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General Electric will soon be able to predict when staff are about to quit. An application under development will analyse human resources data, identify situations where people often leave and prompt the group to step in and persuade them to stay. “If we can reduce GE’s average voluntary attrition rate . . . it would have enormous productivity implications”, Paul Davies, a GE HR executive, told Harvard Business Review recently.
I had always assumed this was the default position of most big employers. If you spend time and money hiring and developing your future leaders, you really do not want them to treat you as a staging post en route to a bigger challenge offered by your rivals.
At the recruitment stage, this can lead to a round of mutually beneficial fibbing. Employers pretend they offer a lifetime of ever-grander opportunities for advancement. Candidates dissemble about their undying devotion to the brand.
Lately, though, I’ve noticed a change in attitude. Candidates are more inclined to be upfront about their ambitions. I seem to have read more applications for the FT’s editorial graduate trainee scheme recently in which would-be employees brazenly state they see the Financial Times as a first step in a career elsewhere in public policy or business. I still wouldn’t recommend this approach. But the idea that promising staff can be shackled to their desks no longer reflects reality. Both individuals and organisations need to adapt to a world of shifting loyalties.
In fact, GE has long been a factory for leaders. McKinsey has for years made a virtue of its up-or-out policy of nudging consultants on towards other challenges. The big four accountancy groups have to hire at a phenomenal rate simply to replace staff who move on. Research suggests some of the most prestigious employers are able to pay their staff less because the training they receive and the reflected glory of the brand will make them more marketable in future.
According to Gianpiero Petriglieri of Insead business school, this is one reason why companies increasingly sell themselves as learning organisations, with “campuses” rather than offices, while universities have in turn become more corporate. Talent factories are no longer as useful in a world where you will pursue multiple jobs and possibly several careers before you retire. Prof Petriglieri prefers to talk about “talent farms”.
Business schools may be the most important “educultivators”, not so much for the skills that they can impart, but for the networks they can grow.
In a study published in Administrative Science Quarterly, Gianpiero Petriglieri, his wife Jennifer Petriglieri, also from Insead, and Ceibs’ Jack Denfeld Wood, looked at 55 managers with mobile careers who were pursuing a one-year MBA at an unnamed “top-tier business school” they call “Blue”.
The study found these people were positioning themselves for mobile careers in an uncertain world. “The crafting of portable selves,” the academics wrote, “helps people fit into and make the most of organisations that they might leave, allowing them to have a place while they continue to be going places.”
What business school students build, according to the study, is far stronger than a mere safety net of useful contacts. Jennifer Petriglieri points out that it is possible for people outside a network to tap into its raw economic benefits. It is hard, bordering on impossible, for an outsider to “belong” to a deeper community.
There are dangers here both for organisations and for the “portable” managers who work there. For organisations, the main risk is that they will tire of investing in development of leaders who are bound to quit. Instead, they will hire plug-and-play executives from the portable community at ever-increasing cost. The anecdotal evidence is that, so far, bigger businesses continue to see leadership development as a vital part of their recruiting pitch.
For managers, the greater risk is that they never touch down properly at the places where they work. Unmoored from the reality of most longer-tenured corporate employees, they would then float off into their own separate community, having lost the trust of the people they lead. That is why people who develop future leaders have a duty also to teach them the relationship skills that will make them personable as well as portable. As Gianpiero Petriglieri puts it: “If all we provide is another bubble, then we have failed.”
Andrew Hill is the FT’s management editor