Executive Interviews: Interview with Jeffrey M Cohn on Talent Management
February 2007
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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.
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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.
1.
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Case Collection
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