Silicon Valley's Blind Spot: Talent Management
When you think Silicon Valley, you think innovation. And yet the Valley has one (giant) blind spot: talent management. Silicon Valley changed the world by offering cutting-edge solutions to problems we didn’t know we had. But while tech firms keep tinkering with talent management, we argue that tried-and-true people strategies will prevail over shiny new concepts.This article by Tomas Chamorro-Premuzic, Ph.D., and me appeared in Talent Quarterly 2017 with the title: What If Talent Actually Does Not Need DisruptingTry to remember what the world was like before Google, Facebook, or even Uber entered the picture. Pretty tough, right? Even though so many of today’s tech titans have only been around for a decade or two, they’ve changed how we communicate and operate in immeasurable ways. That’s Silicon Valley for you:Through technological disruption and a fearless entrepreneurial mindset, no industry or sector has escaped the transformative impact of its ideas, which have demolished established business models and unrivalled corporate giants. When you think Silicon Valley, you think innovation. And yet the Valley has one (giant) blind spot: talent management.Look for innovative approaches to identifying, managing, developing, or retaining employees in the 20-mile stretch of California between Palo Alto and San Jose and you’ll be disappointed. Sure, many tech firms have managed to rebrand or market mainstream HR practices to appeal to the masses, and presumably job applicants, with terms like “people analytics,” “chief happiness officer,” and “digital talent ninja.” Those same companies have also advertised their organizational cultures with cult-like appeal, making their management ethos as desirable as their game-changing products. And yet one area has appeared to resist innovation with remarkable strength, namely talent management.The truth? None of these practices are all that original, or even all that useful. Many of the concepts embraced in the Valley—like grit, learning agility, and holacracy—are founded on limited scientific evidence, and have yet to demonstrate any real value in the workplace. Meanwhile, other ideas—such as strengths-based coaching, the death of negative feedback, and denial about talent differentiation—are actually harmful in theory. For a culture so obsessed with algorithms, rigor, and data, it’s disappointing to see such wide-ranging levels of bullshit adoption.
So why have Silicon Valley firms failed to produce real innovation in the talent space? Here, we offer a speculative view about the underlying causes—and, crucially, recommendations for talent-related innovators. Despite the facts, we’re still hopeful that these otherwise-innovative organizations will eventually produce groundbreaking advancements in the war for talent.
The Valley’s Talent Innovation Gap
In our view, there are three main reasons why Silicon Valley has been slow to catch up to the talent-related innovations happening elsewhere in the world.1. Disruptive tech firms base their success on great ideas and products—not people.Google’s Sergey Brin and Larry Page once said that coming up with an idea is easy, but creating the company that makes that idea a global success requires smart management and leadership. While that may be accurate, it’s also true that when you completely own search, social media, or online payments, you don’t need to be ahead of the game in the talent space. In fact, if highly qualified, smart young people love your brand and products, you won’t need groundbreaking talent acquisition processes to get ahead of your rivals.In our combined personal experiences teaching MBA students around the world, we’ve witnessed the problem that traditional conglomerates have these days when it comes to competing for talent against hipper Silicon Valley companies, including small startups. Look at it this way and it makes sense that huge tech firms have invested great efforts in turning their HR and talent management practices into a big PR campaign. Be known, desired, and sought after, and you’ll attract enough job applications that quantity will inevitably increase quality.
2. Engineers don’t take soft skills seriously.
When Silicon Valley rebranded talent management as “people analytics,” it kickstarted the obsession for “datafying” much of HR, even if the focus so far has been on trivial predictions (“Employees who go to the bathroom more often are more likely to quit in the next 2 years”) rather than meaningful explanations of employee behavior and productivity (“Disengagement increases turnover”). Yet despite this rebranding, the engineering culture of Silicon Valley has demonstrated a clear disdain for psychological constructs, including talent.Instead of leveraging 100 years of organizational science, and perhaps even attempting to move that science forward, the focus has been on the tangible and formal components of talent—hard skills, expertise, and technical knowledge— rather than personality, values, or abilities. As a result, many top tech firms are faced with the same problem that financial services, pharmaceuticals, and other technical industries faced in the past: a surplus of proficient individual contributors with little potential for management and leadership.Furthermore, subjective assessments of performance and potential are still widely used to determine internal and external staffing decisions. For instance, a well-known unicorn contacted us recently to discuss whether their current interview process of 12 rounds of unstructured interviews could be shortened. Draw your own conclusions.
3. High IQ goes a long way—at least in tech and engineering.
While even technology rms would boost their talent game if they expanded their conceptions of talent to allow for soft competencies—curiosity, integrity, emotional intelligence, ambition, and self-awareness—to be considered, it’s also true that in their analytical, algorithmic, and problem- oriented cultures, IQ does go a long way.Interestingly, Silicon Valley firms don’t generally acknowledge the centrality of IQ to their talent identification strategies, with some behemoths (notably Google) explicitly stating they don’t evaluate IQ. But when you’re mostly selecting doctorates from Stanford and MIT, or MBAs from Harvard, do you really need to put candidates through an IQ test?At a recent event, Google’s CEO for Iberia noted that the secret component of the company’s talent strategy was to hire on “learning ability”—the most commonly accepted definition of IQ! (See, selecting an uber-smart cognitive elite with stellar degrees from Harvard and Stanford does pay off .) However, the major challenges for big technology rms are no longer cognitive, but rather, social, political, and ethical. Deciding to sell a phone that costs almost as much as a country’s per-capita income is an ethical choice. So is collecting millions of data points that enable an algorithm to nudge a shopper to buy a product or sway an election result in favor of one candidate.
Are Silicon Valley’s Talent Philosophies Sensible?
Most of the talent management strategies and philosophies that Silicon Valley has adopted appear to be focused on self- branding attempts, in an effort to specifically entice young people to apply to their companies.As Jeffrey Pfeffer noted in his book Leadership BS: Fixing Workplaces and Careers One Truth at a Time, the management BS in question rejects a company’s populist attempt to market its working culture as a “feel-good” environment where tedious tasks, rules, and authority rarely apply. From sushi chefs to ping pong tables to VR playrooms, the portrayal of competitive modern workplaces as college fraternities is now commonplace. Consider the following dogmas governing many of the rising Silicon Valley firms:
1. Poor talent differentiation and the democratization of development.
“We believe everyone has potential,” “Everyone here has talent,” and “We develop everyone” could be common mantras in the Valley. And sure, they all sound pretty appealing for potential job candidates, because they imply that there aren’t any real talent barriers to make it in the world’s most innovative and desirable firms. Yet such populist slogans butt up against well-established evidence on the inherent distribution of potential, talent, and performance in any organizations.Indeed, as the Pareto principle stipulates, if you measure total output in any collective unit well, you’ll find that 20 percent of people (at most) are responsible for 80 percent of performance and productivity. These systematic differences in performance have undeniable implications for a company’s talent identification and development process. If you can bet on those who are most likely to become star performers in the future, the ROI of their high-potential identification and development programs will be much higher. Besides, telling untalented people that they’re talented won’t boost their performance—it’ll just upset those who do have talent and perform well.
2. Strengths-based talent management.
Imagine going for your annual medical checkup and not being told that you have a major health condition brewing. In fact, instead of diagnosing your problems, your doctor just focuses on your medical strengths, ignoring what’s wrong and telling you about all the things that are right. How would you make the necessary changes in your lifestyle to address your health condition? While this idea may sound absurd, it’s widely accepted in Silicon Valley.A growing number of firms are eliminating negative feedback from their performance appraisals and embracing positive psychology concepts that aim to make employees feel good about themselves, such as happiness, growth mindset, purpose, and authenticity. If you were hiring someone to fly an aircraft, it would be critical to know if the candidate had bad vision. So if you’re trying to unlock your most talented employees’ full potential, wouldn’t you want to make them aware of their weaknesses?
3. The mindless celebration of fads and shiny new objects.
Silicon Valley’s most counterproductive habit is that its pro-innovation bias is often manifested through a tendency to adopt novel trends and gravitate toward bold new concepts without much concern for quality. For example, digital interviews are increasingly adopted as a more objective alternative to traditional interviews, even though machine-learning algorithms have yet to demonstrate superior validity vis-à-vis well-executed structured interviews.
“People have come to have too much swagger and not enough insights.”
With that swagger comes bad behavior: Uber, for example, has recently been the subject of a litany of scandals including allegations of sexual harassment, intellectual property theft, and driver manipulation.To be clear, we remain optimistic that the revolutionary rms in Silicon Valley will ultimately be able to produce some much-needed innovations in the talent space. Take Google, which is running its own experiments to validate what we’ve long known: that being a good people manager matters. Google researchers found that employees value coaching, but the first step to being an effective coach is deep self-awareness. And that requires awareness of the science of personality.If Silicon Valley’s data-driven approach to problem solving can be combined with an interest in organizational science—and an acknowledgment that there is a science to understanding and managing people—its key talent management processes may become not just more rigorous, but also cutting-edge. These firms need to invest equally in furthering people sciences to understand their employees, and scientific talent management practices without getting carried away by fads and hype.But until then? Silicon Valley must remain faithful to the science and adopt the methods and processes that have worked for decades. What a novel concept.