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Published: November 23, 2010
 / Winter 2010 / Issue 61

 
 

Best Business Books 2010: Human Capital

Talent Redefined


Rob Goffee and Gareth Jones
Clever: Leading Your Smartest, Most Creative People
(Harvard Business Press, 2009)

Boris Groysberg
Chasing Stars: The Myth of Talent and the Portability of Performance (Princeton University Press, 2010)

Jody Heymann with Magda Barrera
Profit at the Bottom of the Ladder: Creating Value by Investing in Your Workforce
(Harvard Business Press, 2010)


Peter Drucker famously defined a knowledge economy as one in which the human brain provides the primary means of production. He then noted the obvious corollary: that an organization’s most valuable resource is lodged in the heads of its employees and goes home with them at night. In the decades since, this disturbing vision of their assets streaming out of the building every night has led many companies to make a reappraisal of the value of their employees and to place a higher premium on talent. But it has also led to a somewhat overexalted view of the role that star performers play in organizations and the extent to which enterprise is dependent upon individual talents.

The consequences of this overvaluation are many. The continuing wild escalation in senior leadership pay — often in defiance of performance — is a direct result of our infatuation with star performers, and our belief in their almost totemic power to produce results. It has also created a cult of individualism that causes many genuinely talented people to misunderstand the nature of their contributions, and to view themselves as free agents when they are not. Finally, it has perpetuated an industrial mind-set based on rigid distinctions between those who make decisions in organizations and those who carry them out, bolstering the elitist presumptions of the former and negatively affecting the performance of the latter.

This year’s best business books on human capital suggest that this approach to talent is now due for a correction. Each sounds a cautionary note about overvaluing individual talent and suggests specific practices to address the resulting imbalances. (See “The Thought Leader Interview: Vineet Nayar,” by Art Kleiner and Vikas Sehgal, s+b, Winter 2010.) Each of the books also makes clear that the school of talent strategy that was focused primarily on star performers and so-called high potentials is obsolete, and that it is time for a more integrated and contextualized understanding of the value that human capital provides.

Clever Management

Clever: Leading Your Smartest, Most Creative People, by Rob Goffee, a professor of organizational behavior at the London Business School, and Gareth Jones, a fellow at the school’s Centre for Management Development, reinterprets the relationship between talent and the organization in knowledge-based environments in a fresh and compelling way. The authors define this relationship as an “interdependence among equals.” In their view, talent is as critically dependent on organizations as organizations are on talent. And they believe that both talented people and their employers tend to underestimate the importance of this mutuality.

Goffee and Jones argue we need a more realistic way of understanding the role that organizational resources play in the exercise of talent; they believe we also need new approaches to leading talented people. Argue is the operative word here, for Clever is written as a manifesto. It eschews footnotes for passionate advocacy that is couched in clear and commonsense terms. This approach serves the reader well: Clever is wonderfully written, immediately engaging, and structured to provide a clearly articulated point of view.

In the authors’ formulation, cleverness is not just a catchy synonym for talent; it’s a way of understanding how talented people — defined as “people with the potential to create disproportionate amounts of value from the resources that an organization makes available to them” — operate in the context of enterprise. “Clevers” are talented people who require an organizational context to thrive and provide value. This makes clevers different from talented individuals who are able to create value on their own, such as artists and solo musicians. The authors argue that the star system that has developed around this latter group, as well as the prevailing infatuation with so-called free agents, has distorted how we understand the former group, making it difficult to differentiate between the two.

 
 
 
 
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