I read a lot, and one of my favorite books that I read in 2010 is Blue Ocean Strategy by W. Chan Kim and Renee Mauborgne. I have no relationship to the authors, and no vested interest in whether you buy the book or not, but I recommend that staffing leaders and recruiters read it as part of their New Year’s Resolution. This is one of those books that will make you smarter. It’s actually a few years old, but has become quite a phenomena, being translated into over 40 languages and winning a huge amount of accolades. Like being voted as one of the 40 most influential books in the history of the People’s Republic of China.
It’s worth reading.
The basic premise of the book is that many companies that win in the marketplace do so in ways that make their competition irrelevant. The name of the book comes from two concepts describing the competitive landscape in nearly all industries: Red Oceans represent the fiercely competitive arena where most companies compete. Blue Oceans are open and not filled with competitors — uncontested market space in other words, which help drive margins and market share while receding competitors remain in Red Oceans competing on price, value, and other replicable product or service traits.
The concept is the result of a decade-long study of 150 strategic moves spanning more than 30 industries over 100 years (1880-2000). In simple terms, the goal of Blue Ocean strategy is to not outperform your competition in a particular industry, but to create a new market: a Blue Ocean.
There are a lot of predictions flying around about what will come in 2011 as it relates to recruitment. And I recommend that we all heed the probable changes that are likely to arrive as 2011 will surely mark an inflection point on what has been a relatively stagnant period in terms of human capital management and recruitment. But it’s not just ‘getting ready to do more of the same that will allow your company to win in the marketplace for talent. The truly game-changing strategies are the ones that will lead your company out of the spaces where most companies compete for talent and into the Blue Ocean of less (or un) contested market spaces for talent.
Here are some thoughts on how smart companies will arrive at a Blue Ocean with regard to the talent for which they compete.
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I use a fictitious, software development startup company called XOX Software as the example, but you can substitute any talent acquisition effort in any industry in a similar manner.
Which Factors Do Recruiters in Your Industry Take for Granted that Should Be Eliminated? In our example, XOX Software is competing for software developers, just like every other technology company. Traditional strategy would suggest that it go head to head with Google and Amazon and Microsoft and all of the others, posting jobs on Dice.com and showing Facebook ads to people who work at those places, trying to entice them away. In other words, traditional recruitment competes in the same spaces for the same talent, applying traditional recruitment practices but trying to do them faster, more effectively, more broadly in order to get the talent that it needs. Blue Ocean Recruitment competes in ways that makes the competition irrelevant.
So in pursuit of Blue Oceans, XOX Software instead took a different tack: it thought through the recruiting efforts in its industry that everyone takes for granted, like posting to “the same job boards that everyone else post to” and using “the same standardized job descriptions that everyone else uses” and it stopped doing those too. And then it made a list of all the other recruiting tactics and approaches that the competition did (the things everyone took for granted in recruiting), and mapped them out and discussed the tradeoffs (both positive and negative) of discontinuing those efforts. And it started to run experiments, eliminating some of the de facto recruiter tactics, and gauging the impact. It was surprised at the results: as it began to eliminate the recruiting activities that most people took for granted, it found that it was actually eliminating waste in the system, and the game it was playing to compete for talent began to change.
The net result is that when it stopped posting to the job boards, the recruiters were freed up to do other things to generate candidates in non-traditional ways. And with that extra time it was able to find its way into other Blue Ocean activities beyond just candidate generation.
The next question that XOX answered was Which Factors Should Be Reduced Well Below the Industry Standards? So XOX Software looked at its talent acquisition efforts with the critical lens of reducing parts of traditional recruitment efforts in ways that would drive them below the standards in its industry. So it made a list of all the factors that, if reduced, would have a positive impact on recruiting outcomes. And it prioritized the list and began to focus on creating reductions in those areas. One obvious one was recruitment cycle time: It realized that Microsoft and Google and Amazon had arduously long interview cycle times when viewed through the lens of the candidate. So it cut theirs from 41 days to 14 days as measured from candidate contact to final decision. And it also reduced the process so that candidates only needed to make one onsite visit. It took some time and a lot of effort, but in the end it found it could interview, make a decision, and extend an offer before competitors could even get many of the candidates scheduled. The net impact was that for many candidates, XOX wasn’t even competing anymore. It was closing candidates it wanted before the competition could even decide they wanted to pursue the candidate.
And then XOX reviewed its remaining list of factors, that if reduced well below industry standards, would create better outcomes. Those included reducing the communication breakdowns related to its employee referral program to avoid the ‘Black Hole Issue’ (referrals went up by 39% within six months of doing so), eliminating steps required in the application process, and a host of others factors.
And after a short while, its recruiting yields improved. Hiring managers were doing fewer interviews but getting better results.
The next question that XOX Software asked was Which Factors Should Be Raised Well Above the Industry Standards? Things were then really starting to change in terms of talent acquisition, and by this juncture this list was both easy to generate but also to execute.
The first thing it identified was that the candidate experience should be improved to well beyond industry standards. So it created a Candidate Bill of Rights and had everyone in the company sign it. The recruiting process quickly became culture-defining because it treated candidates in ways that were so far above the industry standards. It even focused on small things, like having the receptionist greet the candidate by name (“Good morning Mr. Johnston, we are excited to have you interview with us today … here’s my direct number, and should you need anything at all today just give me a ring …”) and making sure every hiring manager related the value proposition of working for XOX Software but did so in their own words, and also having each member of the interview team send a note to the candidate thanking them for interviewing and offering assistance if the candidate had more questions. It made a list of seven other things beyond these three examples that would create a remarkably different candidate experience, and began to execute on each one of them.
Beyond improving the candidate experience, it focused on other factors, including improving work life balance (ridiculously long work hours were pretty standard fare for software developers), and increasing professional development in a customized way for each employee based on their preferences.
And the key was that very few of the changes cost substantial amounts of money, but paid huge dividends, because it created Blue Ocean space in the War for Talent. XOX was not competing for the same talent in the same way … much of the competition for talent was becoming far less relevant.
The final step in the XOX Recruitment Strategy was coming up with the list of Which Factors Should be Created that Don’t Exist Today? This was a little harder, because it required really good listening skills and some brainstorming.
It started by surveying candidates to find out what things they wished they had in their careers but didn’t. And it surveyed employees.
And then it got really smart and surveyed employee family members to find out what spouses and children wished were different about the career dynamics that were created in the Software Industry. And it turned out that XOX Software learned some really interesting things, which led them further into a Blue Ocean because many of the changes were things that it hadn’t thought of, but could be implemented without huge expenses.
So as 2011 looms, there indeed will be changes, some predictable, some not. Most talent acquisition strategies will focus on doing the same things faster, in more volume, sooner, and with greater reach.
But the standout recruiting results will come from Blue Ocean Recruiting: systematically working through the factors described above to change the game and compete for talent in a way that makes the competition irrelevant.