Talent factories

Fast Company has an article citing research from a new book, Chasing Stars: The Myth of Talent and the Portability of Performance. The author studied Wall Street research analysts – a role that seems designed for the lone rangers.  His hypothesis was that analysts’ performance should remain fairly consistent across firms.  However,

“Star equity analysts who switched employers paid a high price for jumping ship. Overall, their job performance plunged sharply and continued to suffer for at least five years after moving to a new firm.” Worse, switching firms doubled the chance that an analyst would fall off the rankings entirely (32% versus 16%)

This corollary (from a firm’s perspective) is that it is better to groom from within, than hire “stars” from outside.  This is in line with Jim Collin’s research too – that leaders are best developed from within.  Interestingly, many of India’s most successful companies seem to follow the same mantra; most notably the Tata Group which develops a very strong internal cadre.   The article goes on to talk about HUL, a company we all admired back in B-school

For instance, Hindustan Unilever, the Indian subsidiary of the consumer goods giant, has developed a reputation as a talent factory. How? Its senior managers are expected to spend 30% to 40% of their time grooming leaders. And executives usually change roles every two to three years so that they learn different aspects of the business. These investments may seem costly, but they have helped HUL become a $4.4 billion company, which reported 5.4% net profit growth at the end of 2009 — and the envy of other companies worldwide.

The habits of leaders

Aakash Chopra has a brilliant post on Cricinfo about the secrets of leading teams.   I particularly liked the interpretation he puts on leadership by example.

Some mistake this sort of captaincy with just performance on the field, but there’s more to it. The captain’s conduct is the easiest way to send a message across. If a captain is disciplined, like Rahul Dravid or Ricky Ponting, whose work ethics are immaculate, the team follows suit automatically. You’ll see both Dravid and Ponting do fielding drills even after a long training session, when they can easily be avoided, and that’s signal enough for others to go the extra yard. Perhaps the one-handed catch Dravid took against the Mumbai Indians last week wouldn’t have been possible without those extra drills.

On the contrary, since Warne thinks that warming up before a match is not a very useful exercise, his team stayed away from it in the second edition of the IPL. While it worked for Warne, others found it difficult to do without, and perhaps the results reflected that.

Fantastic point, and it feeds in very nicely with Jim Collin’s theory on level 5 leadership

The term “Level 5” refers to a five-level hierarchy. Level 1 relates to individual capability, Level 2 to team skills, Level 3 to managerial competence, and Level 4 to leadership as traditionally conceived. Level 5 leaders possess the skills of levels 1 to 4 but also have an “extra dimension”: a paradoxical blend of personal humility (“I never stopped trying to become qualified for the job”) and professional will (“sell the mills”). They are somewhat self-effacing individuals who deflect adulation, yet who have an almost stoic resolve to do absolutely whatever it takes to make the company great, channeling their ego needs away from themselves and into the larger goal of building a great company. It’s not that Level 5 leaders have no ego or self-interest. Indeed, they are incredibly ambitious—but their ambition is first and foremost for the institution and its greatness, not for themselves.

It’s really hard for any of us to acquire the talent of a superstar, but we can follow their habits and be the best we can.  That, is probably all that a leader needs of the team.