Tuesday, November 25, 2008

Elitism 401 : Elitism and the war for talent.

Elitism 301 is found here.

One day an outstanding resume landed on my desk from a graduate student from MIT. I called his HP number immediately to arrange for an interview. The student said he had already found another job but had not signed his employment contract yet. I told him my company paid competitive wages and may be able to match or better what he was offered provided we selected him after an interview. He told me that it was unlikely that an engineering firm would be able to pay what he was offered. I curiously asked him how much he was getting and my jaw dropped when he told me his offer. He was getting paid what engineers in my firm were getting after working for 8 years.....no way I can possibly match that. Defeated in the battle for this talent, I wished him all the best and asked him if he mind saying which company was going to.....his reply : LEHMAN BROTHERS.

"......you have to pay the market rate or the man will up stakes and join Morgan Stanley, Lehman Brothers or Goldman Sachs and you would have an incompetent man and you would have lost money by the billions....." - MM Lee April 2007

There was certainly no lack of talent at Lehman Brothers but it collapsed. The economic problems of the world today are caused largely by investment banks who were known to hire to best people who were paid the highest salaries. It turned out the high salaries didn't buy integrity...it didn't even buy competence and a basic sense of responsibility. It was this collection of "talents" with a lot hubris that brought so much economic pain the world. Lehman failed because they believed they were so good they could do no wrong. When the bank collapsed the former CEO Dick Fuld went to Washington and denied any wrongdoing, put the blame on everyone except himself and kept his millions in salary. A few days later a woman punched him in the face at a gym : [Link] - I guess she was just disgusted. See that is hubris, when the ordinary people can see that something is wrong but they refused to fix it thinking they have the monopoly on wisdom.

Look around you - do you see any other group of men that are just as arrogant...believing they are the only talents in our society that can do what they do? You better becareful because they too will bring you pain. They too will deny their mistakes and blame you for all that has gone wrong. They too will pay themselves obscene amounts of money and do a bad job. They will hide their mistakes from you...talk down to you...take away the check and balance, risk our past successes on bad ideas because they don't listen and lead us down the path of destruction - the same path that Lehman Brothers took....after that they are so arrogant they might blame you for not being good enough to support their broken system....afterall they are the "best" men for the job so it has to be others that let them down.

Someone left an interesting article on the war on talent [Link]. It is a paper entitled "FIGHTING THE WAR FOR TALENT IS HAZARDOUS TO YOUR ORGANIZATION’S HEALTH". We all want the best talents for our organisations to do what we do better but we have to be careful not to foster a culture of arrogance that can breed hubris. There is one thing I observe in people - passion, honesty and hardwork can overcome the lack of talent. If we as a society believe that results can be bought with money, just pay money to solve our problems with human resource- we are guaranteed to end up like Lehman.
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What happens in a war for talent?

There is:

• An invariable emphasis on individual performance (rewarding the individual stars), thereby diminishing teamwork, creating destructive internal competition, and retarding learning and the spread of bestpractices inside the company;
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• A tendency to glorify the talents of those outside the company and downplay the skills and abilities of insiders, leading to a loss ofmotivation on the part of those inside the firm and to their turnover(thereby ensuring that the recruiting challenge will be even greater asthe company tries to replace those that has inadvertently sent packingelsewhere);
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• The creation of a self-fulfilling prophecy where those labeled as lessable become less able because they are asked to do less, given fewerresources, training, and mentoring, and become discouraged, in theprocess ensuring that the organization has way too many people whoare in the process of dropping out of the competitive fray;
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• A deemphasis on fixing the systemic, cultural, and business process issues that are invariably much more important for enhancingperformance, as the company seeks success solely through getting the right people in the door;
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• And finally, the development of an elitist, arrogant attitude—once you have successfully competed in the war for talent, you have the best people—an attitude that makes building a wise organization almost impossible; in wise organizations, people know that they know and they know what they don’t know. Companies that think they are winning thewar for talent think they are so full of smart people that they know everything!"

18 comments:

Anonymous said...

Hi Lucky

In the page Elitism 301, the link to Elitism 201 is wrong...it brought me to 101. I really enjoy reading your postings...keep it up!

AlphavilleSG said...
This comment has been removed by the author.
yamizi said...

Lucky,

The worst thing is when such hubris are literally in power. We can't do a thing to affect change besides praying hard that no silly policies to be implemented in combo style.

The heat on the ground is really difficult to take.

kilroy said...

They think all problems can be solved by money...you have hit the nail on the head....not just in getting ministarial wannabes but also in getting votes...but Hougang and Potong Pasir voters showed that there are Singaporeans of sterner stuff!

Anonymous said...

I have heard one of our MP has ever said quietly, 'they are the chosen one to be political leaders in Singapore'. Such people in the system are common these days. This has further proved what Lucky Tan had written in his interesting blog. I really admire you, Lucky. Thanks for all those insights.

Anonymous said...

Well said Lucky. I am sure engineers make brilliant investment decisions. I know of a lady who was engineer by training. I believe one company collasped under her. Well she was head hunted to another big firm and finally was given billions to invest. She buys anything from coffee shops to childcare centres. Some say she has a knack for investment...and we are all seeing it.

Anonymous said...

One such future leader has spoken. Read ST forum. The one with the big headlines

Anonymous said...

Hi Lucky

Actually, it is important for IB to hire the "best" and most of them makes a lot of $$$ for their banks.

The problem was not so much of elitism (not that there was none) but greed and lack of transparency and regulation(Greenspan, Cox, and ur beloved Uncle Ben, etc)

Having said that, running a IB is like totally different from running a country. We may have been recruiting the wrong types of talents. like hiring Genghis Khan to run WHO. Or an engineer to run a hedge fund.

in fact, I feel that our problem is that we are not hiring enuff "talents". other than tar-man, all our mini-stars are talentless and seemed to be hired for the sole reason that they are no threat to the throne :-S

Anonymous said...

Hi Lucky,

I really enjoy your current postings...more so than the satirical ones. You are so on the money, it's amazing how insightful you are and how well you write. Thank you for helping put things into perspective for us with so much clarity!

jo.

Anonymous said...

Mr Tan,

I have nothing but admiration for you for what you have written and for your sharing of your wisdom without asking anything in return.

Thank you.

Onlooker said...

And Elated millionaires Children who goes on scholarship on OUR money goes to serve them as elated elites who are sadly..... and getting high ranks in the National Servant compliancy agency.
And now as almost all the Elated elites children are grown up they would rather give scholarships to "disposable Migrant Talents" then to really help the real local needy student (no money for lunch) who need the money more.

TeE said...

Thank you Lucky. For sharing this article with all our people. :)

Anonymous said...

Another insightful piece of writing as usual. So proud of you. Keep writing. Luv it.

Anonymous said...

Lucky. The link to the article is not working. There should be a ".pdf" at the back.

Anonymous said...

Lucky, how can you be sure that the MIT grad wasn't pushing his luck to test whether you will buckle and offer him more? Probably he was offered lesser than what he claimed.

Anonymous said...

Lucky,

you are the MAN!!!
Keep going, cos I enjoy your work one hell of a lot.

Avatar6^ said...

Talent + Good Work = Positive Results
Trust me talent don't fail as long as they have the correct data and information at hand. Such misinformation are real bad, and true Talent will not act if he feels information and data are not accurate upon cross referencing.
Seldom Talents get the recognition or rewards they should been given. As true talent is quite selfless and undemanding and wont be able to protect own interest.His main concern and joy would be to see his idea and work succeed, beyond a shadow of doubt.So some one just above him will always steal away the Thunder and Recognition from him.

wiseinvestor said...

The following verse by Warren Buffet exactly describes Lehman Brothers and even some sovereign wealth fund.

Does management resist the institutional imperative?

The institutional imperative is “the lemminglike tendency of corporate management to imitate the behaviour of other managers, no matter how silly or irrational that behaviour may be.” It is human nature to want to follow the group, because it is much easier to blame someone for failure associated with contrarian behaviour than failure associated with group behaviour. Watch out for managers who follow the institutional imperative in buying companies that make little sense, as this kind of empire building almost invariably destroys shareholder wealth.