The Development Dilemma

Organizations have to make a choice. Should they just buy out managerial talent or grow their own. The short term solution is a no brainer – buy the talent. That usually means fishing around in organizations which have faced similar business challenges as you are. In hiring talent from another organization it works well if besides the work experience fit, there is a match between the values of the two organizations. Organizations that have had a track record of growing their own talent, tend to have strong processes and a culture which encourages people development. So the caveat is that while hiring such people in the short term can bridge the talent gap, they often tend to get disillusioned by the new employers’ lack of commitment to the people development agenda. Hence if you are a startup, people will be indulgent on this count for the first year or two. Beyond that there is no choice but for organizations to stop stealing flowers from the neighbor’s garden and grow their own.

There is an interesting challenge that faces HR people when they seek to develop talent. Let us say, you have a business that will double or triple in turnover, profits and complexity over the next 2-4 years. Is the past performance a good predictor of success? Not necessarily is my answer. An employee might have demonstrated a great ability to grow the business from $1 mm to $4 mm. Does that mean the person will be successful in growing the same business from $40mm to $150mm? One may argue that the skills needed to grow and successfully manage the transition of a business from $40mm to $150mm are very different if you wish to grow the business from $400mm to $800mm. The strategies that make a business grow in its earlier years is very different from what makes the business grow in its maturity. In the same way, the skills that make a manager succeed in managing a growing business may be different at various levels of turnover. The name of the game here is to identify the tipping point beyond which the game changes. 

The developmental task is just as complicated. Many organizations are today adapting a 70:20:10 model of development. 70% of development is on the job; 20% of it is by learning from others eg a coach or a mentor and the final 10% learning is from the inputs in a classroom. This paradigm is built on the premise that adults learn best on the job. they can supplement their learning by some coaching and only a miniscule percentage of new skills are learnt through classroom training. In taking the example given above, how should we create a development plan of a manager who will need to play on a larger canvas as the business grows rapidly. When a business grows by say 30% in a year, it is a sobering to ask how many its employees are growing their capability by a similar percentage. If not, every year a bigger and more complex business is being managed by a workforce that is struggling to keep up with the additional capacity needed to be successful.

One last thought – look at where your business was three or four years back. How accurately could you foresee the challenges and opportunities of the business that you face today. If you had to put a rough percentage to that, what would it be? 10%… 30%… 50% … and if you could accurately predict more than 50% of the things that you have today, you must be a genius. Most people are unable to get this right beyond the usual 15-20% range. If that is the level of accuracy with which we are able to predict the future business scenario and the opportunities and challenges in the ecosystem, how do we know that the development plans we have put in place address the skill gaps in the future. The developmental dilemma continues to intrigue. In the absence of clear coordinates, development is going to remain a best guess document.

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