Talent Wars Damage Business.

Wars consume the very things you are fighting?for.

War is an unfortunate yet permanent fixture of human history. War is the inspiration behind countless heroes, villains, gods, legends, and artistic endeavors. Its roots go way back in time, to the biological nightmare of the testosterone-driven reproduction and survival behavior of stone age males. Or as the contemporary philosopher Ken Wilber so crudely yet aptly summarized: “f**k it” or “kill it.”

Like any subject stirring the hormonal system, the “kill it” shines a light on our subliminal fascination with violence on an institutional scale. That fascination is likely why The War for Talent turned bogus research into a dumb rallying cry across the HR industry (Why that research was bogus can be found here).

The War for Talent is the McKinsey-branded instruction guide on how to wage and win such a war. Talent is a scarce resource. Demand goes up while supply is low. Companies must adopt the talent mindset, or the belief to get the best talent on all levels in the organization. They must fight talent wars to hoard as much of that resource as possible. A talent war well fought will secure a critical competitive advantage, according to The War for Talent.

Ask yourself instead if such talent wars are beneficial at all. Can they be ever won? Instead of The War for Talent, reality hits closer when rephrased as The War on Talent. The two titles are interchangeable because both have the same destructive impact on hiring, retention, and organizational performance. The War for Talent showed more accuracy in predicting corporate failure than success.

The War for Talent is a talent advisory that sucks.

The VC GP, founder of Paypal, Facebook board member, and rebellious contrarian Peter Thiel opines competition, or wars, are Shakespearean in nature. Take Romeo and Juliet: “two houses, both alike in dignity”. They are alike yet hate each other, and grow more similar when the feud escalates. In business, this creates a deluge of declining margins and accelerating commodification, because the focus of leadership shifts to what competitors do, instead of what customers want.

Thiel has the following on linking war to business:

“(…) managers never tire of comparing business to war. MBA students carry around copies of Clausewitz and Sun Tzu. War metaphors invade our everyday business language: we use headhunters to build up a sales force that will enable us to take a captive market and make a killing. But it’s competition, not business, that is like war: allegedly necessary, supposedly valiant, but ultimately destructive.”

The War for Talent turns talent management into a zero-sum game. It flattens a contextual trait and skill set into a one-dimensional fit-for-all resource. And by doing so it eludes feuding companies about the true nature of what they are after.

The result is a disease hyped as a cure. It’s like the Dilbert cartoon where the pointy-haired manager asserts fraud is a differentiating core competency once you call it “marketing”.

A Google search today on the War for Talent subject shows how alluring the link of talent to war is.

That’s over 8 million results:

These metaphorical wars tend to never end. A waste of money for some, and a lucrative source of income for others.

The War on Cancer, the War on Drugs, and The War on Terror were high-flying and well-intended policy initiatives. They aimed to solve a medical enigma, a socioeconomic and national security problem respectively. The war metaphor framed and expressed the ambition, focus, and fierce determination behind those ventures. Yet contrary to the brouhaha surrounding their announcements, they achieved anything close to their intended goals. Unleashing those wars often exacerbated the problem they were supposed to eradicate.

The War on Cancer? Death rates of cancer in the US are the same today as they were in 1950 after hundreds of billions in research funding. The War on Drugs cost over 1 trillion USD since it was declared a national security threat during the Ford administration in 1974. It goes on without an end in sight. while drug purity continues to increase. The War on Terror was estimated to cost US taxpayers 9 trillion USD (including ongoing medical and disability expenditures). The perpetrators of terror seem to have grown bolder, the lines of recruits longer, the massacres bloodier.

The War for Talent?

There is no reason for such war. It’s a fool’s gold. A wild goose chase sold to you by the ones who benefit from it. For those who subscribe to the illusion:

The talent war cannot be won, will never be won, and will never end.

Consider the following evidence:

1. Detailed research shows that external hires usually underperform compared to their previous company. This is normal because new employees need to build up an internal support network, and lack familiarity with the processes and systems in the new company that enabled them to be successful in their previous job. Previous stellar performance might not be as portable as assumed.
2. Companies that focus on educating, growing, and developing their blue-collar, technical, and leadership talent perform better. Focus on your culture, hiring processes, and retention before turning to external talent. It will cost much less, increase commitment, build engagement, and raise retention rates. In short, you get higher performance while avoiding an auction to attract the best.
3. Talent is contextual. Talent is abundant if you look beyond education and experience. While important, both have a surprisingly low predictive validity in assessment. Studies revealed that a combination of culture fit, motivation, conscientiousness, and cognitive ability will yield a much higher predictive value for future job performance.
4. The law of crappy systems trumps the law of crappy people. Some companies and organizations are so dysfunctional that they turn great managers into bad performers. On the other hand, research consistently shows how people deemed average (or unsuitable) can perform superbly within well-designed systems. Companies are not the sum of smart and great people. Culture and systems do matter as much, or even more, than brilliant individuals.
5. The talent shortage is manufactured because there is only such shortage if you consider talent fixed, rather than a mindset that allows one to learn, grow, and adapt to changing environments. When you consider people to have a fixed mindset, with little or no ability to learn, the Talent War scenario is its logical conclusion. Talent is then the fictitious “resource” to fight for in a fictitious labor market.
6. Effective teams often outperform more talented collections of individuals. Individual talent and motivation are partly under the control of what companies do, and what matters to organizational success is the set of management practices that allow individuals to collaborate effectively and productively. For instance, the practice of top-grading, or segmenting an employee population by individual “performance” and linking compensation and career development prospects accordingly, proved to be disastrous for some organizations.

By 2013, 12 years after its publication, 27 companies were showcased by The War for Talent as “exemplars” in talent management. Of those companies, from which others were recommended to learn, 12 disappeared or posted disastrous profits, and only 7 displayed excellent performance. Of the total sample of 106 companies surveyed 22% disappeared, 13% were disasters, 16% were disappointments, and 10% did OK, taking into account the authors’ metric of shareholder return, performance, and investment return.

Companies that adopt the talent war mindset often wind up venerating outsiders and downplaying the talent already inside the company. This leads to competitive, zero-sum dynamics that make internal learning and knowledge transfer difficult, activate a self-fulfilling prophecy in the wrong direction, and create an attitude of arrogance instead of an attitude of wisdom.

The talent war is the delusional quixotic fight that proves Edmund Burke right?:

The problem with war is that it usually consumes the very things that you’re fighting for.The War for Talent imagery is hazardous to business.

The antidote is to make hiring decisions based on empirical data and sound reasoning rather than relying solely on intuition, anecdotal evidence or bogus research that taps into the collective confirmation bias.