In Search of Natural Winners

29 June 2006 |

Lee Iacocca needs no introduction; he is a universal management icon – the miracle man of modern-day business. Iacocca achieved superstar status in enterprise management during his days as the president of the Ford Company in the ‘70s. When he pulled Chrysler back from the brink and turned it around into one of the most profitable automobile companies in the ‘80s – the making of a living legend was complete.

No doubt, Lee Iacocca was an exceptional management talent. His strength was in his ability to keep the basics simple at work, and to inspire his co-workers to give their best. Iacocca famous words, “Management is nothing more than motivating other people,” is a testimony to his belief that you are only as good as your team is.

Iacocca spent 32 successful years with Ford, propelling them to an unprecedented position of strength in the automobile market, which included the triumph of the famed Ford Mustang. After being pushed out of Ford in 1978, Iacocca went about creating the Chrysler miracle by hiring a dedicated team of extremely talented people, most of them who were with him at Ford.

It is not surprising that every big enterprise dreams to have a Lee Iacocca in their ranks but they struggle to find one who is even half as good as a Lee. Iacocca’s character was moulded by the years of calamities – the years of great depression and the Second World War. Through times of adversity, Iacocca sharpened his talent through hard work, knowing it too well that there is no substitute for competence.

It is quite interesting that Iacocca’s glamorous days were during the days of the bitter Cold War – when the global market was a lot smaller. Many countries then had protected economies; state-owned enterprises and big monopolies to boot. One can only imagine what Iacocca would have dared to achieve if he were to be working at his prime in the current global economic conditions.

With the fall of the Berlin wall and the end of the Cold War, another brilliant manager started to make the news on the other side of the Atlantic. A quiet and unassuming Scot took over as the manager of the Manchester United football club. Sir Alex Ferguson will forever be remembered as the man who created the modern-day business miracle out of a football club. In soccer, money pours in if you keep on winning consistently. Everyone adores a winner.

In his first three years as the manager, Ferguson could not add even a single trophy to Manchester United’s prized collection. It was a masterstroke when he decided to put faith in the young talent. Many football pundits lambasted Ferguson for this move, which they thought was a horrible gamble. The tough Scot decided to stick to his plan; he recruited youngsters from the Manchester United Football School – and most of them went on to make a big name and fame over the next decade. David Beckham, Ryan Giggs, Neville brothers, Paul Scholes – all came through the same system.

Ferguson managed the pool of young talent so well that they went on to become the invincible force in the game of football. Manchester United was not just a football team; they were also a listed company in the London Stock Exchange since in 1991, when they were valued at USD33 million. The celebrity status of the victorious team and the talent at Ferguson’s disposal, which he recruited and trained, made Manchester United a massive commercial success through various sponsorship deals, merchandise and ticket sales.

The sight of Ryan Giggs on a brilliant run through the left flank or that of Beckham’s mastery in supplying the long ball or in taking that unbelievable free-kick – soon translated into big money. In May 2005, American businessman Malcolm Glazer acquired a controlling interest in Manchester United at an approximate cost of whopping USD1.5 billion.

Lee Iacocca and Sir Alex Ferguson believed in putting faith in people who had the right talent for an assigned role. The key to their success lies in a successful Talent Management program they came up with and religiously adhered to. Elbert Hubbard, the 20th century American writer’s words capture the significance of acknowledging talent, “There is something that is much more scarce, something finer far, something rarer than ability. It is the ability to recognize ability.”

Talent Management as a concept is much misunderstood by the modern-day managers; they consider it to be more of a human resource function. Managing talent within an organisation is critical in defining its success. Balance sheets and share values reflect the scale of success of an enterprise. Even with massive infrastructural investments, operating with the wrong set of personnel, the best of businesses finds creating wealth as not as easy as kicking a ball in the park; it is as difficult as bending it like Beckham. You need talented players to succeed in a team sport; successful businesses too follow the same principle.

Manchester United is one of the incredible success stories of globalisation. The football club has a great following and the revenue that comes through Manchester United merchandise from all around the world is a clear indicator of their market status.

The advent of a vigorous globalisation drive has brought in a lot of changes to the way business is conducted these days. Competition is abuzz in the world market; it has created new opportunities and accelerated possibilities of growth for ambitious companies with talented management and brave new ideas.

Market forces riding on the wave of globalisation have been putting immense pressure on not only capital but also on labour. It is just a matter of time that the wave takes monstrous proportions of a tsunami, which Adam Smith called ‘creative destruction’, wiping out the conventional and yet comfortable models of business. It is in this context, some companies with a vision have charted a new course; putting trust in innovation and on increasing the efficiency of their operations.

If the economic tsunami in the form of globalisation is one big threat to the conventional model, technology has been helping hasten the process. Technology, especially Information Technology and Telecommunications, have brought the world a lost closer and a lot smaller. This has resulted in a great deal of competition at the work place; skilled-labour has been migrating to new territories where they are in demand, or work is getting outsourced to other parts of the world. Labour, especially in the developed countries, is faced with a situation where they have lost their historic bargaining power.

It is not only with business; almost all systems go through the crisis in a period of transition. When a conventional model is broken down and is being replaced with a new one, there is confusion and chaos. Managements have to be prudent in planning accordingly for such a scenario. When the pressures of profit-making forced Sir Alex Ferguson to sell David Beckham to Real Madrid, he invested in a new vibrant talent in Christiano Ronaldo – and gave the youngster the illustrious number 7 shirt. Once Beckham was sold to Real Madrid, Manchester United’s ride on the top also came crashing down.

When managing your work force, which is exactly your human capital, which is so crucial to the success of your enterprise – there has to be certain high standards and systems put in place. An ad-hoc system of hiring and firing wouldn’t necessarily build a champion enterprise. Many of the managements leave it to the last – when the crisis hits them, to try fixing the problem. It is clearly upon managements to develop and embrace a system which will clearly manage and predict any upcoming crisis on the personnel front.

Talent Management becomes extremely relevant to managements in such a scenario where key personnel make the difference to the success of the enterprise. The scope of Talent Management goes further beyond the three crucial stages of Recruiting the talent, Developing the talent, and Retaining the talent. In today’s market environment, a good Talent Management system will decide the very future of an enterprise.

Enterprises have to be prepared to attract the right kind of talent; they need to maintain a positive employment image in the market to attract the best talent. With competition in all spheres of business, talented youngsters are now presented with a choice to make about where they want to work. Employers just cannot take it for granted anymore. Most of the young talents are blessed with a vision about their future; they seek assurances of being provided with the best opportunity for a steady growth. Many personnel from Ford joined Iacocca in a sinking Chrysler, simply because they trusted the man’s ability in taking care of their future too.

It is always not possible to keep on recruiting as and when a requirement arises. Managements do realise today that they need to identify the competency deficiencies in their personnel and evaluate progress in performance review. Systems such as regular internal appraisals go a long way in addressing this aspect of management. If there are shortcomings, personnel should be given adequate training and it also need to be ensured that they complete the required training program. It can easily be now understood the real compulsions Lee Iacocca had in putting a great deal of trust in his personnel. And the case is same with Sir Alex who is a stickler when it comes to having his boys well-trained and prepared for a big game.

Retaining the talent is also a significant factor in managing talent. Motivating your personnel, sharing the fruits of success with them, and most importantly providing a friendly environment to perform at their best – are essential in retaining the talent. As much as how enterprises are driven forward by the vision of growth and more profits, individuals too want to be rewarded with tangible growth and profit for their efforts. The classic example of an enterprise failing on this count is Ford pushing out Lee Iacocca.

Eileen Antonucci, executive vice president for Executive Talent Management Systems at Executive Development Associates, says, "Talent is viewed as a key strategic resource for achieving business objectives and is never taken for granted. Talent management systems do not leave key factors to chance. The organisation carefully develops a distinct 'employer brand' to attract talent, thinks through how work is organised and its impact on issues such as employee satisfaction and retention. A talent management system is part of the fabric of the organisation."

Enterprises in the Middle East are waking up to the realities of implementing a proper Talent Management system. With economy booming with the high price of oil, new business opportunities are presenting by itself everyday. Gone or those days of enjoying government protection from external competition. The advent of Free Zones has brought in multi-national and trans-national companies who are well-equipped to translate their professionalism to big profits.

The conventional model of managing personnel in the Middle East has become too archaic, and wouldn’t stand a chance in the new global market. The days of enjoying the luxury of the non-competition regulations to retain their personnel are numbered. It is impossible to attract the best talent or motivate them to excel when they are bound by the red-tape of contractual obligations. What needs to be understood by the top executives in the Middle East is that competition is here to stay, and that they are up against some of the best in the world. What is most encouraging is that there is a new generation of companies in the Middle East who have put competent systems in place to acquire, develop and retain exceptional talents – and they have a realistic chance of unearthing a Lee Iacocca or a Sir Alex Ferguson.

Copyright: Anna Melfort


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