Companies develop talent because they are motivated (or need) to try something new.  Can we create new products with an engineering team focused only on sustainment?  Can we explore new markets with account managers who can barely keep current business?  Can we cut costs without lean and six sigma skills in our production team?  No, we need to increase the skill of the team, or find better people, to accomplish these critical improvements.

Development of talent entails risk.  Companies have an increasing awareness that risk opportunities represent the upside of risk.  The ability of a company to carefully weigh risk against reward, then act swiftly and decisively has become a new business core competency.  Professor Mark L. Frigo calls this Strategic Risk Management. 

Traditionally, risk management in HR has involved employee retention, reduced turnover, prevention of harassment claims; all mitigation focused. However, implementing a Strategic Risk Management approach in staffing and talent management is about development: development of the overall team, and development of each individual.  There must be a clear tactical approach to both current employees and new hires.

Allowing current people to stretch their skill set and try new things involves some risk, but having a sound development and training plan, safety nets (mentors) and boundaries (defined processes) can be the mitigating solutions.  Providing current employees with a development plan that enables them to grow, and try new tasks, incorporates the notion of "intelligent failure" - purposeful, planned mistakes that happen once, and generate good learning.  This propels progress.

With new hires, and strategic replacements, we often ask clients: Would you rather have a new hire who yawns with a "same old, same old" attitude, or one with a little fear in his belly and the hunger to try new things?  Hiring "Up and Comers" - people who have risen quickly, but may not yet have peaked on the accomplishment scale, also involves some risk.  Success with this tactic - hiring someone on the front end of the accomplishment curve, involves knowing exactly what the person needs to get done, and being able to predict, with the lowest element of risk, whether they will be able to achieve those goals.  A good performance-based search process incorporates this approach.
We know that entrepreneurs are more willing to take risks, and established companies move to a more conservative approach, with a focus on mitigation of risk.  Yet most established companies still want to be "entrepreneurial."

Entrepreneurs cognitively categorize business situations more positively.  In other words, they are more likely to have an expectation of a positive outcome, and this attitude aligns with taking risks and obtaining the resulting reward.  The trick is not making this an entirely intuitive process.  Incorporate the science of strategic risk management into your talent management framework, to ensure that you are stretching to get the rewards that come with empowering and equipping people to do their best work for you.

Change of Ownership:  Sure, management assured everyone that the impending merger or acquisition wouldn't impact any executives.  But, the acquirer wasn't in on that conversation.  Change in ownership always results in executive changes.  Newest hires are most vulnerable, but all functional leaders risk that there may be a similar person retained instead of you. 

What To Do: Have your personal value proposition prepared.  Be ready to demonstrate to the new owners what you have accomplished, and why it is important to keep you on.  If this tactic doesn't work, you still need the info to bolster your job search effort.

Out of the Loop:  Are you being excluded from key meetings?  Are private communications increasing, but you are excluded?  Fewer people seeking your input?  These are huge signs of vulnerability. 

What To Do: Read the writing on the wall, return recruiter calls, and get your resume updated. 

 
Profits/Revenue Down:  Lots of companies have suffered in the downturn.  If you are still there, and have survived RIFs already, you may still be vulnerable.  Although we advocate transparency, most companies usually make cutback decisions in small groups, in dark rooms, after people have left. 

What To Do: If you are a key contributor to making or saving money, be sure senior management knows you care, hears your frequent, regular suggestions for improvements, and sees you going above and beyond to make a difference.

Mistakes:  That huge mistake you made, that your boss tried to minimize...  It didn't go away, and it wasn't forgotten.  If you are the cause of a missed schedule, cost overrun, or dissatisfied customer, it may be a bigger deal than you think. 

 What To Do: Once you discover the mistake, make a plan to mitigate the impact, disclose it with the best possible spin, and already be working on the solution at the time of disclosure.  If it is too late for all that, ask the hard questions, and find out if your boss really is OK with what happened.  Lack of communication on the tough stuff leads to surprises

Documentation:  Is your boss or HR suddenly sending you e-mails about mistakes, or requests to improve?  They may be building a file to support your termination. 

What To Do: Take such communications seriously, and don't get defensive.  Try to sincerely address the complaints, and if you can't do the job expected, perhaps ask for reassignment to something you know you can do.

Confidential Job Posts:  Seen a "confidential" job ad that accurately describes your position?  A search may have already been launched to replace you. 

What To Do:  Your boss and HR both fear trouble when you are let go, so negotiate an exit arrangement that is Win-Win.  Get yourself time, money or both, and give your company a release from claims, and you may be able to exit gracefully.  Collect letters of reference from peers and higher ups whenever possible.  They are more likely to provide these before you are out the door.

It is difficult to prevent an employer from letting you go.  Their perception is what counts, and most employment these days is "at will."  Don't slip into denial, and face the challenge head-on.  You may be able to turn the situation around, or at least prevent it from taking you by surprise and becoming a disaster.

 

 

We recently became aware of a book called Nudge: Improving Decisions About Health, Wealth and Happiness by Richard Thaler and Cass Sunstein.  These Chicago Business School professors talk about "Choice Architecture" - organizing the context in which people make decisions.  They provide many scientific and even some humorous examples of how this has worked in society.  For example:  School kids chose healthier food if it was prominently displayed in a cafeteria, and the junkie food was harder to find, even though the total array of food stayed the same.  In Amsterdam, men became 80% more "accurate" in men's rooms, when tiny pictures of flies were embedded into the porcelain in urinals!  The authors use the term Libertarian Paternalism, which they acknowledge contains two heavily laden words, to describe the phenomenon where people are completely free to choose, but it is legitimate to try to influence them to make choices that will improve their lives.  The book provides lots of examples of how choice architecture could improve the world, people's health, and they way they manage their own money.
We were struck by the many parallels we've seen of choice architecture, from the "natural and logical consequences" style of parenting, to A/B choices presented when closing in sales, and motivating employees to be more productive and improve morale.  The key is being ethical.  We've all seen commercials that were all about choice architecture, but are blatantly manipulative.  The authors of Nudge advocate using choice architecture (giving a nudge) only when it is most likely to help and least likely to harm.  We think business leaders will benefit from this simple explanation of how to influence with integrity.  We all want to find ways to steer toward the outcomes we want, do no harm in the process, and help people we interact with to feel that we create win/win solutions.