Hoffman Reid - The alliance : managing talent in the networked age

Imagine its your first day of work at a new company. Your manager greets you with warm enthusiasm, welcomes you to the family, and expresses her hope that youll be with the company for many years to come. Then she hands you off to the HR department, who sits you down in a conference room and spends thirty minutes explaining that youre on a ninety-day probation period, and that even after that, youll be an at will employee. At any moment, you can be fired. For any reason, you can be fired. Even if your boss has no reason at all, you can be fired.

You just experienced the fundamental disconnect of modern employment: the employer-employee relationship is based on a dishonest conversation.

Today, few companies offer guaranteed employment with a straight face; such assurances are perceived by employees as naive, disingenuous, or both. Instead, employers talk about retention and tenure with fuzzy language: their goal is to retain good employees and the time frame is... indefinitely. This fuzziness actually destroys trustthe company is asking employees to commit to itself without committing to them in return.

Many of your employees have responded by hedging their bets, jumping ship whenever a new opportunity presents itself, regardless of how much they profess their loyalty during the recruiting process or annual reviews.

Both parties act in ways that blatantly contradict their official positions. And thanks to this reciprocal self-deception, neither side trusts each other. Not surprisingly, neither side profits as fully as it might from their relationship. Employers continually lose valuable people. Employees fail to fully invest in their current position because theyre constantly scanning the marketplace for new opportunities.

Managers, meanwhile, are caught in the middle. Theyre wary about even acknowledging the problem, much less solving it. Instead of thinking about how to facilitate growth in their employees in forward-looking ways, they worry about keeping their teams intact long enough to complete key projects. No one wants to risk being jilted, so no one invests in the long-term relationship.

Employers, managers, and employees need a new relationship framework where they make promises to one another they can actually keep. Thats what this book aims to provide. And we think it will help build successful companies and powerful careers.

The old model of employment was a good fit for an era of stability. In stable times, companies grew larger to leverage economies of scale and process improvement. These titans offered an implicit deal to their workers: We provide lifelong employment in exchange for loyal service . Maximizing employee security is a prime company goal, Earl Willis, General Electrics manager of employee benefits, wrote in 1962. In that era, careers were considered nearly as permanent as marriage. Employers and employees committed to each other, for better or worse, through bull and bear markets, until retirement did them part. For white-collar professionals, progressing in ones career was like riding an escalator, with predictable advancement for those who followed the rules. Because both sides expected the relationship to be permanent, both sides were willing to invest in it and each other.

Then the world changed, both philosophically and technologically. The rise of shareholder capitalism led companies and managers to focus on hitting short-term financial targets to boost stock prices. Long-term investment took a backseat to short-term cost-cutting measures like rightsizingor as we used to call it, firing people . Around the same time, the development of the microchip ushered in the Information Age, sparking a communications revolution and the globalization of business. Companies like the Big Three American automakers found themselves competing with leaner, hungrier competitors.

As a result of these shifts, the stability of the 1950s and 1960s gave way to rapid, unpredictable change, and once-stalwart companies began to be toppled out of the S&P 500 at a faster and faster rate. Adaptability and entrepreneurship became key to achieving and sustaining success in business, their importance growing as the spread of computers and software imposed Moores Law on every corner of the economy. Today, anyone with an internet connection has the power to connect with billions of others around the world. Never before in human history have so many people been connected by so many networks.

The traditional model of lifetime employment, so well-suited to periods of relative stability, is too rigid for todays networked age. Few American companies can provide the traditional career ladder for their employees anymore; the model is in varying degrees of disarray globally.

In response to these competitive pressures, manyprobably mostcompanies have tried to become more flexible by reducing the employer-employee relationship to whats explicitly spelled out in a legal and binding contract. This legalistic approach treats both employees and jobs as short-term commodities. Need to cut costs? Lay off employees. Need new competencies? Dont train your peoplehire different ones. Employees are our most valuable resource, companies insist. But when Wall Street wants spending cuts, their most valuable resource suddenly morphs into their most fungible resource.

In the 1980s, a Conference Board survey found that 56 percent of executives believed employees who are loyal to the company and further its business goals deserve an assurance of continued employment. Just a decade later, that figure had plummeted to 6 percent.

In the at-will era, employees have been encouraged to think of themselves as free agents, seeking out the best opportunities for growth and changing jobs whenever better offers beckoned. The Towers Watson 2012 Global Workforce Study found that even though about half of employees wanted to stay with their current employer, most of them felt that they would have to take a job at a different company in order to advance their careers.

Its just business has become the ruling philosophy. Loyalty is scarce, long-term ties are scarcer, but theres plenty of disillusionment to go around.