – it’s about designing deliberately the new behaviours needed to shift your organisation from the way it operates today to the way it will need to operate to win in tomorrow’s market.
In the apocalyptic aftermath of the war in Iraq, California Democratic Congressman Xavier Becerra remarked that ‘Winning the peace is harder than winning the war’. In this third age of business winning the war for talent is of course still important, but winning the peace once you have got ‘em – that’s going to be the real difference between success and failure.