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LEVERAGING
THE TALENT–DRIVEN
ORGANIZATION
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Leveraging the
Talent-Driven Organization
Richard Adler
Rapporteur
ISBN: 0-89843-519-6
10-004
1767CSP/10-BK
Contents
Appendix
Roundtable Participants ........................................................................... 41
About the Author....................................................................................... 43
Previous Publications from the Aspen Institute Roundtable
on Talent Development........................................................................ 45
About the Aspen Institute
Communications and Society Program.............................................. 47
iii
This report is written from the perspective of an informed observer at the
Aspen Institute Roundtable on Talent Development. Unless attributed to a particular
person, none of the comments or ideas contained in this report should be taken as
embodying the views or carrying the endorsement of any specific participant
at the Roundtable.
Foreword
The following is a report of the second roundtable in our series on
Talent Development. We use the phrase “talent development” with
great caution. It is not meant in the usual Human Resources sense of
attracting and training personnel. Rather, it is meant to convey the
centrality of talent to the 21st century organization. Indeed, we think
now of the “talent-driven firm,” one whose organizational function has
moved from producing scalable efficiencies to solving problems in a
flexible and adaptive way.
The first report in this series, Richard Adler’s Talent Reframed
(Aspen Institute 2009), sets forth this thesis, that the new talent-driven
firm is one that provides conditions for talent to learn, collaborate, and
make decisions utilizing social networks and other tools that character-
ize our digital age. The talent of today expects to learn constantly, to
grow steadily, and to exert leadership where he or she can. Structures
and strategies need to follow suit.
This report goes the next step. In July 2009, the Aspen Institute
Communications and Society Program brought together 19 top-level
executives and thought leaders to discuss how, during a time of dimin-
ishing resources, firms and organizations can leverage their assets to
access talent and knowledge inside and outside the firm, and create
workscapes that encourage learning, problem-solving, and leadership.
The intellectual underpinning of this series comes from the work of
John Hagel and John Seely Brown, co-directors of the Deloitte Center
for the Edge. Together with John Davidson, they published an article
in the Harvard Business Review suggesting that there is a Big Shift tak-
ing place in American business. Despite significant increases in worker
productivity over the past four decades, the financial performance of
American companies has declined broadly over the same period of
time. The characteristics that enabled businesses to create scalable effi-
ciencies for much of the 20th century have now become obstacles to
flexibility and adaptation needed in the 21st century.
As Richard Adler reports in the following pages, today’s leaders need
to build a culture of experimentation that fosters problem solving and
continual improvement. That is the kind of environment that will
v
vi Leveraging the Talent-Driven Organization
attract and retain talented workers of the future because it allows them
to get better faster. Instead of scaling operational efficiencies, the report
suggests, the 21st century firm must figure out how to scale learning.
The report details how a number of firms are using social network-
ing tools to open up communication, collaboration and learning across
boundaries, leveraging these tools to develop new products and real-
time solutions for customers. It discusses the qualities of leadership
throughout an organization that foster innovation and learning. And it
touches on some of the policies that governments will need to consider
to foster a competitive workforce in this new era.
Acknowledgments
I would like to take this opportunity to thank the Deloitte Center for
the Edge for being our senior sonsor for the Roundtable, John Hagel
and John Seely Brown for their suggestions and assistance in recruiting
participants, and Richard Adler for weaving the Roundtable’s dialogue,
background readings, and his own independent research into a concise
and coherent report.
Finally, I thank Kiahna Williams, project manager, and Tricia Kelly,
assistant director of the Communications and Society Program, for
their efforts in producing this report and the Roundtable itself.
Charles M. Firestone
Executive Director
Communications and Society Program
Washington, D.C.
January 2010
Leveraging the
Talent-Driven Organization
Richard Adler
Leveraging the Talent-Driven Organization
Richard Adler
1
2 Leveraging the Talent-Driven Organization
the Edge, summed up the message from the index by asserting that the
same factors that were responsible for the success of businesses in the
20th century are “killing us” in the 21st century.
India, suggested that the “stagnation of the education system” and its
failure to properly prepare students for the challenges of the current
marketplace, is another potential contributor to the decline in busi-
ness performance. The skills that students have traditionally acquired
through their formal education may no longer be as valuable as they
once were in the corporate world.
Steven Spear, Senior Lecturer at MIT, suggested that an explanation
for diminishing return on assets may be that “assets have become com-
moditized as markets for them have internationalized and information
about them has become more readily available.” Therefore, holding
assets is less a source of competitive advantage. It’s how they are put
to use that matters more than ever. Richard Adler, Research Affiliate
at the Institute for the Future (and author of this report) pointed to
the rising burden on employers of the cost of health care, which has
doubled as a share of GDP over the past 30 years.3
high performance teams, some of which may exist only long enough to
take on and solve a particular problem, and may involve people outside
of as well as inside the firm.
Rather than striving to increase efficiency across a company’s
operations through standardizing and automating operations, the 21st
century firm seeks to scale opportunities for learning and maximize
opportunities for its employees to discover what the market wants and
how that demand can best be met. This is accomplished, not by build-
ing and guarding stocks of proprietary knowledge, but by being willing
to share information openly with and learning from others externally
as well as internally.
Clearly, this new model is dramatically different across multiple
dimensions from the great majority of existing companies. Moving
from current realities to this new paradigm would seem to be a daunt-
ing challenge for most firms. But the Roundtable participants related
stories of major corporations that have achieved great success following
the traditional rules. These organizations have also recognized that the
environment has changed and have therefore taken significant steps
toward transforming their culture and their ways of doing business.
For example, Procter & Gamble, which had long prided itself on
the ability of its in-house research and development (R&D) capabili-
ties to create new blockbuster products, has begun to look to external
partnerships as sources of innovation. Starbucks, which built its initial
success on the vision and marketing skills of its top management, is
now inviting its customers to contribute ideas for new products. And
NIIT Limited, a global corporate training company based in India, has
developed a series of “clubs” that cut across traditional functional lines
in order to expand and accelerate innovation.
Procter & Gamble’s Connect and Develop Strategy. For many years,
P&G maintained its position as one of the top U.S. consumer products
companies by relying on its world-class R&D capabilities to create
a stream of distinctive new products. But by the year 2000, having
reached some $70 billion in annual revenues, its R&D productivity had
leveled off even while R&D costs continued to increase. According to
Laura Mattimore, Director of Leadership Development at P&G, com-
pany leadership concluded that “it was no longer true that a group of
The Report 9
people in Cincinnati had all the answers.” They recognized that for
every researcher employed by P&G, there were perhaps 200 others
around the world who were equally smart and creative. The company’s
new Chief Executive Officer, A.G. Lafley, set a goal for P&G to acquire
half of its innovations from outside the company, a radical departure
from its past practices.
Through its new strategy of “connect and develop,” P&G annually
identifies the top consumer needs that will drive the future growth of
its brands. The company translates these needs into “science problems
to be solved,” then uses multiple networks to seek ideas for solutions.
Sources for innovation include a proprietary network linking the com-
pany’s 15 top suppliers, who collectively employ some 50,000 research-
ers, and several “open” networks including NineSigma, InnoCentive,
and Yet2.com. By 2006, more than one-third of new P&G products
included elements that originated outside the company. The company’s
innovation productivity rate has increased nearly 60 percent, and the
overall cost of innovation has decreased. In a description of its new
strategy, the company asserts that “for most companies, the invent-it-
ourselves model is a sure path to diminishing returns…we believe that
connect and develop will become the dominant innovation model in
the twenty-first century.”6
• What are they using social media for? To grapple with real-
world problems and issues.
• Why are they using social media? To get help, for the joy of
solving problems or learning something new, to earn recogni-
tion, for monetary rewards.
became more numerous and more complex, and as the number of its
global customers and partners increased, the task of supporting and
engaging with all of them through traditional channels became increas-
ingly difficult and costly. And as the Internet emerged and evolved, it
began to offer new possibilities for how the company operates.
Six years ago, SAP launched an online network for software devel-
opers who worked with its products. Developers were a logical starting
point since they already operated in a culture of collaboration and
sharing, were generally comfortable with using a variety of software
tools, including social media, and were often early adopters of new
technologies. Based on the success of this first foray into social media,
the company began to “work its way up the stack.” It launched similar
networks for “adjacent communities” including business customers,
analysts, and even university students who represent potential future
employees or customers for the company’s products. SAP now operates
six different networks under the umbrella of SCN.
ingly likely that the same questions would be repeated while past answers
would get buried. To combat “answer fatigue” from too many redundant
questions, all existing content is now searchable, and answers to the most
commonly asked questions are put into FAQs in a wiki format.
Although SCN is based primarily on message boards, it also makes
use of a variety of other social media tools. For example, a blogging tool
is available, and more than 5,000 members—only one-third of whom
are SAP employees—maintain blogs on the network. In an online inter-
view, Yolton described how the company uses other social media plat-
forms to support both online and offline activities like conferences:9
• We use Twitter to talk about events beforehand, during, and
after a conference. Speakers share previews of their content
before the conference. During events…it allows the people not
present to stay up-to-date. We did a product launch in New
York earlier this year and we sent some top contributors who
polled a larger audience through Twitter at our press confer-
ence. Then we asked questions that came from Twitter of the
person on stage—which we then webcast and tweeted out to
the community.
• We use Flickr so individuals can take their own photos and tag
them and then the community can see them aggregated.
• Some of us use Facebook [as well as] Digg and other tools.
In Chasing the Rabbit: How Market Leaders Outdistance the Competition and
What Great Companies Can Do to Catch Up and Win (McGraw-Hill, 2008),
Steven Spear describes the characteristics of “high velocity companies” that
are consistently able to respond faster and perform better than their com-
petitors. What these companies share is a culture of structured continuous
learning that is based on:
One of the most impressive stories in the book is about the power of trust
and teamwork. It describes how Toyota and its network of suppliers respond-
ed to a catastrophic fire at a company that was the sole supplier of a small but
vital component in virtually all of the company’s vehicles. Despite predictions
that this loss would cripple the company’s just-in-time production system, a
group of Toyota’s suppliers, most of whom had no experience producing this
kind of part, rapidly banded together to recreate the lost production capacity
and began providing the missing component in a matter of a few days.
26 Leveraging the Talent-Driven Organization
Harrah’s Corporate
Harrah’s Corporate Diversity
DiversityWheel
Wheel
Organizational Dimensions
Functional Level/
Classification
External Dimensions
Work
Work Income Content/
Geographic Field
Location Marital Location
Status
Internal Dimensions
Age
Return on Return on
Investment Innovation
A D
Analyze It Strategize It
Measure It Experience It
Problem Solve It Conceptualize It
B C
Return on Return on
Implementation Interaction
Few people are equally strong in all four quadrants. Using a meth-
odology developed by Herrmann International, it is possible to assess
individuals’ relative strengths and come up with a profile of their domi-
nant cognitive style. Since all four types of skills
are necessary for a successful enterprise, the goal
of management should be to create working …the goal of
teams that are “diverse by design” and include management
people with all of the requisite skills to identify should be to
a problem, analyze and find a solution, and then
implement that solution. Harrah’s now does
create working
this on a regular basis to tackle the “hardest teams that
problems” that the company faces. are “diverse
Ensuring the right kind of diversity is a key by design….”
strategy to optimizing the value of talent to a firm.
But, Keeton acknowledged, managing diverse
groups well can be difficult, and when it is not done properly, the result is
often chaos. Diversity, per se, is neither good nor bad: what gives it value
is the ability of leaders to “yield manage diversity” to produce superior
30 Leveraging the Talent-Driven Organization
results. And while diversity is a critical success factor for innovation, there
are other rules that must be followed in order to sustain an innovative cul-
ture. First, everyone must be willing to put their best ideas forward, even if
they do not coincide with conventional wisdom. Second, it is vital that the
best ideas win, no matter who proposed them. And finally, there needs to
be a system in place that can take an idea and turn it into an “actionable,
scalable result” as efficiently as possible. When done right, Keeton con-
cluded, a diverse team of 12 people will include “the 13th mind” which is
the combined value of active collaboration.
P&G’s Mattimore noted that Lafley spent the majority of his time
“teaching and coaching others,” and regarded virtually every interac-
tion as a “teaching moment.” This was consistent with the company’s
emphasis on continuity: managers at P&G are evaluated on how well
they help subordinates develop, and succession planning reaches down
at least three levels below top management. And since P&G managers
tend to have most of their retirement savings in company stock, this
also encourages a long-term perspective.
Ann Korologos who has served on the boards of a number of major
corporations noted that each Chief Executive Officer she has known
has been different, but that all successful CEOs have agendas that are
fundamentally about the company they lead and not about themselves.
Character and integrity are the most important characteristics for any
leader, and it is often a character flaw that results in a leader’s down-
fall. Perhaps the biggest challenge for leaders today is the increased
transparency of organizations. In fact, people in an organization—and
perhaps outside it as well—may know as much or more about the orga-
nization as the CEO. There is no longer any place for leaders to hide.
Leaders also have to cope with continuing change. The strategy that
led to success at one point may need to be revised or dropped entirely
when conditions change. Fred Keeton noted that Gary Loveman
brought about a major revolution in the gaming industry when he
introduced the use of rigorous analytics to identify where profits were
really being generated. But eventually this approach spread throughout
the industry and no longer provides Harrah’s with a competitive advan-
tage. As a result, Loveman is now trying to discover “what’s next.”
Another example of the need to change direction is provided by
Cisco’s Don Proctor. For many years, the company followed a business
model that was based on outside acquisitions. Over a 16-year period,
under the leadership of CEO John Chambers, the company carried out
128 mergers and acquisitions, which represented an important source
of growth. Identifying, assessing, acquiring and then integrating all of
these firms meant that the company’s leadership was largely focused on
practical operational issues embodied in the “A” and “B” quadrants of
the Whole Brain Model. Now, the focus of the company has shifted,
and the CEO’s role has shifted as well. He now operates more out of
the “D” quadrant that involves strategizing, experiencing and concep-
tualizing new threats and opportunities in order to find and articulate
32 Leveraging the Talent-Driven Organization
“a bold vision for the future” for the company. Over the same period
of time, Cisco has evolved from a traditional command-and-control
structure to one that involves collaborative leadership.
Maryam Alavi added that leadership needs to be seen as a talent
that can be distributed throughout an organization, not concentrated
just at the top. In fact, every effective worker needs to have leadership
abilities, the ability to bring about posi-
tive change. These capabilities can be
…leadership needs best developed in an environment that
to be seen as a talent encourages everyone to take risks, ask
that can be distrib- questions, solve problems, and discover
what works.
uted throughout an
organization, not
Public Policies to Support Talent
concentrated just The final Roundtable session focused
at the top. on public policies that could support
more effective development and use of
Maryam Alavi
talented workers by American business.
As John Hagel pointed out, we know
that digital technologies will continue to evolve and offer new chal-
lenges and opportunities for business. But the role of public policy in
influencing the impact of these changes is much less certain; it is the
“wild card” that can play a positive or negative role in helping busi-
nesses to respond to The Big Shift. What is at issue here is not just the
country’s economic competitiveness. Our national security is also at
stake. As Don Proctor put it, “we need the best and brightest to manage
the grid”—the infrastructure through which so much of the country’s
vital life now flows.
Ann Korologos, who served at the U.S. Secretary of Labor from 1987
to 1989, identified several areas of opportunity for policy initiatives.
She noted that while the government is not particularly well suited to
promoting talent directly, it can create the conditions in which talent
can flourish. Given the country’s serious economic problems, the first
and most urgent task for the federal government is to stabilize the
economy and capital markets. Next, the government needs to insure
that we have the open, competitive marketplaces that are necessary to
support innovation.
The Report 33
2 Million Minutes
Two million minutes is the total amount of time that elapses between
graduation from middle school and high school graduation. A documen-
tary film produced by entrepreneur Robert Compton explores what
American students are doing with this time compared to their counter-
parts in places like China and India. The film focuses particularly on the
shortcomings of U.S. education in science and math, and points out that
half of all college freshmen in this country require remedial work. The
original film, along with new documentaries that look in greater detail at
high school education in China and India, have been shown in numerous
places (including the 2008 Aspen Ideas Festival) in an attempt to spark
a debate about how to improve the quality of American education. The
message of the film, according to Stephen Gilllett, is that the U.S. is fall-
ing farther and farther behind the rest of the world in the education it is
providing to the next generations of workers.
Conclusion
At the heart of Deloitte’s Shift Index is a paradox: despite dramatic
improvements in the technological infrastructure that supports busi-
ness processes, and despite significant increases in worker productiv-
ity over the past four decades, the financial performance of American
companies has declined broadly over the same period of time. The
explanation for this discrepancy, according to John Hagel and John
Seely Brown, is the lag that exists between the rapidly changing com-
petitive landscape of business and the speed at which firms have rec-
ognized the fundamental changes in the environment and responded
36 Leveraging the Talent-Driven Organization
Notes
1. For more about the challenges facing the publishing industry as a result of new technolo-
gies, see Richard Adler, Media and Democracy: A Report of the 2008 Aspen Institute Forum
on Communications and Society, March 2009. Available online at www.aspeninstitute.org/
publications/media-democracy-report-2008-aspen-institute-forum-communications-society.
2. John Hagel III, John Seely Brown and Lang Davison, “The Shift Index: Uncovering the
Emerging Logic of Deep Change,” Deloitte Center for the Edge, June 2009. Available online
at www.johnseelybrown.com/shiftindexabstract.pdf.
3. A 2009 study from RAND found that growth in health care costs has had negative effects on
employment, output, and value added to GDP in the U.S., and that the effects are greater
for industries in which high percentages of workers have employer-sponsored health care
insurance. See N. Sood, A. Ghosh, and JJ Escarce, “Employer-Sponsored Insurance, Health
Care Cost Growth, and the Economic Performance of U.S. Industries,” HSR: Health Services
Research, June 9, 2009. Available online at www.rand.org/news/press/2009/07/23.
5. “Reference Guide on Our Freedom and Responsibility Culture,” Netflix. Available online at
www.slideshare.net/reed2001/culture-1798664.
6. Larry Huston and Nabil Sakkab, “Connect and Develop: Inside Procter & Gamble’s New
Model for Innovation,” Harvard Business Review, March 2006.
7. Jessie Scanlon, “How to Build a Culture of Innovation,” Business Week, August 19, 2009.
Available online at www.businessweek.com/innovate/content/aug2009/id20090819_070601.
htm.
38 Leveraging the Talent-Driven Organization
8. See, for example, John Seely Brown and Douglas Thomas, “MBAs be Warned: The Gamers Are
Learning More Than You Realize,” Wired Magazine, April 2006.
9. Interview: B2B Online Community Insights from Mark Yolton, SAP Community Network.
Available online at http://blogs.business.com/b2b-online-marketing/2009/b2b-online-com-
munity-sap.
10. Some of the information about D Street comes from Mary Brandel, “The new employee con-
nection: Social networking behind the firewall,” Computerworld, August 11, 2008. Available
online at www.computerworld.com/s/article/322857/The_new_employee_connection_Social_
networking_behind_the_firewall.
11. See Maryam Alavi and Gerald C. Kane, Social Networks And Information Technology:
Evolution and New Frontiers,” in D. Leidner, and I. Beccra (eds.), Knowledge Management:
An Evolutionary View of the Field, AMIS Research Monograph, 2008.
12. Mitch Ratcliffe, “Starbucks Launching Digital Ventures,” Rational Rants, March 19, 2009.
Available online at http://blogs.zdnet.com/Ratcliffe/?p=382.
13. For a description of Loveman’s impact on Harrah’s, see Julie Schlosser, “Teacher’s Bet,”
Fortune Magazine, March 8, 2004. Available online at http://money.cnn.com/magazines/
fortune/fortune_archive/2004/03/08/363688/index.htm.
14. “Performance-Based Rewards for Teachers,” DEST, March 2007. Available online at www.
dest.gov.au/sectors/school_education/publications_resources/profiles/performance_based_
rewards_for_teachers.htm.
15. “Cities In Crisis 2009: Closing the Graduation Gap,” America’s Promise Alliance, 2009.
Available online at www.americaspromise.org/Resources/Research-and-Reports/c/Cities-In-
Crisis-2009.aspx.
APPENDIX
The Aspen Institute Roundtable on Talent Development
Roundtable Participants
41
42 Leveraging the Talent-Driven Organization
43
Previous Publications
from the Aspen Institute
Roundtable on Talent Development
45
About the
Communications and Society Program
www.aspeninstitute.org/c&s
47
48 Leveraging the Talent-Driven Organization