However, despite young people’s strong entrepreneurial drive, just 8% of the people polled owned businesses at the time of the survey, and only 11% intended to start businesses within the next year; 38% of the potential young entrepreneurs said they had delayed starting a business because of the economy.
Aaron Smith, co-founder and executive director of Young Invincibles, says:
An astounding number of young people want to start a business one day. And they overwhelmingly support action on the part of their leaders to remove barriers to these dreams.
The poll highlights specific barriers to entrepreneurship, including the inability to access the capital needed to get a business going, a lack of knowledge needed to run a small business, concerns with overcoming current debt burdens and a lack of mentors from whom young people can learn.
Some 65% of the people polled think that making it easier to start a business should be a priority for Congress, with 41% saying it should be a top priority; 83% believe that Congress should, at a minimum, increase the availability of start-up loans. Even more respondents – 92% – support increased access to the education and training needed to run a small business as a way to encourage people to become entrepreneurs, and 81% support student loan relief for young people who start companies.
Alumni and associates
Organisations should be seeking to create an “ecosystem” that enables them to have access to the skills of young entrepreneurs who do not want to follow a conventional corporate career. Retaining relationships with talented people who leave organisations in mid-career and do not aspire to corporate leadership roles is also crucial.
Large management consultancies such as Accenture, McKinsey and the Boston Consulting Group are champions of the idea that former employees should be seen as and encouraged to see themselves as “alumni” of the organisation. They take the pragmatic and realistic view that at least 50% of the consultants they recruit will leave the organisation within their first decade of employment, either to pursue a corporate career or to set up their own enterprise.
Far from attempting to handcuff their staff, many consultancies actively encourage their corporate or entrepreneurial ambitions on the grounds that they will wind up being future clients or collaborators, bringing in new business to their former “alma mater”.
As Emily Lawson of McKinsey explains:
We constantly challenge and review our processes to try to ensure that we are bringing in the best, managing them well and offering them fantastic opportunities and ensuring that they feel good about the firm, whether or not they decide to stay or go. We manage our alumni network very actively.
So if you join McKinsey, you join for life even though you are not necessarily still employed here. We manage much less through systems and much more through values. Our risk management systems are about embedding a common set of values and holding that very visibly. There is a set of norms about how you behave that are well understood and are inculcated early on within your first year.
Tim Levine found this was also true of Bain & Company, a global management consulting firm, for which he worked before pursuing an entrepreneurial career. As he explains:
They certainly don’t hold you back. They take the attitude that if you are going to leave, you are going to leave. They take pride in the success of their alumni and in my case, they allowed me to continue to work in the office and use it as a resource centre – and keep my desk for a period of six months. This was critical for me when I was setting something up and short of capital.
It is also hard to work on your own and you have plenty of smart people around you. It really helps the transition. And they were keen for me to know that if the enterprise didn’t work out, my old job with them was still there. They stated frequently that they would love to have me back but at the same time they wished me every success in my endeavours to be an entrepreneur. That is a very nice position to be in.
More generally, there has been an increase in former employees working in associate and consultancy positions for their one-time employers. A new breed of well-qualified and highly motivated freelancers called independent professionals or IPros are choosing self-employment for its own merits rather than seeing it as second-best option because full-time work is not available.
As the foremost researcher on IPros, Patricia Leighton, emeritus professor of employment at the University of Glamorgan, explains:
If we define IPros in terms of high skill and generally a high level of educational attainment and then disaggregate them from the general statistics on self-employment, they are a dramatically increasing element of both the UK and EU labour market. It has been recently reported that between 2008 and 2011, their numbers increased by 12.5%. In some EU states the growth has been well in excess of that. For the UK, the figure is 24%, accounting for over 1.6m people in 2011.
Moreover, there is no research evidence that supports the idea that these people are forced into IPro work due to lack of permanent employment. Generally, they have freely chosen to work this way and equally importantly, regularly conducted surveys from the UK, Netherlands and Australia tell the same story, that many have rejected standard employment.
They tend to dislike working in bureaucratic, hierarchical organisations and especially “office gossip and backstabbing”. They seek autonomy. Their commitment is to their skill or occupation and not to an individual employer.
Leighton stresses that reports on IPros suggest that they have high levels of job satisfaction and self-respect and that they feel valued by clients and collaborators. “They look forward to Monday mornings,” she comments.
Moreover, although IPros were traditionally male and moved into self-employment after a career as an ordinary employee, the latest EU research from the Nordic states, Germany and the Netherlands demonstrates that a growing number go straight into self-employment after studying for graduate and postgraduate qualifications – and that women make up a growing proportion of this group. As Leighton comments:
This is interesting because this is probably before they have got children or have other caring responsibilities. In other words, there is a growing number who are saying “actually, this is the way I do want to work. I don’t want to work in a large organisation”. This is a significant development. The average age of IPros is going down. Most of them will not say that they will never work as an employee. They are saying this is their preferred choice.
Conclusion
Every organisation should consider how it can widen its access to talent. The proportion of employees who will do what it currently takes to climb the corporate ladder is shrinking and what used to be termed “the periphery” is growing. People at the periphery consist of those who have opted for part-time, self-employed or contract work from choice and not necessity and who possess skills that previously would have been confined to the core.
There are also growing numbers of young people who are opting out of corporate employment and whose skills and entrepreneurial flair are needed by the companies they are forsaking.
Within large corporations, there are mavericks, intrapreneurs and specialists who are not catered for by traditional talent management programmes but who, again, have skills that are increasingly relevant to an uncertain commercial environment.
The use of business incubation schemes and linked-in internships, career planning specifically targeted at intrapreneurs, and relationships with former employees based on the concept of alumni and associate status enables organisations to widen their access to talent.
This all requires fresh thinking and a new, more flexible approach. Caroline Curtis, head of talent, succession and leadership development at Santander UK, observes that this means opening up the talent management programme and focusing more on enabling the business units to assess and evaluate their own talented individuals in terms of their strengths, aspirations and future potential.
Stephen Dury of Santander UK concludes:
When I am given an innova
tive, challenging project, which is about developing a new proposition, changing the business or shaping the organisation, often what I am looking for within the business are intrapreneurs and talented people from all backgrounds that feel an individual responsibility for doing things better and want to help make a difference.
The challenge is identifying those people who might not appear on our talent map but you know from working with them that they fit the talent profile that is needed within Santander. It is also about finding the talent that might not be available to you in your own organisation – and finding it at the right time and collaborating effectively for the benefit of everyone concerned. That can catapult talented people into a place where they want to stay.
7 Playing the talent game
I think the issue of confidence does affect a lot of people and for me this is about not being afraid to take risks. You need the confidence to say I’m going to try this and not be afraid to fail.
Rain Newton-Smith, head of emerging markets, Oxford Economics
Shalini Joseph, who is in her 30s, has moved around a lot since she graduated from the National Law School of India University in 2006. She was recruited as a management trainee by a multinational fast-moving consumer goods (FMGC) company, where she negotiated and drafted contracts relating to the business and advised the marketing and sales department about legal issues. A year later she took up a short-term research internship at the Competition Commission of India, a national antitrust regulatory body, where she stayed for ten months. She then joined a leading Indian law firm. Joseph says:
I was trying out things to find out what I really liked. I guess that was where there was a bit of a discrepancy between what I expected and what I finally got. That’s where the movement happened.
Meeting her career expectations was tough going for the companies that employed her. As she explains:
When the FMCG company presented on campus, it sounded really exciting. The people who came were not so much from the legal department. They were from HR and marketing – and it sounded really good.
Once I started working for the company in its law department, I realised that it wasn’t fulfilling my aspirations because it was just a support function and that moving into core management in the firm wasn’t possible. At that stage, I also felt I should be learning more. If you are not learning, and all your college peers are charging ahead and doing high-level deals, you feel the need to move.
The initial training programme gave me a holistic view of the business, but after that my work was nothing like it. Fresh out of school, it wasn’t a challenge for me and challenge is important at that stage of your career. You need a stronger prospect of where the job is going to lead. It made me feel it’s going to take forever to get anywhere. My feeling was that in some law firms, if you can prove yourself, you can move up really fast. That is a huge motivation factor.
Joseph worked for almost three years at Trilegal, a law firm in Mumbai. Then an old dream of doing an MBA came back and she decided to apply. She was offered a place at INSEAD in November 2010 and immediately quit Trilegal. This turned out to be a mistake, as personal and financial circumstances forced her to turn down the offer and defer her MBA by almost a year.
During that year she travelled and also worked for a non-governmental organisation, where she got her first taste of entrepreneurship and business management. That experience is what really cemented her decision to pursue a career in management. As she explains:
I originally had an interest in marketing which I put on hold. I found in law that it was executing the business end of transactions that I was missing out on. So I figured let’s take this one step further. There are so many things in business I could do but I didn’t need to decide what I would end up in. An MBA makes perfect sense to help me decide that. It could be marketing, it could be consulting, it could be private equity. One year doing an MBA studying these subjects would help me figure that out.
The thought, research and analysis Joseph put into her career is not unusual. Playing the talent game requires risk-taking, opportunism and bags of self-confidence. It also requires people to make the grade in the organisations they work for and negotiate their way through career paths that, as Chapter 4 outlined, look more like trellises or even labyrinths than old-fashioned ladders.
Making the company grade
The first challenge is to meet the targets that an organisation sets. As indicated in Chapter 1, most businesses measure high potential in terms of each individual meeting two interlocking criteria:
the ability to hit performance targets;
the ability to demonstrate senior management potential.
Delivering against performance targets is easy to quantify. Most organisations operate some form of performance management process that assesses on a regular basis each person’s (or team’s) ability to meet set targets. Targets are usually set in advance and subject to quarterly or annual appraisals so, provided the targets are sufficiently defined, it is not difficult to assess whether someone is at the grade or not.
Demonstrating potential is more problematic. First, the criteria used to assess leadership potential vary and will be shaped by an organisation’s remit, culture and strategy. Second, organisations are often far less transparent about what they mean by “potential” than what they mean by performance. Individuals may have to deploy some educated guesswork or detective work to assess where they are in the pecking order.
Google’s means of assessing potential provides some clues. Unlike many organisations, it is fairly transparent about the criteria it uses. These were outlined at a talent summit in 2012 by Liane Hornsey, vice-president of people operations:
We measure leadership against five criteria. Being Google, we didn’t take those five criteria off the shelf. No. We took all the data from our attitude surveys in the last five years, all the data from our upward feedback surveys since they began and all our performance data – and we looked for trends about what makes a great leader. We also did a great many in-depth interviews with those leaders that we deemed to be great on paper and those leaders that we deemed to be pretty damn awful on paper – and we interviewed a lot of their direct reports too.
In that way, looking at qualitative and quantitative Google-based data, we came up with five capabilities for senior leaders. They are simple and some of them you would easily recognise but they are important.
The first one obviously – it sounds like a “motherhood and apple pie” statement but it is so important – is to be able to lead people with vision. This is about alignment and engagement. No question in Google. If you haven’t got the heart, forget the mind.
The second thing is we measure our leaders on their ability to collaborate across functions. We believe in teams, and we believe in teams within teams within teams. We don’t like politicking. So I could be a phenomenal leader within my own team, score brilliantly according to my upward feedback surveys, but if my 360-degree feedback says that somebody over here thinks I am a jerk, I’m not doing very well when it comes to my performance. So we look for people who can really collaborate in a genuine way.
Third, we look for people who can make timely decisions through periods of ambiguity. This is important to us because we have a lot of engineers who always want the data. We have to balance emotional intelligence and IQ when it comes to decision-making. So we do a lot of work to try to make sure that people can use their gut instincts as well as their head. The head always leads in Google but the guts are important too. When we look at achieving whole person development, that is what we focus on.
The fourth capability is the ability to develop teams to succeed. So if your upward feedback is rubbish, you are not going to do well in your performance management. If your teams are not singing because you are the leader, you are not going to do well.
Finally, we measure people on their ability to deliver results in times of change.
Google’s way of assessing these leadership traits is
also revealing. As Hornsey explains:
Google is an analytical company. We measure everything. And the People Operations Function is no different. This is the most analytical function I have ever worked in. We do nothing without an algorithm. So, how do we determine whether our people are very good? We absolutely measure our leadership capability.
Twice a year every single manager or leader throughout the organisation has upward feedback. It is quite an onerous process. Every single person in the organisation is asked to comment on their manager.
On top of that, we have an attitude survey once a year. So, again, we ask our people to comment on their managers. And then we stack-rank all our managers and leaders and instead of chastising the bottom 20%, we sit them down – we try not to make it clear that they are in the bottom 20% – but the bottom 20% will be coached by the HR business partners.
Every single person in the bottom 20% will see the HR business partner naturally in the course of events. They’ll talk through their survey, they’ll talk through their strengths, they’ll talk through their weaknesses and they’ll be coached and supported.
And then, by the way, because we value behaviours and we value the way people act, we link improvement to objectives – and we link objectives to pay. So we put our money where our mouth is. You get better as a leader, you get more pay.
Being opportunistic
The last thing worth noting about Google’s way of assessing senior management potential is that it places a premium on people who take risks. As Hornsey concludes:
One of the things we ask our people to do is think big, be innovative and have ideas – and not just having ideas but bringing teams and people together and implementing your idea. What does this do to the talent development agenda? Of course, it identifies your stars without you having to do a thing and without you having to hunt for them. All you have to do is to provide an environment where people are willing to take risks. Of course, as in all walks of life, the cream rises to the top.
Managing Talent Page 16
