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You can't feel them. You can't see them. You can't taste them.
You can only measure their effects. They seem to be abstract constructs.
They're intangible. Yet they are valuable resources that produce
results that in turn translate into products, productivity, market
share and profits. Employee morale, esprit de corps and level of
motivation, respect, recognition, knowledge and intellectual property,
culture, company philosophy and ethos, 'unwritten agendas', business
image and goodwill may be regarded as intangibles.
The most important factor in economic life and foremost of all
the intangibles is knowledge. It may well be the key wealth creator
of the 21st century. Effective knowledge management is fast becoming
a core competency today. You must invest time and money to develop
this competency. It will totally change how you do business. It
will involve major changes in your processes, culture, infrastructures
and measurements. According to John Butler, author of Successful
Entrepreneurial Management, "draw out, capture, share,
write up and apply the experiences of each employee. Bottle your
know-how."
Thomas A. Stewart defines intellectual capital in his book Intellectual
Capital as 'intellectual material - knowledge, information,
intellectual property, experience - that can be put to use to create
wealth'. Wealth is the product of knowledge. Therefore you must
become a knowledge manager.
Today's employment market suggests hiring intellectual capital
is very difficult and expensive. You must strike the right balance
between senior-level knowledge and developing knowledge within the
organization. A few years ago, I worked for an oil and gas exploration
and production company with worldwide operations and 1,800 employees.
Seems large by small business standards but within this organization
were many smaller organizations. Knowledge management was handled
very differently depending upon the functional group. In the exploration
and production areas, the strategy was to hire only those with at
least 5 years of experience and a proven knowledge of their specialty
- no exceptions. Management's feeling was that the organization
was not large enough to support a training program and, in general,
the engineers and scientists were not good at coaching. In accounting
and finance, the attitude was just the opposite. A sophisticated
college recruitment program was the core of a 'promotion and training
from within' philosophy. Also associated with this was a rotation
strategy. Employees moved 'around' for development purposes. Promotions
were based on performance. Performance was based on knowledge and
execution. Time in job was another important aspect. No matter how
good an employee, only time would present enough challenges to enrich
the employee's knowledge base, consequently, a typical assignment
lasted at least 18 months.
In both cases, knowledge management and organizational effectiveness
were considered successful. Turnover was low and productivity was
high in both organizations. And costs related to hiring and retention
were considered very reasonable in both organizations.
But what if the knowledge management strategy had been misapplied.
What if the accounting department hired only those with 5 years
experience or more and the exploration and production group hired
trainees. Several other companies in that industry were doing just
that. We found their turnover to be much higher and productivity
to be much lower. Dissatisfaction seemed to be a common denominator.
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How do you know which strategy is the right one for your organization?
First, look at the market. Look at what level of expertise is
most readily available in the marketplace. Talk to your local
community colleges and tech schools. Ask them what they are forecasting
for the next 5 years in terms of graduates in your particular
area of need vs. demand. If their forecast suggests bright graduates
in abundance (or at least enough to satisfy your needs) then a
development program may be worth looking at. The next question
is what will it take to ensure these lesser-experienced new hires
succeed. Do you have the senior experience to coach lesser experienced
new hires? And do these senior employees have the right temperament
to coach? A combination attitude and behavioral assessment can
help to determine who would make a good coach. A 'how to coach'
training program is also recommended regardless of the person's
natural tendency to be a coach.
Recruiting is critical to the process regardless of which strategy
you choose. When it comes to recruiting, delegating this task
to administrative staff is a mistake. Certainly, administrative
staff plays a key role in organizing and setting up the recruiting
program, but the most successful recruiting campaigns are found
to have the most senior management or owner-operator of the business
very involved. They are leading the strategy meetings, involved
in making recruiting decisions such as which school to recruit
from and deciding which advertising strategy to take. They also
use a consensus method of hiring. That is, they allow other key
stakeholders in the organization to participate in the hiring
process and have a vote. This could include the most senior technical
person and office manager/personnel officer. To increase your
success ratio and reduce risks associated with hiring, hire for
fit by using a behavior-focused interview strategy. That is, ask
the applicant to describe particular past work experiences and
how they dealt with them. Past behavior is a strong predictor
of future behavior. You will also increase your success by using
behavior and attitude assessments. Assessments give you an accurate
picture of the person's behavioral style and attitudes thus reducing
the ability of the applicant to mask behaviors or attitudes that
won't be successful in your organization. You'll also be able
to focus your interview questions to specific behavioral areas
that need clarification. The goal is to get the best possible
understanding of how the applicant will perform and at the same
time begin the educational process by sharing behavioral job expectations.
To help articulate job expectations, the job's behavioral requirements
can also be assessed. These can be beneficial for both interviewing
and coaching current employees.
The intangibles are a challenge for sure. Knowledge will be your
most valuable asset over time. A high turnover rate is the equivalent
of having termites within your knowledge-management strategy.
The damage is invisible until it is too late. To avoid the termites,
don't hire to 'get by'; hiring for fit requires a strong conviction
to holding out till the right one is found. Once you've found
the right one, don't get too comfortable. You have other intangibles
to focus on once you have the knowledge-management strategy in
place and the right people on board.
About the author
Carl Nielson is a management consultant providing clients with
a range of services including coaching, team training and development,
pre-employment needs analysis and applicant assessments. More
information about hiring for fit can be found at http://www.nielsongroup.com/hiring_for_fit/
hiring_for_fit.shtml .
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