One of the most challenging aspects of management is balancing long term success with the need to survive the next quarter. There is, as with so many things, the opportunity of a virtuous circle. This happens with organisations who are led by strategic thinkers. Paul Polman is one such luminary who took the step of moving away from the focus on quarterly reporting when he took over at Unilever:
Immediately, the Dutch-born Polman put his shareholders on notice. He declared that they should no longer expect to see quarterly annual reports from the company, along with earnings guidance for the stock market. Unilever, he explained, was now taking a longer view. The CEO went a step further, urging shareholders to put their money somewhere else if they don’t “buy into this long-term value-creation model, which is equitable, which is shared, which is sustainable.”
Forbes
The move was courageous, though unlike most of us he was in a unique position to pursue such dramatic reform—being both a CEO and at a commanding inflection point in his tenure. As he would later recount: 'I figured I couldn’t be fired on my first day'.
For those of us further down the pecking order, where we do not have the same levers to pull as a CEO and are not so indispensable that we cannot be let go on our first day, leading stakeholders in taking a longer term outlook can bring a few more stage gates. This is particularly the case when we walk the talent tightrope with our team.
In a hiring environment that is still Recovering From The Great Attrition, line managers need to take care to retain top talent while apprehending that budgets are not limitless nor opportunities endless. A situation that is further complicated as organisations engage in protracted belt tightening while they navigate the near term. As one CEO observed in a recent keynote, 'we have plenty of money, but need to watch our burn'.
Why I think it without hyperbole to compare the process to a tightrope walk is because the data is in and the traditional 20/80 rule, which stipulates that 20% of employees deliver 80% of organisational value, is incorrect. Research shows it is closer to 5% of employees delivering 95% of an organisation's value. This is because, particularly in the case of highly complex roles, the value to effort ratio clocks high performers as being 800% more productive. A statistic which stems from:
five separate studies involving 198 samples including 633,263 researchers, entertainers, politicians, and amateur and professional athletes. Results of each of these five studies are remarkably consistent and indicate that individual performance does not follow a normal distribution.
O'Boyle Jr & Aguinis (2012)
To put these numbers into a business context. If you were working on a new product, and a competitor were to use 20% more great talent in their organisation, they would beat you to market even if they started a year or two later. In an environment in which speed to market is again on everyone's lips, failure to find and keep top talent can make or break an organisation's strategic roadmap.
