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Steven Schooner

Winter 2014 - The Public Manager

While innovation occurs constantly—incentivized by familiar devices such as patents, research grants, public procurement, and tax deductions—some barriers prove so stubborn that they demand a different type of incentive, a more dramatic and exciting

Prizes! Innovation, Risk Shifting,and Avoiding Contracts and Grants

Last year I contributed to the Talent Management magazine article, “Talent Rules: Effectively Immediately,” by my colleague and friend Kevin Wilde. In the article, Wilde proposes that the industry put an end to what he called “silly” practices—the “small distractions which impede out evolution.” My contribution focused on the so-called “results” that the industry promises but rarely delivers. You know what I mean; the vendor claims that its solution will get the best business results for buyers.  Now, I’m not sure if this is a silly practice, just downright unprofessional, or perhaps even unethical. Either way, it needs to stop.The problem is that most of these claims are empty promises, based on old results or validated by poorly constructed tests. Case in point: many vendors claim that a positive change from a pre- to a post-test after using their solutions is evidence of its effectiveness. What they fail to recognize is that without a proper control group (a test group that takes the same tests, but does not participate in the learning experience) it is almost impossible to draw definitive results from pre- and post-testing alone.We can’t necessarily blame our industry brethren for this oversight, given that few of them have been schooled in experimental research and design. Therefore, the notion of control groups is likely new to them. What’s more, perhaps I’m merely expressing my latent frustration over having to spend more than four years in graduate school learning the ins and outs of experimental design and statistics.The fact of the matter is, though, that talent management firms or training suppliers shouldn’t make claims about stellar results unless the proper controls for all the varied factors are in place. Often, this requires spending extensive time, resources, and effort on data collection. Sadly, this is time and resources that aren’t always easily available.Again, let’s consider the control group idea. Quite frankly, it can become overly complicated to “control” all the potentially intervening—and interfering—variables when doing real-world research. Let us not forget that working with real people is not like controlled experiments with rats in a laboratory. Nevertheless, this isn’t a suitable excuse for either not conducting any validation research or relying on poorly constructed experimentation.Don’t agree with me? Let’s dig even deeper into vendor validity claims for talent selection inventories. While it may be true that significant correlations can be achieved and reported (with very small coefficients and very large test populations), these correlations typically account for a relatively insignificant or miniscule amount of variability in the prediction process.For instance, even a statistically significant .25 correlation of an assessment tool with some measure of on-job performance accounts for just 6 percent of the 100 percent potential variance of ALL factors that can contribute to a perfect correlation. Consequently, suggesting a that specific inventory is an effective predictor of job performance is like saying that two people looking for love, who match up extremely well on a personality inventory, are going to get married. It is certainly possible, but the chances are very slim based on this one measure.Instead, I believe that every buyer should act like they are from the “show me” state of Missouri. They need to demand that vendors show them exactly how a learning or performance solution (whether it is a selection instrument, a training program, or a developmental inventory), does what it says it does. More importantly, the vendor needs to have plenty of validated data to back-up their claims.Conversely, it behooves talent management firms to make sure the claims they make about their products and services are actually validated. In fact, if proper validation research has not been conducted, it is certainly better to admit that—and let the client purchase on face value–than  to unprofessionally make false or uneducated claims of effectiveness.To be sure, knowingly making false claims isn’t a widespread practice in the talent management industry. Rather, claims are based on inadequate data. The problem does occur often enough, however, that talent firms should be aware of the issue—if for no other reason than to challenge clients to clearly understand the difference between valid and invalid claims when evaluating a potential purchase. After all, it takes only one rotten apple to spoil the entire barrel. And, as guardians of our industry, it is our responsibility to oversee that bogus claims do not go unchallenged.All of this leads to a few questions: If you are a leader of a talent management firm, have you thoroughly validated your effectiveness claims? Are there experiments that should include control groups to more clearly demonstrate their effectiveness? Lastly, would you put your claims up to the test of the courts if you were sued for false representation?

Growing Talent Development Firms: Claiming Effectiveness

 Whether you are a Mom-and-Pop operation or one of the larger talent development firms, you probably have some sort of strategy guiding you. Hopefully, this strategy has been documented and is the outgrowth of input from key people in the organization. But even if the strategy is only in your head, it is still waiting for action.Unfortunately, many strategic plans, which are key to the future of our businesses, are rarely executed fully—if at all. In the previous blog on strategic growth planning, I mentioned that some 80 percent of strategic plans fail to get executed. (I know I have read or heard this stat enough times to think it is true. But if truth be known, I don’t have a source to share with you to validate this alleged finding. Nonetheless, there is good reason to believe that most strategic plans are not fully executed as designed.)There are myriad reasons why this is the case, not the least of which are the normal changes to a business model or that leadership demands a different direction than originally proposed, deeming the original strategy moot. More importantly, in the ever-evolving talent development industry, one could even argue that sticking to a growth strategy could be counter-productive.  But what about strategic plans that are not subject to major interferences in the business model or competitive landscape? Why aren’t they  implemented? Execution Best PracticesA March 2015 Harvard Business Review article, “Why Strategy Execution Unravels—and What to Do About It,”  by Sull, Homkes, and Sull spells out several likely culprits, highlighting the myths many business leaders adhere to about strategy execution. Their research found that several practices actually get in the way of effective execution, including:inadequate alignment across business unitsundying commitment·one-way communicationstoo much of a performance cultureexecutive-only leadership.While the authors studied very large multinational organizations across many industries, these strategy execution lessons that apply to any organization.  Let’s take a closer look at each practice. Alignment:  To execute a strategic plan in a typical three- to five-year time span, senior leadership must be in total agreement about the direction the business is driving toward. Without this sort of alignment, major departments  and functions will continue to do their own “thing”—working at cross-purposes of the overall business.Interestingly, the research pointed out that while 40 percent of managers note alignment (or lack thereof) as the main cause of poor execution, the second major reason was failure to coordinate across units, noted by 30 percent of participants. Apparently, alignment alone doesn’t necessarily equate to execution—albeit it is a significant influencer.  So, while one of the primary goals of any strategic planning process is to achieve senior leader alignment, it also is important to align across all business units.Commitment: Most business leaders believe that alignment requires commitment to the strategic direction. But in my experience, alignment can exist (on the surface) without total commitment to the strategy. In this case, leaders agree with the overarching direction and some elements of the strategy, but not with all of it. In fact, unswervingly sticking to a strategic plan may impede its execution, given that many intervening factors and changes will surface over time. While commitment to the plan is initially necessary, ignoring the environmental changes taking place will undoubtedly result in leaders executing the wrong plan.Communications: The most likely reasons organizations fail to execute strategic plans:Leaders don’t provide communication to the rest of the business.Leaders provide communications that are unclear, foggy, and lack any inspiration for moving forward.Simply communicating the strategy from “on high” is too little to achieve a well-executed strategy. Instead, communications must create a dialogue that enables employees to offer input and questions so they can truly understand their role in the execution process. If a rational business case for the strategic direction isn’t offered to—and accepted at—the individual level, it will be difficult for employees to internalize the plan and their role in its execution.Performance Culture: Possessing a culture that is committed to performance is critical to execution. Organizations must establish a culture that recognizes and rewards practices like teamwork, experimentation, and flexibility, which may appear at times to slow down performance.  Although a high-performance culture values and demonstrates continual accountability, this head-down and all-hands-on-deck approach doesn’t allow organizations to slow down in the short term so they can move faster in the long term.  Indeed, the right delays—yielding the right results—should be perfectly acceptable.Executive Leadership: We often hear that true change must start at the top. But top-down involvement can impede the achievement of sustainable results. Certainly, the CEO and C-level team must lead the initial charge for execution, and even monitor its progress. However, the sooner frontline employees can internalize a strategy, the sooner they can rightfully execute it. Once the organization feels it must wait for executive approval, the process slows, engagement wanes, and innovation falters. In other words, it takes a village to effectively execute, not just a team of senior leaders who decide when and how execution should take place.Bottom LineThese execution practices are logical enough and, at some level, seem relatively simple to enact. Regrettably, they become more complicated in their actual operation. Perhaps, though, this is just the nature of most businesses that are growing—with growth comes frequent change and even alterations to the corporate strategic direction.Maintaining flexibility around strategy is a dual-edged sword, because sometimes flexibility can become an easy excuse for not following the original, well-thought out plan. Other times, flexibility makes complete sense and is, in fact,  necessary for the business to move forward. In either case, executing a strategic plan is a critical element of both the short- and long-term success of any business, including those in the talent development space. What’s more, minding these best practices can help any organization execute their strategy with success.How have you experienced poor to no execution of a strategic plan? Whether you were the leader or the follower, what were the reasons for this in your business? What were the real business consequences of the failed execution? How could the execution have been specifically improved? Share your experiences in the Comments below.  To learn more, check out my book The Complete Guide to Building and Growing a Talent Development Firm.