Should you really celebrate getting rid of your best people?!?

The wall street journal has an article arguing that in some situations, the best managers actually want their top talent to leave the organization. This would seem counter-intuitive and that’s the point of the article. The thesis is that this is a great thing that few but the most brilliant leaders should think of! The way I read the article I see it as just a twist on burn and churn. Burn and churn but now with a happy face and longer term benefits after the churn.

The article’s profile of a top leader is one who is always surrounding themselves with the most aggressive and creative individuals they can find. This is true, because top leaders at large organizations are always hyper aggressive and they rarely put up with people who only want to respond to emails during regular working hours. This is where the internal competition spiral starts leading into a caustic environment. The tech world is awash in these types of leaders but Ellison, Bezos, and Nadella aren’t the only executives who are overly aggressive.  They are just leaders in the economies fastest moving and changing industry, which is still awash with tremendous growth.   By its very nature the tech sector leaders get most of the limelight. The author does talk about alternative industries, many of which have reputations for brutal work environments yet since those industries don’t see 30% year over year growth they doesn’t get the highlight.

Back to the cycle. The leaders recruit the best possible talent. The talent sticks around for a short while and leaves for bigger and better things. In many cases their own startup’s or senior roles at other companies in the respective industries. The boss’s celebrate this because the success of the last generation of workers allows for a new hyper-aggressive generation to come in, sometimes at below market rates, just for the benefit of working with the famous boss for inclusion in their resume.

Think about this for a second. The boss gets people far more qualified than is actually need and they work them to death. If the super work driven employee stick around, well then good, you gotta love having an organization filled with those types of people. If they don’t, then the cult of personality allows for the next group to come in, probably at a lower cost just for the perceived benefit of working with the boss. In that respect it’s genius. It’s the ultimate false promise of opportunity, of “work hard and play hard” only this world it’s “work hard so you can work harder”. It’s enabled by an industry that believes in the cult of that particular boss.

The best quote from the article is:

“The talent-flow strategy is also better tailored to many of today’s abiding business realities, including volatile markets that demand more dynamic workforces; a generation of millennials less inclined to stick around for loyalty’s sake; and an entrepreneurial, gig economy that encourages frequent shifts in employment over the course of an individual’s career.”

Another way of saying it is that since organizations have so little loyalty to the individual in every aspect of their business (retirement, benefits, staff development, career planning, etc..) the corporate world has created a new generation of individuals and professional culture that has completely eschewed loyalty to the company. Now the companies are not only learning to live with it, they are turning it to their advantage.

I think there is a part of the story that the article’s author leaves out. it’s that the employee, probably very quickly, discovers that they can’t do the thing they want to or need to do, via pre-hire promise of empowerment or leadership edict, so they go on to the next big thing, the place where they believe they can make a difference. It’s why employee turnover is so high and tenures are so short, especially with ‘top talent’. In the same way the welder will move across the street within six months to a new job for an extra $1.50/hr, the professional will do the same, only this time it’s for the promotion or the ability to do the obvious thing the industry needs. In more entrepreneurially dynamic and cash rich industries they start their own business with seed capital.

The author uses the healthcare example to communicate the benefits of what the article refers to as professional networking. The point being made is that this type of post employment networking benefits the super star employee and the former company. This happens because many of the former employees start their own business with their old boss’s approval and/or direct investment. To me it seems like this is a modern twist on the franchise model. In my observation, the hyper aggressive employee is disillusioned by the limitations of the corporate world. They become severely distressed by the fact that the company isn’t going in an obvious direction. He or she opts to leave the company to take advantage of this potential opportunity. The boss in question is happy to start what amounts to an independently run division of the company or joint operation. It’s just one he doesn’t completely own. So the old boss invests in a known quantity (the former employee) at a significantly lower risk exposure than if he started the division itself. The new franchisee takes on the risk, works super hard, flys or fails, and the original boss has minimal risk but a potential for maximum reward and oversized influence in the new organization. Rinse, repeat, and the illusion of working for the original boss being a great place to advance your career goes from rumor, to legend, to accepted fact.

Are these superstar leaders amazing? Generally they are, but is it because they believe it’s important to get talent to leave the nest to get new top talent? Nope. That’s just old school burn and churn. They would rather the talent not leave, but if the company is so brutal, restrictive, and limited in advancement opportunities then of course they are going to go. The amazing part is that they figured out a way to benefit themselves and their companies with their staff even when they aren’t cutting a check anymore.

Inspired by: http://www.wsj.com/articles/why-the-best-leaders-want-their-superstar-employees-to-leave-1475460841