In this blog, I am discussing about the importance for companies to have the essence, which inspires the employees to stay in the company and attracts new talents.
"Attractive companies will retain employees even though the other employers would offer them higher salaries. This means that you have a story," dr. Nenad Filipović, Academic Director, IEDC–Bled School of Management
1. What is most important for a company to get to the top and to remain there?
In short: interpreting well the market situation and deciding for a business model which creates distinctive value for the customers. However, it is only “the ticket to play the game”, probably not more than 30% of the final result. The remaining portion is passionate and consistent implementation of chosen strategy, which is all about activating the human capital of the company. Without an adequate employee structure, both in terms of competency and motivation, there is no success of the company. Companies must recognize this fact and start to invest in the talent development of their employees. Only 15 percent of talent develops during education process, 85 percent happens at the job.
2. What does talented workforce mean for the development of business and economy?
It is very difficult to achieve a competitive advantage by traditional factors, including the low cost of labor. Only the internal knowledge resource and people, who maintain excellent relationships with clients, achieve the competitiveness of businesses.
3. What does it mean that a person is talented for the job?
The workplace is becoming an increasingly questionable category as companies increasingly operate on the principle, which exploits specific competencies of people, jobs are created and disappear depending on current needs of the market, and strategies ... It is much more flexible than it was in the previous years. By the way, important skills that are very respected and requested today are flexibility and learnability; trade unions should instruct their members about this necessity. In addition, multitasking and set of competences, which are displayed as knowledge and skills as well as behaviors, are also expected. If I take an example of the head of the bank office. In the past, this should be a person, who was familiar with banking products and operational processes of the bank. Today, if the bank wants to be competitive, this must be a person, who is good at working with people, knows how to motivate people and shows by example that it is necessary to be customer focused, helpful. These are not just competences in the field of knowledge, but also behaviors. It is also more difficult to develop such talents because it is easy to gain knowledge and experiences, whereas it is very difficult to change the behavior.
4. Who in the company or organization has the task of developing talents of employees?
This is the role of the executive director; the role of the HR manager can only be a professional service. Responsibility for the development of people is the responsibility of the leaders. Therefore, initiatives from below are very limited. We can create a team, where people trust each other, but it is useless, if the first level of leadership shows no understanding.
5. How can we recognize that a company leader has the talent to develop and motivate people?
A good sign is how quickly the company responds to changes. Companies that are more engaged in working with people and that have integrated talent development are also more responsive to change. After all, statistically speaking, more research shows that good talent development results in profitability.
6. How important are trainings and continuous achievement of new skills for employees?
The world is not standing still. In many areas knowledge becomes outdated fairly fast, which is why constant attainment of new knowledge and skills is important. Managers are under more pressure than frontline employees and are even more dependent on continues development. However, research consistently points in a surprising direction: as much as knowledge and skills are important, a) they are only to a minor degree developed “in the school”, most of it comes from on the job learning and reflection, and b) knowledge and skills are less important than attitudes, which can also be developed through concentrated effort, often including a combination of “external” education that has components dealing with personal development, project based learning, as well as coaching and mentoring.
And finally: if you believe that “money talks”, then a good argument is the research showing that the stock price of companies which are consistently on the Fortune list of best employers significantly outperforms the Fortune 500 index. If you are more in favor of academic jargon, then consider what else besides employee talent (including competences and motivation) matches the definition of resources providing sustainable competitive advantage: valuable, rare, inimitable and nonsubstitutable. Finally, if you believe in common sense, then the only way to beat the crisis is to get the best out of the people.
7. Will investment in lifelong learning and business education be returned and what is the average time frame?
Studies made about the investment a company makes into an Executive MBA education for a high potential employee show return on investment being on average less than a year. The assumption, of course, is that the employee gets the opportunity after finishing the education to contribute, which often requires changing the way company operates.
8. An evergreen question: what skills should a good manager posse?
I prefer the word competence to the word skill, since what drives success in management profession is a combination of knowledge, skills and attitudes. With the increasing speed of change in the ways we do business I believe we have got the confirmation that the same person can be a successful manager across different industries and business models. In my opinion that implies “transferable” set of managerial competencies, but I still believe that different competencies may be needed in different situations. Some of the more commonly needed ones include ability to create trustful relationship with others and influence them, lot of positive energy used in tackling demanding challenges, structured thinking. More can be added on the positive side of the character, but research shows that successful managers also need to be “bulldozers”, move ahead even when that creates some pain with others, focus on pursuing own goals.
9. Is there an ideal age for becoming a top manager?
The age question should be put in the context. If we talk about leading a large organization in reasonably stable conditions, there seems to be enough evidence that personal maturity is a large benefit. Now, some people become mature and wise at the age of 30, some never. When it comes to leading an agile, entrepreneurial organization engaged in newest technologies, we have the history of college dropouts creating and leading colossally successful, large companies at a very young age.
10. Is business education esteemed equally important in our region compared to the West European countries?
While business education is nominally recognized as important in the region, actual practice is driven by two negative factors. On the one hand side, financial realities make it difficult for many companies to pay high quality education. At the same time, they see little effect from the (lower quality) education they occasionally engage in, so the budgets remain very low. On the other hand side, there is genuine lack of appreciation of contribution people make to the strategy implementation, too many companies believe “command and control” approach gives sufficient results.
Let me illustrate this with an example. We have recently worked with a financial institution from a West European country that was suffering huge losses and was saved from bankruptcy through state intervention. When they asked us to help them in the process of turning around the company, and we jointly prepared the first draft of a set of activities with which we would try to help, I asked the CEO if he were not concerned with relatively high cost of the program. His answer was shocking. He said that all the bad results in the past were produced by people, either because they were not educated enough or because they had poor attitudes. Making significant changes, in his opinion, required major change in the heads and hearts of people. He said: “what is few millions of investment into people compared with billions of losses created in the past”. That kind of thinking we rarely see in the region.
11. Is business ethics more present in developed countries or in emerging markets?
Companies in emerging markets more often engage in unethical practices. Let us not have illusions, however. Siemens admitted paying bribes in excess of 1 billion euros from its telecom unit, Volkswagen put itself close to disaster by cheating on emission control. Several years ago there was a wave of suicides in France, provoked by mobbing, which is these days epidemic unethical behavior in developed countries. At the same time vast majority of managers I know try hard to behave ethically. As an illustration, IEDC – Bled School of Management MBA alumni are proportionally involved in significantly smaller number of law suits then there counterparts from leading US business schools.
Special comment: the comparative analysis of the Adecco Global Competitiveness Talent Index, which measures the ability to generate, attract and retain talent (2015/16), ranks Slovenia 26th among the 93 countries. What do we lack to become a leading “Switzerland”?
I do not believe in these macro stories of success. Country status may be contributing, but I think that the most important factor in the business world when it comes to generating, attracting and/or retaining talent is the internal company setting, which is co-formed by the company's management. If the leadership is able to create an interesting, captivating story, it will attract employees who will be committed and driven not only by monetary compensation, because payment is not measured only in money, but also in employees’ satisfaction – being part of the story, which is worth of the effort.