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Playing not to Lose

I grew up in eastern Ohio, and just like most self-respecting people from the Ohio Valley, I am a dedicated Pittsburgh Pirates fan. In recent times (sadly, we're talking a couple of decades), this has been a lonely, unfulfilling undertaking. I approach the end of each winter with optimism about the coming baseball season, which typically lasts only until about Memorial Day weekend, when I have to face the inevitability that the Pirates are simply not going to be in the World Series. Again. I have to admit that I do, however, take solace in my dedication to noble, yet futile team loyalty.

In their 2008 book Sway: The Irresistible Pull of Irrational Behavior, coauthors Ori and Ron Brafman discuss the term “swamp of commitment.” They explain that it is perfectly natural for human beings to doggedly continue to follow a course of action that, while it made sense when it was initially plotted, is not supported by changes in the environment or empirical reasons for changing course. In layman's terms, this may be why so many of us held on to our tech stocks long after the tech bubble burst. Or, in my case, it's why I hold tight to the notion that the Pirates always have a chance to win the World Series. It's human—hope springs eternal.

While there are quite a few compelling headlines emerging from i4cp's soon to be published Critical Human Capital Issues of 2011 study, one theme in particular has emerged that clearly distinguishes high-performing companies from their lower-performing rivals. Not surprisingly, it has to do with their ability to avoid the “swamp of commitment.” Specifically, high-performers recognize that the darkest days of the recession are likely behind us and that the most pivotal game-changing scenario of the recovery is that talent will once again be a hotly contested commodity.

So what are these high-performing companies' executives focusing on in 2011 that will set them apart from their low-performing counterparts? We found that they are already planning for the inevitable heated competition for talent and a spike in voluntary turnover. Granted, voluntary turnover is a lagging economic indicator, but these sharp-minded executives are not waiting to “lag” behind any trends that will keep them from succeeding in the new economic climate. Instead, they are already developing integrated talent strategies that focus squarely on knowledge retention and succession planning.

Their reasoning? They understand that after several years of flat salary increases and bonuses, cutbacks in career development resources and opportunities, deflated 401(k) savings accounts, and all-time low levels of overall job satisfaction, they will be hard pressed to keep their best and brightest from signing on with another team. They are particularly focusing on a combination of knowledge retention to avoid the loss of talent in the first place and on succession planning to minimize the impact of some inevitable losses.

By contrast, the critical human capital issue that characterizes low-performing companies in 2011 is execution against strategy. Strategy execution is among the top five human capital priorities of low-performing companies, regardless of their size. What's more, strategy execution does not appear at all among the top priorities of high-performers.

Mind you, while focusing on execution is not, in itself, a bad approach to running a successful business, it begs the question of whether, in fact, the strategy that brought you through the recession is also the best strategy to position your company well for the competitive realities of the post-recession world.

In other words, by focusing their energies on executing their old strategies without proactively developing new approaches to competing for top talent as the economy improves, lower-performing companies are running the risk of becoming caught in their own “swamps of commitment.” They are, in essence, playing not to lose.

Peter Drucker once noted, “The best way to predict the future is to create it.” High-performing companies are predicting and creating their own futures and, to return to baseball terminology, controlling their own destinies.

We Pirates fans are a loyal breed; but I have come to the realization that when I celebrate their victories these days I find myself finding less enjoyment in their victories (when they happen) and, instead, am relieved that they simply didn't lose. While I continue to wallow in my own personal baseball equivalent of a “swamp of commitment,” I'd like to offer up some recommendations for examining your own human capital priorities for 2011 to help you focus on playing to win.

i4cp's 4-Part Recommendation

1. Get in the game.
If you didn't plan for your post-recession game, it's not too late to get on it. In order to ramp up or regain the ability to function faster and with more agility, organizations need to get out of crisis mode, which should include an acute eye to your talent needs. While your business may not have changed, it's a new game with new rules in 2011. Organizations must be poised for growth and change, and those that are able to refocus on functionality now will have a better crack at being well ahead of the pack down the road.
 
2. Redefine and rebuild, but do it quickly. Organizations that view the post-recession playing-field as an unprecedented opportunity to position themselves aggressively will no doubt be rewarded for their boldness. Organizations that are stuck in recovery-mode will be less likely to take risks and consequently may lose out on what may be a last shot at seizing a competitive edge—one that may ultimately spell out the difference between winning and losing.

3. Know your bench. You know who your key players are but you need to take it a step further and determine—down to each individual—who is at risk to jump ship and why. Your organization may not yet be in a position to make major changes in terms of compensation and rewards, but determining what your key players need and want from their jobs beyond these elements is critical to retaining them.

4. Get going on your draft. Once all the post-recession dust has settled, it will be clear which organizations suffered serious losses in their key talent. A mobilization of star players has already begun and organizations that act most quickly will be the winners going into 2012. If you are at risk to lose key talent, know how your organization will respond to those losses so that if they cannot be prevented, measures are in place to recruit the talent you need now and in the future, with an eye toward effective (and realistic) succession planning.

About the Author(s)

John Gibbons, i4cp , is Vice President and General Manager of Research and Development at i4cp. He has been a human resources practitioner, researcher, and thought leader in human capital strategy for more than 20 years. His work has been featured in hundreds of publications and news outlets around the world.