There Are No Trading Deadlines in Business
Winning Teams Infuse New Talent Frequently
Imagine trying to win a championship without the ability to draft, recruit or trade for new players? The team you have is the team you must work with for the foreseeable future? This strikes me as a recipe for disaster, not the formula to build a winning team. This is the exact approach being employed by several large publicly traded companies.
The pandemic has caused corporations to take drastic measures to protect their bottom line. Several companies that Groove Management follows, but that are not our clients have taken a very defensive approach to hiring and headcount. During the spring of 2020 we saw many organizations announce hiring freezes, with no new additions to headcount. This has been a pet peeve of Groove Management’s for years. SHRM interviewed me regarding headcount freezes versus hiring freezes during the pandemic. The article Companies Look to Cut Costs with Hiring Freezes, One expert advises freezing headcount instead. The concept is to keep headcount at a set level, but to continue to recruit in an effort to upgrade talent and continue to build the employment brand. The hiring freezes that several companies implemented meant no new positions could be created and any departures needed to be filled with internal talent. While I am definitely a proponent of creating career opportunities within an organization and growing talent from within, there are absolutely times when it makes sense to bring in talent from the outside. In a SHRM article Weighing Internal vs. External Hires, Bob Damon, executive chairman for the Americas at global executive search firm Korn Ferry International stated, “When companies are in tough turnaround mode, or require a significant shift in strategy due to disruption in markets, they should think more closely about external candidates.”
Even the talented internal team can be frustrated by an insular approach to talent. Outsiders bring fresh perspectives, new energy and new learnings to a team. When talent it recycled through an organization, the net positive effect is diminished. People want to be a part of a winning team and getting to work with new people with diverse experiences from outside a company and industry is what drives employee engagement and higher performance. When faced with the prospects of an open position organizations need to look to forwardfill the role, rather than backfill. This forwardfill talent strategy is one that has been adopted to several talent focused companies. It is a proactive approach where the future needs of the organization are assessed, the role is redefined and a slate of internal and external candidates is considered. There must be a balanced approach to talent acquisition that considered the benefits and the risks of filling positions from the outside. In an organization that is in an industry that is being disrupted by emerging technologies, external talent plays an even more important role. External talent brings fresh thinking, disruptive ideas and approaches that have not been considered. This is how progress is made and companies can reinvent themselves. Reinvention almost never happens without outside influence and fresh thinking.
Business lessons from sports teams
This takes me back to the sports analogy. The recipe for a championship team always includes new leadership, fresh talent and new approaches. The Tampa Bay Buccaneers would never have won the Super Bowl LV had they not recruited Tom Brady and others. The infusion of new players and new thinking not only brought better skills, but it improved the performance of everyone on the team. This is the lesson that companies need to learn. Pairing rising talent with proven talent from the outside is the key to boosting an organization’s performance. When I hear about companies only considering internal candidates for an open role, I question the talent strategy. To make matter worse at one publicly traded company we follow they recently announced a major re-organization that includes the retirement of a key senior executive. Rather than considering conducting a thorough search, the company decided to move several people into new roles. Not a single move included hiring someone from outside the company. This speaks volumes of the lack of focus on talent within the company.
In sports trades can create an unfair advantage, so leagues implement salary caps and trading deadlines to level the playing field. In business no such rules exist. Organizations are free to always be recruiting and trading up on talent. Ironically it appears that there is significantly more turnover in professional sports than in publicly traded businesses at the senior levels. A proactive talent strategy that is always scanning the market for talent is what sets top performing teams and companies apart.
Talent matters and it is one of the key differentiators between high performing companies and the rest. Those organizations that focus on fielding the best team outperform the competition whether that be in sports or in business.