Business Case Studies, Executive Interviews, Jeffrey M Cohn on Talent Management

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Executive Interviews: Interview with Jeffrey M Cohn on Talent Management
February 2007 - By Dr. Nagendra V Chowdary

Jeffrey M Cohn
Director of Research at Chief Executive Leadership Institute (now at Yale);
Director at the Law & Economics Consulting Group.

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  • General Electric (GE) has always been called CEO Factory; yet it needs and can accommodate only one CEO for a definite tenure. Whats so unique about GEs Talent Machine? What are the important lessons?
    GE has made a conscious choice. The costs of not developing talent, and being forced to look externally to fill key positions once they become vacant, is much higher and more burdensome than internally developing talent and having some defections every once in a while (because some talented people dont get promoted to the CEO).Its a decision and a talent management strategy that has paid off handsomely for GE.

    However, a word of extreme caution: The lesson for other organizations is not to replicate GE, sponsoring every leadership development activity under the sun. That would be quite expensive and incredibly foolish. On the contrary, the goal for other organizations is to decide which precious few developmental activities to sponsor, and to which activities they should just say no. Its this kind of discipline that has the biggest impact for the vast majority of organizations.

  • In your article, you said, Perversely, the desire to avoid this issue (succession planning) is strongest in most successful CEOs. Why do you think so? Is it not in their own interest that they leave behind continuity of an illustrious legacy? Or is it that some primal inhibitions deter them from incorporating a meaningful succession planning?
    I recently had fascinating conversations with several worldrenowned lawyers and governance experts, Martin Lipton (Wachtel, Lipton, Rosen and Katz), Samuel Butler (Cravath), Rodgin Cohen and Richard Beattie. Despite the fact that I met with each of them independently, their conclusions were strikingly similar. The strongest and most secure CEOs tackle head on the issue of succession planning. Some CEOs even begin the process the day they step into office. It may seem counterintuitive or cut across the grain of basic human nature. But proactive, secure CEOs recognize that succession planning and leadership development are the opposite, and highly complementary sides of the same coin. To effectively develop leaders throughout their organizations, competent CEOs realize, succession planning is the necessary first step. The actual process of succession planning, done right, vividly illustrates for the CEO and Board the competencies and skills individuals at all levels will need to acquire to successfully execute the companys strategy for years to come. How can that be a bad thing?

  • Its one thing to spot and nurture the talent in an organization for higher order organizational roles. Its quite a different thing to retain talent though. Where do you think companies go wrong in retaining their talent? After all, in that acclaimed talent, there would be a sizeable contribution from the company and if that talent is not used for the company, would the opportunity cost of losing talent not be high? What do you think the companies should be doing to retain the talent?
    Instilling a sense of deep pride, at the individual level, is at the heart of retention. Monetary compensation only goes so far. Money is a splendid way to attract talented individuals to an organization. But numerous studies indicate that monetary compensation only goes so far. It doesnt do much to actually motivate and retain talent, on a day to day basis. Designing positions that allow each and every individual to leverage their particular strengths and passion is the best way to build pride and to retain talent over the long haul. No one does this quite as well as Jamie Dimon, the CEO of JP Morgan Chase. Because he so masterfully architects positions that leverage his teams strengths, he has been uncommonly successful at retaining star performers. Indeed, like the Pied Piper, star managers have even followed Jamie as he transitioned from Citigroup to BancOne to JPMorgan Chase.

  • What steps should be taken to spot and retain the talent in knowledge/talent driven industries like IT, entertainment, universities, etc? Are there any best practices from these industries?
    You asked me about GE earlier. Unquestionably GE is one of the worlds most fertile environments for growing talent. But GE is a company that has been analyzed and researched to death. And as I have mentioned, their talent strategy works for them, but wont work for most organizations. An organization that I bet you have never heard of, however, and one that might even beat GE at its own game, is a small, but rapidly growing entertainment law firm in Los Angeles, California called Barnes Morris Klein & Yorn (BMKY). Despite their small size, BMKY is at the epicenter of major Hollywood deal making, and represents a virtual Whos Who of AList celebrities, artists and entertainment companies. And they do it in a hostile environment. The entertainment law industry is about as cut throat as any I've ever seen, chock full of sophisticated, aggressive competitors, where high profile lawyers seemingly defect daily to competitors. Yet, for past decade BMKY has bucked the trend and continued to attract, groom and retain some of the worlds best lawyers. How can they do this? Its not your typical professional services firm. Almost every single, innovative practice that BMKY has introduced, and subsequently institutionalized would likely fail miserably at any other law firm. But taken collectively, and within the context of BMKYs overall strategy and culture, these discrete and seemingly odd initiatives all play an important role in the organizations cohesive, integrated and proactive talent management system. Without giving away any silver bullets, they have totally scrapped hourly billing (can you imagine a law firm that doesnt meticulously monitor hourly billing?); all their partners meet twice a week to discuss clients and trends in the industry; they work in cross functional teams to ensure clients get the best of all worlds and a multi disciplinary perspective; they travel in packs to industry events; they recruit general purpose athletes rather than narrowly focused specialists that cant see the big picture; they even start new, prized recruits from some of the countrys top law schools as personal assistants to more established partners. New associates dont complain though. Far from it. They love it. Never have I seen a culture that supports teamwork, innovation and client focus more than within this small but fascinating organization. But its not magic. The recipe for success was simple. In the early years, they sat down with a blank sheet of paper and designed a cohesive system, from scratch. In the past ten years they havent missed a beat executing against this simple plan. Thats the tough part.

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