By Kazeem Olayemi Odeyeyiwa, FCA 

Expectedly, the desire of all businesses is to stay ahead of the competing crowd or maintain a strong competitive edge and be profitable. And it is a truism that lasting competitive advantage is possible through availability of outstanding employees to drive various value activities of the value chain.

It takes a lot of time and resources to recruit, maintain and retain outstanding employees. Every once in a while, special employees come along that just really seem to get it. They drive the entire company forward in ways that were unimaginable. Advancement and reward are never an issue for these superstars because they understand the power of cause and effect, and only a worthy company can retain and afford them.

Apart from outstanding employees, there are also other categories of employees, among who are “the coming employees”. The coming or upcoming employees are employees that are still growing. For this category of employees to become outstanding, what seems like four stages of leadership and intellectual influence must take place.

That is, the coming employees must see (or be made to see) outstanding employees as role models. This stage of influence is called “Modelling”. From Modelling, coming employees begin to see outstanding employees as their motivators. This stage is called “Motivation”.

Having become motivated by the outstanding employees, coming employees approach outstanding employees for mentoring relationship. The outstanding employees begin to practically guide the coming employees.

This stage is called “Mentoring”. When the outstanding employees have finally deposited almost all that they know in the coming employees, the coming employees will finally become like outstanding employees. This stage is called “Multiplication” which is technically called “Reproduction”. This process will naturally ensure sustenance of corporate culture of peak performance and possibly facilitate effective succession planning.

According to John Maxwell in his masterpiece, “The 360 Degree Leader”, “The best way to develop high-caliber leaders is to have them mentored by a high-caliber leader. If you lead your organization, you are probably the best (or at least one of the best) leader in the organization. If you are not already doing so, you need to pick the people with the greatest potential, invite them into your circle, and mentor them.”

Recruitment Process

It is noteworthy that any organisation that is passionate about having outstanding employees must first put in place a tested and rigorous recruitment policy that focuses more on personal or general skills rather than technical skills. This is because over-reliance on intelligence quotient (IQ) for employee recruitment can also lead to influx of intellectual employees that lack interpersonal skills, emotional intelligence, team spirit, etc., that are critical to becoming outstanding employees.

This is because no employee can become outstanding without the operational support of his colleagues just as no football striker can deliver sterling performance consistently without regular supply of passes to him or her by teammates. 

HBR’s Paradox of Work Engagement of Outstanding and Low Performers

John Baldoni, president of Baldoni Consulting, a full-service executive coaching and leadership development firm paradoxically explains in his article christened “Your Least Engaged Employees Might Be Your Top Performers” published in the Harvard Business Review thus: “Some of the most engaged employees in your organisation are your worst performers. And some of the least engaged are your highest performers.”

This inference stems from the new research by a consulting firm, Leadership IQ. The study “matched engagement survey and performance appraisal data for 207 organisations”. According to Mark Murphy, chief executive officer of Leadership IQ, “We had long suspected that high performers might not be as engaged as has traditionally been assumed. But seeing that, in 42% of cases, high performers were even less engaged than low performers was a bit of a shock.”

This conclusion runs contrary to the traditional belief as well as many studies (including the one from Gallup) that show high engagement — that is, how much employees are committed to their work — correlates with better bottom line results, including productivity and profitability.

You could think of these low performers as hamsters on a wheel, spinning fast but actually going nowhere. Conversely, high performers may be coasting like swans on a pond, just gliding by. You do not see their effort because it is below the water. As Murphy says, “In our study, high performers gave very low marks when asked if employees all live up to the same standards.”

The research confirms that while low performers may be more engaged, their efforts may not be as productive, especially since it is the higher performers, despite low engagement, that are doing all the work. The underperformance of the former undermines the effort of the latter. This is especially true, according to the study, when low performers are not held accountable for poor performance. These employees may not even know they are doing a poor job.

Naturally when poor performers are allowed to slide by, it erodes the morale of high performers who feel, again according to the study, “helpless about the trajectory of their careers”.

“We had seen plenty of cases where managers avoid dealing with low performers (because they believe the conversation will be difficult), and instead assign work to the employees they enjoy — i.e. high performers,” says Murphy. “And as a result, they end up ‘burning out’ those same high performers they enjoy so much.”

Baldoni says while he finds Leadership IQ’s findings linking high engagement to poor performers to be contrarian, it is not usual for good performers to feel lost in the system. This is a comment he hears frequently in his coaching work.

The question is, what do we do about it? Murphy offers two suggestions. “First, leaders need to set very explicit, and behaviourally-specific, expectations for performance. These expectations need to define and delineate good, great, and even poor performance so employees and managers can clearly define and differentiate best practices, teach those practices to others, and then hold people accountable accordingly.”

Doing this, according to Murphy, “gives high performers confidence that their manager understands the meaning of ‘high performer’ and it holds the manager accountable to actually differentiate employees on the basis of their performance”.

Second, Murphy suggests regular monthly meetings (perhaps lasting no more than 20 minutes) that ask managers about what’s going on in the workplace and how motivated they feel. As Murphy says, “If a company CEO were told that their best customers were unhappy, it’s a safe bet that CEO would be on a plane within hours. If we truly believe that people are our most important asset, shouldn’t we pay a bit more attention to the engagement of the best of those people?”

Senior management needs to communicate more clearly, hold people at every level accountable for results, and actively invest time and resources in the talents of high performers.

All too often, companies do not know their employees are unhappy until they leave. Exit interviews reveal that they leave because they did not believe anyone cared. Research has confirmed the old saw that people leave bosses, not companies. That makes holding bosses accountable for employee engagement critical.

Senior leaders need to do a better job of teaching managers how to be better managers. And they also need to apply such standards to themselves. 

Turning Creative Employees into Outstanding Employees

Creative employees are another set of coming employees that that become outstanding employees with proper talent management skills. In fact, unless you learn to get the best out of your creative employees, you will not get the best from them. However, if you just hire and promote people who are friendly and easy to manage, your firm will be mediocre at best.

Dr. Tomas Chamorro-Premuzic, an international authority in personality profiling and psychometric testing says although every organisation claims to care about innovation, only very few are willing to do what it takes to keep their creative people happy, or at least, productive. The following are some of the things to do to effectively engage, retain and turn coming creative employees into outstanding ones.

Make them feel important. According to T.S. Eliot, “Most of the trouble in this world is caused by people wanting to be important.” And the reason is that others fail to recognize them. Fairness is not treating everyone the same, but like they deserve. Every organisation has high and low potential employees, but only competent managers can identify them. If you fail to recognise your employees’ creative potential, they will go somewhere where they feel more valued.

Let them freely express themselves. Show your creatives unconditional support and encourage them to do the absurd and even fail. Innovation comes from uncertainty, risk and experimentation. That is, if you can predict the outcome, it is no longer creativity. Creative employees are the natural experimenters, so let them try and test and play. Of course, there are costs associated with experimentation — but these are lower than the cost of NOT innovating.

Do not pressurise them. Creativity is usually enhanced by giving people more freedom and flexibility at work. If you like structure, order and predictability, you are probably not creative. However, we are all more likely to perform more creatively in spontaneous, unpredictable circumstances — because we cannot rely on our habits.

Do not constrain your creative employees. Do not force them to follow processes or structures. Let them work remotely and outside normal hours; do not ask where they are, what they are doing or how they do it. This is the secret to managing Don Draper, and why he never went to work for a bigger competitor. This is also why so many top athletes fail to make the transition from a small to a big team, and why business founders are usually unhappy to remain in charge of their ventures once they are acquired by a bigger company.

Surprise them. Few things are as aggravating to creative employees as boredom. Indeed, creative people are pre-wired to seek constant change, even when it’s counterproductive. They take a different route to work every day, even if it gets them lost. Creativity is linked to higher tolerance of ambiguity.

Creative people love complexity and enjoy making simple things complex rather than vice-versa. Instead of looking for the answer to a problem, they prefer to find a million answers or a million problems. It is therefore essential that you keep surprising your creative employees; if you fail to do this, you should at least let them create enough chaos to make their own lives less predictable.

Only involve them in meaningful work. Natural innovators tend to have more vision. They see the bigger picture and are able to understand why things matter (even if they cannot explain it). The downside to this is that they simply will not engage in meaningless work. This all-or-nothing approach to work mirrors the bipolar temperament of creative artists, who perform well only when inspired — and inspiration is fuelled by meaning. This rule can also be applied to other employees: everyone is more creative when driven by their genuine interests and a hungry mind.

Notable Attributes of Outstanding Employees

The following are some of the attributes that outstanding employees possess. If your managers do not value these attributes, maybe they are not the right managers for your organisation anymore.

Outstanding employees are highly expressive as they ask for help whenever they need it.

They form great relationships with people inside and outside the company. They know which teams they are a member of and work to strengthen their team relationships so that things do not get tense or stressful in a clinch.

Outstanding employees know more than just the procedures their job requires. According to “ForbesCareers Newsletter”, they know the reason why their jobs exist and that knowledge lets them suggest tweaks and innovations that let them work more effectively.

Outstanding employees notice what is going on around them at work, and they integrate their constant learning into the way they do their jobs.

Great employees look ahead and anticipate problems that might emerge on the job. They bring up potential problems early and push to get those problems addressed before they can do harm.

Outstanding employees tell the truth about sticky topics like workload, work/life balance, difficult customers (or vendors, fellow employees or managers) and ineffective procedures. They find their voice and use it even when no one else dares to.

Outstanding employees do not rest on their educational credentials, job title or honours bestowed on them. Liz Ryan is CEO/founder of Human Workplace and author of Reinvention Roadmap, they are open to new ideas no matter who suggests them. They share their own thoughts, not the conventional wisdom they have been taught by other people. They do not brag about themselves.

Excellent employees are coaches and mentors to people around them. They often hear “You are so generous to share your expertise!” They do not take the view that knowledge is power. They know that knowledge is only power when it is shared with others. Outstanding employees address conflict rather than avoiding it. When they step into a conflict resolution process, they maintain respect for everyone in the mix. They do not place blame on other people. Rather, they do not apologise just to keep the peace.

Outstanding employees have a personal career plan or direction in mind. They do not assume that their employer will manage their career for them. They manage their own career.

They enthusiastically learn all aspects of business. According to Kevin Daum, a career management expert, outstanding employees understand they are part of something bigger and more worthwhile than just their jobs. They look to learn other areas of the business and be fluent in finance and management so that they will positively impact multiple areas of the company.

Outstanding employees steward their organisations. They treat the organisations as if they (the organisations) were theirs. They look to make prudent decisions about expenses and opportunities with the long-term future of the company in mind. They easily assess risk versus reward, selflessly when making decisions.

They generate viable opportunities. Outstanding employees know you do not have to be in sales or marketing to help a company grow. They see company growth as a collective effort and constantly keep their eyes open for ways to more than pay for themselves.

Outstanding employees resolve issues before they are issues. Amazing employees are always looking to improve systems proactively, and they do.

They tell it as it is. Amazing employees understand that hiding bad news helps no one. They find kind ways to bring uncomfortable information to the surface, but they bring it to the surface. They tell people what is necessary before major damage is done.

They demonstrate high standards with low maintenance. Managers always feel relaxed when they can trust an employee to perform a task to the same high standards they would expect from themselves. Not all can do this without constant attention or difficulty. Amazing employees quietly drive their own high standards.

They grow themselves and others. They not only drive their own careers but inspire others to do the same. These employees lead by example in how to advance without creating animosity or resentment. They see and create their perfect future, and also bring others along.

Motivation and Regular Training of Coming and Outstanding employees

It is noteworthy that to achieve and sustain corporate peak performance, organisations need to motivate employees and cultivate the culture of regular training of upcoming and outstanding employees. This training will ensure enhancement of the capabilities of upcoming employees to become outstanding while assisting existing outstanding employees to sustain and even exceed their peak performance and avoid complacency or diminishing returns setting in.

According to Andy Grove, there are only two ways for a manager to improve the output of an employee, these are motivation and training. Motivation is the key ingredient for success in any organisation. You can have all the technical skills in the world, but if you cannot motivate your team, it will be difficult to achieve success.

Motivation has long been recognised as being vital to the fulfilment of human potential. It has never been so important, however, as in our current era of drastic social and technological change and the stress that necessarily results.

Dr. Walter Doyle Staples, author of “Power to Win” and one of most-celebrated American authorities on human-potential issues says there can be few subjects as fascinating as positive and stimulating motivation if only because it means so many different things to different people. Only positive motivation will bring about productive results because it concentrates on desire, whereas negative motivation concentrates on fear.

To motivate your team, one of the things you need to do is to find out the level of their motivation. Everyone has motivation. Your employees are motivated on some level and it is your responsibility to find the level of their motivation and move them (the employees) to the next level. The key to this motivation is to be consistent with all your employees at all times.

If you show sincere in your employees, they will definitely be motivated. Understand what your employees are passionate about in their lives. Try to know their personal needs, what brings them joy or pain, what their short- and long-term goals are, etc. Once you can find out these, you can move them to a new level of motivation, because you have shown enough care. Once you understand your employees’ needs and goals, they will take more interest in understanding and achieving your goals.

Sykes suggests that to motivate your employees productively, you need to listen to What’s in It for Me? (WIIFM). Sykes educates that to truly be a motivator, you must always be in tune with your employees’ WIIFM. Find out why it is beneficial for them to do a task, etc.

Once you have found out the employees’ motives, you have discovered how to motivate them. Giving your employees the opportunity to be proud of their work constitutes yet another of the many ways of motivating them. Napoleon Bonaparte corroborates this by saying, “A soldier will fight long and hard for a bit of coloured ribbon.”

Reward team members publicly for a job well done. Give them an opportunity in a team meeting to explain how they accomplished a task. Let your organisation give recognition to these employees by personally sending a note, recognising them in an organisational or team meeting, or creating a Hall or Wall of Fame recognition for them that really have gone beyond the call of duty.

Also let your employees know why doing a particular task is important to you, the organisation and to them. Employees like to know why tasks are being requested of them so that they can feel involved and that the task is worth it. To motivate your team, you need to expect the best from them. If you expect the best, your employees will rise to that level. You do it with the words you use.

Also, training should be the most basic requirement for all managers in an organisation. An effective way to enforce this requirement is by withholding new employee requisitions from managers until they have developed a training programme for their departments.

Motivating Outstanding Employees through Appraisal

At times, outstanding employees are not accorded the necessary recognition. Experts say if you are an outstanding employee stuck in an undeserving organisation, your path is clear — it leads up and out of there, and on to your brilliant future.

The employee appraisal process therefore gives organisations the opportunity to praise employees who are outstanding. To ensure that these employees truly understand how much you appreciate their contributions, carefully select the words you include on their evaluations. By picking just the perfect words, you can communicate your appreciation clearly and allow them to bask in your pride, likely bolstering their commitment to the workplace.

Fatal Error of Recognising only Outstanding Employees

Human Resource Management experts are of the opinion that in as much as it is good to motivate and recognise outstanding employees christened, it is will be counterproductive according alone them the recognition, compensation or motivation.

Steven Brown, author of 13 Fatal Errors Managers Make with the subtitle And How You Can Avoid Them, predicates his displeasure with recognising only top performers on the fact that if you take all the top performers in your industry and hire them for your organisation, at the end of a year, only one person will come first.

In Brown’s words, “Before you begin to think how fantastically such employees would perform, on the average, I have some bad news for you: You cannot hire all the top performers, and you cannot build any department within a company with only top performers. No matter how great your financial resources, recruiting abilities, or connections, your efforts will fail. Why? Because … many top performers just don’t exist, and even if they did, only one person can get the top spot, while the others get the title also ran.”

He stresses that many managers waste much time trying to make themselves the first to achieve the impossible feat of hiring only top performers. “Simultaneously, they unintentionally discourage their middle (or steady) performers, who make up the backbone of any successful organization. All profitable companies build their business on good, reliable middle producers, plus a few superstars,” educates Brown.

Parting Shot

From Brown’s submission therefore, it makes sense for organisations to always recognise outstanding employees to sustain and exceed performance while recognising coming employees where necessary to as a way of challenging them to increase their performance. 

Kazeem Odeyeyiwa, a Professional Accountant, Certified Information System Auditor and an alumnus of the London Business School undergoing a Doctorate of Business Administration Programme at the California Intercontinental University, USA, is the Managing Director/CEO, Repton Group based in Nigeria.

 By Kazeem Olayemi Odeyeyiwa, FCA 

Talent management is of strategic importance to the overall business or organisational strategy, as such, there must proper articulation of the critical relationship between the two. Human Resource Management experts confirm that the creation of differentiating strategic capabilities signifies the relationship between business strategy and human resource.

Talent management is a strategic approach to creating a superior workforce and reflects an organisation’s commitment to the attraction, development, motivation and retention of productive and motivated employees.

Since the goal of talent management is to create a high-performing and sustainable organisation that meets its strategic and operational goals, an organisation’s talent management strategy must be linked to its business strategy.

According to Mari Ann, an employee management expert, recruiting, developing, motivating and rewarding employees for job performance that is in alignment with the organisational goals are all essential aspects of talent management, and must be fully integrated into all employee-related processes, including job descriptions, training and development, performance goals, metrics and performance reviews.

It is noteworthy that the alignment of talent management with business strategy begins with a careful analysis of an organisation’s strategic and operational goals and objectives.  Based on this analysis, the management team, in partnership with the Human Resource Department, can identify and understand the implications on talent strategy and planning.

Once the team understands how the business objectives will impact the organiSation’s talent, members can then define specific talent goals and initiatives and formulate their talent strategy and commitments.

Definition of specific talent goals and initiatives and formulation of talent strategy and commitments include communication and engagement of employees in the organisation’s business strategy; implementation of a leadership development programme for high-potential employees; development of a strategy for succession planning; conduct of assessments at all levels of the organisation to determine skills gaps; provision of comprehensive training that addresses skills gaps; alignment of performance goals with business strategy and reward for employees who meet their goals;  design of recruitment programmes to identify and attract the right talent.

Organisations that recognise the importance of adopting a talent management strategy that aligns with their business strategy can expect to be more successful in attracting and retaining the talent needed to achieve their strategic goals and objectives.

Irony of Conviction and Case Study

Even though many people and organisations agree that aligning an organisational talent strategy with business strategy is a worthwhile exercise, it is not many that make productive use of the alignment.

Research confirms that it is only about one-third of U.S. companies for instance, that claim to identify critical roles that talent strategy plays in the actualisation of business goals. And even only fewer companies, about 10%, have reached the stage where talent management is part of their annual business planning process and talent initiatives are truly owned by business leaders and line managers.

Madhura Chakrabarti, who leads the people analytics and employee engagement research practices at Bersin, Deloitte Consulting LLP says, “During the course of our research, however, we did find companies with exemplary processes for aligning talent and business initiatives. Right Management is one of them. If you don’t know Right Management, you will likely know its parent company, Manpower. The company uses an excellent model to facilitate its talent strategy and planning process.”

Chakrabarti says the process starts with the review of the company’s strategic execution framework, which lists the goals and initiatives outlined in its three-year strategic plan. The business objectives are divided into five main sections: revenue, business development, profitability, thought leadership, organisation and culture.

From this strategic execution framework, the Human Resource team can then discuss the implications on talent strategy and planning. These are organised into four categories: (1) Mindsets; (2) Leadership; (3) Organisation; and (4) Skills. Once the team understands how the business objectives will impact the organisation’s talent, members can then define specific talent goals and initiatives which will become their “talent commitments” for the year.

These may include initiatives such as communicating and engaging employees in the company’s new strategy, deploying a new model for high-potential employees, expanding succession planning to the next level down in the organisation and creating an action plan for improving diversity.

Once the talent commitments have been determined, the model is used to communicate the objectives and commitments throughout the organisation. This way, the Human Resource staff members understand what goals and deliverables that are expected, and how these support the business strategy.

Right Management is a great example of a company with a mature process for talent strategy and planning. Many companies can learn from this model, which has been extremely successful in ensuring that talent initiatives are aligned with business objectives. This model is also used as a communication tool to help staff understand and work towards their goals.

The future plans of a business offer the greatest indication of the type of talent that is needed to deliver success.  Many organisations focus on developing the next generation of leaders. However, cultivating a diverse pool of talent for the next leaders to lead is just as vital to future business success.  Unfortunately, this complex strand of organisational development presents a number of potential pitfalls which can ultimately lead to talent management shortcomings and ultimately failure.

One of the pitfalls is wrong notion that talent alone can constitute a strategy. Talent activities alone do not constitute a strategy. A coherent talent management strategy aimed at identifying and developing employees at all levels, benefits each employee and is clearly good for the organisation.

Aligning talent management with the business strategy sets a course for individuals to achieve their potential, and identifies their possible future fit within the business. Clearly, it is the future plans of a business that provide the clearest indication of the talented employees that will be needed and who therefore need to be developed or brought onboard where they are absent.  This complex process must enable people at every level to present and develop their potential.

Organisations that act only to identify potential for succession planning are wrong in believing that this constitutes strategic talent management, when it is just a single component of the process.  Over-arching strategy is essential, as pursuing talent management in a vacuum is a wasteful exercise that can only deliver success by chance.

Another pitfall is the failure to develop the talent pool. It is a depressingly widespread problem that many organisations focus nearly all their efforts on developing the next generation of leaders.  While an organisation requires leaders in order to continue to thrive, it will also require a diverse pool of specific talent for the next generation to lead.  To build a strong future, tomorrow leaders need tomorrow skills and abilities, not just a younger version of today’s skills and abilities. The long time-frame of a talent management strategy requires the vision to predict the company’s needs for the next 15 or 20 years.

Evaluating the contribution people may make a decade or more into the future is incredibly difficult, but is vital to future business success. Just as talent operates in the context of an organisational framework, so also a winning formula operates in the context of its time and circumstance.

Failure to build the business case for investment in talent development constitutes another pitfall. Through informed alignment of talent management strategy with business strategy, organisations can identify the capabilities that are really needed (thus providing a realistic business case for the development investment).

Strengthening this business case raises another challenge, that is, developing effective criteria for selecting the right candidates for development and thereby using available resources as effectively as possible to support the maximisation of potential.

This effective long-term thinking can override short-term pressure from shareholders, who are often reluctant to invest in talent management. Future vision also has to be applied to prevent current performance being the basis for selection, as it is not a reliable indicator of an employee’s performance in a subsequent role.

Line managers and supervisors have the closest and most accurate view of current performance. However, this isolated perspective does not automatically translate into a clear view of future potential and presents a common trap that many organisations fall into.

Other subtle pitfalls stemming from organisational structure can also have adverse effects on the success of a talent management strategy. Assessment and selection of learners’ individual characteristics, proven learning agility, openness to learning, motivation to learn and improve performance and payment of dividends in terms of the subsequent transfer of new skills are good, but it is also striking that these are elements of talent development where the trainer, facilitator or coach has least influence.

In businesses there is often also a critical disconnection between training and daily organisational life of a scenario in which learning and training are applied indiscriminately and learners subsequently receive little support, and the little context, in applying the learning that they have acquired.

Organisations achieve and maintain success through the actions of the people at all levels that constitute them.  As a multi-faceted process, talent management has many parallels with the change management process.  In all its aspects, from attracting and retaining the best talent to engaging, developing, deploying and supporting its people, bringing a dynamic ‘change management’ view to the talent management strategy enables organisations to help individuals develop into the roles that the changing organisation will require in future.

This responsive, forward-thinking approach ensures that organisations are equipped with talent at every level to deliver continued and enhanced business success in the short, medium and long terms. A great talent strategy has to start with where your business is going—and what your leaders need in their toolbox to take you there. At this analytical juncture, it is necessary to use the case study of AT&T.

Case Study of AT&T’s Alignment of Talent Strategy with Business Strategy

“Harvard Business Review” recently published a case study of effective application of talent strategy during turnaround by the board and management of AT&T. The publication was written by John Donovan as the chief strategy officer and group president at AT&T and Cathy Benko as the vice chairman and managing principal at Deloitte.

It is reproduced as follows:

Having built the United States’ telegraph and telephone infrastructure in the last century, AT&T could once claim to be the company “where the future was invented.” But now the Dallas-based firm, like many in the technology sector, faces a future in which its legacy businesses are quickly becoming obsolete. With its industry moving from cables and hardware to the internet and the cloud, AT&T is in a sprint to reinvent itself.

The overhaul presents an enormous HR challenge. AT&T employs about 280,000 people, most of whom got their education and foundational job training in a different era. The average tenure at the company is 12 years—22 years if you don’t count people working in call centers. But rather than hiring new talent wholesale, AT&T has chosen to rapidly retrain its current employees while striving to engender a culture of perpetual learning. One of us (Donovan) is championing this effort at the company.

For the past three years, AT&T’s CEO, Randall Stephenson, has been making large strategic bets on a diverse range of wireless technologies—most recently the $63 billion acquisition of satellite television company DirecTV. Asked about the decision to venture into new businesses, John Stankey, the head of AT&T’s Entertainment Group, says, “We have no choice.”

Customers are demanding constant connectivity; from 2007 to 2015, for example, data traffic on AT&T’s wireless network grew by more than 150,000%. The company forecasts that by 2020, 75% of its network will be controlled by software-defined architecture. That percentage was virtually zero in 2000. This means, says Stankey, that most of AT&T’s global employees “signed up for a deal that is entirely different from the environment in which their business operates today.”

The new landscape requires skills in cloud-based computing, coding, data science, and other technical capabilities. Many of these fields are advancing so quickly that traditional methods of training and development cannot keep up. As Scott Smith, AT&T’s senior vice president of human resources operations, puts it, “You can go out to the street and hire for the skills, but we all know that the supply of technical talent is limited, and everybody is going after it. Or you can do your best to step up and reskill your existing workforce to fill the gap.”

Since 2013, when the initiative began, AT&T has spent $250 million on employee education and professional development programs and more than $30 million on tuition assistance annually. AT&T estimates that, all told, 140,000 employees are actively engaged in acquiring skills for newly created roles. (And the expectation is that every four years they’ll change roles again.) From January to May 2016 employees who’d been retrained filled half of all technology management jobs at the company and received 47% of promotions in the technology organization.

It’s too soon to measure the full results, but one encouraging sign has been an increase in speed and efficiency. In the past 18 months AT&T has reduced its product-development cycle time by 40% and accelerated time to revenue by 32%. Recently, when the company decided to develop an “on demand” capacity that let large business customers expand their bandwidth in real time, it took only six months to scale it up from an idea to a service with more than 450 customers in over 175 markets. Prior to 2014, developing and rolling out that kind of offering would have taken at least a year.

The first task of AT&T’s program—dubbed Workforce 2020 (or WF2020)—was to identify the skills the firm would need and create a blueprint for sourcing them internally. Managers documented existing gaps and formulated “future role profiles” for themselves and their teams. Every manager in AT&T’s network and technology strategy organization, which constitutes roughly half the firm’s professional workforce, was assigned a new role and expected to get the training or credentials to fill it.

To help employees with the transition, in January 2014 human resources launched an online self-service platform, which provides a host of tools and processes for performance management, career development, and talent planning. It also offers workshops on a wide range of topics, such as virtualization and cloud computing, “technologies in motion,” and “the communication transformation.” So far, the platform has gained good traction with workers, who accessed it 6 million times last year alone.

Last Words

For any talent strategy to have the desired business impacts, it must be designed in alignment with the overall business strategy of an organisation.

Kazeem Odeyeyiwa, a Professional Accountant, Certified Information System Auditor and an alumnus of the London Business School undergoing a Doctorate of Business Administration Programme at the California Intercontinental University, USA, is the Managing Director/CEO, Repton Group based in Nigeria.

By Kazeem Olayemi Odeyeyiwa, FCA

Every corporate organisation cherishes impressive performance in the form of productivity, profitability and sustainability. No any business is set up with the intention of decline or eventual collapse. Therefore, it is important for business owners and managers to be conscious of the symptoms and causes of business decline with a view to preventing or addressing them.

By way of personal health analogy, Doug Verley, a business management expert says if you think about this like a person who is not feeling well and experiencing a headache and high temperature, the headache and high temperature are not the causes of the ill-health but rather the symptoms or early warnings signs.

Verley adds that if your doctor instructs you to take a headache pill and get some rest, he or she is actually treating the symptoms of the illness and not the cause.  If, however, he or she carries out tests and discovers you have a bacterial infection and prescribes antibiotics, he or she is now treating the cause of the illness, and the rest and painkillers will help you feel better quickly.

A business is very similar.  If your business is in decline and you only treat the symptoms of the problem, for instance, lack of cash in the business to cover costs, and you get a loan, the problem will continue to grow and cause major issues.  If, however, you review your cost structures, pricing model, inventory and invoicing policies, you attack the problem at the root cause(s).  This means that the situation will improve and prevent the future reoccurrence of the symptoms.

Therefore, the symptoms give us clues as to what may be wrong with the business; however, they provide no direction for required management action.  You therefore need to be able to analyse the symptoms to identify the cause(s) and then decide on the best way to solve the underlying problem.

There are indeed many signals that indicate that a business is surging towards decline. They are often financial and non-financial in nature. There are a variety of warning signs that indicate that a company is experiencing financial distress. Being aware of these signals can help prevent failure. The following are some of the signs which could help you avoid financial distress.

Financial Signals

Declining or negative profit margins: One of these signals is declining or negative profit margins. Declining profit per sale suggests problems with cost management, pricing or competition. Poor profit margins are usually the first indicator that a business is not doing well.

When a business struggles to break even, that is an indicator that it will not sustain itself from internal funds and will be forced to raise capital externally. This will raise its business risk and lower its creditworthiness with creditors, suppliers, investors and banks eventually limiting access to funds, leading to eventual collapse.

Negative cash flow: Another signal is negative cash flow. Negative cash flow statements are a critical indicator of financial distress. A negative cash flow statement implies that the company is paying more cash than it is generating from its operations. If cash flow stays negative over a sustained period, it is a signal that cash in the bank could be running low. And this can be very dangerous.

Payment delay by customers: Payment delay by customers is another of the numerous signals of business decline. When customers take too long to settle their payments with a company, it is a signal of business decline. This situation can severely stretch the cash flow and as a result, the company will not have enough cash on time to pay its own creditors and address liabilities. In situations where the company significantly depends on only one or two major customers, this risk is greatly high.

Low current ratio: Low current ratio is also a business decline signal. Current ratio is the ratio between current assets and current liabilities. Best practice dictates that this ratio should always remain greater than one. To the uninitiated, this means that the company’s current assets are enough to pay off its current liabilities. Where the ratio is below one, trouble is already rearing its head.

Poor sales growth or declining revenue: When there is no growth despite massive marketing activities, this could mean that the market is not satisfied with the product or service and the business may inevitably close down.

Declining relationship with the bank: When relationship with the bank becomes significantly strained, asking for extra security, personal guarantees, debentures, withdrawing overdrafts and of course declined loans, it more often than not implies that the creditworthiness of a business has been adversely eroded.

Lack of financial reports: Many business owners do not know the financial position of their businesses. Similar to flying blind, this is always a recipe for disaster. By not being able to track rising costs and accounts for payables, a business may become insolvent due to lack of good financial information. A company may be growing rapidly making profit but also suffering negative cash flows.

Borrowing to cover shortfalls: When a company is constantly borrowing and asking its investors to inject more capital, this is an underlying sign that it is increasingly finding it difficult to sustain itself operationally. At this point, a critical re-evaluation is needed to assess whether the venture is viable in the long run.

Declining ROE and ROCE: Reduced returns on equity and capital employed signal inefficient use of financial resources.

NON-FINANCIAL SIGNALS

Apart from financial signals, there are also non-financial warning signs that indicate that a corporate organisation’s performance is moving towards the shore of decline.

Weak or inexperienced leadership and management: One of the non-financial warning signs of business decline is weak or inexperienced leadership and management. Weak or inexperienced leadership, lack of clarity of vision, inability to adapt or poor decision-making can cripple a business. Management systems that rely heavily on one individual for decision-making could result in a decision-making crisis.

An inexperienced management team with weak organisational skills as well as poor understanding of business may also lead to problems. Also, internal problems such as changes in senior management and the resignation of members of the Board of Directors can also bring about organisational decline.

Lack of innovation or adaptation: Inability or resistance to timely adoption of new technologies or failure to adapt to realities of new market shifts (e.g., Kodak, Nokia, BlackBerry) can quickly lead to decline or make an organisation become obsolete in terms of its offerings.

Poor quality of products and services/declining market share: When the quality of your product starts to decline, it is more than likely that customers will start buying from competitors. This automatically is a sign of business decline.

Inadequate business planning: Lack of a solid, regularly updated business plan outlining goals, strategies and market analysis can increase vulnerability of a business.

Ineffective marketing: Ineffective marketing is another non-financial signal of business decline. Poorly executed campaigns, lack of brand differentiation or failure to communicate value can negatively affect visibility and sales.

Market disconnection: Failure to understand customer needs, market trends or new demand can lead to offering irrelevant products or services.

Declining employee morale and turnover: Another non-financial warning sign of business decline is declining employee morale and turnover. High staff turnover or low morale can indicate internal issues like poor management or lack of support. While it is true that each industry will have specific challenges and rates of employee retention, significant changes in employee turnover tend to be an early warning sign that a business is in trouble. Sometimes this is measured, erroneously, by changes in key personnel.

The reality is that your business does not operate in a vacuum.  It has many interested and involved parties often referred to as stakeholders. At the top of this list, we will find employees. Their commitment is critical to the survival of your business.

Missed deadlines on key projects: Missed deadlines on key projects are also one of the numerous non-financial warning signs of business decline. Planning and organisation are required to get a job done, and then working out when and how you will do it. They are also about developing project timelines and meeting deadlines. When these critical skills are absent in the operation of a corporate organisation, it is a signal of business decline.

Disputes among managers or owners: Closely related to the above is persistent disputes among managers or owners. In an atmosphere of chaos, definitely, nothing meaningful can be achieved. And this will negatively affect the business.

Lack of a clear business strategy: This tends to manifest itself in analysis paralysis, too many staff meetings to debate issues, frustrations, blame and counter blame, loss of business momentum, etc.

Declining customer service: Desperate businesses have a tendency to chase money and new client transaction, while neglecting existing customers. This is also a sign of business decline.

Legal or regulatory predicaments: Lawsuits or regulatory non-compliance can lead to reputational damage for a business and cause unexpected business decline.

Operational inefficiencies: Poor systems, lack of delegation or inadequate quality control affect productivity and customer satisfaction and can lead to business decline.

Solutions to Business Decline Signals

If you feel your business is exhibiting any of these symptoms of decline, you need to act fast to remedy the situation.

One of the ways to tame these warning signals is to talk to experts or seek professional advice. Andrew Griffiths, author of “101 Survival Tips for Your Business” says if you let people, especially your suppliers and creditors know your situation and why it is happening, they will bend over backwards to help you.

In Griffiths’ words, “They don’t want to lose the money that you already owe them, and they certainly don’t want to lose your business.”

He advises that there are also businesses that specialise in turnaround management. They intervene by helping businesses to talk to their suppliers, creditors, etc. “They can mediate with landlords and financial institutions, possibly help with restructuring your debt, and generally remove a lot of pressure during these difficult times,” stresses Griffiths.

Another way to handle financial pressure for instance, is to avoid it. Griffiths says if you are concerned about the financial state of your business, then talk to your accountant immediately.

To handle this situation, you can develop a business-oriented corporate culture. Corporate culture refers to the basic philosophy underlying the objectives or goals of an organisation. Develop a performance-based culture in your employees and inculcate this culture in yourself first.

Apart from motivating your employees to offer peak performance, endeavour to put in place, exceptional customer service so that they bring more business to you.

If your products are not doing well in the market, then you need to repackage. Do market survey to find out what people are buying in the market. Then apply SWOT Analysis to the operations of competitors that are doing well. That is, try to find out their strengths, weaknesses, opportunities and threats. You can use simple questionnaire to discover these from customers.

You can also handle the situation by being open and honest with various stakeholders.

Also build a strong team. Focus on leadership development, employee training and delegation. On negative cash flow, find out the major causes of this problem so that your financial situation can get better. Implement robust financial management system. Monitor cash flow, control costs and maintain reserves.

On payment delay by customers, you need to put stringent measures in place to ensure that your customers pay your money as and when due.

Also develop a clear business plan. Create and regularly update a plan with validated market research, clear goals and strategies.

Prioritise customer needs and experience by continuously collating feedback, providing excellent service and adapting offerings.

Adopt innovation and adaptability. Embrace technology, encourage new ideas and be willing to adopt workable business models. Also implement effective marketing and branding by clearly differentiating your brand and us multi-channel strategies to reach the target audience.

Final Note

In a nutshell, the best way to tame identified financial and non-financial signals of business decline is to identify the real causes of these warning signals and proffer appropriate solutions.

Kazeem Odeyeyiwa, a Professional Accountant, Certified Information System Auditor and an alumnus of the London Business School undergoing a Doctorate of Business Administration Programme at the California Intercontinental University, USA, is the Managing Director/CEO, Repton Group based in Nigeria.