Much of the thinking around modern understanding of talent in organisations can be traced back to a book written by three McKinsey execs called The War for Talent.
As we have discussed previously, many of our notions of talent need to be challenged. While some of the conclusions of The War for Talent are outdated, 16 years after the initial research was carried out, there is one thing that remains true and continues to play out today: talent will be the most important corporate resource over the coming 20 years.
In a world where growth is slow, and the barriers to entry are reducing faster as technology becomes easier to purchase and deploy, companies must be constantly pushing forward, while challenging themselves along the way. Where there is capital for great ideas, strategies are transparent and successful strategies can be replicated very quickly (think Groupon and the daily deals market). This means that a company’s people remains their number one competitive advantage.
Talented people, in the right kind of culture, have better ideas, execute those ideas better, and even develop other people better. You can have all the money in the world, and a stream of potentially amazing ideas but if you don’t have the people to execute on them then they mean very little.
While the war rages on it has also changed
The war for talent has escalated in the tech space where large cash-rich companies are adopting a very specific talent strategy, given the not-so-catchy term ‘acquihire’. An acquihire is where (predominantly early stage) companies with strong engineering teams who have worked well together are purchased, not necessarily for their product or services, but for their talent.
You might not have heard of many of these acquisitions as the companies are usually small companies and are often quickly shut down and the people integrated into the wider team; Storylane at Facebook, Hotspots.io at Twitter and very recently Hackpad at Dropbox, to name a few examples.
Since becoming CEO, Marissa Mayer resolved to tackle Yahoo’s biggest problem: a lack of talent. There simply weren’t enough talented people working at Yahoo. One Yahoo executive told Business Insider that over the past couple years, too many of Yahoo’s “B-players” have hired “C-players,” and that these people are not “fired up to come to work”.
Yahoo believes that it has solved its problem, at least so suggested its chief financial offer Ken Goldman, who spoke at a Morgan Stanley investor conference in San Francisco last month.
How did they manage this in such a short period?
You guessed it…
Mayer went on an acquisition spree, buying 37 companies (the largest and most high profile being Tumblr), and their staff primarily focused around the much coveted mobile engineering space.
The search for the best and the brightest has become a constant, costly battle, and ultimately a fight with no final victory. Not only will companies have to devise more imaginative hiring practices; they will also have to work harder to keep their best people.
While the trend for acquihires gives us a glimpse into the scale of the problem, it is not a sustainable strategy and one this is unavailable to the majority of businesses.
So, what is available to the majority of businesses?
It is not about acquiring talent in overpriced deals or developing new shiny HR processes, it is about developing and nurturing a mindset that emphasises the importance of talent to the success of organisations.
Companies must work harder to build a culture that talented people want to work in, and you don’t have to a multi-billion pound company to attract talent in this way.
As Peter Druker famously said: “Culture eats strategy for breakfast.”