Receive daily articles & headlines each day in your inbox with your free ERE Daily Subscription.

Not logged in. [log in or register]

Announcing the Winner in the Epic Corporate Battle of Innovation vs. Efficiency

by
Dr. John Sullivan
Mar 11, 2013, 5:11 am ET

Take notice: If what you do produces only average results … prepare to be eliminated!

We are witnessing a visible revolution and shift in corporate focus. The public visibility of this shift is unusual because strategic changes in the corporate world are normally slow in coming. In fact, the majority of corporate leaders typically fail to identify or even grasp it when what is known as a “strategic inflection point” has been reached.

So in case you missed it over the last two weeks, I’m announcing here that the long-established corporate goal of maximizing productivity or efficiency has lost the battle for supremacy and it has moved down into second place. The winner and now champion for at least the next decade is the corporate goal of … dramatically increasing innovation! If you can bear with me for a minute, I’ll give you some quick examples to illustrate this dramatic and revolutionary shift.

The goal of “continuous improvement” is being supplanted by the expectation of “exceptional work.” We are witnessing the “death of the average” and the dawn of the era of innovation.

Anything That Gets in the Way of Innovation Is Now a Goner!

The major retailer Best Buy just last week shocked the HR world by announcing that it had killed it’s justifiably famous ROWE (Results Only Work Environment) program at its corporate headquarters. The cancellation came despite the program’s amazing productivity results. ROWE has measurably produced up to a 41% increase in productivity and up to a 90% reduction in turnover. These are breathtaking results by any standard. When it was introduced in 2005, ROWE was heralded as the wave of the future, demonstrating that productivity was more important than “showing up.” But this is 2013, and the new wave of the future is innovation not productivity, so the famous program is history.

This is a decision that would have been unheard of before innovation became such a dominant corporate requirement. If the decision seems crazy to you, you need to learn about the tremendous business impact of innovation.

Explaining the Seemingly Illogical Decision to Sacrifice Productivity and Image

A second equally stunning illustration of the shift occurred just last week when Yahoo announced that it was also killing its well-established productivity-focused telecommuting program, and it is now requiring “all hands” to work on-site. The announcement created an international furor, including a front page story in the NY Times and it certainly hurt Yahoo’s employer brand image. To most, the decision simply didn’t make sense. Unfortunately, 99% of the commentators have mislabeled this policy shift as a trend leading to “the death of telecommuting” and an attack on working women. However, they couldn’t be more wrong.

The actual reason for the decision is that data shows that the serendipitous interactions that occur between onsite workers increases collaboration, and thus innovation. So what actually happened was that the need for innovation triumphed over a clearly productive telecommuting program. If you have been puzzled by these two seemingly illogical decisions, you now know what the CEOs of these two firms already knew. And that is that these two shifts would only make sense if innovation was a significantly higher contributor to profit than being efficient or even productive. What both the Best Buy and the Yahoo decisions actually signal has literally nothing to do with telecommuting; it is the beginning of the end of the decade-long primary corporate goal of being productive. And at the same time, the simultaneous elevation of the new corporate goal of what is known as “serial innovation.”

Apple Illustrates Why the Battle That Has Been Won by Serial Innovation

You might be justifiably thinking that the action of two firms don’t make a trend, so it may be appropriate to point out that numerous other firms have already made this goal shift.

Apple is the role model when it comes to shifting to serial innovation. As a result of its goal shift, Apple is perennially at the top of the Fortune most-admired-firms list and it has become the No. 2 most valuable corporation in the world. Over the last decade, it moved from near bankruptcy to introducing at least eight wildly successful products. Each of these products ended up dominating not just Apple’s original industry (which was PCs) but completely different industries, including electronic music, online and retail stores, telephones, telephone apps, and the tablet computer. Apple and its new way of doing business have now become the benchmark standard for serial innovation. Which incidentally I define as “continuous industry dominating innovations that change the game and stun the competitors.” Each individual employee at Apple on average generates over $2.2 million each year in revenue (compared to Yahoo’s $353,000).

So, if you are a manager or work in HR, you would be the “corporate hero of the decade” at your firm if you could elevate your firm’s employee output value to those stratospheric levels.

Google Never Bothered With Efficiency as a Goal

Some relatively new firms that also dominate their industry never bothered to adopt efficiency as their primary goal. Google, the No. 3 most valuable firm in the world, with a stock price over $800 (compared to Yahoo’s $21), has from Day 1 focused on serial innovation. Its focus on innovation has allowed it to dominate not just the Internet search engine industry but also telephone operating systems, maps, online advertising, driverless cars, and more recently, web browser usage.

The most illustrative example of Google’s formal push for innovation over efficiency and continuous improvement is the following quote from Larry Page. The quote, as reported by the well-known author Stephen Levy, highlights how continuous improvement can actually prevent you from being “wildly successful.” (I added the italics for emphasis.)

Larry Page lives by the gospel of 10x. Most companies would be happy to improve a product by 10 percent … The way Page sees it, a 10 percent improvement means that you’re basically doing the same thing as everybody else. You probably won’t fail spectacularly, but you are guaranteed not to succeed wildly.

That’s why Page expects his employees to create products and services that are 10 times better than the competition. That means he isn’t satisfied with discovering a couple of hidden efficiencies or tweaking code to achieve modest gains. Thousand-percent improvement requires rethinking problems entirely, exploring the edges of what’s technically possible, and having a lot more fun in the process.

Clearly the expectation of a 1,000% rate of improvement makes it clear that innovation is king at Google.

Facebook Wants Innovation and Speed to the Point Where it Encourages Failure

Facebook, the most successful IPO in history has also never bothered with efficiency as a goal. It dominates its field with well more than 1 billion social media users but it also developed well-known innovations including the “like button,” and its new campus is a model for facilitating collaboration and innovation. Facebook makes it unambiguously clear that innovation is the top corporate goal. To ensure that everyone gets the message, this organization paints innovation slogans on the walls throughout their campus. I couldn’t help but notice on a recent visit a prominent slogan that said “Move fast and break things.” Well nothing says forget efficiency more than encouraging workers to break things.

Additional quotes from it website further support their focus on innovation …“Innovation is paramount” and “We welcome pioneers. In fact, we insist on them.” Its CEO has made it clear to even the shareholders of his expectations for serial innovation in his letter to Facebook’s shareholders. (Note: I added itaics for emphasis.)

Focus on Impact – If we want to have the biggest impact, the best way to do this is to make sure we always focus on solving the most important problems. It sounds simple, but we think most companies do this poorly and waste a lot of time. We expect everyone at Facebook to be good at finding the biggest problems to work on.

Be Bold – Building great things means taking risks. This can be scary and it prevents most companies from doing the bold things they should. However, in a world that’s changing so quickly, you’re guaranteed to fail if you don’t take any risks. We have a saying: “The riskiest thing is to take no risks.” We encourage everyone to make bold decisions, even if that means being wrong some of the time.

Because being innovative requires you to be first. Speed and rapid learning are also essential components of the serial innovation equation, as noted in this Zuckerberg quote:

Move Fast Moving fast enables us to build more things and learn faster. However, as most companies grow, they slow down too much because they’re more afraid of making mistakes than they are of losing opportunities by moving too slowly. We have a saying: “Move fast and break things.” The idea is that if you never break anything, you’re probably not moving fast enough.

Facebook’s emphasis on speed and making mistakes helps to explain why the CEOs of Yahoo and Best Buy didn’t take the cautious approach and slowly phase out telecommuting.

Other Firms Outside of High-tech Have Made the Shift Toward a Focus on Innovation

In addition to the high-tech firms listed here, firms outside of that industry are also making the shift toward a primary corporate focus on innovation. Some of those firms include Zappos, Amazon, Pixar, Glaxo Smith Kline, Netflix, and the previously mentioned Best Buy. The key learning is that this shift toward innovation will affect every industry, because I’ve not been able to find a single industry that is exempt from intense competition, new technology development, and rapid change. Those in the corporate world outside of high-tech that argue that they are exempt from the need for speed and innovation are part of the problem, not the solution.

If You Produce Average Results … Your Job May Be in Jeopardy

As an employee or a manager, you need to keep on top of this phenomenal shift because, as a result, “exceptional” and “innovative” will begin to replace “continuous improvement” as the corporate definition of success. Because average is the enemy of innovation, it means that if you are an average performer or if you work in a low innovation continuous improvement function like HR, accounting, 6 Sigma, or legal, you need to be aware that you are at risk of becoming a lower corporate priority and having your funding reduced. For years, professionals in these fields have made their name by being efficient, risk adverse, and continually improving by 3%-5% each year. But the world of business has changed, as have CEO expectations, so in the future only serial innovators who can produce greater than 50% improvement will be champions.

You might still be able to survive in a corporation by demonstrating your exceptional productivity but unless you are a serial innovator, you simply can’t expect to be respected, well-funded, or promoted.

HR Must Accept the Role of the “Innovation Catalyst”

The HR function must be a leader in spurring innovation first because employee costs are often the highest single variable cost item in a corporation, but also because all innovations come from people. In the past, HR could get by with the same level of conservatism and continuous improvement as accountants and lawyers but changes in the business world and the V.U.C.A. environment will now make it impossible for any business function to be anything but fast and a driver of innovation.

Many outsiders consider HR to be “risk-averse” and focused on efficiency. There are of course some exceptions to the efficiency-dominated HR function, the leader being Google’s POP’s group, which is far ahead of every other HR function that I have researched in fostering using a data-driven approach to increase corporate innovation.

What is needed is for HR to become what I call an “innovation catalyst.” However, the shift from traditional HR will be difficult, primarily because many HR leaders grew up in the efficiency and minimizing legal risk environment, and that’s all that they know. Some leaders who I know simply hope to “wait it out” and put off any shift until after they retire. The shift will be even more difficult because there are no publicly available HR innovation playbooks, no budget allocations or even metrics for increasing HR’s impact on corporate wide innovation.

A further roadblock is HR’s focus on equal treatment. This is an innovation killer because it takes specialized and focused recruiting, retention, internal movement, and reward processes to attract, keep, and manage innovators. So after understanding that the shift is already occurring, the first step for forward-looking HR leaders to take is to spend time explaining in detail why the shift toward becoming an “innovation catalyst” function must occur and get all in HR to act differently and immediately begin influencing change.

In the cases where HR is in charge of managing the corporate culture, obviously it must act to shift the cultural direction towards serial innovation. Without that cultural shift and a complete buy-in by each individual HR function and professional, innovation will likely become another meaningless HR slogan or value. The last important step is to change HR hiring, budgets, rewards, and HR metrics to reflect this new innovation focus.

Final Thoughts

Innovation is king, long live the king! If you’re still having doubts about the need for your organization or your function to shift to a serial innovation mode, consider what Jack Welsh emphasized years ago and that I have adapted as my defining focus.

If the speed of change inside your organization is slower than the speed of change outside of it… your end is in sight.  — Jack Welch, former Chairman and CEO of General Electric

Any questions about what you need to do?

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  1. Keith Halperin

    Thanks, Dr. Sullivan. So now we know that “innovation” is the “watch word” for the ’10s- like “synergy” was in the ’90s and something else probably in the ‘Oughts. “Watch word” means: watch your wallet, watch your back, and watch your job when someone starts using it around you…

    Cheers,
    KH

  2. Richard Araujo

    “The goal of “continuous improvement” is being supplanted by the expectation of “exceptional work.” We are witnessing the “death of the average” and the dawn of the era of innovation.”

    Nice rhetoric from whoever, unforuntately the bell curve will never go away and average will remain, not only as a mathematical artifact, but also as the majority of the workforce. Perhaps everyone below the 99th percentile should go on welfare and live off of Google’s incredible innovations.

    “The actual reason for the decision is that data shows that the serendipitous interactions that occur between onsite workers increases collaboration, and thus innovation.”

    What data?

  3. Keith Halperin

    @ Richard: We will now be all working for LakeWoeBeGone.com, where all the managers are good, all the innovations are quick, and all the employees are above average.

    Data? Who needs data or facts when you have the opinions, biases, and prejudices of the very highest levels, like the heads of Yahoo, Best Buy, Google, and Facebook? Data is what’s required when you don’t have POWER…

    Cheers,

    Keith

  4. John Millican

    In my opinion, the pace of innovation in recent years within the HR & OD has been slow when compared other organisational functions.

    But in order to be the catalyst for innovation that we probably need to be, we need to first demonstrate we’re living by this same maxim. The truth of the matter is that not many HR functions are anything other than mediocre. So first to our own backyards?

  5. Quickthink » Blog Archive » Produce Less - Innovate More?

    [...] had a chuckle reading Dr. John Sullivan today talking about a “visible revolution and shift in corporate focus”.  The basic point is very simple. [...]

  6. Robert Dromgoole

    Don’t be so quick to cast stones at Dr. Sullivan here. His entire article is filled with data. I think people in HR got their pants in a twist over the attack against working from home. Innovation IS what made Apple, Google & Facebook so successful. I don’t think Dr. Sullivan is saying productivity doesn’t matter, only that is isn’t the KEY metric any longer. I believe he’s on to something. There’s a reason why the Netflix culture slides were called “the most important document to ever come out of the Valley”. That Netflix slide deck is filled with similar points. Wake up and smell the innovation …

  7. Richard Araujo

    I saw no data at all in his article, except for the numbers claimed for Best Buy’s previous program. And that’s not data, those are claims with no support.

    “ROWE has measurably produced up to a 41% increase in productivity and up to a 90% reduction in turnover.”

    The above would be considered data if it had support behind it. I’ve no reason to doubt these numbers but I also don’t see support, so they’re just claims.

    “The actual reason for the decision is that data shows that the serendipitous interactions that occur between onsite workers increases collaboration, and thus innovation.”

    This is the data I’m interested in, none of it was referenced. All we have to justify the claim is an anecdotal comparison of Google to Yahoo, share price and productivity per head of labor. So if neither company changes their approach but in five to ten years Google is no longer on the top of the heap, will their focus on ‘innovation’ be to blame for their fall as much as it got credit for their success?

    Last I’d read in the tech mags people are getting tired of Apple’s iOS and Samsung’s newest phone just outsold Apple’s for the first time in history. As the market for their products matures I give it even money that Apple will keep its loyal cult customers but the consistently higher cost of their products will eventually lead to the adoption of more competitively priced products by most people. The open source nature of Android vs Apple’s mega proprietary approach is also likely to be an issue in the future. Increasingly people want to jailbreak their iPhones, to the point where people are even pushing for legislation to make it required.

    Now of course, I can be totally wrong. However, the reason I’d be wrong is because the factors affecting the success and failure of a company go well beyond its operations. Companies that are run like dog crap can still be successful with the right product at the right time. Companies that are run ultra efficiently AND which are super innovative can still fall by the wayside if their innovation goes in the wrong direction and if their products and services don’t sell.

    Put more simply, laying the buzzword “Innovation” out there is ultimately unjustified and useless. It reads and sounds good, but in the end there is an element of luck, and a few billion other factors which aren’t predictable and which heavily affect success to let the current, but likely temporary, success of one or two companies dictate what everyone else does. The buggy whip manufacturers that took Henry Ford’s ideas and created a buggy whip assembly line would still have lost money. And, with everyone concentrating on innovating all the time, who’s cleaning the damn toilet?

    True innovation requires risks be taken, how many companies are truly willing to take those risks AND shoulder the potential losses, and not toss their most ‘innovative’ employees out on their asses when their ideas don’t pan out? My guess is not many, and not many employees will want to hear how innovative they are expected to be, while they bear all the risk of that process, their livelihood as collateral, and the company sucks up all the return. In all likelihood those employees will see it simply as an extreme version of the What Have You Done For Me Lately management technique. “PTA meeting? How dare you, you haven’t INNOVATED for us in the last ten minutes!”

    Maybe it’d be better applied as a strategy if companies realized that, as employees take home less and less, they also give less and less of a ?#$% about the company and its products. Some people ARE just looking for a pay check because not everyone lives to work. And how will the ‘innovation’ of their managers up to and including the CEO be measured, and how will those people be held accountable? Policy buzzwords that sound good in a board room pitch aren’t necessarily the pinnacle of thought. Policies have consequences, are you sure all of these have been thought out? I’m not.

  8. Robert Dromgoole

    This isn’t the Harvard Business Review, with a white paper and citations Richard. It’s an ERE blog article. But I still credit John with positing a trend worth watching.

    http://gigaom.com/2013/01/29/netflix-company-culture/

    Perhaps another way to write it is redefining performance. Sure, someone needs to clean the toilets but lets be honest, those workers are easy to find and replace.

    But the true game changer focus strategy has been going on for some time. Dr. Sullivan being based in the Valley is at the epicenter for some of this shift. While I haven’t always agreed with his posts, I find this one particularly thought provoking.

    If the Valley has re-defined corporate culture (and it has) and people like Larry Page are redefining performance, you should at least pay attention and ask why. They are doing something right.

  9. Announcing the Winner in the Epic Corporate Battle of Innovation vs. Efficiency | Recruiter It News

    [...] So in case you missed it over the last two weeks, I’m announcing here that the long-established corporate goal of maximizing productivity or efficiency has lost the battle for supremacy and it has moved down into second place. The winner and now champion for at least the next decade is the corporate goal of … dramatically increasing innovation! If you can bear with me for a minute, I’ll give you some quick examples to illustrate this dramatic and revolutionary shift. (more…) [...]

  10. Keith Halperin

    @Richard: Bravo! We need to remember that the true purpose of buzzwords is to increase the wealth of the “*slick hucksters with high-level connections ready to sell the latest recruiting snake oil or “magic bullet” to desperate and not-yet insolvent recruiters and their superiors who fail to recognize that in most cases they are futilely ‘rearranging the deckchairs on the Titanic’ of their companies’ ill-conceived, over-blown, grossly-dysfunctional hiring practices”…

    I would LOVE to see what happens when a lower/mid-level employee without any internal connections or clout tries to innovate the procedure or policies of any given organization, PARTICULARLY in many of the often-touted “employers of choice”.

    How about this “innovation” is a synonym for when management takes more and more and gives less and less in return?

    @ Robert: Being here (in the Bay Area) in the Bay and $1.75 will get you a one-way ticket on BART. As I’ve said before: anything a billionaire head of an “employer of choice” does is probably well worth taking with a “whole lot” of grains of salt, as it’s unlikely to be of much use/relevance to the vast majority of us out there who don’t work for “employers of choice”…You want innovation? You ask those of us in the trenches doing the REAL work out there what needs to be done, and then you DO it (and don’t fire us in the process)….

    Cheers,

    Keith “You Want the Truth? You Can’t Handle the Truth” Halperin

    *Of course, there’re none of those here on ERE.

  11. Social Media Strategy For You and Me and Every Recruiter We Know

    [...] Strategy is never static, it must shift and grow with your business. This article explains how and why companies are shifting their strategies to promote innovation over [...]

  12. Robert Dromgoole

    Keith, I posit that those companies are worth paying attention to, because they’re doing a majority of hiring and driving industries forward. Plus it’s just plain fun to watch what your neighbor is up to in my opinion, watch what is working. Sure, if you’re Acme, or hiring pizza delivery drivers, none of this may make any sense at all. I don’t think anyone was claiming one size fits all.

    @Keith, I don’t get the anti management rant? Most of the innovators and risk takers are the ones who are most highly rewarded. So you’re implying that risk takers and leaders aren’t doing real work? I don’t get it. Sure, someone needs to sodder the mother board, empty the garbage, plan the Christmas party etc. But that’s not where the profit or advancements are made. Its ideas which employ people. Pay the idea makers AND those who can make those ideas happen. The workers should thanks those innovators on a daily basis, because without them, they’d be unemployed.

    If an employee has a great idea and a company won’t listen, then shame on them. They should quit and start up their own company then. This is America.

    I think the leaders in these organizations will surround themselves with people who buy in to the mission, vision and values of that organization. If someone doesn’t buy in, respectfully ask them to leave and find someone who does align.

    In the 60s, even the janitors at NASA answered when asked what their job was, “To put a man on the moon.”

    People may need to redefine how they think of work. What these companies want is to enable more innovation. They’re manufacturing intellectual property. People roles are either to be the innovators, or help to enable it.

  13. Richard Araujo

    “This isn’t the Harvard Business Review, with a white paper and citations Richard. It’s an ERE blog article.” – Robert Dromgoole

    You made the claim and said this is what the ‘data’ shows. I don’t expect a fully cited paper with bibliography, I expect at least a link or a mention as to what this particular data is and where to find it. If it’s just an opinion piece, fine, but say that. The reason I ask is because if such data does exist, I want to see it. Not to make you justify your opinion, but because I want to know and be able to present these kinds of ideas to people effectively if I find they have merit. To do so, I need more than a buzz word.

    “Perhaps another way to write it is redefining performance. Sure, someone needs to clean the toilets but lets be honest, those workers are easy to find and replace.” – Robert Dromgoole

    My point was it’s not particularly helpful to gear your entire hiring effort toward getting the Innovators! when in fact the majority of your company is made up of 9 to 5 workers who get the nuts and bolts work done every day. Do you want those people to innovate? If so, accept it and manage accordingly. Or, do you want them to show up on time and produce at a rate commensurate with their salary? I’d wager the larger portion of a company’s success is based more on the latter than the former.

    “If the Valley has re-defined corporate culture (and it has) and people like Larry Page are redefining performance, you should at least pay attention and ask why. They are doing something right.” – Robert Dromgoole

    You could say that about any and every company that was ever successful on a similar level in any industry, and I’d wager a lot of them used methods that were totally the opposite of the newer companies and considered old hat these days. Does that negate their success though? Or is it perhaps that being the top dog in any industry affords you the opportunity to pay and treat people better, and get and retain more good ones? And perhaps it affords you the opportunity to try new things and credit them with your success, even if the causation is a bit more complex. Just a thought, but it’s a simpler explanation that holds more water in my opinion.

    “I would LOVE to see what happens when a lower/mid-level employee without any internal connections or clout tries to innovate the procedure or policies of any given organization, PARTICULARLY in many of the often-touted “employers of choice”.” – Keith Halperin

    I wouldn’t. I’ve seen it, I don’t want to see it again unless I can see a more positive experience.

    “How about this “innovation” is a synonym for when management takes more and more and gives less and less in return?” – Keith Halperin

    I wouldn’t go that far, but I would say that I think for various reasons employers have gotten used to being in the superior bargaining position because of a terminal shortage of jobs, brought on by what I’d leave for discussion elsewhere. Suffice it to say it still amazes me how many companies and managers are themselves amazed at the ample returns they seem to make in talent acquisition and retention by simply not treating people like crap. I don’t think Google is all that innovative as much as it is that a great many other companies are still handling their operations along the lines of a Dickensian workhouse. And performance is often defined by irrelevancies. In the first two years of my employment more time was spent discussing my damn haircut than the actual results of recruiting efforts. For the record, I prefer a crew cut, however this wasn’t deemed suitable. Many meetings were had. That hiring for top level candidates when from well over a year when I arrived to around 8 weeks from job approval to someone starting isn’t something that received much note.

  14. Keith Halperin

    @ Robert: “because they’re doing a majority of hiring and driving industries forward.” ARE “employers of choice” EoCs (from now on) doing the majority of hiring? Unless things have changed since October 28, 2011, it’s been medium-sized employers who’ve created the great majority in the past few years, not the well known larger ones. (http://www.entrepreneur.com/blog/220616:
    So if most small companies aren’t going to hire, what type of businesses can we look to for job growth? Middle-market companies. Companies between $10 million and $1 billion in sales create 34 percent of all the jobs — a tiny slice of the U.S. economy that consists of just 200,000 companies, according to a new study from the Ohio State University Fisher College of Business and GE Capital.

    Unlike big or small businesses, the study suggests that medium-size businesses aren’t typically concentrated in one geographic region, industry or one ownership structure. So they tend to have more flexibility in tough economic conditions than their larger and smaller counterparts.

    The Fisher College study found that from 2007 to 2010, these mid-market companies added 2.2 million jobs, while big businesses cut 3.7 million jobs. Why haven’t we heard about this more? It seems the small pool of mid-market companies don’t have the kind of lobbying force of either small business or big business.)

    ……………………………………………………..

    “Keith, I don’t get the anti management rant? Most of the innovators and risk takers are the ones who are most highly rewarded.”
    How about:
    1) The Great Recession-trillions lost, millions unemployed, billions in management bonuses, no jail time for Banksters.
    (http://www.huffingtonpost.com/news/banksters
    If Bankers Took Steroids or Made Knockoff Handbags, They’d Clean Up Wall Street Tomorrow
    Richard (RJ) Eskow | Posted 09.11.2012 | Politics
    Read More: Bank Fraud, Banking, Banks, Wall Street Crisis, Banksters, Wall Street, Wall Street Reform, {$entry.entry_vertical} News
    Let’s do the numbers. Number of seizures to recover counterfeit goods worth $178 million: 24,792. Number of arrests for crimes worth tens of billions in settlements and trillions in losses: Zero.)

    2) Economy doubles in size since the 70s, wages stagnant- profits to management greatly increase: Increasing economic inequality. (http://www.nytimes.com/2013/01/13/sunday-review/americas-productivity-climbs-but-wages-stagnate.html?_r=0 : Wages have fallen to a record low as a share of America’s gross domestic product. Until 1975, wages nearly always accounted for more than 50 percent of the nation’s G.D.P., but last year wages fell to a record low of 43.5 percent. Since 2001, when the wage share was 49 percent, there has been a steep slide.)

    3) Rewarded for what? Speculating with other people’s money?
    (http://www.gladwell.com/2010/2010_01_18_a_surething.html: How entrepreneurs really succeed. One thing that rarely gets discussed in business circles (except occasionally by folks like Nassim Nicholas Taleb) is the role of luck and how often successful business leaders are described/described themselves as being successful, when often they are merely being lucky…

    ……………………………………………………..

    “If an employee has a great idea and a company won’t listen, then shame on them. They should quit and start up their own company then. This is America.”

    Yes indeed it is America. So, who who will lend them the money to start this grand new business? Who will pay their mortgages and medical insurance and kids’ orthodontists bills while they are starting their new businesses? Will you, or will they diligently strive through “positive mental attitude,” hard work, and an unquenchable desire to succeed to be “a hard- charging grabber of the brassring and not just the low hanging fruit”?
    ……………………………………………………..

    “I think the leaders in these organizations will surround themselves with people who buy in to the mission, vision and values of that organization. If someone doesn’t buy in, respectfully ask them to leave and find someone who does align.”
    There’re terms for folks like these: “sycophants, suck-ups, brown-nosers, Kool-aid drinkers”. ISTM that the leaders REALLY need folks who’ll “put the leaders in their places” when needed, and show’em when they’re wrong…

    Robert, I think while most business folks SAY they want innovation, down deep they WANT real innovation no more than they WANT genuine competition- if they’re ahead of the game, they want to make sure stay things stay that way with minimal effort- innovation stirs things up, shows that existing assumptions, beliefs, and prejudices might be false, and sometimes requiring people to actually THINK.

    @ Richard: well-said again. As far as EoCs treating people well: in my experience, that doesn’t necessarily apply across all departments, at least the one large numbers of my colleagues and I worked in a few years ago.

    Cheers,

    Keith keithsrj@sbcglobal.net

  15. Richard Araujo

    As far as EoCs treating people well: in my experience, that doesn’t necessarily apply across all departments, at least the one large numbers of my colleagues and I worked in a few years ago.” – Keith Halperin

    Probably not, but what EoCs do offer, by luck in some cases, is an employer brand that aids in the sale of jobs. Working for Google has some cache to it which also brings some sense of job security and prestige, justified or not. Just like working for IBM or Northrup Grumman had in the past. And if these companies truly are generating the profits they claim, it would not surprise me to find a comfort level internally which has allowed for some risk taking that didn’t work out, but which lead to less severe consequences than would have otherwise been expected.

    Per the rest of your comment, I think people often forget the average person is… average. And most managers aren’t super efficient, knowledgeable, skilled people managers. They are 9 to 5 grunts, even in their own minds, often trying more not to get fired than to excel. And often it’s bad management above them that puts them in that position. At a certain point it’s a choice between, “Do I take a chance and potentially improve the company but also risk falling down, and pissing off my boss and losing my job and not feeding my kids,” or, “Do I play it safe and cover my ass so I at least get my job done but also have it on record that if something gets screwed up, everyone knows it wasn’t my fault.” The people who perpetually choose the former approach over the latter will always be in the minority.

    Hell, I’ve been in that position before. And the blunt truth is I have bills to pay. So while I’d rather not be doing it, I have to spend a not insignificant amount of my time making sure every move I make is documented with the right people at the right times so when it’s convenient for someone to throw me and my department under the bus, we have a defense. And that wouldn’t be necessary if the upper management I deal with didn’t have a shoot first and ask questions later approach, but they do. My most egregious example of this was a programmer position I dealt with early in my tenure here, where after nearly a year of constantly changing job descriptions and the position going on and off and back on hold, the IT manager was getting heat for a project that fell behind and of course decided to say it was the fault of recruiting for not filling the position because they, “hadn’t seen any candidates.” I was able to produce over 70 candidates and if I recall correctly, over 20 interviews they’d been on with people who met all the criteria of all the various job descriptions they gave over time.

    If I hadn’t documented that, I would have been out of a job. As it stands, because the IT director who pulled this is held in high esteem by the company’s owner, the issue simply disappeared, with no consequences to the director or their department of course. I, on the other hand, had to sit through numerous meetings with people literally screaming at the top of their lungs for, again literally, hours on end, while I did my best to stay calm and simply present the resumes and the candidates and the timeline of events. Now most people would scoff at the idea that a manager would be stupid enough to waste their company’s time and money doing something like that, but in my experience it’s common; wasting ridiculous amounts of time bitching and moaning about nonsense. It isn’t even the behavior, which is reprehensible in many cases, that’s the issue, but the opportunity cost. Every hour you spend on pointless, unproductive crap is an hour not spent on productive endeavors. Often ‘entrepreneurs’ and ‘innovators’ have no concept of opportunity cost, they figure they spend every minute of every day on their business, why shouldn’t everyone else? Of course, everyone else doesn’t get paid as much and might want to occasionally prioritize their family over work, but that shouldn’t matter, oh no…

    That is how ‘management’ is done in the real world in most companies. It’s something with which ‘thought leaders’ need to acquaint and/or reacquaint themselves. Maybe some of them should give me a ring and tell me how I’m supposed to brand the recruiting for a company I worked for once where, no lie, the owner called someone at their damn mother’s funeral, which he was aware of, and started screaming at them about a late project. I’d really like to know how to apply ‘best practices’ and ‘innovation’ to a company run by a psychopath.

    Who knows, maybe they haven’t worked for some of the same types of companies I have. But when I see their suggestions, such as in this article, I have to wonder what world they are living and operating in. Because it sure as hell isn’t the one I’ve been in so far in my life.

  16. Richard Araujo

    EDIT: The dichotomy I point out in my last two paragraphs is best illustrated by Rodney Dangerfield’s character in Back to School, in the scene where he attends his first class in their ‘Business School’. I’d recommend it as a good Real World vs Academia illustration.

  17. Keith Halperin

    @ Richard: You’re stealing my thunder again! ISTM that the world of the “*Recruiting Thought Leaders” is far removed from the real recruiting world in which you, I, and (I bet) the vast majority of our readers and colleagues work in. The people that these “RTLs” usually speak to are either the cause or complicit in many of the problems that we discuss here. I understand these people’s situations: “you need to go a long to get along”, and who wants to “rock the boat” and make things uncomfortable for themselves? Consequently, they **don’t want to hear how messed up they’ve either made or allowed things to become; they want to hear some basically trivial pablum which allows them to feel that they are (or get caught pretending) doing something significant.

    I think we should consider ***these RTLs in the same league as well-paid professional psychics, astrologers, and political pundits: we should wish them well and be glad they’re able to earn such good livings making their customers happy; we just shouldn’t pay much attention to what they say or tell us to do…

    Cheers,

    Keith

    *Not those of ANY on ERE of course; just on other places.
    **And almost certainly wouldn’t pay four- and five-figure fee$ to hear
    *** I’d draw exceptions for RTLs who are still “in the trenches” like us, but I don’t hear about those folks. Maybe they’re being modest…

Post a comment

Please log in to post a comment.

Note: You need to sign up for an account on our new commenting system if you haven't already done so — even if you have an existing ERE account. Find out why »

Login Information