I was recently reading a well put together article on Harvard Business Review by Liz Wiseman entitled Smart Leaders Get More Out of the Employees They Have but my own thinking says you need to consider both internal development and external recruitment…difficult to find the balance, kind of the talent “Holy Grail”.
The article details that on average, managers are only utilising 66% of their employees capabilities and high growth companies natural reaction is to search the market and bring in the most talented people they can find, attracting them with better wages, more perks and the promise of being something big. No wonder that even with a recession going on, you can still find recruitment companies bouncing up all over the place. (I have nothing against recruiters by the way, they serve a very good purpose for the employee and the employer)
The article goes on to suggest that a more cost-effective and smarter way to grow is to look deeper into your existing talent and have in place executives and senior managers that can get the best out of them. After all, no matter whether you acquired the company through a buy out or have created it from scratch the people you already have in place were considered talent at one point in time and as the data shows, you have at least another 1/3rd worth of capability left to harness.
If you think of this in a reasonable way, two large blue-chip companies…lets take pharmaceuticals, will have very similar human resources, specialists and research available to them and the only differential is how well their policies, operations, strategy and management behave. By empowering staff to think outside of the box, work more effectively and enjoy what they do it has been proven that your organisation will perform better than the competition.
On the flip side, sometimes change is needed within an organisation and the fastest way to achieve said change is to bring in quality individuals to fill key positions who can quickly influence and impact. This is often seen at the top-level of management, CEO’s are drafted in to attempt to revive dwindling fortunes or based on their past experience in implementing change etc etc….This is not limited to top-level management though. I have recently experienced this first hand in a financial institute that is making a conscious effort to alter its image, brand and the way it conducts business. There are an abundance of experienced managers out in the market place looking for a new challenge who have become disillusioned with where they are and this organisation has recognised this fact and invested heavily in sourcing this talent to help it expand in a way that does not hinder its operational and credit & risk abilities.
So my conclusion would be that there is a time and place for looking internally and investing externally. Its being able to analyse yourself, your organisation, the macro-economy and your competitors that will help you decide which way forward is best for you.