Talent Shortage or Management Challenge?




A friend of mine is attending Tech Crunch. He sent me this text: “Tech Crunch panelist question – “What’s your biggest risk?” Person pitching answer – “Hiring.” Panelist response – “That’s everyone’s biggest risk. What else?”

The text wasn’t a surprise. I frequently hear similar sentiments from prospective clients. I have been talking about Talentism and how talent is more valuable than capital for almost a decade. Someone pitching for money but saying that talent is his or her biggest problem isn’t novel. But it is troubling. Not because the statement speaks to the “talent shortage” that pundits are currently bemoaning. But because the presenter and the panelist are probably wrong.

Gallup has been releasing interesting workplace studies for years. There are two studies in particular that you should investigate before you accept conventional wisdom about talent shortages.

The first study argues that most managers aren’t good at their jobs.

The second study shows why most people who work for those managers don’t like their jobs.

A manager is responsible for achieving the organization’s goals through the work of others. Therefore, an effective manager must:

  • Clarify for themselves and the people who work for them: the purpose and goals of the organization they serve, individual responsibilities to fulfill that purpose and achieve those goals, and behaviors rewarded and punished (i.e. the organization’s culture);
  • Design an organization and work that can accomplish goals in the face of unpredictable and important change;
  • Determine what kinds of people will perform well given those realities;
  • Predict what essential qualities someone has to demonstrate in order to be “one of the stars”;
  • Know where to find people who have those qualities;
  • Assess individual and team performance on an ongoing basis to ensure that the design, people and culture are evolving to meet the realities the organization faces, now and in the future.

Managing is hard. But stated simply, managers must consistently hire, fire and promote the right people. When we say that most managers are struggling in their jobs, we are really just saying they are struggling to hire, fire and promote the right people to achieve the organization’s goals.

But let’s assume that we are talking about one of Gallup’s 18% : a good manager. A manager who is practiced in designing, finding, selecting and assessing well, even in the midst of chaotic change. I have worked with people like this. And my experience is that they don’t think there is a talent shortage.

Good managers realize three things:

  • Doing important things well is hard. Hiring the right people is the most important thing you can do well as a manager. Therefore good managers expect hiring to be hard.
  • The only way to get better at doing hard things is to hold yourself accountable to high standards, believe you can always do better, and relentlessly improve. The best way to ensure you DON’T improve is to blame others and regret your circumstances.
  • Statistically most people work for bad managers. They would be happy to change jobs to work for a good one. There are plenty of people out there to hire. Manager’s need to commit to clarifying what they need, designing the best way to find it and learning from their mistakes.

I have a deep empathy for people who are managing and don’t want to look in the mirror to see how they are failing at it. I was one of those people. We have a good excuse for our failures: the human brain. It is wired to confuse the truth, to tell people that they are better than the facts would indicate. As I have failed, learned and evolved as a manager, I have learned the following:

Clarify Before Acting

It is likely that a manager’s team is not completely aligned to the organization’s purpose, goals and culture. It is also likely that their team doesn’t clearly understand their responsibilities to achieve those goals. When teams aren’t appropriately aligned they underperform their potential. An hour spent on clarifying and aligning will likely be worth 2 hours reviewing resumes.

Redesign Before Replacing

It is probable that a manager’s organization and work design is inefficient. In practical terms that means that they are likely hiring people to do work that doesn’t need to be done. Good managers know what is important and what is noise, stay laser focused on the important things, and design to minimize waste. They also understand that learning and evolution are not waste, but necessary work in an organization that is responding to change. A day spent ensuring that the organization and work design are increasingly efficient will likely be worth two days of interviews.

Merit Before Myth

There is no real talent shortage for most roles. There is, however, a shortage of people who have the right pedigrees to make hiring easier for confused managers. There are only so many people who can graduate from an Ivy League school, be a star at an academy company and know credible people who will sing their praises. It is likely that by focusing on those pedigrees and badges managers are just running up the price of a select few, rather than really solving their fundamental hiring problem. One of my favorite quotes from Ray Dalio explains this clearly: “The common mistake of investing is to assume that the investments that had the highest returns over the past few years are the best investments, rather than they have become expensive.” I believe that this applies to hiring: managers are probably looking at talent that everyone else says is great and failing to ask whether all they are doing is pushing compensation higher. How many manager’s seriously consider making cheaper labor investments that will produce higher returns? It is harder than buying what everyone else is buying, but nobody gets rich following the herd. A week clarifying what is really needed to achieve goals will likely be worth a month of recruiting.

Predict Before Placement

I have yet to meet anyone who readily admits that they are a bad judge of other people. Being able to assess someone is both deeply personal and primal for all of us. You wouldn’t be reading this if your ancestors had been a bad judge of what other people are like. But managers need to change their thinking. They aren’t selecting someone to be a member of their tribe. They are trying to predict the future. Goals are getting more complex, jobs more complicated and circumstances more confusing. When a manager hires someone they are making a bet that person will be able to solve problems, create opportunities and achieve goals in spite of those challenges. The manager has to make educated guesses about the choices someone is going to make as they face difficult circumstances. A manager who relies on their instinctual biases to do this is likely going to fail. That is why assessment is little better than flipping a coin; managers usually can’t trust their gut. Daily commitment to assessing based on facts will likely be worth a lifetime of recruiting regrets.

Reflect Before React

If you are struggling as a manager you will be sorely tempted to lash out at your miserable fate. You will naturally want to turn to solutions that feel good, even if they aren’t really working for you. Thinking that there is some incredible person out there who will solve your problems and make you successful is alluring, but improbable. I get it. I have done it. Understand that what you are going through is common. It doesn’t make you a bad person. Give yourself time and space to reflect on your circumstances and how you likely caused them to happen. That will help you determine whether you have a hiring problem or a management problem.

After all, that is where the science, the data, and the common sense says that’s where you should start. And if you really can’t find the talent you need you have nothing to lose from trying something different.


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