Buying startups and shutting down their business in the name of acquiring talent is a hot trend—and one easily destined to fail.

Talent retention in ‘acqui-hiring’ fails most often for the same reason it has always failed—culture.

And before anyone offers the ‘large company culture vs. startup culture’ argument let me point out that Google and Facebook are large companies, not startups.

Retaining acquired talent isn’t a new problem and I addressed it in 2006 from the other side, i.e., a young company wanting to maintain its culture as it acquired smaller companies.

Realistically speaking, I don’t care how cool the culture and perks at Google and Facebook are, there is no way they or similar companies can provide true startup culture, camaraderie, or environment.

But it is amusing (if you don’t own their stock) to watch them try.

In the same vein, why is it so surprising when long-term employees leave?

The media loves to feature stories about turnover at Google, Facebook, Zynga, Groupon, Amazon, even Microsoft and other startup-no-longer companies, while ignoring the same turnover at Cisco, Intel and. IBM

When will they learn?

Those who get a thrill creating something from nothing and building foundations may start losing interest when the scaffolding for higher stories goes up and become totally disinterested when the walls go in.

High salaries, excessive stock options, even powerful positions may hold them, but retention doesn’t always translate to productivity or cultural harmony.

All I can say is caveat emptor and don’t whine if (when) it doesn’t work.

Flickr image credit: AKZOphoto

I thought it was time to check back for a snapshot look at what’s happening in terms of people in the workplace.

First, an overview from Boston Consulting Group’s six-part article (free registration required) that presents strong support for the idea that you get more from your people by providing more for them.

Those that excel in leadership development, talent management, and performance management, for example, experience substantially higher revenue growth and profit margins.

I remember the oil crash in the mid-1980s; I was working in executive search (I was a headhunter) and I watched as several recruiting firms devoted to oil and gas closed their doors when the industry crashed, laid off, stopped hiring and adopted Draconian HR policies. Those companies are currently reaping that which they sowed, with the exception of Devon Energy Corporation. (Booz & Company’s strategy + business requires free registration.)

When the oil price fell, companies stopped hiring, and a generation of geological science and engineering students chose other fields of study instead. Now, as turnover rates rise and competitors lure away skilled engineers, this talent gap means that human capital capabilities have been strained for nearly every company in the industry.

As a life-long single this article on the inequities of so-called work-life balance between those with kids and those without really resonated.

As a result, many Americans who work for companies that embrace flexible hours are confronting a sort of office class warfare. Some employees have come to expect that the demands of their children, in particular, will be accommodated — and not all of their colleagues are happy about it.

Quick; what has changed most since you started work? How ‘bout summertime Fridays?

Everyone leaves work at noon on Fridays, said Ben Morris, 31, a British photographer who was a host of one of the Thompson parties, which start at 3 p.m. “People just leave the office. And Mondays become a write-off because no one’s there on Friday. They’re playing hooky.”

“We used to go out a lot at night, but we’re getting older, concentrating on our future,” said Reign Apiim Artis, 23,

Flickr image credit: pedroelcarvalho

Today we look at some interesting commentary on the state of the talent force (I positively detest the term ‘human capital’); some new and some seriously old.

Companies frequently hire from the outside based on the idea that new blood is good for the organization, but is it?

According to Wharton management professor Matthew Bidwell, “external hires” get significantly lower performance evaluations for their first two years on the job than do internal workers who are promoted into similar jobs. They also have higher exit rates, and they are paid “substantially more.” About 18% to 20% more.

Have you wondered if the job market will ever turn for more than the young tech-enabled? Maybe not quickly enough, but time does move on and demographics will not be denied.

A Human Capital Zeitgeist, is emerging as companies big and small are getting smacked with the realization that talent management is SO critical to competing in a volatile marketplace, they might actually have to throw a bit more respect at the “human” in the human capital equation.

This demographic time bomb isn’t new; it was recognized more than a decade ago, but managers’ ability to recognize, attract and retain talent has escalated dramatically, with the economic crash more like an attack of hiccups, than an actual change.

McKinsey declared the start of “the war for talent” in 1997. It has turned out to be a more or less permanent conflict. Revisiting their earlier work in 2001, the management consultants stated: “The war for talent will persist for at least the next two decades. The forces that are causing it are deep and powerful. The war for talent is a business reality.”

Do you believe that happy employees perform better? Not everyone agrees, although I freely admit I’m on the pro side of that argument.

Productivity measures across national economies have captivated the attention of policy makers and executives alike. Ultimately, though, the source of productivity is the individual knowledge workers who get things done every day. And the evidence is clear: People perform better when they’re happier. OR Happy employees tend to enjoy the status quo so much that they might resist changes to it. This is hardly a recipe for success in today’s world, where agility and embracing change are essentials for success.

Of course, no discussion of productivity can take place without including Elton Mayo and the Hawthorne Effect. Impressive experiments, since they are as relevant today as they were nearly a century ago.

What he found however was that work satisfaction depended to a large extent on the informal social pattern of the work group. … He concluded that people’s work performance is dependent on both social issues and job content.

Finally, no commentary on people and the workplace would be complete without something on the Millennials; the demographic the media and pundits keep insisting are completely different from preceding generations—but are they really?

“For the past 12 years, I have studied the so-called generation gap through empirical research, and have found that stereotypes of millennials in the workplace are inconsistent at best and destructive at worst.” ­­–Jennifer J. Deal, senior research scientist, Center for Creative Leadership

Flickr image credit: pedroelcarvalho

What extracurricular activities do you look for in your entry level candidates?

Too many mangers chess team means a thinker/problem solver, debate team assumes good verbal and written skills, captain of anything indicates a leader.

How impressed would you be if you saw FAA, i.e., Future Farmers of America on the resume?

Many managers would write that off as irrelevant at best and valueless at the least, unless it was an agriculture-related position.

Not so fast.

Consider Gamaliel Rizzo, an apartment dweller from Brooklyn who is studying to become a doctor. He says he spent more time honing skills like public speaking and developing business budgets than learning about farming.

“What amazes me is the degree to which they have made themselves relevant when by all expectations they should have simply ceased to exist.” –Pamela Riney-Kehrberg, historian at Iowa State University.

And it’s not just in the heartland that the FAA is thriving.

About 70 percent of its members live in rural areas, and 19 percent live in small towns. The fastest growing segment, however, is in urban and suburban areas, now making up 10 percent of the membership.

So what’s the take away on this?

If you want the unusual, look for the unusual.

If you want to hire people who think outside the norm then you should look for those who did things outside the norm.

If you need talent that will challenge conventional thinking and not cave to the nay-sayers look for the ones who went against the tide and persevered in spite of the cardinal sin of “not fitting in.”

It’s not that conventional activities, such as chess, debate and sports, aren’t good, but looking further, even if it’s not on the resume, will help you uncover the hidden gems that others miss.

Flickr image credit: Bush Library

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

I’ve always believed that the difference between success and failure is opportunity.

Entrepreneurs love to talk about opportunity; I think it’s one of their favorite words—except when it comes to people.

Many entrepreneurs have no interest in anyone who hasn’t done [whatever], not necessarily through formal education, but immediate experience.

Which I find amusing, because what is current today will be outmoded or re-imagined—possibly before they even get their product to market.

Last July I worked (mostly argued) with “Tom” to develop the req for his top marketing person; an obviously critical position.

At the time, I warned him that he was creating a wish list wreck, not a req, but he “knew what he wanted.”

And what Tom wanted in his VP was someone well-versed in Facebook, Twitter, SEO and all things Internet; he said any marketing experience that predated Internet marketing was irrelevant.

When I asked about experience building a team, hiring, developing strategy, competitive pricing, etc. he said none were that difficult and as long as candidates knew the rest they could pick up the details on the fly.

Additionally, candidates had to be currently working; anybody not working no matter the reason was bad news and he wasn’t going to hire someone else’s mistake.

Plus, anybody smart enough to satisfy him would quit her current job in a heartbeat in order to jump on this opportunity.

Last week Tom called to say that he still hadn’t hired a marketing vp and his investors were pressuring him; did I have any other suggestions or ideas on filling the req?

I said not really, I had given him all my ideas when the wreck was being written and nothing new came to mind.

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Image credit: Bun in a Can

Last week we looked at the talent being lost as a result of profiteering by for-profit trade schools and colleges. But what of American talent graduating from America’s top schools?

We know that America needs talent. We need talent in all walks of life; we need talent at every level of business, but some of our best talent is being lured away by Asia, Inc.

The lure is coming from Chinese, Korean, Japanese and other Asian corporations; they are successfully recruiting, wooing and hiring the best and brightest at top tier business schools all over the country.

“There is a sense that the center of gravity is shifting,” says Julie Morton, Booth’s associate dean for career services. … “This has never really happened before, except in little spurts, where you have a fairly large group of talented, recent MBAs asking for assignments in China, Vietnam, India,” says Jeff Joerres, CEO of global staffing firm Manpower. Adds Richard Florida, professor at the University of Toronto’s Rotman School of Management: “I don’t think many of us thought Asia would become the destination for top Western talent—but it is.”

Part of this shift is recession driven, but the ‘shifting center of gravity’ is cause for concern.

It’s not that the skills and knowledge acquired from international work isn’t valuable, of course it is, but it means that talent is lost to America for the next five years, give or take, when we need it most.

Additionally, foreign students are returning home to found companies, rather than staying in the US. That isn’t comforting considering that immigrant entrepreneurs founded 25.3 percent of the U.S. engineering and technology companies established in the past decade, according to a 2007 study from Duke University.

A bit of recession silver lining comes in the form of B-school grads taking an entrepreneurial path when they can’t find a job.

And there is a bipartisan (believe it or not) effort to gain talent by creating a “founder visa,” a two-year visa for any immigrant entrepreneur who can secure $250,000 in capital from American investors. After the two years are up, the person could become a permanent resident if his or her business has created five full-time jobs in the U.S., raised an additional $1 million, or hit $1 million in revenue.

But they are a long way from passing the legislation.

I find it sad that amidst all the rhetoric and hand wringing our so-called leaders in Congress do little-to-nothing—usually in the service of lobbying groups or an inflexible ideology that sees only the past and has little concern for the future if it involves change.

Image credit: budgetstoc on sxc.hu

Recessions such as the current one have always encouraged people to think about education, whether traditional or trade, and that always bring out the sharks—especially when federal money is involved.

“At institutions that train students for careers in areas like health care, computers and food service,… tuition that can exceed $30,000 a year.”

They borrow to pay it because they are sold the idea that there is a job at the end of the tunnel; too often the jobs don’t materialize, but the debt is all too real.

Even worse are the promises made by for-profit colleges to the tens of thousands of young Americans who serve in our armed forces.

The five largest provide classes online and charge $250 a credit (as opposed to $50 a credit at local colleges on bases), which allows them to receive the maximum reimbursed by U.S. taxpayers…

Taxpayers picked up $474 million for college tuition for 400,000 active-duty personnel in the year ended Sept. 30, 2008, more than triple the spending a decade earlier… degrees from any accredited college provide a boost toward military promotion, credentials from online, for-profit schools can be less helpful in getting civilian jobs, especially in a tight labor market.

But this is America, land of opportunity and if they are anything the for-profit colleges are focused on opportunity.

With Congress and the Defense Dept. making noises the colleges followed a tried and true path of other for profit companies—when you can’t do it in-house acquire it from outside. So they are buying smaller, weaker colleges and, presto, instant accreditation.

ITT Educational Services didn’t pay $20.8 million for debt-ridden Daniel Webster College in June just to acquire its red-brick campus, 1,200 students, or computer science and aviation training programs. …the Nashua (N.H.) college’s “most attractive” feature was its regional accreditation… Regional accreditation, the same gold standard of academic quality enjoyed by Harvard, is a way to increase enrollment and tap into the more than $100 billion the federal government pays out annually in financial aid.

Make no mistake, this is our problem, yours and mine, and it doesn’t matter what your politics are.

These are the people who will form the bedrock of the US workforce in the coming decades; who are struggling to improve their lives or who have given up years building their own career and spent those years protecting yours.

They deserve better than an apathetic public or lobbied Congress that turn a blind eye or timid efforts as education funds are plundered so a few can gain wealth on the backs of America’s talent.

Next week we’ll take a look at another source of lost talent. Please join me.

Image credit: Alan Cordova on flickr

CEOs have the spotlight today—about them, from them and for them.

CEOs have never liked anything that comes between them and the compensation they believe they deserve—not independent directors, governance gurus, sensibility and certainly not TARP. Business Week offers an interesting overview of TARP’s effect on CEO engagement, but it’s the readers’ comments that make the story unique.

What exactly does a CEO contribute to the organization? In an excellent article from A.G. Lafley, Procter & Gamble’s CEO, talks about the most important things to focus on, wherever you are in the business cycle.

Now learn interesting lessons from a Bollywood dance class and a parent who asks “Can our leaders dance?”.

By now, everybody has heard of Susan Boyle; in this article from Harvard Business Publishing Peter Bregman discusses how to find the ‘Susan Boyles’, i.e., hidden talent, in your organization.

Your comments—priceless

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Image credit: nono farahshila on flickr

The CEO reputation isn’t exactly in the ascendancy these days, in fact, as a group it’s pretty well tanked. So it’s sad to see them, again as a group with exceptions, strolling down another truly stupid path—no time for talent worries. “It’s no surprise that global leaders raked financial pressures to cut costs (82.95%) and rapid market decline (54.36%) as their toughest business challenges. Unfortunately, “Loss of leaders in key areas or insufficient talent to quickly adapt to change” (5.30%) fell to the bottom of the list.” Dan McCarthy at Great Leadership spells out the details, including a link to the survey. Whoo hoo, short term thinking at it’s best.

Jim Stroup at Managing Leadership eloquently discusses the stupidity (my word) of inspiring emotional connections in ‘followers’.

“That’s what the modern individual leader wants: uncritical commitment, steadfast devotion, unquestioning obedience. There is little room in contemporary leadership theory for qualified, deliberative followership; extended, modified, or rescinded at the initiative of the follower.” Scary attitude!

Finally, to add a little levity to a day dedicated to stupidity, past and future, here’s a quick explanation of the banking crisis for those of you who still don’t understand the MAP that got us into this mess.  It’s a little story that’s making the rounds on the Net. Hat tip to KG Charles-Harris who sent it to me.

Young Stern moved to Texas and bought a donkey from a farmer for $100.00. The farmer agreed to deliver the donkey the next day.

The next day he drove up and said, ‘Sorry son, but I have some bad news, the donkey died.’
Stern replied, ‘Well, then just give me my money back.’  The farmer said, ‘Can’t do that. I went and spent it already.’

Stern said, ‘OK, then, just bring me the dead donkey.’

The farmer asked, ‘What a ya gonna do with him? Stern said, ‘I’m going to raffle him off.’

The farmer said ‘You can’t raffle off a dead donkey!’   Stern said, ‘Sure I can. Watch me. I just won’t tell anybody he’s dead.’

A month later, the farmer met up with Stern and asked, ‘What happened with that dead
donkey?’

Stern said, ‘I raffled him off. I sold 500 tickets at two dollars apiece and made a profit of $898.00.’

The farmer said, ‘Didn’t anyone complain?’  Stern said, ‘Just the guy who won. So I gave him back his two dollars.’

Stern now works for Goldman Sachs.

Or did until he was laid off.

There, do you feel better now that you know the truth?

Image credit: flickr

For some really fascinating reading check out Business Week’s The Future of Work, covering a myriad of topics and issues for managers, career info and guidance for workers and profiles of what and how technologies are changing the work-world.

Especially interesting is the survey of 2,000 Americans in middle management and above, 25 years and older, on work, now and in a decade. Some of the responses were expected, some surprising, some sad, a few hilarious, but all are interesting. Here are a few of my favorites:

Now

• 90% of managers think that they’re among the top 10% of performers in their workplace. (LOL/ROF)
• 11% of men, vs. 5% of women, are scared of their spouse.
• 36% say people got more done before the era of email.
• 6% of respondents under age 30 have accidentally called their boss mom or dad.

Ten years from now

• 82% believe that self-fulfillment, as opposed to fear, will be the most powerful workplace motivator.

However many of the individual of articles you choose to read, there is one particular piece of intelligence that had better penetrate your brain.

Whatever your business, large or small, global or local, at all levels, you’d better concentrate on retaining your talent, all your talent, top to bottom, because it’s becoming more and more irreplaceable, as well as more and more expensive when you do—a trend that won’t be slowing down any time soon!