In 2003, Michael Lewis released his book “Moneyball.” It’s a study of the Oakland A’s and their general manager, Billy Beane, and their analytical, data-driven approach to selecting players to create a winning team when the competitive landscape was decidedly imbalanced against small market teams.
If you’re like me, you’re thrilled that the 2021 MLB season is underway.
Please note, this isn’t just another sports analogy. Instead, it’s a coincident reference point regarding talent. It turns out, Beane’s assertion about the unreliability of our eyes and gut is just as true for our organizations as they are for professional shortstops and leadoff hitters. Said differently, how companies approach talent optimization is a predictor of business results.
A study released in February of over 500 executives across 15 industries, whose companies employ 50–500 people, indicates that 55% of respondents have a talent strategy in place. Fortunately, that’s up from just 37% in the prior year. Borrowing from my peer contributor Stacey Mason and her applied improvisation work, there’s an “unfortunately” to this same statistic.
Unfortunately, 45% of companies participating in the study do not have a talent strategy in place. Where am I taking this? If Beane is right and we can be deceived by our judgment and half of our companies have no strategy in place, our talent decisions are essentially reduced to a coin flip.
I talk to leaders regularly who, at different times, find themselves somewhere on a spectrum between being confident and confounded. It’s been a challenging year, and the prevailing thought remains that it is a buyer’s market for available talent. Yet how we assess our needs, consider available talent and make placement decisions is a more significant driver of our success rate than the market itself.
It’s why some companies can outperform the available talent market and others miss on the “can’t miss” choice; why some make internal moves that take advantage of someone’s sweet spot and others continue to promote people to their lowest level of incompetence.
I would suggest your company’s approach says a lot about what it believes on two fundamentals. The first is that our “eyes and gut” are the exception and therefore highly reliable; or that we find value in tools and processes that provide objective data to inform our decisions. The second is that our talent strategy is not a predictor of individual, team and company performance; or that it is.
Many of us, myself included, have come to our own beliefs on these two choices based on our own anecdotal experiences. We’ll point to our successes and failures to support those beliefs. But what does the data suggest? According to this study, 87% of the companies with a talent strategy aligned to a business strategy met or surpassed its performance goals in 2020. (Yes, that 2020.) Additionally, these same companies reported significantly better outcomes related to teamwork, engagement and confidence in their strategies.
That is not a coincidence. One of the study contributors, Kirk Arnold, Executive in Residence at General Catalyst said this: “One of the most challenging aspects of driving business strategy into business results is bringing that strategy to life across the team — helping each team member understand and embrace the contribution they can, and must, make to ensure the strategy’s success.”
One final borrow from applied improv: Unfortunately, there are many factors in business that are far beyond our influence or control. Fortunately, we can “control the controllable”: to what we pay attention to, the tools we can employ, the strategic choices we make and the beliefs that drive each.
Chuck Hyde is the founder of C3 Advisors, a Northwest Arkansas firm focused on executive development and talent optimization. The opinions expressed are those of the author.