Our Delusions About Talent
Tomas Chamorro-Premuzic, professor of business psychology at University College London, dispels some of the myths that have persisted in the 20 years since McKinsey coined the phrase “war for talent.” He argues the science of talent acquisition and retention is still in its early stages. Chamorro-Premuzic is the CEO of Hogan Assessments and the author of the book The Talent Delusion: Why Data, Not Intuition, is the Key to Unlocking Human Potential.
SARAH GREEN CARMICHAEL: Welcome to the HBR IdeaCast from Harvard Business Review, I’m Sarah Green Carmichael. Talent. It’s a word that gets thrown around, almost recklessly, in conference rooms, and job interviews, and all-hands meetings. The best companies are in a quote “war for talent,” the saying goes. With a roster of a-plus players, companies innovate and excel.
And this lust for talent is with good reason. A former colleague of Steve Jobs quotes the Apple founder as saying, “It doesn’t make sense to hire smart people and then tell them what to do. We hire smart people so they can tell us what to do.”
But there might be a little too much truth to that. In the optimal case, companies are assembling top teams of superstars that align into an unstoppable juggernaut, driving the enterprise forward. But in the worst case, companies are shelling out big bucks for talent, but don’t really understand how to get these people to work together. And the result of their war for talent ends up looking more like the roster of inflated egos of an over-budget, dysfunctional movie.
So, here today to dispel some myths about the war for talent is Tomas Chamorro-Premuzic He’s a Professor of Business Psychology at University College, London. Tomas, thank you so much for talking to the HBR IdeaCast.
TOMAS CHAMORRO-PREMUZIC: It’s great to be here.
SARAH GREEN CARMICHAEL: So, what are so many companies getting wrong?
TOMAS CHAMORRO-PREMUZIC: I could give you a list of many mistakes. But they all have in common that most HR, or talent management, practitioners, and decision makers in the space of talent rely too much on their intuition. They play it by ear. And they think they know talent when they see it, and therefore they know how to deal with it, and so forth. And the companies that are really smart in this game are more data driven.
SARAH GREEN CARMICHAEL: So, how do you define talent?
TOMAS CHAMORRO-PREMUZIC: The simplest one, really, is to think about talent in terms of the vital few. OK, so Pareto’s rule of– 20% of individuals in any collective group or organization can be expected to account for 80% of output or productivity. So if you can identify the vital few in a company, those are your most-talented employees. And your task is to predict who they will be before your competitors do. So that’s a very simple rule, you know, that talented people are the vital few.
Second one is, we can think of talent as performance minus effort, or effortless performance. If you’re good at doing something without trying very hard, you probably have a lot of talent.
SARAH GREEN CARMICHAEL: So I want to go back to this idea of the war for talent now that we have a better understanding of what talent may be. We’ve been hearing this phrase bandied about for decades. Where does it really start?
TOMAS CHAMORRO-PREMUZIC: More or less 20 years since McKinsey introduced his phrase, or idea, of the war for talent, which is I think a very good premise– the idea that people are a key treasure, if you want, a valuable asset of organization. So, much like organizations are valuable because of the industry they’re in, their main products, their ideas, their strategy– well, people are as important, if not more.
So I think there is a lot of agreement with this idea today. So much so that it’s become a little bit of a cliche, you know. And if you look at real-world practices, and in talent management, the war for talent has almost become the war on talent. Because instead of attracting, engaging, motivating and developing talented employees, most organizations are almost repelling them, mismanaging them. Not developing– and they are incapable even of identifying them. And so there are various symptoms that I think are indicative of this kind of tragic war. [LAUGHS]
SARAH GREEN CARMICHAEL: Well, tell me a little bit about how you think this war for talent became a war on talent, because I think– have you seen a sort of worst-case scenario of the war on talent?
TOMAS CHAMORRO-PREMUZIC: First of all, when they’re hiring a person for a critical job they wouldn’t have done a proper job analysis, or understand what the job really requires. At best, they will know that they need an engineer, or a software developer, or let’s say a salesperson. But nothing else.
Secondly, they would have read an article maybe at HBR–
SARAH GREEN CARMICHAEL: [LAUGHS]
TOMAS CHAMORRO-PREMUZIC: –on why certain competencies are now really important. And I said, oh yes, I need I need a measure of EQ, because I read that it’s important.
Third, they would have run maybe five or six rounds of interviews with a lot of people being involved. And despite the fact that there were 15 or 16 interviews in total, what the boss really wanted– the person that the boss really wanted because they were a New England Patriots fan like the boss–
SARAH GREEN CARMICHAEL: [LAUGHS]
TOMAS CHAMORRO-PREMUZIC: –himself or herself, that person got the job. And then they ended up thinking that they did something scientific, because there was a process. But doing something very intuitively in a very kind of expensive and time-consuming manner. And then a year later, because the boss didn’t want to accept that they made a mistake, everybody else in denial or pretending that that was a good hire, which stops them from actually improving the process later on. So can you see– I mean, this is so common.
SARAH GREEN CARMICHAEL: When I hear executives talking about talent– they still very much– oh, our people are our most important asset. It’s still very much at the top of their agenda. If it is the thing that is so important to them, how are they getting it so wrong?
TOMAS CHAMORRO-PREMUZIC: First, disengagement is an epidemic. I mean, most people anywhere in the world don’t like their jobs, or are not enthusiastic about their jobs and the organization. So whether the number is kind of 70% for disengaged people, or higher, is debatable. But clearly, if you ask the average person what they think about their job, their opinion will be very low.
At the same time, second indicator– 75% of employed people are considered passive job seekers. So they’re not actively looking for another job, but they’re hoping that there is an offer. Imagine in the realm of marriage if 75% of people were hoping for a better partner, spouse–
SARAH GREEN CARMICHAEL: [LAUGHS] That would be depressing.
TOMAS CHAMORRO-PREMUZIC: –it would be depressing, yes. Third, self-employment rates are going up even though economic conditions are mostly strong in the developed world. And then fourth, everybody wants to be an entrepreneur and dreams of being the next Elon Musk or Steve Jobs, mostly because they don’t want to work for somebody else.
I mean, they’re disenchanted with traditional employment. And this is really quite problematic. I mean, most of these people will fail at these kind of deluded, unrealistic aspirations. But they’re also escaping traditional employment, which means that we might potentially see a future where smart people don’t want to work for anybody else.
SARAH GREEN CARMICHAEL: But even if people are not feeling particularly engaged, we are seeing companies be fairly successful. Companies are sitting on huge piles of cash right now. Companies are doing things like developing self-driving cars, delivering stuff from Amazon with drones. You know, we are seeing a lot of innovation, and a lot of profitability. So I mean, is that happening sort of despite this engagement epidemic, or does it mean that people don’t actually need to be that engaged to do good work?
TOMAS CHAMORRO-PREMUZIC: Actually, it means that some companies are getting it right.
SARAH GREEN CARMICHAEL: Mm.
TOMAS CHAMORRO-PREMUZIC: There will always be a normal distribution at the individual, and at the organizational level. And the companies that you alluded to– surprise, surprise– don’t just have a lot of cash, and don’t just churn out a lot of innovations, They also are consistently ranked as best places to work. I mean, one of the companies you alluded to has a kick-ass approach to managing talent that has been controversial. You know , the case of–
SARAH GREEN CARMICHAEL: Amazon.
TOMAS CHAMORRO-PREMUZIC: –Amazon, yes.
SARAH GREEN CARMICHAEL: Yeah.
TOMAS CHAMORRO-PREMUZIC: But I think that even that is very interesting, because it shows that most employees don’t want to join a firm to be happy, or be hugged by others, or bring their dog in. Talented employees want to be somewhere where they can have an impact, where they can make a difference. And you know Jeff Bezos is, I think rightly, consistently rated as one of the best CEOs and founders in the world. Because he has this ability to draw people in to his vision, and that means he’s going to work you very, very hard.
But if you feel productive, and you feel useful, and you feel that you are learning and making a difference, you will be engaged. So I think there are exceptions, and the ones that you alluded to will almost justify the existence of this principle.
SARAH GREEN CARMICHAEL: So I want to pull out what some of the lessons are from Amazon, who you’ve talked about, or other companies you think do this well. So one of the things I’m hearing is that people want to have an impact. People actually enjoy working hard if they feel like they are having an impact. What are some of the other things that managers, or executives, might do if they want to do a better job of managing their talent?
TOMAS CHAMORRO-PREMUZIC: Managers and organizations can do more to make jobs more relevant to people, and that means understanding what individuals are really like– understanding their values, their drivers. And then finding– placing them in roles that actually can help them fulfill, or satisfy, those needs.
And typically this isn’t done. Even in organizations that are very good at selection and talent identification. They’re saying OK, you have these skills, and you have this background, and I need somebody who is an engineer, or a journalist, or a writer, or a psychologist. So that will be– and what you need to look at is actually, what does it feel to achieve these goals in this role? And how will that help you satisfy certain values, core drivers, and needs? And when that happens, then people engage more, and they’re more productive.
SARAH GREEN CARMICHAEL: Can you give me an example of someone who was kind of in the wrong role, switched to a different role, and how that changed them?
TOMAS CHAMORRO-PREMUZIC: Yes, sure. So I’ll give a generic example. If an IT manager with great technical expertise and stellar credentials is asked to run the IT division of a company that is mostly interested in mitigating risks, and ensuring that the system doesn’t crash, and that they comply with regulations. But that IT manager is really interested in innovating, and strategy, and kind of disrupting things. Even if they have the right skills, after a while they will feel that they’re just clocking in-and-out, and the job has no purpose, and so forth. It’s understanding the aspirations, and almost the style and personality and values that a person has, and whether that role, and indeed the organization, will be compatible with that or not. Right?
So it’s not just about the role, but actually, what’s the climate and the culture of the organization? Will this person fit in?
That’s why the data on this is very clear. On average, internal appointments from within the same organization are more likely to succeed than external appointments. It’s often the case, even with senior leaders– when you bring them out from the outside world, they can have the right skills, but mostly all the probability that they miss-fit or not fit in, is higher.
SARAH GREEN CARMICHAEL: So making sure the person fits the role and fits the organization– essential. Is that all you have to do, and then you’ll be all set? Or is there other stuff that’s still to do?
TOMAS CHAMORRO-PREMUZIC: That certainly solves most of the problems, I think. If selection goes well, your management headaches decrease. Even when you do selection well, I think, then the next kind of a challenge or a hurdle that you need to master is the development part.
And we know very clearly, theoretically what should be done to make people more self-aware– give them accurate feedback. Don’t just focus on their strengths, but tell them what they’re not doing well, or what their weaknesses or limitations are.
SARAH GREEN CARMICHAEL: Can I just interrupt right there? Because we have heard so much from people arguing that you should just focus on your strengths, and that you get more by developing your strengths than by focusing on your weaknesses. Why do you think that’s barking up the wrong tree?
TOMAS CHAMORRO-PREMUZIC: They’re not saying it because they have any data on this, because I haven’t seen any scientific studies that actually make the case for ignoring one’s limitations or weaknesses. I think they are saying it because it’s a nice populist message, and it’s what people want to hear. The reality is that you only develop skills by being aware of your limitations. And that even exceptional performers, or achievers, get better by working on what they’re not doing very well, you know, working on the floors.
So I mean, it’s silly to even have a discussion on whether we should focus on the strengths or weaknesses, because one needs to do both. But I think strengths are certainly overrated. And weaknesses are underrated– to the point that we’re not even allowed to use the word “weaknesses” now. People have strengths and opportunities.
SARAH GREEN CARMICHAEL: [LAUGHS]
TOMAS CHAMORRO-PREMUZIC: So you know, how is this candidate? Well, they don’t have many strengths, but they have so many opportunities. I was like, well, have you got anybody with zero opportunities?
SARAH GREEN CARMICHAEL: [LAUGHS] So one of the big trends I’ve been following– how companies have been moving to get rid of performance reviews– moving to get rid of things like time off. Just to say, basically, we’re going to treat people like adults. We’re going to give them feedback in real time. They can take as much vacation time, or as little, as they want. And they’re kind of moving backwards from these formal talent management processes and procedures. Do you think that’s a mistake, or do you think that reflects a hopeful trend?
TOMAS CHAMORRO-PREMUZIC: It’s both kind of a mistake and hopeful, I think. The hopeful part is that many of these attempts are trying to perfect processes and the kind of measures that are not working very well. So we know that in most cases people are not getting too much from the yearly performance appraisal review. They’re either too lenient, or too political, or inaccurate. So why not do something that is better, that is more accurate? OK?
And equally, most people are still managed as if we were living 50 or 60 years ago. As if you had to be present at work, and do your work from somewhere. When in fact, there is no real reason in most cases for people to be in an office if they want to be somewhere else. And there’s no real reason to actually have a fixed holiday or vacation period if you’re accomplishing your goals. So, I think that’s the kind of hopeful part is if we’re trying to improve things that are not being executed very well.
At the same time, I do worry about the populist and nonsensical part. To pretend that people won’t need accurate feedback on their performance is just silly. To pretend that a company can function if everybody is on vacation all the time is just silly. To pretend that we can have an organization, or teams, without a leader, like this idea of holacracy– everybody can be their own boss.
It’s silly, because for 10,000 years people have lived in groups that are led by individuals. So whether you want to call somebody a leader, or supervisor, or chief evangelist, whatever. Doesn’t matter, it’s a formality.
So I think it’s both– it reflects on attempts of doing things better, and that’s fine. But also, an attempt to pretend we don’t need certain things, and that’s silly.
SARAH GREEN CARMICHAEL: So do you think today’s HR departments are equipped to do this? I mean, or do we need to first reform HR, and then try to end the war on talent?
TOMAS CHAMORRO-PREMUZIC: The smartest organizations that I’ve known from a talent perspective are not necessarily that much better in their competence or knowledge components. But they are better in the fact that the c-suite trusts HR practitioners and talent management.
Talent management is really a critical process– an engine of growth in those organizations. I mean, the premise here is very, very simple. It’s like, all organizations have problems. They always will have problems. Most of these problems concern people. So you need to have, in your organization, experts in people, that understand human behavior, and that can actually measure it, manage it, develop it, engage it better than they actually do.
SARAH GREEN CARMICHAEL: So tell me about a company you know that really seems to get this and so this well?
TOMAS CHAMORRO-PREMUZIC: Companies that do this well– I don’t want to mention specific examples. They follow a very well-defined recipe, which actually– and this is frustrating. Because we’ve had this recipe for five or six decades in industrial organizational psychology, which is first identify who your high performers are in the organization. For that, you need to have robust and objective data on performance, which already a lot of companies don’t have. So that’s where things go wrong.
Secondly, put those people through a comprehensive, rigorous psychometric assessment that enables you to understand their strengths, their weaknesses, their values. And you basically get the full picture. You will know these individuals very well, OK.
Third, assuming that you want more of that, then use the same assessments, the same tools, to vet, or evaluate, your job applicants. OK? And then, fourth, test whether the system is working or not later on– 6, 9, 12 months later– by seeing whether, on average, performance is the same, higher, or lower.
So it’s about benchmarking with rigorous data, choosing the right assessment tools. And then at the end of the day, there’s only two questions they need to answer– what should I assess, and how? If you don’t know what you’re looking for, then it doesn’t matter how good you are at assessing it.
Currently, most companies rely too much on interviews, which are, we know, not very reliable, not very valid. And they invite all sorts of biases– not just unconscious biases, but also conscious biases. So that’s why it’s a good example of how we need to rely less on our intuitive subjective evaluations and let the data speak for itself.
SARAH GREEN CARMICHAEL: So I do agree that interviews are flawed, and looking at people’s resumes has been shown to be very flawed. But I’m not sure I’m ready to fully buy into this idea that the answer is to just assess everyone with tests. There are a lot of assessments out there that have been very controversial. And people basically say that’s no better than a horoscope– you sort of get this reply that sounds like, yeah, that’s me. And then you take it again and get a totally different result– but that also kind of sounds like me.
TOMAS CHAMORRO-PREMUZIC: Yes. I mean, that is a problem, but individual performance data, team-level data. How engaged are their teams? How are these managers evaluated in their 360’s? If they’re leaders, what are their revenues and profits of their companies? To negate that there is an association between these scores and these organizational outputs equates to not being interested in data, and assuming that everything is random. We know that it isn’t. At the same time, we know people are not squirrels or fish.
SARAH GREEN CARMICHAEL: [LAUGHS]
TOMAS CHAMORRO-PREMUZIC: You can’t predict everything they will do. But if you have the right job requirements or specifications, and you have candidates that can complete an assessment, you will be able to predict their performance.
SARAH GREEN CARMICHAEL: Have you ever seen a case in a newspaper where you’re reading a headline– a new CEO is coming into a company– and you just think, oh, this is going to be bad.
TOMAS CHAMORRO-PREMUZIC: Somebody said, “It is very difficult to make predictions, especially about the future.” Sometimes it’s more of a retrospective interpretation. But I mean, the example that does come to mind is Marissa Mayer and Yahoo. I think Marissa Mayer certainly had a lot of skills, and a stellar kind of resume, and you could see why she was not just a high potential, but a high-performing employee at Google. However, it always seemed to me that Yahoo were looking for a super-brand, or somebody who can actually make their company seem more current, more sexy.
And I think they got that with Marissa Meyer, because she did all those things. But I don’t think she had, either, relevant experience as a CEO– it was a first-time CEO going into a big company–
SARAH GREEN CARMICHAEL: That is really struggling.
TOMAS CHAMORRO-PREMUZIC: –really struggling. You know, it’s why not go for somebody who has an experience in taking companies that are struggling and taking them and turning on them around?
And then secondly, from the kind of culture fit, personality, more a kind of soft skills perspective, I didn’t see a good match there, either. I think Marissa Mayer tried to create, at least, her kind of close entourage and team– something that she would have wanted to have at Google.
But then, if you’re looking at the wider organization there was a mismatch there. And it’s always difficult to judge when you have an end of one, what would have happened if we had somebody else there? I mean, this conversation can happen with professional sports, as well.
But I mean, just looking at it from on paper, and at the theoretical level, yeah, that’s an example or a case where it seemed like people didn’t really pay attention to what they wanted or needed. And they hired somebody for the wrong reasons. And I think she took the job for the wrong reasons, as well. You know, it was a step upwards in the sense that she became a CEO, but actually she would have been probably better off staying where she was, or taking a different sort of challenge.
SARAH GREEN CARMICHAEL: Mm. Is there also a lesson there for the talented person, themselves, who may feel that they are not being fully used in their current position by their current company, and want to move up, and want to do something else? And want to take on a bigger challenge? But you know, doing that would mean taking a big risk and maybe doing something that in the long run isn’t the best choice for them.
TOMAS CHAMORRO-PREMUZIC: Yeah, I think if the person really is talented there will always be opportunities out there outside of their current job. But you know, the reality is most people take too long to move to a different job. I mean, people will cope or tolerate a bad job for a lot longer than they tolerate a bad relationship, for example. And it shouldn’t be. Because it’s actually easier to find a better job than a relationship. We are trying to help those individuals by educating decision makers as to the importance of identifying people with talents. And actually nurture them, and engage them, and trying to keep them and retain them. But it’s possible that it will take too long for that to happen.
So, in the short run, I think– this almost will sound like unethical advice– but I think, given that people are usually rewarded in most organizations when they self-promote– when they engage in kind of politicking, political maneuvering, and they kind of manage upwards– that’s the sort of advice that you can give individuals who might be talented, but flying under the radar.
SARAH GREEN CARMICHAEL: Mm. So how do we end the war on talent?
TOMAS CHAMORRO-PREMUZIC: By recruiting better, developing better, engaging better, collecting better data, and making more data-driven decisions on potential and performance. I mean, talent management is a relatively young profession, and I think all we have in talent management, now, is we talk about evidence based on management or HR practices. But there’s so much that characterizes these practices that is subjective– based on mythology rather than the facts. And very intuitive. But we have a lot of progress to make.
SARAH GREEN CARMICHAEL: Tomas, thank you so much for coming in and talking with us today.
TOMAS CHAMORRO-PREMUZIC: It’s a pleasure.
SARAH GREEN CARMICHAEL: Tomas Chamorro-Premuzic is a Professor of Business Psychology at University College, London, and the CEO of Hogan Assessments.
His new book is called, The Talent Delusion: Why Data, Not intuition, Is the Key to Unlocking Human Potential. You can read more of his work at hbr.org. Thanks for listening to the HBR IdeaCast, I’m Sarah GREEN CARMICHAEL.