Fall 2017

See what we have in store at the next CLO Breakfast Club

The Continued Rise of STEM:
4 Indicators the STEM Market Is Driving the Talent Economy

How is STEM impacting the talent economy and how can you leverage it?

S

cience, technology, engineering and mathematics are part of everyday life as well as the business world. These subjects, collectively known as STEM, have become higher priority in recent years as the interest in their general and occupational impact continues to rise. STEM education provides skills and knowledge that can be applied to many occupations. The discipline-specific knowledge along with innovation and problem-solving skills are important to the future of organizations worldwide.

Fall 2017 • Talent Economy

Editor’s Note

I

t’s hard to believe that we’re in the final quarter of 2017.

The end of any calendar year is always a good time to reflect. For the editors at Talent Economy, 2017 was an especially significant year. It was our first full year as a publication. When we launched Talent Economy a little more than a year ago, none of us could have imagined the reception it would get, both with business leaders who had become devoted readers of its predecessor, Talent Management, and with the thousands of new readers who have visited our website, subscribed to our email newsletters, listened to our podcast or watched any of our videos. As editor, it has been a pleasure serving you.

Of course, no time of reflection is complete without a new path forward. And just as we welcomed the final quarter of 2016 with great change in a new, rebranded publication, this year is no different. That’s because starting with this edition of the quarterly, we’ll no longer be printing a magazine four times a year. For most consumers of our content, this will not change much; talenteconomy.io continues to be the hub of everything that happens within the world of Talent Economy, with tens of thousands of monthly visitors reading our text, audio and video-based insights and analysis. This will be the case well into the future of the publication.

But for the select few that had become accustomed to receiving the printed quarterly journal in the mail, times are changing — or should I say, we’re finally catching up. It’s no secret that the business model behind print journalism is well into its decline. Outlets with cherished histories of publishing in print have seen their advertising dollars dwindle and their readership move online. To start, we wanted to provide our readers with at least a taste of that print experience by publishing in print four times a year with long-form, research-based stories that uncovered some of the most nuanced trends shaping the world of business and talent. By all objective measures, we at Talent Economy succeeded mightily. Our quarterly journal stories continue to this day to be some of the most talked-about and well-visited stories online, and they’re common fodder among readers who write me regularly over email.

This, in an odd way, is exactly why we’re no longer printing the journal. Instead of sending the quarterly to a fraction of our readers, moving it to a more native, digital format allows us to distribute some of the best Talent Economy content to a wider audience. As you scroll down the new digital edition of the quarterly, you’ll quickly notice that the illustrative and design elements that made the journal great in its first year are even better now, thanks to enhanced ability to add motion, audio and video to the reader experience. What’s more, the experience is adaptable no matter what device you’re using. Whether it’s desktop, tablet or smartphone, Talent Economy’s digitally delivered quarterly journal is now optimized fully with the modern-day reader in mind — all while maintaining the polish and sophistication of a printed journal.

To this end, we feel that the journal is more essential than ever to the Talent Economy experience. Having a truly reader friendly digital experience with make consuming the journal and the rest of the publication’s content more intertwined.

While we may have changed the way you receive and experience the journal, that doesn’t mean we’ve taken away much of what makes it an essential read for any business or talent executive. Although we’ve traded thumb turning with a scroll or touch screen swipe, it is still packed with dynamic features crammed with high-level insights, research and perspectives to help you navigate the ongoing complexity of today’s business landscape.

So welcome to the new and improved Talent Economy quarterly journal experience.

Frank Kalman, Managing Editor
fkalman@talenteconomy.io

Fall 2017 • Talent Economy

Contributors

Susan Kushnir

is director of lean management at S&P Global. Previously, she was the director of organizational development, learning, talent and engagement for the Girl Scouts of the USA.

Frank Levesque

is regional vice president, people & culture at Suffolk Construction Co. He holds a master’s in business and HR management from Lesley University as well as a bachelor’s in management from the institution.

John Boudreau

is research director at the Center for Effective Organizations and professor at the University of Southern California’s Marshall School of Business. He’s authored more than 50 books, the latest of which is due to be published in early 2018.

Edward E. Lawler III

is director, Center for Effective Organizations and distinguished professor of business at the University of Southern California’s Marshall School of Business, and the author of more than 400 articles and 48 books.


Volume 2, Issue 4
Fall 2017

President John R. Taggart
Vice President, CFO, COO Kevin Simpson
Vice President, CRO Clifford Capone

Vice President, Editor in Chief Mike Prokopeak
Editorial Director Rick Bell
Managing editoR Frank Kalman
ASSOCIATE EDITORS Andie Burjek, Lauren Dixon, Ave Rio
COPY EDITOR Christopher Magnus
Video and Multimedia producer Andrew Kennedy Lewis
EDITORial Interns Marygrace Schumann
CONTRIBUTING ILLUSTRATORS Christina Chung, Lauren Rebbeck, Jovanna Tosello
Contributing Writers John Boudreau, Alice Cahill, Cathleen Clerkin, Jennifer J. Deal, Ryan Jenkins, Susan Kushnir, Edward E. Lawler III, Frank Levesque, Lawrence R. McEvoy II, Lara Quinn, Michelle V. Rafter, Marian N. Ruderman

Vice President, RESEARCH & ADVISORY SERVICES Sarah Kimmel
Research Manager Tim Harnett
Data Scientist Grey Litaker
Research Content Specialist Kristen Britt
research Graphic Designer Theresa Stoodley

Media & production Manager Ashley Flora
Production Coordinator Nina Howard
VICE PRESIDENT, EVENTS Trey Smith
events Marketing Manager Anthony Zepeda
webcast Manager Alec O’Dell
Events graphic designer Tonya Harris
BUSINESS MANAGER Vince Czarnowski
Regional Sales Managers Derek Graham, Daniella Weinberg
Director, Business development & events Kevin Fields
Audience Development Director Cindy Cardinal
Digital manager Lauren Lynch
digital coordinator Mannat Mahtani
LIST MANAGER Mike Rovello
Business Administration Manager Melanie Lee


Talent Economy is published January/February/March, April/May/June, July/August/September, October/November/December by MediaTec Publishing Inc., 111 E. Wacker Dr., Suite 1200, Chicago IL 60601. Periodicals postage paid at Chicago, IL and additional mailing offices. POSTMASTER: Send address changes to Talent Economy, P.O. Box 8712 Lowell, MA 01853. Subscriptions are free to qualified professionals within the US and Canada. Digital free subscriptions are available worldwide. Nonqualified paid subscriptions are available at the subscription price of $125 for 6 issues. All countries outside the US and Canada must be prepaid in US funds with an additional $33 postage surcharge. Single price copy is $29.95.


Advertising:
For advertising information, write to sales@talenteconomy.io.


Editorial:
To submit an article for publication, email editor@talenteconomy.io, Letters to the editor may also be sent to editor@talenteconomy.io.


Permissions and Article Reprints:
No part of Talent Economy can be reproduced without written permission. All permissions to republish or distribute content from Talent Economy can be obtained through PARS International.

For single article reprints in quantities of 250 and above and e-prints for Web posting, please contact PARS International at MediaTecReprints@parsintl.com.


Subscription Services:
All orders, inquiries and address changes should be addressed to:

Computer Fulfillment
Talent Economy
PO Box 8712
Lowell, MA 01853

or call customer service at 800-422-2681 or 978-671-0446 or email hcmalerts@e-circ.net.

Fall 2017 • Talent Economy

Contents

Cover Story

36

Large-Scale Inequality

Wealth and social inequality in developed nations — but especially in the U.S. — comes with implications for the business of talent.

Features

22

A New Frontier for Executive Coaching

Executive coaching has established itself as a full-fledged industry. Where is it today and where is it headed?

28

How to Measure HR Effectiveness

How do human resources organizations measure their efficiency, effectiveness and impact?

44

The EQ Factor

Why emotional intelligence, or EQ, is the most-important executive competency in today’s business era.

Analysis

10

Fighting Inequality

Leaders in the U.S. need to reconsider how inequality will influence their business.

11

3 Ways Generation Z Will Transform the Workplace

Generation Z is creeping its way into the workplace. Here’s what to expect.

11

How Digital Nudges Transform Workforce Management

Digital nudges, a favorite tool of behavioral economists, are pushing workplaces forward.

14

How to Measure Your Company’s Executive Team?

How to measure executive teams taking on new responsibilities in business.

15

Is the Skills Gap Real?

Business leaders cite a skills gap as a top challenge, but skeptics disagree.

16

5 Practices Firms Can Use to Fight Off Overworking

Sometimes working less, not more, is the secret to increased organizational productivity.

Editor’s Note

4

Editor’s Note

Talent Economy welcomes a new digital quarterly experience.

Dashboard

8

Dashboard: Wealth

Data and insight on the talent economy from Talent Tracker.

Insider

18

Tamar Elkeles is Investing in Talent

Tamar Elkeles on venture capital’s view on talent.

Bottom Line

52

Bottom Line

The most interesting and revealing quotes from the Fall issue.

Fall 2017 • Talent Economy

Fighting Inequality

Wealth inequality is likely to be written about as a defining theme of our era, but how business leaders react to it will go a long way toward shaping how history remembers it.

by Frank Kalman

T

ime will tell how history will define our current era of business, but if there’s anything of certainty we can expect future historians to write, it will be that rising global inequality among developed nations will be a defining story of our time.

Indeed, as French economist Thomas Piketty famously outlined in his 2014 tome “Capital in the Twenty-First Century,” we’re at a point in time where the concentration of wealth is so profound that it threatens the very fabric of democratic society. Perhaps nowhere has this been more prevalent than in the United States, where inequality, both in terms of wealth and social, quickly emerged among the defining themes of the country’s 2016 presidential election.

That event ultimately propelled, ironically, a billionaire, Donald Trump, into the White House on the heels of support from voters who felt that economic opportunity had long passed them by thanks to globalization and technology — two forces, Piketty argues, that have contributed to global wealth inequality in the first place.

But as our cover story in this issue shows, inequality has proven to take on many forms. And its influence over some of the basic tenets of our society — namely education, executive pay and technology — appears likely to have a major influence over the flow of talent in the labor market.

3 Ways Generation Z Will Transform the Workplace

by Ryan Jenkins

F

ollowing the entrance of millennials, Generation Z, defined as those born after 1998, has begun creeping its way into the workplace.

Gen Z has been raised in an on-demand culture and been shaped by ubiquitous connectivity, social media, mobile technology, a post-9/11 world and a deep recession. This is a generation of self-starters, self-learners and self-motivators who are eager to leave their mark on the world.

Gen Z will be showing up to work sooner than you think. Here are three ways the generation will transform the workplace.

With Their Desire for Multiple Career Roles and Routes
It’s not uncommon for members of this generation to be managing multiple major life projects. For instance, they might be pursuing a college degree, performing routine maintenance on their own productivity app and growing a YouTube audience.

How Digital Nudges Transform Workforce Management

by Michelle V. Rafter

D

igital nudges are everywhere.

The email from the benefits team reminding employees to update their health care preferences — that’s a nudge. So are the notifications managers send workers on their smartphones telling them when their next shift starts. As are group texts from people in a leadership training class reporting their progress.

Mobile devices, enterprise social network tools and other workplace apps have made it easy to deploy such digital nudges to encourage behaviors that benefit both employees and the organization. Companies are using digital nudges to reduce absenteeism, increase productivity, improve communications, meet individual and team objectives, and boost performance in other ways.

Danny Garcia, chief executive of JDS Security Services in Chula Vista, California, has used nudges for a few years to remind security guards of upcoming shifts. The business wouldn’t be the same without them. “They make it easier,” Garcia said.

How to Measure Your Company’s Executive Team?

by Alice Cahill, Lawrence R. McEvoy II and Laura Quinn

When it comes to creating a culture that empowers the entire company, there is no single silver bullet.

But if you could implement just one development initiative, ensuring your executive team is as effective as possible might bring you the biggest return on investment for your dollars.

Executive teams are more than just a group of senior leaders. Individually and collectively, how they function creates the template that other teams throughout the company follow.

Is the Skills Gap Real?

by Lauren Dixon

When companies face difficulties filling open roles, whose fault is it? Are prospective candidates not seeing the listing? Or are the candidates out there just not qualified for the role?

Many business leaders cite the skills gap — a mismatch between the skills needed and the talent with the right skills — as the main reason for their troubles. There are constantly new technologies disrupting the skills needed to perform certain roles, but can’t businesses just train new hires? There are more than 5 million open roles and about 7 million people unemployed, so aren’t there enough people to fill these jobs?

Conundrums like these are why some experts feel the magnitude of the skills gap is overblown.

5 Practices Firms Can Use to Fight Off Overworking

by Alice Cahill, Lawrence R. McEvoy II and Laura Quinn

Research has shown that working too much isn’t good for productivity. Here are five practices organizations can use to get employees to work less and be more productive as a result.

INSIDER • • • • • • • • • •

Tamar Elkeles Is Investing in Talent

by Frank Kalman

Tamar Elkeles is no stranger to the world of startups — or high growth, for that matter.

In 1992, Elkeles joined technology company Qualcomm Inc. just after its initial public offering in December 1991. At the time, Qualcomm had roughly 700 employees, Elkeles said, and when she left the firm, about two and a half decades later, it had grown into a 31,000-employee juggernaut.

Elkeles was there through it all, most recently as the company’s vice president of learning and organizational development and as its chief learning officer — a role that had her overseeing Qualcomm’s entire employee development and organizational learning operation.

Still, Elkeles’ latest role puts her in what many would consider an entirely different world. With Silicon Valley riding its biggest wave since the dot-com boom of the early 2000s, and as valuations for privately funded startups reach all-time highs, Elkeles finds herself in the middle of it all as the chief talent officer at venture capital firm Atlantic Bridge Capital LLP.

Fall 2017 • Talent Economy

by Susan Kushnir
illustrations by Jovanna Tosello

The profession has come a long way in the last decade. How has it evolved, where does it need to improve and what does its future hold?

• • • • • • • • • •

“C

haotic, largely unexplored, and fraught with risk, yet immensely promising” is a description of the coaching industry from “The Wild West of Executive Coaching,” a 2004 ground-breaking article in Harvard Business Review by the president and CEO of the Executive Coaching Network, Alyssa Freas, and U.S. top 50 coach Stratford Sherman.

Flash forward more than a decade later. Are we still in the midst of a coaching rodeo? Has the field continued to gallop ahead but in many directions?

The answer is complicated. It is true that the executive coaching industry still comes with its share of fuzzy evaluation metrics, a lack of standard qualifications and uneven execution, but in many ways, the field has also evolved — and in unexpected ways.

Here I examine the areas in which the executive coaching industry has properly evolved — as well as the areas where there is still room for improvement.

Fall 2017 • Talent Economy

By John W. Boudreau and Edward E. Lawler III
illustrations by Christina Chung

How do human resources organizations measure their efficiency, effectiveness and impact?

• • • • • • • • • •

W

hat human resources measurement and analytics features are most associated with HR leaders’ ratings of the function’s organizational effectiveness and performance? Do organizational effectiveness and performance tend to be associated with measuring HR departmental efficiency and the quality of its services? Are they associated more with measuring “strategic” or “outside-in” features, such as improving the decisions of non-HR leaders?

In this article, we will report some of the findings from our 2016 survey of HR leaders in more than 100 large U.S. corporations. The full report will appear in our forthcoming book, “Human Resource Excellence: An Assessment of Strategies and Trends,” which will be published in 2018. We will also compare the findings of our 2016 survey, with the findings from our 2004, 2007, 2010 and 2013 surveys. Our focus will be on HR metrics and analytics. We will examine the extent to which HR organizations measure their efficiency, effectiveness and impact, as well as the effectiveness of the metrics and analytics systems for HR operations and strategic outcomes.

Fall 2017 • Talent Economy

Large-Scale Inequality

Through three parts — education, wealth and technology — Talent Economy examines the effects social and financial imbalance have on the quality and future of workplace talent.

• • • • • • • • • • • • • • • • • • • •

Can the U.S. Education System Fix Inequality?

By Lauren Dixon

T

he education system of the United States, from primary school through higher ed, must overcome a number of obstacles to smooth the widening inequality gap contributing to businesses’ ability to source diverse pools of talent.

“Education is about creating a level playing field,” said Andreas Schleicher, director for the directorate of education and skills, as well as special adviser on education policy to the secretary-general at the Organization for Economic Cooperation and Development. “Where you do have educational outcomes set by social background, you’ll see that translated to economic opportunity. I do think the link is robust and strong.”

Equal Opportunity?

Opportunity, however, remains unequal for many minority and low-income groups in the U.S. education system.

The U.S. Supreme Court effectively ended segregation in public schools in 1954 with its Brown v. Board of Education ruling, but the promises of full integration still haven’t taken hold 63 years later. “Not all students, not even those in the same school, experience equal opportunities to learn,” Schleicher said.

Fall 2017 • Talent Economy

by Frank Levesque
illustrations by Lauren Rebbeck

Hard technical skills are table stakes for executive hires in today’s economic environment. The differentiators will be those able to display the soft, emotional, hard-to-define skills of emotional intelligence.

• • • • • • • • • •

“I

magine the following scenario. You’re hiring a new member of your executive team. The candidate across the interview table has impeccable credentials: MBA, professional certifications, a decade of relevant industry experience and a track record of “getting it done.”

During the extensive interview process, the candidate demonstrated clear examples of strong business acumen and strategic thinking — they’ve checked the box on almost all the hard skill qualifications you’re looking for. If there is a red flag at all, it is that, based on your own observations and feedback, the candidate may have come on a little strong in describing their accomplishments. They also interrupted the interviewers on a few occasions.

One interviewer in particular remarked, “I can’t quite put my finger on it, but there’s something there that just doesn’t feel right.” Regardless, this was quickly dismissed as a nonissue, as the position required tangible results in a relatively short period of time and, based on the alignment of the candidate’s experience and the established key competencies for the role, they certainly appeared to fit the mold.

Bottom
Line

Portraits by Theresa Stoodley

Quotes of Note from This Issue

“Your school today is going to be your economy tomorrow. It’s not just an agenda of more economic participation, but also one of greater social cohesion, greater kind of strength in our societies. That’s something to be valued as well.”

— Andreas Schleicher | “Large-Scale Inequality,” Page 38

“Emotional intelligence is the starting point for success in our complex organizations, no matter what job you have.”

— Annie McKee | “The EQ Factor,” Page 50

“We owe a lot of our daily comforts to technology. But it does cause disruption that requires adjustment. Those adjustments are possible, only they call for people to make that adjustment and for policies to respond accordingly to support and facilitate those adjustments.”

— Zia Qureshi | “Large-Scale Inequality,” Page 43

“I don’t have any confidential clients. If they have problems admitting they are getting coached, I don’t want to work worth them. If someone doesn’t want help, I don’t help them.”

— Marshall Goldsmith | “A New Frontier for Executive Coaching,” Page 24

Thanks for reading our Fall 2017 Issue!