Internal Talent and diversity

How many of you have interviewed for a job and been unsuccessful, receiving one line of feedback simply stating that “other candidates represented a better fit to the company or role”? How many have you have supplied this sort of feedback? Maybe it’s fear of giving constructive feedback that results in this being many people’s fall back position. The use of “cultural fit” as a rejection mechanism is something most professionals are now more sensitive to the because this statement can be interpreted as potentially discriminatory.

Recruiting against cultural fit

Most Recruiters screen for cultural fit, even if they are not communicating to candidates that they have been rejected based on the lack of fit. Diversity and Inclusion efforts in most organisations seem to be in direct conflict with the fact that many companies lack real diversity in Sourcing channels for Talent Attraction. Referrals are a very positive source of hires in most organisations, but mean that you run the risk of hiring lots of similar people. Poorly defined Assessment processes also result in companies hiring similar people from the same pools.

A diverse mix of gender, ethnicity, age, experience and cultural backgrounds is crucial in most companies to drive success. There is plenty of evidence that this happens at all levels in most organisations. Here is an interesting fact that highlight the lack of diversity in most organisations at Executive levels. 20 -30% of CEO appointments in large businesses are outsiders, meaning you already have to be a CEO in a large business to stand a chance of making the long list. Probably why the number of female CEOs in Fortune 500 is only 27 as of January 2018.

So what’s the answer?

At the Executive level, clearly internal development of talent is an obvious one. There are studies that have looked at internal appointments and the evidence suggests that a 25% better performance is achieved by insiders than external hires in to the same top posts. Satay Nadella has seen $400bn added to Microsoft’s market cap since his appointment. Yet there was very little enthusiasm for his appointment, despite him following the Founder and another Microsoft Lifer in to the post. It seems baffling to me that Corporations would turn down the opportunity to leverage a 25 year detailed assessment process (which is what you had with Nadella), in favour of someone who you’ve spent a few months gathering a limited amount of data on. Corporations ar investing heavily in D&I initiatives, so surely it makes sense that you give these efforts the opportunity to filter up to the Executive level by driving world class internal talent development.

If the talent isn’t there then clearly you have no choice. It goes to show that talent spotting internally and investing in your existing staff is still not maturing in most organisations to the level that it should. But this sort of issue is no surprise to most people in Talent teams. So many organisations don’t make external talent mapping a priority at the Exec level. If you don’t know how strong you are against your competition then you won’t have the knowledge of what gaps need addressing. If your competition has better talent in any area, you will lose. But you may also find it difficult to attract the best external talent in these situations because everyone will want to go and work for the best teams with the best people. If the external talent market s know this and you don’t then your ignorance will be very damaging.

You can’t argue with the studies that unequivocally prove that diversity makes companies better. Thanks to @brucedaisley for inspiring this post (this post has been a little while in the making so you’ll have to scroll back through the Eat Sleep Work Repeat back catalogue to find the podcast) and sharing his interview with Professor Anita Woolley. A study by Prof. Woolley and her colleagues looked at the Cognitive Intelligence of teams. These studies found that teams with more than 50% women perform at a measurably higher level and performance based on this one fact is significantly higher than you would expect to see based on the sum of the individual intelligence of team members. Everyone in the team raises their contributions in teams with a more diverse mix.