Why Companies Overpay for Tepid & Terrible Talent While Blocking, Rejecting & Trampling Top Talent5/13/2014 By James Santagata
Principal Consultant, SiliconEdge Have you ever wondered why companies so often overpay for talent that just doesn't perform or worse negatively impacts the company's performance? By the same token, have you ever wondered why companies seem to so often inadvertently or even consciously block, reject and trample Top Talent? The fact is, the so-called War For Talent most often resembles a War On Talent.
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What Does Apple's Rumored Acquisition of Beats Electronics Say About Tim Cook & The State of Apple?5/10/2014 By James Santagata
Principal Consultant, SiliconEdge With Apple's rumored acquisition of Beats Electronics for up to $3.2 billion USD it begs the multi-part question: Is this something that Steve Jobs would have done during his tenure, is this good for Apple or does it suggest that Tim Cook is simply a corporate lackey? Looking at the M&A transaction history for Apple, even when adjusted for inflation, we see that Apple has never made an acquisition approaching this size, not even the acquisition of Next Computer. Why is this? Well, for one, Steve Jobs had massive business acumen, he apparently understood that in these large acquisitions there are two main risks. First, is the integration risk of corporate cultures. Second is the fact that in many cases companies are just paying for goodwill that never existed or quickly evaporates once the acquisition is completed. $500 million USD is a good chunk of change. $3.2 billion USD is even larger. With that kind of money, a stud like Steve Jobs could have built something from scratch and then owned the market. Evidently, Tim Cook can't create or drive organic growth; he seemingly can only acquire and focus on accretive growth. Nothing wrong with that, if it works and that's Apple's new "strategy" but it would be a massive departure from Apple under Steve Jobs since firms like Google and Microsoft are the ones who buy billion dollar businesses; Steve Jobs is the one who creates them. And what exactly makes Beats Electronics so valuable to Apple? This reader comment found on the Register website didn't seem to think there was much there: By James Santagata Principal Consultant, SiliconEdge After Facebook's massive $19 billion USD acquisition of WhatsApp, two question have arisen. The first is my question. How exactly did the Tech Cheerleader Press miss out on WhatsApp? That is, after countless posts over the years pimping Quora as "it", Twitter and others, where was the love for WhatsApp? This is actually a rhetorical question so no reason to answer it. The second question is now coming from the Tech and even Business Cheerleader Press. "Where's The Next WhatsApp", they ask. Take a couple seconds now and do a quick search on that phrase and you'll be greeted by almost a dozen recent articles that are predicting or searching for the next WhatsApp. You'll also find that these articles specifically target audiences ranging from the tech community to business folk, ad agencies and the general public. That is to be expected, of course, when such large amounts of money such as $19 billion USD are thrown around. I can live with that. In fact, I expect that from the Cheerleader Press. It's just par for the course.
But here's the part that no one or at least very few will tell you. The next WhatsApp is already out there and it's running fine. It may even be LINE for all I know. But it doesn't matter, because whatever it is, the Cheerleader Press probably won't find them until they make it and even if they did, they wouldn't understand them due factors such as trait ascription bias. Further, just like WhatsApp, the future WhatsApp may be running their operation out of a moldy warehouse and they probably aren't or won't be at Launch or Disrupt or any other events. Why? First because many of these startups have very little capital reserves and they are more concerned about eating and keeping the lights on. It's prioritizing capital outlays vs expected returns. Second, even if they have the funds, they are most likely focused on building and refining their product while engaged in customer acquisition, retention and growth, perhaps employing Lifetime Value analysis or a traditional RFM model. Going to conferences takes not only time but energy. It's draining. And what again, is the ROI? That's just the way it is. And that's why people are or were like, "Hey, who the hell are the WhatsApp guys?" Where did you guys come from? How did you build this thing? Why haven't we heard about you? And now, suddenly they are treated like rock stars, as they should be. And yet the Cheerleader Press will never get it,because they are victims of drinking the Kool-aid cocktail of social proof, the halo effect and various cognitive biases while subscribing to the standard Myths and Memes. By James Santagata
Principal Consultant, SiliconEdge If it seems that we're under a constant barrage by the Western Media Myth (WMM) that (a) Japan is "failing" and that (b) this "failure" of Japan's is primarily due to Japan's "talent problem", it's because we are. We're also told through this WMM that Japan's supposed "lack of talent" has further manifested itself in such as way as to be responsible for Japan's supposed "lack of creativity" and "lack of innovation", thus, contributing to again, the so-called "Lost Decade". However, just when the WMM would have us give up all hope that Japan can saved, the WMM preaches that these "unique problems" that Japan faces can simply and quickly be solved by (a) increasing the number of English-speaking Japanese and (b) internationalizing the apparently "backwards" Japanese-only speaking speakers and/or (c) increasing the number of immigrants Japan accepts. Apparently, the WMM proponents believe that even a US-Open Border policy would "help" the Japanese economy if not "save" it. To support such silly myths, memes and the previously proposed "solutions", the Western Media often holds up statistics showing Japan's lack of internationalized workers (however you define this), Japan's relatively low TOEIC and TOEFL scores compared to other Asian countries as well as the dearth of Japanese college students now studying overseas compared to the figures thrown up by countries such as India and China (for the record, the Japanese figures are low even when comparing this on a per capita basis, but this begs the question -- so what?). As I have argued for over a decade now, these claims and even statistical comparisons by the Western Media are not only useless but downright dangerous to those that want to fully understand Japan's current situation as they ignore the real root causes of Japan's underperformance. And note that I say "underperformance" here and not failure. As the third largest economy in the world (behind China that has ten times the population along with zero controls on economic externalities), it's pretty silly to continue to paint Japan as an economic basket case or the "sick man of Asia". The key to all of this is to understand that Japan lacks leadership. That is what is hampering Japan. Japan doesn't lack creativity, Japan doesn't lack innovation, Japan doesn't lack talent and Japan doesn't lack English-speakers, although Japan could improve in all of these areas. The Western Media's arguments or framing of these issues, especially in terms of Japan's supposed lack of "English-speaking" talent becomes even sillier when we consider that it ignores what I have deemed the "tip of the spear" or "tip of the sword" strategy. As I have stated many time before, business is warfare, the only difference being that in business there is no Geneva Convention and prisoners aren't routinely taken. In a war, it is considered completely unwise to judge the strength of an army solely by the total number of troops. One must judge an army by its effectiveness in killing and maiming people as well as smashing, burning and breaking things. One would also be well advised to measure an army's effectiveness in terms of its ability to project power. Again, the number of troops is mostly irrelevant. This becomes even clearer when we analyze a war dominated by air power, In such a case you don't measure a military's effectiveness by the number of pilots deployed in theater or even the total trained (and active) pilots but rather you measure a military's effectiveness (related to these air campaigns) by the efficacy of the pilots that are deployed and the results which they attain. For instance, even on a conventional basis, one pilot and perhaps one navigator can wreak enormous havoc on an enemy force, and yet, this one pilot and navigator are backed up by thousands of others ranging from ground crews that handle maintenance, fueling and ordnance. Air traffic controllers to mid-air refuelers (who in turn are supported by their own ground crews) and this ripples through the entire supply chain from the men and women who cut the paychecks, the cooks, the water purification teams, the truckers, the doctors and dentists to the nurses and so on. Thousands and thousands of non-combatants are involved to support a relatively small group of pilots and this doesn't even include all of the time and effort that went into designing and producing each plane and each weapons systems, all to support one pilot and perhaps one navigator. And yet it works because that plane and that pilot are, indeed, the tip of the spear. You can see this as well in a US Navy Carrier Task Force when you consider how many personnel are on one aircraft carrier -- mutiple thousands. And this one carrier in turn supports a relatively small group of pilots. But it goes far beyond this, because that one aircraft carrier is in turn supported by a group of other ships - submarines, cruisers, destroyers and so on. All of these assets and personnel are supporting this one aircraft carrier which in turn supports her air crews who are, by definition, the tip of the spear. Unsurprisingly, businesses and economies work in the same way. This should be common sense and yet evidently the Western Media still doesn't get this nor does most of the Silicon Valley "Cheerleader Press". In concrete terms, what does this mean for Japan? Well, this means that in Japan not every person or employee needs to speak English or be internationalized. It's a silly notion to assume that they do. Moreover, even if each Japanese worker did have these skills there is no guarantee that the Japanese economy would stronger since there is a huge opportunity cost to skill-up in these areas which could, in fact, dampen Japanese creativity, innovation and productivity. In any event, today I was back on site at a client (a Japanese domestic firm), running interviews for 2015 college graduates. I had eleven Japanese and several foreign student candidates lined up for today. This was in addition to the 15 Japanese candidates I had interviewed for the same client the week before. And once again, I am and have been extremely impressed with the quality of all candidates, both Japanese and foreign candidates. This simply adds more empirical evidence to my long made argument that Japan doesn't suffer from a lack of talent, creativity or innovation. No. Japan suffers not just from a lack of but a dearth of aggressive, quality leadership which is able to effectively and profitably deploy and monetize the outstanding domestic and international talent that is already onboard or can be readily acquired. To counter balance this lack of leadership and the resultant underperforming or ossified firms it produces, Japan must create and maintain a very healthy entrepreneurial ecosystem. An ecosystem that can continually challenge, engage, kill and compost underperforming incumbent Japanese corporations, especially ossified incumbents, wherever they may be found. Related Background Articles:
By James Santagata
Principal Consultant, SiliconEdge That Japan like any country, be it developing or developed, has her share of problems is not in the least bit surprising or at least it shouldn't be. However, what has surprised me over the years is how many foreign "Japan watchers" and "Japan pundits" always seem to miss the crux of what's really going on on the ground in Japan and more importantly what's going on in the mind of the Japanese. When articles are written or comments made about the supposed dearth of Japanese startups, the author or speaker almost always boils this down to several factors such as Japan's Shima-guni mentality (Island Nation / 島国), the so-called Galapagos Effect (which as I've continually pointed out is really just a misnomer for an industry or marketplace rife with ossified, rent-seeking incumbents and regulatory capture), Japan's supposed lack of talent, Japan's supposed lack of diversity and Japan supposed lack of creativity. In the past, I've written about and either fully debunked these myths and memes or I've put them into a context in which they are far better understood. With that said, there is another popular myth and meme that comes up regarding the lack of Japanese startups and that is the idea that the Japanese have an almost in-born fear of failure. I'm not here to argue that Japanese don't have a fear of failure because they do. We all do. Just as most other peoples around the world do, including those in the US and even including those working in Silicon Valley. People fear failure. But to hear the pundits tell it, "Japanese need to get over failure and embrace it". These pundits act like the fear of failure in Japan is simple a psychological construct* like it is in parts of the West like in the US. (*For the record, even in the US failure is more than just a psychological construct, there are still real financial, social and psychological penalties, set backs and damage that can and do come with it. But this is so much less than what is faced in Japan) Now I am here to tell you, that in Japan this "fear of failure" is not simply psychological but real. Depending on the failure level there are material penalties that can accrue or hit one hard and if you are to strike out on your own or with a small group of friends, launch a company and it fails it is not like Silicon Valley where you can walk down the street and pickup a paycheck at a top firm while your lick your wounds, get on your feet and start again or even just resume your pre-startup career. In Japan, the damage and risks include and span the following:
There are huge differences in how societies views failures and how you move on in terms of romantic prospects and relationships, platonic relationships and friendships, how your family views you, the support groups you have and, most importantly, the career risks which translate, in the end, to money - to financial issues. Although much has changed in Japan over the last 8 years, especially in the last 4 years or so, it is still no where near the levels of what we see in the West regarding some issues such as Mid-career hires. Now let's step back in time, to say 1995. In the US, for instance, much of the economy was still coming out a bad recession from a couple years earlier where housing prices were pummeled - in fact, I remember many saying they wouldn't buy a home again. As one specific example, I'll pick Silicon Valley as just one example, even in that economy, a person could have a massive failure and if they learned something and could present themselves well, they could easily land a similar or even better job by leveraging it. Even if they were fired. Conversely, even if they didn't learn anything, they still could land a similar job. Even if they were fired. People hired with a very open mind based on what the candidate could produce. In Japan, the idea of mid-career hires, although changing now, was really non-existent unless you had super skills, super connections or worked at a foreign firm (gaishikei), like Microsoft, Oracle, etc. who needed talent and hired among themselves. I can tell you, as just one example, when I met with Fuji-Xerox HR group back in mid-2008 to discuss their domestic hiring needs, although they were very polite and professional, it was made extremely clear they wanted new grads only and that they weren't set up to recruit mid-career hires. Did that mean that mid-career hires didn't happen at Fuji-Xerox? Of course not. But it did mean and it does mean that mid-career hires (a) were rare and (b) a special case. Which again leads to this risk factor of damage to one's career and so on. Coupled with this was a employee/candidate ethos that often considered working for a direct competitor "dishonorable" while on the company side, such a candidate applying for a position from a direct competitor would be seen as "suspect" or "suspicious". Again, I want to emphasize this has been changing for the better over the last 8 years and specifically the last 4 years or so but this hiring mentality exists and so does the economic and career damage fear among workers. I can also share with you some examples where I took top talent from various gaishikei firms (in this case, in the network & information security industry) and introduced the persons to other top companies, both domestic and gaishikei. Often what I heard was, "They are a job hopper". My thought: "Are you insane" or "What an idiot, can you not see how talented this person is to fill the position you've had open for the last 4 months...." My reply, "Uh, no. They aren't a job hopper. And regarding their changes, the last company they worked for went bankrupt and the other two companies before that, that the candidate worked for got acquired by huge multinationals. They left because they preferred a smaller work environment." The reply? "Well, that shows bad choices on their part." A bad choice? To know the firm would go bankrupt? To work at a startup or a company working in emerging markets or developing nascent technologies? This actual conversation took place in 2008. And I've had numerous conversations like this, from the mid 1990's, skipping through the dot com boom of 1999 to 2001 (in the US, the dot com bomb died out with the 2000 Nasdaq crash but Japan trailed about a year) to around early 2009. Then it thawed a bit. I should note that in the dot com bomb, Japanese firms were so scared by the hype and activity happening online that they did hire mid-hires and they did bring in foreigners, even non-Japanese speaking. Fear of the firm failure, spurned positive changes. In other words, competition is good. I should also add that this was within the fast moving, dynamic tech industry. I've also done work in very static sectors like industrial chemicals, and as late as 2008, it was not uncommon to have a HR manager or even the hiring authority (even the country manager) characterize a person who had stayed at each job less than 5 to 10 years was seen as a job hopper and also undesirable. Wrapping this up, it's not so much that Japanese have a greater fear of failure than, say, Americans, it is simply that the economic cost of a failure in Japan is much higher - financially, socially, psychologically. Once you understand, all the pieces begin to fall into place. By James Santagata Principal Consultant, SiliconEdge Former Wall Street Journal technology reporter Yukari Iwatani Kane has published a new book entitled, "Haunted Empire: Apple After Steve Jobs" and I'm here to posit, that without even having cracked open one page of this book she is spot on, at least with regard to her provocative title. "But wait, what? How could she be right?" "How could that title be right?" "How can you, James, be such a pompous ass to think you know anything about Apple let alone judge Kane's book by its cover?" "Doesn't Apple create magical products? It's true that Steve Jobs has passed on but the same great staff, the same great workers remain!" And all of that is true. However, to understand why the title of the book is right and why I'm right we need to honestly and objectively understand who Steve Jobs was and what made him so successful and Apple so successful under his leadership. And leadership is an operative word here. At the same time, we need to understand that competition doesn't operate in a vacuum so we must ask, "What made Apple's and Steve Jobs' competitors so timid? Why didn't they respond and counterstrike? Better yet, why didn't they create the iPhone type phone, the smartphone first?!" And the answer is simply it goes back to the structure and dynamics of office politics and power within a company. The real shock should not be that Apple, with zero experience within the mobile phone industry, built and released the blockbuster iPhone but that none of the incumbent handset makers did! Where was Nokia and their smart phone? In fact, where were the rest of the handset makers? And that is the real shock. Not that Apple made a smartphone but that the 800-pound Gorillas gave them an opening and then didn't pounce and kill or even defend their territory. However, if you've taken one of our related coaching or training sessions (How To Beat Silicon Valley's (and other) Fast-moving Startups At Their Own Game) or just intuitively understand Office Politics and Power (aka Organizational Politics & Power - OPP) this not only comes as no surprise but rather it both predicted and expected. And once you understand Office Politics and Power, you can quickly see and understand why and how Apple under Steve Jobs beat Sony to the next iteration of the Sony Walkman which became known as the Apple iPod. It helps one also understand why and how Larry Ellison discussed the Net PC (in the mid-1990's) but Apple built it (the iMac), and why Apple could add some basic design features and colors to it to make a hit while intra-company rent-seeking behavior at the competition prevented them from responding or competing let alone getting that to market first. OPP also explains why and how Jobs could do the same with Pixar while a former Disney employee, John Lasseter, who suggested as much years before Jobs ever thought about animation or rendering farms was let go (or summarily fired depending on the source one references) from Disney, only to have it all come full circle again with Disney acquiring Pixar. Go figure! And, of course, it explains some of the biggest daddy ball drops in history such as Xerox PARC and their full blown PC and related projects (which later became reflected in industry leaders like Apple, Adobe, SGI and 3Com) and Kodak with their digital camera years before the competition had one...that all went to waste... I've talked about that in detail here, about the Myths About Steve Jobs and how is personality and ethos, while celebrated within Silicon Valley (and beyond) is actually completely anathema to traditional Valley ethos. Reference: Steve Jobs: The Man Who Broke Every Myth & Meme In Silicon Valley & Become A Legend The problem then, is that a company (any company, including a post-Steve Jobs Apple) needs a strong leader who is unafraid to break eggs to make omelettes and unafraid to slaughter sacred cows for burgers or even just for fun. They also need a leader who is not just unafraid but actually enjoys and even thrills in steamrolling the competition and taking the troops straight up the middle as Alexander the Great did to Darius during one the Macedonian-Persian wars. As a further piece of evidence, one only needs to consider that the Akio Morita, the founder of Sony, was Steve Jobs while Steve Jobs was still in diapers. Moreover, Akio Morita was extremely aggressive, even actively counterattacking industry special interests who tried to have the courts block the Sony Betamax recorder. Morita was successful in defending this and in ultimately escalating this to the US Supreme Court with Sony (and consumers) coming out as the victor.
Tim Cook being the nice great guy and "steady, paint by number operator" he is (certainly he's the first guy that I would hire or consult with to determine what color doilies to lay out for my dinner party), shares none of those characteristics with either Steve Jobs or Akio Morita. So now lets move on to more questions regarding Job's selection of Cook as his successor.
By James Santagata
Principal Consultant, SiliconEdge Well, if you haven't heard the news yet the Valley M&A buying spree continues unabated, this time with Facebook snapping up mobile messaging company WhatsApp for a hefty $16 to $19 Billion USD (depending on which news source you reference).
There are many lessons and takeaways from this acquisition but allow me to focus on just a few. 1. Ignore The Cheerleader Tech Press: WhosWhat? WhatsWho? WhatsApp! Personally, I wasn't aware of WhatsApp before this acquisition as I don't use the app and I'm mostly a user of Viber and Skype so I can be forgiven. However, within the Silicon Valley Cheerleader Press, especially Tech "Apple-Twitter-Quora" Crunch and even Pando Monthly and VentureBeat, I'm sorry but even as frequent if not habitual reader, I just didn't see the coverage. How could this be, how could they miss it, a huge multibillion dollar company? The answer is simple: Why would you expect the Cheerleader Tech Press to get it? 2. Companies Can't Pick Top Talent: It turns out that before co-founding WhatsApp, Brian Acton formerly worked at Yahoo in a quite senior / important position. After over a decade at Yahoo, he left to take some time off and then applied for a new position landing interviews with at least a few major valley tech companies such as Facebook and Twitter. However, he was rejected at both. Perhaps these rejections were due to Action being incompetent. Or perhaps Action interviewed poorly and no communication skills? Or is it perhaps more likely that these companies or at least the hiring authorities at these companies either (a) don't know how to select top-shelf talent and/or (b) allow office politics and threats to an incumbent employee's ego or career path to dictate who gets hired and who doesn't? Examples are where a senior person with top skills scares a younger or less experienced manager from making the hire -- doubt that? It happens all the time. All the time. And it costs companies millions if not billions per year. Oh and it makes you wonder, if Facebook had hired Acton, would they have gotten him to build WhatsApp for a lot less than the $19 Billion USD they paid for it? Or would WhatsApp never be built and fall into the "Innovation Lost" point below? 3. Leaderless Rather Than Leadership and Innovation Lost: Perhaps the biggest lesson is why Yahoo, which had him onboard for over 10 years didn't extract this value, this innovation It's possible that Yahoo was simply so completely leaderless and rudderless that they didn't even know what to have him do. Or perhaps he tried to be innovative and got his hands slapped. Whatever the reason, it's clear that Acton had some innovative ideas inside of him and more importantly he had the confidence and motivate to start and execute. But it's clearly not just a shame but a multi-billion dollar tragedy that Yahoo had him on the payroll all those years, had him suited up and yet would let him get in the game and swing for the fences. If you can create a company with the proper culture that has strong leadership, embraces innovation, empowers employees and hires top talent or solid talent, especially talent that either scares other firms (because it's too good) or is good inside but is a bit dinged on the outside, you're firm will do very, very well. http://techcrunch.com/2014/02/19/how-things-change/ By James Santagata
Principal Consultant, SiliconEdge We hear so much about the supposed power of innovation and creativity. That these qualities or skill sets are somehow both unique and scarce. And at the same time, a lack of innovation and creativity is often quickly blamed for the downfall or underperformance of a company or organization. But is this really true? And more importantly, how much impact do innovation and creativity or their lack thereof really have on an organization? Here's the real deal: Innovation & creativity are highly overrated and badly misunderstood. If these were so vitally important, then Xerox PARC would have been and still would be the most successful company in the world while Microsoft would perhaps be the least successful. But it didn't turn out that way because... Well, because innovation and creativity are both meaningless and worthless without the ability to productize them. And productization is both meaningless and worthless without the ability to monetize it. And monetization can't happen without a strong leadership. Strong leadership is required to allow, enable and drive an organization to productize and then monetize its innovation and creativity. Don't let anyone tell you otherwise. Over the last twenty years, and accelerating in the last 7 years, not only Japan but the entire world has begun to question Japan's ability to innovate and create as companies such as Apple and Samsung rule Japan's former stomping grounds and gleefully gorge themselves on Japanese companies' bento boxes on a daily basis. Meanwhile, once mighty and innovative Japanese firms like Sony and Panasonic bleed red and constantly try to slough off workers while peddling a staid if uninspiring set of "me-too" and "also-ran" product lines. How far has Sony fallen? Well, it's gotten to be so bad that if Sony founder, Akio Morita, were to magically re-appear today and venture over to the front entrance of Sony Japan, he wouldn't recognize the place. Worse, if he then decided to apply for a position, not only wouldn't they hire him, they'd most likely call security and have him escorted off the premises. But all is not lost. In our No Box Thinking™ (Volume 3), entitled "How Struggling Japanese Companies Can Beat Silicon Valley's Fast-moving Startups At Their Own Game" we go through exactly what has happened, what has changed and how, in a short time and by using some talent management adjustments, Japanese firms can again perform at our above that of their competitors. By James Santagata Principal Consultant, SiliconEdge Hats off to Sheryl Sandberg and her book Lean In: Women, Work, and the Will to Lead. It's started a valuable conversation but until concrete actions are taken, that's all it is - a conversation, talk. And by concrete actions I mean focusing on understanding, developing and utilizing specific tools and strategies to accept the world as it is, and then to use these tools and strategies to create, mold and reframe a new more comfortable and productive reality. Because Leaning-In Isn't Always EnoughThis training draws extensively from our Psychological Jujutsu training and High-Impact Leadership series to create a body of original material that is specifically tailored for women currently in or seeking leadership roles.
We delve deeply into the fine line separating the 4B's -- Bimbo, Babe, Bitch, Brilliant-Boss -- and more importantly we discuss exactly how to effectively place yourself and stay in the Brilliant-Boss category without triggering negative push backs, mismatches or attacks. By understanding the impact and deeply embedded, yet invisible, role that evolutionary psychology plays with regard to the organization and society's view of strong women leaders, we'll explore how to deftly avoid the many traps and pitfalls while learning how to push the correct buttons and trigger the proper scripts allowing women to lead an more effective, efficient, productive and satisfying work and home life. |
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