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Ep 589: Talent Acquisition As A Competitive Advantage

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As the debates about the future of talent acquisition rumble on, it’s important to focus intensely on the critical value effective hiring brings to the organization. Talent remains a key differentiator that drives competitive advantage for a company, and this will be even more true in the future.

My guest this week is Simon Taylor, Head of Organization Effectiveness at Gap Inc., who has authored a forthcoming book called “Build Smart: A Blueprint for Building a High-Performing Organization.” Simon has a TA background and, in the book, outlines just how critical hiring is for companies. In our conversation, he shares his insights into what makes great hiring and its role in high-performing organizations.

In the interview, we discuss:

• Common talent issues companies are facing.

• How important is recruiting in 2024?

• Competitive advantage from high-quality talent acquisition

• The long-term impact of bad hiring

• What makes a great hire

• The importance of potential

• Upskilling hiring managers and changing their mindset

• How to get buy-in across the organization

• Leveraging data to illustrate opportunities

• Why AI will be huge for talent acquisition

Listen to this podcast on Apple Podcasts.

Transcript:

Matt: Support for this podcast comes from Transform. Recruiting Future is excited to announce a partnership with Transform. Transform brings together people driven leaders, investors, and innovators across industries and backgrounds with a shared passion for people innovation and transforming the world of work. Transform 2024 promises to be the best yet. You can expect three days of powerful content. Innovation showcases probing conversations, hands on learning experiences, over 300 speakers, and energizing after hours networking Las Vegas style. So, come and meet me in Vegas on March 11 through the 13th. Register now and save $200 by going to mattalder.me/transform. That’s mattalder.me/transform.

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Matt: Hi there, this is Matt Alder. Welcome to Episode 589 of the Recruiting Future Podcast. As the debates about the future of talent acquisition rumble on, it’s important to really focus on the critical value effective hiring brings to an organization. Talent remains a key differentiator that drives competitive advantage for a company and this will be even more true in the future.

My guest this week is Simon Taylor, Head of Organizational Effectiveness at Gap. who has authored a forthcoming book called Build Smart: A Blueprint for Building a High-Performing Organization. Simon has a TA background and, in the book, outlines just how critical hiring is for companies. In our conversation, he shares his insights into what makes great hiring and its role in high-performing organizations.

Hi Simon and welcome to the podcast.

Simon: Hey Matt, good to be with you.

Matt: An absolute pleasure to have you on the show. Please could you introduce yourself and tell us what you do.

Simon: Yeah, sure, thanks. So, I’m Simon Taylor. I work at Gap. I’m the Head of Organizational Effectiveness there. And a little bit about me, my background. So, I’m from New Zealand. You probably hear the accent come through. Lived in the States for some time now. Actually, went to the University of Washington up in Seattle and did rowing there, which brought me to the States. And since then, just had a fun time in LA with my career. I started off at Disney as a recruiter and really enjoyed that. And that got my feet wet in the talent acquisition space, HR space. And then that moved me on to a tech startup, actually, where I headed up HR prior to their acquisition by Amazon. So that was a whirlwind and had a phenomenal experience.

And then since that point, I’ve been in the OD/OE space at companies including Warner Bros, Amgen, which is a Fortune 500 biotech company. And like I said, I’m at Gap right now. So yeah, that’s a bit about me. I live just south of LA and work remotely for Gap, who’s based in San Francisco.

Matt: Fantastic stuff. Now, one of the things that you’ve done recently is you’ve written a book called Build Smart: A Blueprint for Building a High-Performing Organization. Tell us about the book, what’s it’s about and why did you write it?

Simon: Yeah, sure. So, one of the things that I noticed as I was working with executives at a variety of different companies over time is that leaders were often finding themselves having to recreate the wheel around how to build a high performing team, how to build a high performing culture and so on, and just felt like, “Man, leaders need a bit of a framework, they need sort of a playbook, if you will, to navigate the sea of information that’s out there around some of these topics. And so, I wrote the book with that goal in mind of really providing that framework to be what I would hope to say is like somewhat of an ultimate resource for leaders to be able to pinpoint and address the biggest pain points in their organization on things related to culture, hiring high-performing teams, clarifying your vision, sharpening your strategy, organizational structure and so on. So, it’s intended to be a bit of a resource that folks reach for on the shelf every month or two when they come up with a different team or organizational challenge. I’ve called it a blueprint for that reason as it’s intended to be instructive.

So, yeah, it’s been a seven-year process and it’s been a labor of love, but a phenomenal experience too, is I’ve really wanted to get the right guidance in front of leaders to be able to serve up the latest research, the latest tools and frameworks and ways of thinking about some of these various topics. And like I said, be that ultimate guide for leaders, the one stop shop so they don’t have to keep looking online or reading the latest article, but they have it all at their fingertips.

Matt: Congratulations, because I know how difficult writing a book is. So, getting it out there, absolutely brilliant. Obviously, it’s a very dynamic time for the world of work and talent at the moment. What are the common issues that you’re addressing in the book and how can companies solve them?

Simon: Absolutely. It’s one thing that’s been interesting is I’ve been giving this broader topic around organizational health, organizational effectiveness, building high-performing companies, giving that a lot of thought through the book writing process. And what’s become even clearer to me now is that every company has a unique set of circumstances and opportunities or challenges or things that are getting in the way, if you will, of them reaching that next level. And one of the things, the concepts I talk about in the book is this idea of what’s called a rate limiting factor. And that’s something that comes from the fields of economics and biology and a few things. But what it refers to is, that thing in that system that creates a constraint or a cap on the speed or performance of the system as a whole. It’s the weakest link in the chain.

And so, just to share an example, we think about, like my car for example, I took it to the mechanic recently and changed the tires and the car went faster around corners and accelerated better because the tires were the rate limiting factor. And so, companies also have rate limiting factors and they’re different for every company. I am getting back to the core of your question and so one of the things that I hope the book provides for folks is enables them through this framework that I’ve laid out in terms of what an organization is, enables them to be able to pinpoint exactly which are their rate-limiting factors, which are those weakest links that are holding them back.

And what I have seen is more of a trend than often than not, is that organizations tend to always struggle with a few things. One is building a high-performing culture. It seems like that’s just a perennial topic that leaders are grappling with. How do we evolve our culture? How do we become more innovative, more nimble, more inclusive, whatever it might be, culture seems to be a key one. Another one, I feel like always, always an opportunity, is around the topic of hiring and how do you hire well? How do you bring the right talent to the organization? Of course, there’s an attraction piece to that, but also, how do you assess them correctly and integrate them? I think, like I said, every organization is going to have something a little bit different. But my hope is that the book arms people with the framework, the tools and resources to be able to pinpoint what those areas are and address them.

Matt: Now, unsurprisingly, considering the type of podcast this is, we’re going to dive deeper into the hiring and recruiting aspect of this. Just before we do, as by way of context, now you used to be a recruiter, lots of people listening are recruiters, talent acquisition professionals. And obviously, we consider hiring, recruiting to be the most important thing company can do. From your perspective in terms of looking at all of the talent function and everything an organization does. Right at the moment, how important is recruiting and hiring?

Simon: It’s so important. I met with the Director of The Center for Effective Organizations from USC, which is this think tank out of USC. His name’s Ed Lawler, and he founded this organization a few decades ago, and it’s really cutting edge in what they’re doing around organizations. And I asked him about hiring in particular and he said something to me that was really, I thought, quite astute and really hit the nail on the head. And what he said was that the ability to attract and organize top talent makes it difficult for other organizations to compete or duplicate your competitive advantage. I think that really sums up the value add, if you will, of great talent acquisition of great hiring is that you’re bringing people in that you can have as differentiators for your organization, to make it difficult for others to compete with you because you’ve got the best talent.

So, I think of it that way and I think on the flipside, on the other side of the coin, is if you don’t have hiring in a good spot and there’re challenges there, then you really have a leak in the boat. I mean, how can your organization survive or thrive long term if through the natural course of attrition, you’re not bringing in the right people [unintelligible 00:09:41] at the very least, maintain the organization trajectory if not accelerate it. So, I think hiring is one of those things where you don’t always see the negative effects of bad hiring immediately.

Think 2×2 grid from I think it’s Stephen Covey of importance and urgency. Good hiring is that high importance, high urgency or maybe even lower urgency in terms of the perception of the organization. So, it really takes proactive effort to do it right, but I think there’s always opportunity to do it better.

Matt: I love that way of thinking about competitive advantage. That’s just so true. I think that as an industry, we really need to think like that 100%. So, at the moment, recruiting talent acquisition is in a bit of a flux in terms of how it works, being disrupted by technology. Companies thinking very differently about what talent is and how they find people for their organization that are going to give them that competitive advantage. What do you think that companies need to look for to make a great hire in 2023, going into 2024?

Simon: Yeah, yeah great question. I think there’re some fundamentals here that are always true and there’re probably some timely things that are particularly important right now, which we can touch on too. So, one of the things I talk about in the book, I framed the chapter up on hiring in two buckets of what to look for and how to look for it. And in the what to look for category, I lay out these four things that make for a great hire. And the first one is they have the necessary skills. That’s sort of the table stakes. The obvious fundamental you’ve got to have. Someone has to have the necessary skills and experience to be able to perform in the job.

The second one is they’re a culture fit, which I would define that as not only being compatible with the culture, but also adding to the culture. Because invariably organizations are trying to evolve or push their culture forward in some way, shape or form. So not being too narrow in that perspective, but having folks that are going to add to the culture. Otherwise, you’ll have—the corporate immune system will be triggered. And I’m sure we’ve all seen examples of where there’s a cultural misfit and it’s not good for anyone. So that’s the second piece is culture fit. The third one is their high potential. And I think that’s really important.

And one that I think companies maybe don’t give as much attention to as they could is assessing individuals, not just can you do this job and are you compatible with the culture? Do you have the mindset and the skill set and some of those intangibles to be able to succeed in future environments that may be different from today? And to your point, around 2023, 2024 and where we’re at right now, it seems like the perennial issue, but things are changing so quickly. I mean, AI is one of those things that’s coming out of [unintelligible [00:12:34] field. And so, what we need is people who can quickly change, adapt, and navigate through ambiguity. And these are all characteristics of high potential people. So, I think that’s really key. And the final one here is they complement the team.

So, if we think about the idea of diversity and specifically cognitive diversity or diversity within a team, different perspectives, different ways of thinking about things, I think a lens that doesn’t always get the attention that maybe it deserves is this idea of how do you create a truly diverse team in which everyone complements one another, that collectively, what is that saying, some of the parts is greater than the whole or however, that said, the whole is greater than some of the parts. So, I think that the idea around complementariness, to use a bit of a long word, and thinking about what are the skills and the strengths of the team? And what are the blind spots of the team today? And how might that inform who we need to attract, who we need to hire to the team to make us well rounded or we can strengthen and support one another?

Matt: What are the common traps you see organizations fall into when it comes to hiring?

Simon: Yeah, I think that it’s a great question. I think the classic one and I think we’ve all been guilty and all susceptible to this over time, is someone comes in the door and they’re really eloquent, they present well, they’re confident, they string their words together beautifully, they’ve got great answers to all the questions, and they don’t miss a beat, if you will. And it was funny because as I was researching a bit around this, because intuitively I felt like, man, that’s a proxy, or can be helpful for roles that really need someone to be eloquent, and that’s an important characteristic. But again, I think there’s a bit of bias there and we can put too much stock in that. So, as I was researching around this, I came across this really interesting concept, I think you would call it from the field of psychology, called the Dunning-Kruger effect. Have you heard of that before?

Matt: Yes. I have I have. But tell us more.

Simon: Yeah, so the Dunning-Kruger effect is essentially, if you think of it like a chart in which has a sharp rise one end and it’s sort of a big dip. It goes down to a low point, then comes up again that represents someone’s confidence. And so, what the concept basically lays out is that someone who is not very competent will have an inflated sense of confidence because they don’t know what they don’t know. And so, you have someone that’s this inept newbie, to put it bluntly, who feels like man. I understand this topic. I’ve got a point of view, and they just don’t know what they don’t know.

So, they’re uninformed in their optimism and their confidence, whereas those that maybe have a bit more of a sort of moderate level of competence, who have been in the trenches for a while, they know enough to know they don’t know it all, and they know who the experts are and the gap between them and the experts. And so, their confidence is a bit more moderate. And then at the end of the spectrum, you’ve got those that truly are experts and their confidence is in line with that. And so, it’s an interesting thing to think about that as a possible heuristic or tool to consider. “Wow, this person’s really confident that I’m interviewing.” Is it because they’re an expert or is it because they maybe have an inflated sense of confidence because they actually have low competence, which is a bit ironic.

So, I think that’s an important trap to consider. There’re one or two others I talk about in the book as well. One of them is around the classic thing that I think underpins a lot of challenges when it comes to diversity and inclusion is affinity bias. We tend to like, as humans, people that share similar values, that are like us, they have similar skill sets, maybe similar background, and you unintentionally can hire a clone of yourself, and that’s problematic from a diversity standpoint in terms of complementary perspectives and really strengthening the team. So, I think that’s a trap to watch out for, in addition to placing too much value on eloquence.

And maybe the third one I would offer up would be this idea around having a narrow perspective on intelligence. And I heard this when I was working with the CFO of Warner Bros, and she shared this concept with me, that at the time was a new concept and it really stuck with me. And it was based on some research from, I believe it’s Robert Sternberg from Cornell University. And what he has found through his research is that there’re three different types of intelligence, and we all possess all of them in some way, shape, or form, but we rarely will be highly intelligent in all three. And so, the three are creative intelligence, analytical intelligence, and practical intelligence. So creative intelligence, being the ability to be really creative, come up with good ideas. What are those innovative solutions and novel ideas that are going to make an impact in the organization, so creative intelligence.

The second one, analytical intelligence, the ability to be able to assess different ideas, what’s the right course of action? What’s the pros and cons? How should we think about designing an effective solution that gets maybe a little more into the analytical detailed side of things? And then the third piece, practical intelligence. I’m sure you have all seen these, where there’re people who just, man, you give them a task and they figure it out. They blow through the red tape where they need to, and figure things out, and they’ve got this practical intelligence that enables them to think on the spot, come up with innovative, practical, pragmatic solutions, and make things happen.

So, that was a fascinating concept for me when I first heard of it, thinking of intelligence in maybe a broader way than what we have been brought up to think of when it comes to intelligence. And I think that has a lot of relevance when it comes to hiring and thinking about who’s the right fit for the team. And going back to that point around complementing the folks on the team that we have today and building different kinds of intelligence and different capabilities.

Matt: I think that’s really interesting and what you really highlight there is just how difficult hiring is in looking for all of these things, not falling into these traps. And I’ve seen great organizations make all of the mistakes that you’ve just talked about. So, how can we deal with that? I mean, what does a great hiring process look like?

Simon: Great question. It’s funny. I was talking with the head of talent acquisition for a Fortune 500 company, and I won’t say which one, but head of talent acquisition. I was asking her about just the general competence level of hiring managers. And her response to me was, everyone thinks they’re an expert in hiring. And of course, the hidden message there was they’re not. They’re not an expert. But that’s a problem, because if you have people thinking that they know something, there’s a saying, I forget who it’s from. It’s old Greek philosopher. “It’s impossible for a man to learn what he thinks he already knows.” So, if you think you’re an expert, that you’ve got a fixed mindset potentially, and you’re not going to be open to learning. So, I think that is a real key problem.

And we can talk about process, but I think a fundamental problem to really grapple with is how do we upskill our hiring managers. And part of that, I think by virtue of a well-designed learning experience, training, whatever it might be, will be helping them see what the opportunity is and what they could learn I think back to my previous point, but I think we’ve really got to help hiring managers hire well. Like you said, it’s not easy. It’s an art and a science. I think we do the organization a great disservice if we don’t have strong hiring practices in place. I think that the barrier to consider and to overcome when it comes to this is organization’s capacity and a sense of everyone has conflicting priorities and different things going on.

So, I think from a change management standpoint, it’s really important to secure the sponsorship of the head of HR and other senior leaders to say this is an important priority. We need to hire well, because that’s going to support our strategy. And so therefore, to do that, we need to train our hiring managers and invest the time. And it can’t just be a quick 20-minute eLearning. It needs to be immersive, it needs to be multifaceted, and we need to make sure we’re actually building capability and can verify that with data. So, I think that’s like a fundamental thing I would sort of mention that. I can go into process if that would be helpful, but I’m conscious I don’t want to go beyond, have too long of answer here.

Matt: I think it would be good to talk about process a little bit, but I think what would be interesting is what you talk about there in terms of getting that stakeholder buy in to make those changes. I know that there will be people listening, screaming in agreement, but struggling to make that happen in reality, what advice would you give people to get that buy in to make the organization really appreciate the importance of what they’re doing and invest the time and resources to do it properly?

Simon: Yeah, yeah. It’s such a good question. Change management is one of my greatest passions and area where I’ve really focused my career, because like you said, it’s so important because you can have the best ideas, but if it doesn’t get traction, then of course it’s not going to have the impact. So, how I might think of it is trying to identify what are the leveraging data to start with. How can you tell a story through data that there’s a problem to be solved, that there’s an opportunity to be seized, and then bringing that data to who you would hope to be your executive sponsor? I would think of the head of HR as the logical person for that typically. You may be in a smaller organization, it’s the CEO or both.

And how do you help paint the picture of, “Hey, there’s an opportunity here or there’s a problem here when it comes to hiring, and here’s a compelling solution that could address that need to help bridge the gap. And I would think that building hiring manager capability would be a key part of that. And I think once you’ve really developed a clear problem statement and you’ve secured the buy in of one or two key people, then that can lead to a bit of a tipping point where the momentum can shift.

I think a key point I’ll add on to that, which I touched on briefly before, is if you can link that problem not only to financial impacts to the company, but also to the success of the business strategy. Now we’re talking the language of the senior leadership team and I think that’s really important to be able to make that connection. And in HR, sometimes we stub our toe by not making that connection to real business value. We know the business value intuitively. We can talk in it in our own way, but we’ve got to put it in the language that resonates with the executives that are going to ultimately need to sponsor this and get behind it. So those would be a couple of thoughts I would offer up in terms of securing buy in for this kind of work.

Matt: Absolutely. That makes perfect sense. Moving on and looking a bit towards the future. As I said earlier in the conversation, very disruptive time at the moment. What do you think the future of the talent function looks like? And also, what impact will generative AI have on that?

Simon: It’s interesting. I think what I’ve observed just over my career is there’re some fundamental things that don’t change. We need to create an environment which individuals can thrive. We need to be able to listen to them to get input from where they’re at and what’s going on for them, how to build capability and the right skill sets and so on. There’re a number of different things that cover the talent management spectrum that I think are pretty fundamental. But of course, over time, how you do that evolves and changes. I think a clear example of that is pulse surveys, replacing the broader census surveys that were popular beforehand and using online platforms. So, I think there’s going to continue to be evolution there from a technology standpoint, in particular across the suite of talent management.

But if we think about talent acquisition more specifically, I think AI is going to be huge. I think both traditional AI and generative AI, I think there’s some interesting solutions out there already, but I think they’re going to get better and better over time. But if I think about talent acquisition in the maybe three buckets of workforce planning, so what are the skills you need? What’s the talent you need for the future? bucket one. Bucket two is finding the right candidates, and bucket three is internal movement. So, finding the right candidates internally essentially. I think all three of those areas are ripe for disruption when it comes to AI and that could drastically enhance the efficacy and the quality of those processes.

I think the challenge that was identified early on with AI is who’s designed the tool and how might bias be implicitly woven into some of these AI solutions. And I think that there’s some good work happening to mitigate that and ensure that bias is not actually in there and quite the opposite and focusing after– looking after some of the, whether it’s diversity goals or what have you, and ways to be able to be more intelligent about that. So, I think that’s really, really key from a talent acquisition standpoint in terms of AI and more traditional AI, no doubt there’ll be generative aspects to that. But I think it’s more about just really sophisticated, just fundamental AI to be able to match people up with opportunities.

And then on the generative AI front, this is a quickly evolving space. If you or your listeners have used ChatGPT that just came out earlier this year, who would have thought we would have a chat bot like ChatGPT that could do the things it could do in 2023? It’s remarkable. So, it was interesting. I was listening to a conversation with the CEO of OpenAI. ChatGPT is from OpenAI. It’s their product. And what he said is that the AI space is changing so quickly that you should focus less on trying to find people that know about a certain skill set per se, I’m talking broadly here, but more about having the mindset and the skill set to be able to learn and adapt with AI.

So, that goes back to some of the things we talked about earlier in terms of what’s a good hire and how do you find the right people. But I think that idea around being able to hire people that have this innovative mindset and are entrepreneurial in a certain sense and are comfortable with technology and comfortable with solving problems and figuring things out, I think these skills are going to be really important because the full opportunity and the full value of generative AI has not become realized yet. There’s great progress, but I mean, gosh, who knows where we’re going to be in five years, ten years?

So, because we can’t know the future, like I said before, we just need to think about how do we infuse the right mindsets, get the right people on board that are going to be able to capitalize and be on the tip of the spear of leveraging this technology as it evolves and as it becomes available.

Matt: Absolutely. And final question, where can people find the book and when is it available?

Simon: Yeah, you can check out the book through my website, simonataylor.com. And it’s releasing December 6th, so definitely come check it out. I will have it up for preorder on Amazon. So, if you hit the website before that date, you’ll be able to find it there. Yeah, simonataylor.com.

Matt: Simon, thank you very much for talking to me.

Simon: Thanks so much, Matt. It was a pleasure.

Matt: My thanks to Simon. Simon’s book is actually now out in April, but if you go to his website, simonataylor.com, you can preorder it and get a free download of one of the chapters. You can subscribe to this podcast in Apple Podcasts, on Spotify, or via your podcasting app of choice. Please also follow the show on Instagram. You can find us by searching for recruiting future. You can search all the past episodes @recruitingfuture.com. On that site, you can also subscribe to our monthly newsletter, Recruiting Future Feast, and get the inside track about everything that’s coming up on the show. Thanks very much for listening. I’ll be back next time and I hope you’ll join me.

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