Talentism

28

Business does not exist in a vacuum. So while my purpose may be to build better businesses on a better business and economic model, there is no part of how businesses exist in a larger ecosystem that isn't worth examining. Take the education system for example. It's not just that the modern western education system is destroying something of incredible value to the businesses of the future (imginiation and curiosity), it is also that the system is creating massive structural inequalities that will eventually shrink potnetial markets for goods and services. Our education system is driving a massive wedge between the upper and lower classes in America, splitting the middle class between those willing to mortgage their futures to get into the right school district and those who either can’t afford, or think it is imprudent, to take that kind of risk. The fault line that is being created by a lack of corporate recruiting competence is leaving the poor completely behind. They can’t afford to move into the right school districts, to get access to an education and supportive peer group that will ensure that they will get into the right college so that they can get the right job. And since the poor are disproportionately people of color, the corporate system is blasting away at it’s foot in two ways: first, by ensuring that the possible pool of talent it can draw from is always scarce and reinforcing behaviors that are antithetical to sustaintable advantage in the creative age, and second, because diversity of background, opinion, perspective and thought are critical to the creative process. But since corporations are ensuring that every nervous parent in America is obsessed with homogenizing the unique perspectives, thoughts, opinions and backgrounds from their kids as they move in droves to exclusive gated communities, the talent pool needed to sustain competitive advantage is shrinking at a rate that is inversely proportional to the overall value of talent to the enterprise. That’s right: the corporate system of selection based on experience and education ensures that as the possible talent pool grows due to immigration and globalization, and as the potential value of that pool grows relative to the needs of the organization, that corporations will actually have an ever smaller pool from which to pick.

27

I have never met a two year old that lacked imagination and curiosity. I have met very few 40 years that still posses either.There is this little voice in a parent's head that tells them that seven million years of biology can't be all wrong, that perhaps the very reason we have schools and jobs is because human beings are just naturally curious and inventive. We have this sneaking suspicion that seeking to normalize thoughts and feelings, begging all the while for external validation and the warm embrace of group-think may not be the right way to go. It's not just all the counter examples to the conventional wisdom: the Curries, the Sanders, the Einsteins, the Kings, the holy writings and yes, even the Gateses. Its the feeling that we are all just going to Abilene, that someone, somewhere started all this with a rather silly (and perhaps even sinister) notion and that now we are all just feeding upon the group's validation of something that may be very wrong. And like the paradox shows, the group think effect has to start somewhere. People far smarter than I have developed almost as many theories around this as there are children struggling in school. But my purpose here is to link building a better business on a better economic model with the lack of talent to make that happen. And therefore, I propose that the problem starts with us. We are doing it. Recruiters and HR people. We can’t put together a job description or a reliable method for improving performance, but we sure as hell know that if someone went to Harvard they are going to be right for the job. Corporations can’t tell you exactly how they built a culture that fostered creativity and innovation, but they know for sure that if you finished a project at Cisco you must be a high-tech titan. It is our own incompetence, our own ability to decipher and describe reliable criteria for success, our own inability to look at an individual’s past and figure out whether they will be successful in our future that drives us to this incredibly destructive behavior. Am I saying that because we can't write a good job description we are strip mining our most precious natural resource for the most mundane and common ore? Yes... I am.

26

(With an apology to my international readers...)

As a parent you are caught between society's rock and the soul's hard place. Every SUV driving, Eddie Bauer clad super-parent guzzling their third latte by 8:00 a.m. will tell you confidently that if you didn't get your child into the right pre-natal school they are doomed to a hopeless future of dead-end sanitation engineering jobs.  The conventional wisdom about how to ensure that your child will be the next Gates allows for no mealy-mouthed weakness, nothing other than a dutiful sieg heil to the super-parent's delusion that they can accurately predict the future .  Dutifully we parents continue to demand that our children strip away their creativity and individuality, their ability to play and interact and problem solve in complex environments. We schedule them from waking to sleep, and we listen as pop culture tells us that we just haven't done enough today to make our child into the next Nobel laureate. And yet most parents are harboring this secret fear that all this will indeed make Johnny a dull boy. Their kids are turning into narcissistic automatons that  don't much resemble kids at all, just small investment bankers that have trouble keeping their rooms clean. And while these little drones are getting the right grades in the right schools, hanging with the right friends and doing the right activities, Will Wright becomes a demigod whose success tells them "Crap, this may all be wrong."

25

Whether thoughtful or not, conscious or not, the modern western education system acts as if its purpose is to systematize, normalize and homogenize the K-12 education experience. It focuses maniacally on least common denominator proofs of a young person's ability to work at home (homework being an increasing part of most students grades), take standardized tests, commit facts to memory independent of meaning or context, dissect problems into component parts that an outside expert has already validated and ensure that behaviors that are celebrated in most creative institutions are crushed and burned early. All of this is being coupled with an insane drive on the part of parents to have their children do more homework, take more standardized test and get homogenized even further. Desperate to find validation in a complex world that seems to change its theories regularly about what constitutes good parenting, parents are only too dutifully running to take all the guess work out of education. 10 = 10, and that’s good enough for them.

24

More stories coming in about the difference between getting good grades and doing a good job. A friend has been reading this numbered rant and pulled me aside earlier this week. “You don’t know how much you have hit the nail on the head with this one” she told me. “My husband is running the software division of a new computer company. They are trying to solve really difficult software problems for a new computing platform. My husband needs help, so he has been calling in the best and the brightest comp sci guys he can find to help him. He has had to fire every single one. These guys simply can’t conceive of a solution that is outside their standard linear way of thinking. My husband is now hiring theoretical physicists and teaching them to code. It’s the only way that he can get the work done.” I have said it before, and I’ll probably say it many times hence… the jobs of the future will require creativity as foundational skill. You can say what you like about our education system (and many have), but nobody is claiming that the education system of today is enhancing the creative capabilities of our kids. At a certain point all the kids that get good grades, go to the right schools, know the right formulas and can perform all the right routines are going to have be trained to become like they were before they went to school: curious and creative. It is inevitable. And the reason it is inevitable is because recruiting hasn’t screamed “Stop the madness!”

23

A couple of months ago I was sitting next to the VP of engineering of a large software company located on the east coast. I was telling this person my Disneyland story. He replied “Depends on what you want to do.” I asked the engineer to clarify. “Well, I hire a lot of software and test engineers. Some of the jobs are pretty much rote coding type of stuff. Others are critical problem solving and new product jobs. When I want to hire the crank-turners I go to the comp sci programs in the area and go through the regular recruiting routine. The kids I get are fine for what I need them for. But when I want to hire problem solvers and innovators I skip the recruiting process entirely and go this one school, or look for graduates of that school. Funny thing is, this school doesn't graduate any software engineers. I have to train everyone I hire from there to code. But I have almost a 100% success rate finding the right people from this school.” (I have purposefully left this vague so that this individual can maintain their hard-earned competitive advantage in talent.) I then proposed that this engineer’s company would simply start outsourcing the “crank turning” jobs to China, India and Eastern Europe. “Sure – it’s getting close to the point where it is just too expensive to do knowledge labor here in the U.S., so eventually we will outsource all that stuff. But I need to be working in the same room with the innovators and problem solvers, so until I am ready to move overseas, I will continue to be bringing people here for that kind of work,” they replied.

22

The night after my social experiment with the sure and senseless band teenagers my wife reminded me that I may have an especially jaundiced view of those fine little fellows, as the entitlement mentality of the average American is a sure way to send me over the edge. Perhaps I was just being too hard on them, all evidence to the contrary. But my thoughts were reinforced the next day as I was talking to one of the fellow chaperons who I had met on the trip. It turns out that he was a software engineering executive at a mid-sized corporation. He laughed and said “We are all in big trouble. The same thing happened to me. But it’s worse than that. I can find lots of kids to hire these days, kids that come from fancy universities and have great degrees, but they are almost completely incapable of solving problems outside of a narrow band of well defined issues. Against the advice of my recruiting department I have started looking at second-tier schools where I can find kids who didn’t always get the best grades but know how to achieve an objective and make something happen. These kids that come from privilege just can’t seem to add value.”

21

(Thanks to all those who have sent me emails, comments and articles. I will be replying to those as the numbered rant concludes.)

Our education system is producing an entire generation of children that can barely think for themselves. Interactive environments where negotiation and social skills were enriched and enabled are dashed away in the vain hope that a full calendar of activities will ensure that little Jane or Johnny will get into the right school and earns lots of money. I was reminded of this recently when I chaperoned a group of 12 year old boys on a trip to Disneyland. Each boy was assertive to the point of being obnoxious and taxing, completely assured of their own self-worth and the value of their opinions. Every move I made resulted in a direct confrontation that questioned my ability to chaperon such a vaunted set of prodigies. Finally, on the second day, I pulled the boys together and said “You all seem very sure that each of you can have more fun if you are in control of where we go next. Yesterday we got on 15 rides due to my scheduling and mapping the appropriate routes. But since you are all very sure that you can do it better, today I will simply ensure your safety and let you determine where we should go, when.” The kids all gave a smug smirk and said “Finally!” Two hours later we were still sitting in the same exact spot, not having gone a single ride. That day we ended up going on three rides, and all of those were in the last hour before the park closed as the kids madly dashed to whatever was closest. It seems that all the children were extraordinarily adept at having their own opinions and questioning what everyone else did, but when presented with the opportunity to work as a group to guide their own destiny, they completely broke down and failed by any meaningful measure, especially by the measure of their own fulfillment and happiness. This is the result of the combination of upper-middle class value systems and the modern education system: narcissistic braggarts who can’t solve a problem on their own no matter how much incentive exists. Most of the children were straight-A students and were destined for the Ivy League. And still, I wouldn’t hire one of them if my life depended on it.

20

Perhaps if we were simply confronted with a static situation we could work our way around the education system. But things are getting worse…. Much, much worse. In order to normalize the data needed to establish the efficacy of education programs that teach these basic skills, and therefore insure that no child is left behind (or with a chance), all the creative and individual aspects of any result sets must be removed. Unfortunately for the people who insist on this normalized data, what is really being tested is the ability to take a certain type of tests. As numerous psychologists (and an increasing number of nuero-linguistic specialists) have discovered, intelligence takes many forms in people. Few would say that Bill Gates is an idiot, but he was barely coherent in early business meetings with IBM. IBM, deeply ingrained in a standardized vision of corporate professionalism, viewed Gates as borderline brain damaged. He would attend meetings mumbling to himself and rocking back and forth to the point where people would throw up their hands and leave the meeting. Since Gates couldn’t provide data in a format that the other members of the meeting found acceptable, should we infer that Gates is not intelligent? Or should the fact that Gates is the richest man in the world who has started and run the most successfully profitable corporate enterprise in all human history tell us something more meaningful?

19

It may well be that when explored from the very purpose of education we determine that organizing a learning environment in a hierarchical militaristic organizational structure that uses static information sources and that prizes and rewards rote memorization, basic analytical skills and obedience to higher authority. But until we have agreement about the purpose of formal education systems and structures we cannot reasonably answer whether those choices are appropriate or not. And as long as we can’t, we are forced to continue advocating for a system which, on its face, seems to be a complete failure at creating an engaged citizenry and a productive and engaged workforce. So the purpose of education is to perpetuate itself, and fight of all comers that may force it to reexamine its delivery mechanisms and methods, no less its reason for existence.

18

The modern western education system does not exist for the purpose of increasing the general productive capacity of the society. The modern education system exists for the purpose of perpetuating itself. It is an organism that has successfully fought off most major infections that would help it adapt into a superior being. To prove this point you just need to reflect upon what we have talked about so far and then continually ask the question “Why?” For instance, if tests are neither predictive of an individual’s ability to apply knowledge in a productive manner, nor able to infer an individual’s passion for a topic nor their ability to create and add value in the exploration of that topic, then why do we take tests in schools? If grades are not predictive of future success but only a quantitative measure (if that) of a person’s ability to adapt to a quasi-academic environment that is substantially different than the environment in which most people will create, produce and work the rest of their lives, why do we have grades? Why do we have teachers? Why do we have principals? School boards? Text books? Education may in fact be the one silver bullet we have. We engage in endless conversations about culture, business, celebrity and a myriad other issues. Why not education and its purpose?

17

The definition of “increasing productive capacity” is not a timeless definition. It is a definition that I believe fits our particular place and time in an advanced but structurally flawed economic system. As I have written, we are entering the creative age, where the ability to commercialize (as in “ship”) creative capacity will be the single greatest driving factor in sustainable economic success. Therefore unlike previous economic ages (agrarian, machine and knowledge), there is an alignment between an engaged, wise and connected citizenry and the needs of the commercial domain in order to achieve success. When what is right in order for the society to increase its general measures of health (lower crime, higher standards of living, lower barriers to individual fulfillment based on class, race, gender or sexual orientation and an increasing capacity to understand the consequences of our actions) is aligned with what is right for the primary drivers of the economy (lower transaction costs due to increase trust and shared meaning, lower cycle times to creative commercialization for increased speed of organizational learning, increased competition due to decreased cost of entry into a market, increased access to talent investors as the ability to individualize talent delivery matches organizational ability to commercialize on that talent), then what the company needs to do well reinforces what the society needs to increase fairness, economic justice, representation and engagement of the populace. So increasing productive capacity is good for the society, individual and corporation.

16

There needs to be a running dialogue about the overall purpose of education, and in absence of that conversation explorations of education’s deficiencies are little more than meaningless critical analyses. Let me propose for the purposes of this discussion that education exists to increase the productive capacity of the society. Some propose that the purpose of education is to expand the general happiness of the individual but I believe that happiness is a purely personal endeavor and not the domain of the state (which invests heavily in education) or society as a whole (which benefits from happiness, but cannot predictably create the conditions for it, as works by the likes of Frankl have shown). Formal education exists to expand the ability of people to produce, and in the creative age productivity is aligned with the individual’s natural desire for place, permanence and individual expression. For the purposes of this conversation, I also assume an interconnectedness between all the individuals in a society, such that productivity cannot be maximized if the society is not composed of “wise, connected and emotionally aware agents in an open civil society where production of value is assessed on the basis of true cost and sustainability.” Lance’s point is an excellent one, and I agree with him. One can view the purpose of education as productive capacity through the lens of civil society, culture, social systems, individual fulfillment or even through Maslow’s hierarchy. My point is that in the creative age, those lenses are all converging such that it will not be possible to achieve excellence in one without achieving excellence in all.

Who Are You Going to Blame When Your Straight "A" Student Doesn't Do Well?

The Corporate Executive Board is one of the most respected business think tanks in the world. The Corporate Leadership Council is the arm of the CEB that deals with HR issues. In 2005 the CLC conducted a study called "Realizing the Full Potential of Rising Talent: A Quantitative Analysis of the Identification and Development of High-Potential Employees". While the study is only available to CLC members, it should be required reading for every educator, academic and business person.

The study is long and contains much interesting information. For instance, the survey behind the study found that 78% of CFO’s were focusing on revenue growth over cost control. At the same time, the study found that 74% of respondents to the survey indicated that “skill / leadership gaps have a negative impact on product innovation.” A Chief Human Resources Officer in the study is quoted as saying that the skills gap is troubling because:

“These are the people we will call upon to lead us to stronger business performance over the years to come. They will launch new businesses, they will find new ways to strip out costs, they will build better customer relationships, and they will drive innovation. Really, the future of the organization is in their hands.”

The study went on to say that “Employee potential grows when employees are pushed outside their comfort zones in news, personal (and at times painful) ways.” The study examined which of these "growing experiences" had the most beneficial impact on the employee’s ability to grow. 22 factors were sited. Of those, only 4 were factors that are learned or reinforced in education institutions:

• Using specialized skills for daily tasks
• Engaging in business forecasting or planning
• Understanding markets, competitors or customers
• Designing new products (which I would argue is actually a creative exercise)

Only one of those factors ("Using specialized skills for daily tasks") makes into the top five (number 5, actually).

And the top three experiences that have the highest impact on employee growth?

• Modifying work to adapt to changing circumstances
• Creatively solve problems
• Persuading senior managers to take different actions

All three of these capabilities are actively and purposefully destroyed in K-12 education. Students are penalized for changing assignments with diminished grades (as my previous example about my son’s homework shows), penalized for solving problems in new ways (try telling a math teacher that you got the right answer by solving the problem in a different way and see what reaction you get), and teachers almost always discourage students from engaging with them openly about things that could be done differently in the classroom.

So let me frame this for you directly:

The Corporate Leadership Council asks it’s members (which include most of the Fortune 500) "What is important to your business?"

The members overwhelmingly say “Growth.”

The CLC then asks its members “What’s stopping you from growing?"

The members overwhelmingly reply “Lack of people who can innovate.”

The CLC then asks “What experiences would help the people who you most rely on (your high potential employees) to grow so that they could help you innovate?"

The members reply “Unlearning what they learn in school.”

Most kids show up to school creative, curious and brave. Most kids leave school programmed and afraid. As a parent you might be able to rationalize this destruction if it helped your kid live a healthier, happier and more productive life. But as this shows, it doesn't. It actually does just the opposite: if your kid is getting straight A's there’s a good chance they won't be a high potential in a world that demands innovative approaches and innovative thinking.

Think about that the next time you tell your kid the only thing that is important is getting good grades. Who are you going to blame when they eventually get bad reviews at work?

15

Capital preservation is no longer a reliable method of opening, winning and sustaining new markets. The commercialization of human ingenuity is increasingly the path to better returns (both in growth and cost reduction). And when innovation becomes ever more important experience and education become less predictive of success. K-12 and university education systems are focusing on short-term measures of highly static skills sets: ability to read and comprehend simple information at a basic level; ability to use basic computation mechanics, elementary methods of communication and a cursory knowledge of history and literature. As Sir Ken said in the video I posted earlier  “(In our world) creativity is as important as literacy.” Unfortunately for us all, the entire education system is geared towards producing better machine-age workers on a farming-sensitive schedule. But even machine-age companies are changing their structures to compete in this new world where the creative is as important as the literate (witness what GE is doing with Ecomagination). As I said before, the education system is assuming that the world needs more investment bankers and academics, both notoriously difficult positions to achieve (and both of increasingly questionable value in a world that is creating as much as it is managing, moving and  measuring). None of these skills is important in adding and / or creating value in the corporate environment of the future.

14

As we have explored before, experience and education are decreasingly effective as means of determining whether an individual will be able to produce a suitable amount of value for the investment required (ROI). When the game was capital preservation (the basis of most risk adverse corporate policies) it made sense to homogenize the risk profile of any potential hire by proxying your decisions to the deans of admissions of prestigious academic institutions or to the hiring managers in other organizations which experienced consistent economic success or had a good brand. So a person attending Princeton and rising through the ranks at GE is going to be less of a risk than a person who walks off the street having barely graduated high school. The Ivy leaguer most likely has the analytical skills needed for most machine and information age management and product development, and they likely have the bland professional demeanor that clients / customers need to feel comfortable doing business with your organization, since most capital used in buying transaction was concentrated in the hands of people who were bland themselves. Whether a hire or promotion can really produce value or not was (and is) secondary to whether the output and the behaviors of the individual employee were predictable and safe.

13

For all the formalized systemization of business analysis (starting with Fredrick Taylor, traveling through Drucker and moving through Porter and Hammer, amongst others), business is still much more art than science. This is incredibly discomforting for all the MBAs that have been drilled in case method and six sigma. But the simple fact is that in business people are given titular power in a hierarchical, militaristic structure where the relative influence of the position is predicated on the individual’s ability to accurately predict the future, which as we all know, is much more art than science. I used to think that elevation was based on ability to execute ever larger tasks of ever greater value with decreasing amounts of waste, developing more complex and effective teams and influencing key constituencies to achieve ever greater levels of output, but I have long since given that up as being too Pollyannaish. Over the many years of participating in large organizations, I have come to the decision that the people who elevate other people are making a bet: this one is going to be able to predict the future better: what we should create for which markets, and who should be a part of the team to make that happen. All of it is about predicting the future, which is tough, because humans are notoriously bad at this mission-critical activity. As Sir Ken said in the video I posted “Nobody has a clue what will be happening in five years time… the unpredictability of (the future) is extraordinary.” Remember, this is a guy who got knighted because he spent a lot of time predicting the future accurately (specifically how society would require different ways of educating students), at a conference attended by many of the top minds in the world. None of them would confidently make predictions for what the future would look like two years out. And yet managers are asked to make those types of guesses all the time. It takes years for someone to become fully comfortable inside the average large corporation, and it takes years to bring products to markets and see whether they will take. So the person you are elevating in the corporate hierarchy today is being held accountable for making the right decisions in a world where the sheer amount and velocity of data makes most of the decisions merely educated guesses. And since the people who make the decisions about who should occupy these ever higher levels of control are as genetically hamstrung as the people they so elevate, those king makers (and their agents in the recruiting and HR departments), look for convenient short-hands that will reduce the risk associated with the hiring or promotion of that individual. The most common shorthands are experience and education. And this is where all the trouble starts.

12

Unleashing the inherent creative potential of human beings, reducing the power and presence of structures that incentivize people to produce waste and destruction as a necessary output of their production, changing the way businesses are valued to encourage them to invest more in creating knowledgeable, wise and constructive free agents in open markets (both internal and external).. this will hopefully be the legacy of Talentism. Obviously this is massive change on a global level. Such change can seem daunting, perhaps even so grandiose as to be unworthy of our attention. But I believe that we can start having an impact on the corporate system to bring this new vision into being, and I believe that the first step happens in the recruiting department.

11

Nothing I am saying here isn't understood by every business person who reads it. Growth means innovation. Cost control will increase profits (recent record profits by many large companies can testify to that), but at a certain point you have to grow or die. Innovation is the key to growth. Companies will need access to a certain type of talented individual (or group of individuals) in order to be able to continue to grow at the rates that they have in the past. Again, structural advantages (brand, access to capital, switching costs, etc.) will be decreasingly important, as those advantages are based on capital and information advantages (also known as information asymmetry) which are fast disappearing. Being able to attract the right talent, rapidly commercialize the outputs of that talent and extend the power of the talent investor through increasing the reach, value and velocity of information in their social networks will be the new advantage. This will require new thinking, approaches, processes and skill sets throughout the corporation, but most of all in HR. I predict that by 2020 we will see the first signs that finance is fighting to get a seat at the table and HR is the de facto control agent in corporate decision making. This will involve a wholesale replacement of the standard HR department with new “Talent Investment” and “Talent Operations” departments, just as HR replaced the old personnel department. The days of 'payroll and picnics' will come to an end.

10

Innovation will continue to increase in value as capital continues to commoditize. This trend will continue for the foreseeable future. The factors that are driving this (western policies that value wealth over work, the corresponding accumulation of capital in private individual’s hands who have enough disposable income to take high risk investing to new extremes, the application of that capital in corporate markets as a way to seek more predictable returns, demographic changes that shrink the available labor pool, education challenges which will continue to diminish the inherent capacity of people to add value in innovation-dependent environments, the increase of free agency as a corporate employment standard, the decreasing cost of infrastructures needed to create and commercialize at the mico-transaction level, increasing information transparency where IP rights and brand identity decreasingly have leverage in customer buying decisions and the inevitable march towards health care in the U.S. which will be decoupled from employers which will further drive free agency employment conditions) are not likely to diminish in any foreseeable future, and these factors will drive the continued value of innovation and the decreasing value of access to capital.

9

At the same time that innovation is growing in importance capital is decreasing in importance. It makes sense: there has been an unprecedented globalization of wealth creation and access to capital sources. Aggregation of wealth in the hands of people who get paid for getting the cash to move quickly (otherwise known as increasing the velocity of capital) means that the allowance for risk in capital markets has dramatically risen (so much so that the Fed is starting to look at the lending practices of banks in LBOs since the terms of the deals are so favorable to the borrower). It’s simply an economic law of averages: more money chasing a relatively stable number of deals means that the bets have to be bigger and the number of potential deals increased by looking for other avenues for deploying capital (the present LBO craze). So at the same time that creativity is becoming ever more important to wealth generation, capital is becoming decreasingly expensive (as measured by the total cost of acquisition and maintenance of that capital). Further, the means of production (those things which enable the commercialization of creativity such as software, hardware, financial services and networks) are easily accessible by everyone. It is cheaper in real dollars (not opportunity cost of time spent) to set up a website than it is to get the average fast food dinner for two.

Same Game, Different Team

Sometimes I feel caught in the middle. My language and concepts seem too esoteric for hard-nosed business people, and my focus on increasing economic effectiveness seems to pedestrian for academics. I get to live with the blank stares of corporate executives every day, so that I have grown relatively used to. But for some reason I am always hopeful that people who spend their lives thinking about education will understand me better. The greatest disappointment is when I realize that the academic professionals who are engaged in education are just as invested in continuing a bad system as the corporations believe they are. I realize that modern western education systems are really good at producing three kinds of professions: academics, investment bankers and attorneys. Since all three work in the field of analyses, they are all deeply invested in making sure that the education system continues to pump out more of them, however damaging that may be.

Perhaps it is just my native cynicism, but I don’t think that there will be a spontaneous societal recognition of the need for changing education, nor will there ever be a conversation amongst powerful people about ideas that will result in fundamental changes to our education system. Systemic inertia and myopic self-interest being what they are, nobility, goodness and wisdom are not the best way to get a bureaucracy to change what it does.

But that doesn't mean all is lost. I do believe that if you can get alignment between what is right and what is good, between what corporations need to succeed in the creative age and the capabilities of education to increase the generative capacity of wise, connected and emotionally aware agents in an open civil society where production of value is assessed on the basis of true cost and sustainability… then you will start to change the education agenda.

Just as organizations have had to go through the “mission / purpose” exercise in order to align their productive capability with an ever-more dynamic market landscape, I believe that once schools understand that what they do doesn’t get their products (educated children) jobs (and therefore doesn’t get them money), they will start to change their behaviors and fundamentally examine why they exist and how they deliver value.

Inevitably the education academics will change the subject and move to America's weakness against other countries in standardized testing, especially math and science. I think they are using this as a blunt instrument to show that the education system is working but inefficient; that we are doing the right things in education, but just not hard enough or with enough focus and fervor. They are dangerously wrong.

I don’t believe that a solid grounding in deep math and science is a prerequisite for future economic success in western economies. Saying that we should be concerned because we are falling behind other countries in standardized testing is exactly that same as equating America to a football team whose front linemen are small compared to other teams. The logical conclusion from this data is that we need to get bigger lineman in order to compete.  So we start building up our linemen and buying better, bigger front line talent at the same time another team comes out with the west coast offense and makes running up the middle less of a competitive advantage. In short, you can achieve the objective of optimizing a certain capability but lose the game anyway.

Learning math and science are not ends in-and-of themselves. They are means to increasing production in economic and scientific endeavors. We may all be competing on the same field, but limiting how we play the game to the standard model will surely result in a loss for the United States.

We can’t use the old linear progression type of thinking in assessing future competitive dynamics. You would think that China would have to put in a copper-based communications capability before they could progress to cell phones, but you would be dead wrong. As is reported on the Earth Policy Institute website in February 2005:

Nowhere is the explosive growth more visible than in the electronics sector. In 1996 China had 7 million cell phones and the United States had 44 million. By 2003 China had rocketed to 269 million versus 159 million in the United States. In effect, China is leapfrogging the traditional land-line telephone stage of communications development, going directly to mobile phones.

The U.S. will not be competitive in the long-term in analytical skills. The simple fact is that a middle-class kid from the U.S. will never be as competitive as a poor kid from China in math and science on the playing field of pure rote learning and fundamental mechanics. It’s not a xenophobic generalization. It is a recognition that China is going to invest more in math and science education than the U.S., that a middle class American won't wake up hungry and thinking that a good math and science education is the only way to get food and that the kid in China is going to have access to cheaper goods and services than the kid in U.S. In short, the problem is structural: it’s an economics, cultural and initiative problem more than anything else. This means we are playing the same game (global economics) but we need to put a fundamentally different type of team on the field in order to “win” (however loosely that may be defined).

Again, all is not lost. Far from it. Even innovations in math and science will be far more dependent on Einstein-types of skills (fundamentally reformulating the problem to arrive at a totally different perspective and solution) than Newton-types of skills (increasing precision in the description and prediction of a phenomenon).  While Einstein clearly understood math, it was not his forte. He was first and foremost a creative who was given the space to think differently because he wasn’t deeply embedded in the physics community of that day which was proclaiming that all things that could be discovered about physics were in the past.

Leveraging the comparative cultural advantage of the U.S. in a creative economy (openness to failure, experimentation and connection across cultural and economic boundaries) should be our first goal. It aligns what is good (increasing the generative capacity of all children, independent of race, creed, color or disability to produce sustainable value that benefits them and the buyer) with what is right (providing more jobs for more people while decreasing the cultural, societal, environmental and economic waste created by those jobs). I believe that the structural deficiencies of the corporatist system that feeds a consumerist dependency on individual gratification as the heart of economic prosperity is at the core of a lot of what ails us. Of course, I could be totally wrong. But one thing I learned long ago is that it is better to be clear than certain. And on this, at least, I am clear.

8

The modern corporatist system propagated itself unattended and almost without check, with the exception of the labor movements of the late 1800’s and 1900’s, which put a different but equally destructive system in play – that labor, like capital, is a value unto itself, regardless of how it is employed or the value it produces. Then things seemed to be turning around in the early 1980’s, when the advent of access to relatively cheap computing meant that an increasing number of companies competed in the realm of applying knowledge. Since knowledge was the unique province of the human being (as opposed to mechanical leverage, which was the domain of machines), people started to become more important than equipment. Then we moved to the place where knowledge was cheap and easy because of the interconnected capabilities of cheap computing resources. Competitive advantage started to go to companies that could commercialize creativity (the most common meaning behind the term “innovation”). As an increasing number of companies compete based on their ability to take human being’s ideas and turn them into consumable products and services, and as the infrastructure for commercializing those ideas becomes ever cheaper to access, utilize and extend, creativity becomes an ever increasing component of competitive advantage. In addition, as the excellent slideshow below demonstrates (a huge thank you to Gautam Ghosh for originally exhibiting this slideshow, whose wonderful blog covers many aspects of innovation can be found here), innovation is increasingly seen as part of process excellence and cost cutting.

7

We are creatures of our cultural heritage, all cogs in a system to which we contribute but can't possibly comprehend. We may never have been soaked with the hose, but we know not to go get the banana. I once heard Senge describe the war between our rather static biology and the complexity our systems as "driving ever faster into the growing darkness of a foggy night while dimming your headlights."  And so it is with business practice. Our tendency to value capital over the creative capacity that makes that capital possible is as old as western society itself (native people's and hunter / gatherers avoiding similar fates since ownership, and the capital that comes with it, was not a common concept in their cultures) . But the systems that would ensconce bad practice into self-perpetuating systemic oligarchy took on a regrettably predictable trajectory during the 1850’s and 60’s. It was during that time, with mass migrations from rural to urban and from agrarian to industrial production that we saw the general “employment identity” come to bear. This identity is based on the belief that access to capital is the equivalent of intellectual superiority, and that securing an investment is harder than finding an employee. Or, put another way… the basic employment identity says: money is expensive, labor is cheap and rank is based on merit. These temporary structural anomalies (for they are not permanent parts of a free market system but artifacts of demographic realities, class structures and resource allocation) created a deep-seated, but rarely examined, belief that there was a justifiable link between success, ability and fairness. That was not (and is not) true, but few wanted to admit that the most open economic system in the history of the world was a rigged game. If you were white, male, connected, safe and analytical, you could probably make a good go of it. If you were colored, female, disconnected, adventurous and creative you would probably die of starvation. Not always, of course, but the probabilities were clearly against you. For most of modern western economic history this power imbalance driven by capital was great for managers and bad for workers. In the creative age, it will be bad for both.

Sir Ken Robinson at TED

Why are the British always so much more eloquent than me?

Bravo to Sir Ken Robinson, who gave the following talk at the TED conference in 2006. It should be required viewing for everyone who cares about education (which should be everyone).

I especially love his take that "creativity is important as literacy."

My Son Won't Do His Homework

I am going through hell with my son. He is twelve, and no matter what I do, no matter what my wife or my oldest daughter do, he won’t do his homework. We ground him, we take away all his gadgets, we prevent him from going to birthday parties and other social events that he loves. Other than corporal punishment (which is a place I won’t go), we have tried everything. It doesn’t matter… he doesn’t care. We can't force him to do something he thinks is wrong. And my personal hell is... he is right.

My son can listen to the radio and pick up his saxophone and play whatever he is hearing. Or, if his sax isn’t handy, he picks up whatever other musical instrument is around and plays that.

But he doesn’t do his homework.

I bought him a book about drawing and he gets up at night and reads it and sneaks around the house sketching things. The portraits he does are incredible. The comics he produces are funny, insightful and engaging. Everyone asks him to draw for them.

But he doesn’t do his homework.

My son is rarely if ever unhappy, and people are naturally drawn to him. He has a great delivery on jokes and has a photographic memory for any piece of pop culture he has seen. We riff on Simpson’s lines all the time, cracking each other up in the process. Then he’ll tell me movies he saw three years ago, shot by shot, line by line.

But he doesn’t do his homework.

My son is intellectually curious. He loves to learn new things and is always asking me “Why does something work this way?” or “What about that?”

But he doesn’t do his homework.

My son loves video games. I work at a video game company so I know how long it is supposed to take to finish all the missions in your average next gen video game. My son takes half that time. He holds competitions with his friends where, after he beats them, he shows them all the tricks that he has figured out about how to beat the game.

But dammit, he doesn’t do his homework.

The other day I insisted that my son finish a piece of homework. I sat down next to him and taught myself math that I never learned in all my years of high school and college (remember, he is twelve). I stayed up until midnight with him, browbeating him the entire time, my anger unchecked. Finally, we completed the problem, which had to do with plotting the parabola of a quadratic equation and reducing the result set to a graph of the system of inequalities. The project was about finding the cross section of a river based on a given quadratic equation.

The next morning my son woke early and went down and made his project interesting to him. He put in cartoon characters exploring the depth of the river, and drew a shark (which he labeled with his teacher’s name) about to eat a happy little duck (which he labeled “My Grades”). He drew a fisherman packing gear and assorted other fish and life. These were not just doodles – he actually helped clarify some of the information that he had been struggling with. By drawing the characters he was helping himself understand what the lesson was trying to teach.

My entire family was completely enthralled by what he had done. It was not only artistically creative and engaging, it actually helped clear up the very nature of the project. Justly proud, we anxiously looked forward to hearing how his teacher responded.

My son returned home from school downcast, shuffling his feet. I asked him what was wrong. “My teacher didn’t like the project, because I put it on the wrong size paper.”

I don't have much hair, but I am ready to tear what little I have out at the roots. My son doesn’t do his homework because his homework is stupid. I have spoken to educators and principles and academicians and grandparents and probably a hundred other people , and nobody has given me a decent answer to this question: "Why are you so convinced that my son is going to be an academic or an investment banker?" Because as far as I can tell, those are the only two things that schools prepare kids to be.

I have been sitting by my son's side for 7 years, doing his lessons. I believe I can state with the unequivocal clarity of someone that his given valuable time to a task that is largely worthless but required... the homework is just plain dumb. It is boring and condescending and even my son, at the age of twelve, can figure out that the rules are arbitrary, that they are enforced in a haphazard fashion, and that the stuff that he loves (art and music and video games) will be a great future for him and the stuff he hates (math and science) is something he will never compete in, never have a chance at.

But school doesn’t care, because school does not have the objective of helping my son produce the maximum amount of value in the future that he will probably encounter. School cares about ensuring that he knows how to take tests, follow directions and can do math that he will never have to care about for the rest of his life. School cares that he can either prove that he is worthy of being in the top 5% that will go on to be homogenized and brainwashed in a top-notch school so that they are almost completely without originality of thought or perspective or that he gets the hell out of the way for those kids that meet that description. School cares that he can be measured and managed, so that he will be a good little cog in a habitual big wheel.

As a parent I am caught between two worlds. I am 100% certain that school is doing great damage to his future prospects, but I also know that the game is rigged to be in favor of kids who get the right grades. Because recruiters can’t seem to get off the “experience and education” kick that does so much damage to our society and our children, I know that my children’s future job prospects are being controlled by people who have never once taken a critical look at what really goes into producing value for a business or market. They just know that their client (the hiring manager) told them they wanted somebody from Stanford with a certain GPA. And if they can get that butt in that seat they can then go deal with the next client.

I want to focus on what will make my kids successful, on what will allow them to provide the most possible value to their clients, their society and themselves. But I have to focus on what will get them work, even if that will hurt them, society, the companies that hire them and everyone around them. This is the very definition of broken system, the very epitome of how we are driving ourselves off a cliff all in the name of safe driving. This is why Talentism matters so much to me.

6

Talentism is the idea that there is no inherent contradiction between open markets and individuals achieving their inherent creative and productive potential in a way that generates the maximum amount of benefit for the shareholder, the company, the manager, the individual producer and the society at large. In this way Talentism is an Utopian ideal and therefore a theory that is open to criticism from those who believe that idealism in all its forms is fuzzy-headed clap trap that doesn't translate into reality.  I have no interest in thinking big thoughts in an ivory tower. Change, not mere words, is needed. That’s why I work in a large corporation and seek to put my principles into action. I am not an academic writing about this as I sip my latte and think about the next Volvo I am going to buy (since that seems to be the modern Dystopian’s metaphor for someone who isn’t given to fear-baiting and cynicism). These theories are being tested; data is being gathered. So far I would put the performance of groups that follow the principles of Talentism against the performance of any group run by the standard militaristic command-and-control risk aversion principles of the average Fortune 500 company.

5

So what’s my problem? Well, for one, western companies may compete in relatively free markets, but they are run as dictatorships for the benefit of senior management. Please, someone, tell me the difference between Enron and the regime of Ferdinand Marcos? These dictatorships create massive amounts of waste, put more time into figuring out how to control markets than actually competing in them and devalue people in the name of creating value for markets, comprised solely of human beings. None of that is inherent in the principles of free markets and privately owned means of production. The economic structures that cause so much damage around the world are artifacts of commonly accepted business practices, not proofs of the fallibility of self-governance. We can change for the better. Indeed, we must.

4

Do not go gentle into that good night,
Old age should burn and rave at close of day;
Rage, rage against the dying of the light.

Though wise men at their end know dark is right,
Because their words had forked no lightning they
Do not go gentle into that good night.

Good men, the last wave by, crying how bright
Their frail deeds might have danced in a green bay,
Rage, rage against the dying of the light.

Wild men who caught and sang the sun in flight,
And learn, too late, they grieved it on its way,
Do not go gentle into that good night.

Grave men, near death, who see with blinding sight
Blind eyes could blaze like meteors and be gay,
Rage, rage against the dying of the light.

And you, my father, there on the sad height,
Curse, bless me now with your fierce tears, I pray.
Do not go gentle into that good night.
Rage, rage against the dying of the light.

(Thanks Dylan)

I have  given most of my life to building businesses. I love business. A value-for-value exchange in an open and transparent market between two knowledgeable, wise and responsible agents is one of the high points of human achievement. To paraphrase Churchill “Capitalism is the worst form of economics, except for all those other forms that been tried from time to time.” I believe passionately in “an economic system in which the means of production are privately owned and operated for profit, and in which investments, distribution, income, production and pricing of goods and services are determined through the operation of a free market.” (Wikipedia) But the context has changed: the means of production (our minds) are not privately owned, nor are they operated for profit, nor can we say that investment, distribution, income, production and pricing of the output of the means of production are determined through the operations of a free market. Our most critical resources are at the whim of a system that secretly covets waste and force as it talks enthusiastically about efficiency and output. And what is that critical resource? The minds of engaged and able people who aspire to maximize the value they can deliver to a fair and open market for their unique capabilities.

3

I know I am not getting through, that I am trying to unwind 140 years of corporate habit and that in a complex world people want simple answers to complex problems. So what? I genuinely believe that our future is at risk and that unexamined thinking, policies and structures in the western business world are at the very foundation of our failing schools, health care system, infotainment consumeristic society that can't seem to agree on anything except that evil people (definition: anyone who doesn't agree with me) are destroying us.  It is clear that the western corporate system is actively, though largely unconsciously, engaged in destroying civil society and the customer base that is formed by that society. Or, to put in the blunt language that executives claim they love: businesses are shooting themselves in the foot with a shotgun. CEO’s everywhere are anxiously looking at next quarter’s P&L while the very structure of their economic enterprise is coming apart at the seams. They are the modern day Nero’s, actively and productively fiddling while their corporate Romes are ablaze.

2

What is Talentism? Thirty years of angst is a lot to bottle into a pithy sound bite, so I usually start my standard diatribe about western economies changing as capital becomes cheap and talent becomes expensive. I point out that hedge funds and venture firms are turning away investors at the same time that companies are jacking up the price of talent in order to find that next "iPod opportunity". I talk about all the reasons that companies waste shareholder value in the name of keeping shareholders happy, and how this is especially true in the area of human ingenuity and creativity, where companies become obsessed with crushing the unpredictable tendencies of people to create and learn at the most inconvenient moments, all in the name of keeping the stock price buoyant. And then I expound about the structural hypocrisy of the average corporate governance structure, which claims to advocate for the average mind-numbing hierarchical control system in the name of protecting shareholder value but that rarely accomplishes more than lining the pockets of insiders regardless of the results they achieve.

1

When people ask “What is Talentism?” I should just say “A better way to do business” or “A way to fix what’s broken with a lot of western economies, but mostly with America.” Or maybe I should lay it on thick, put it all out there: "Talentism is a way to course correct from the managerial-centric corporate system that destroys shareholder value, encourages waste and immoral behavior and picks away at the very societies it needs to succeed." I should avoid devolving into lectures that have been developing in my head for almost 30 years. You would think I could learn by now that this is the business conversation version of “Isn’t the weather nice today?” Call me Quixote, but this is the windmill I have chosen, and I'll keep tilting at it until it really turns out to be a dragon or I die trying.

U.S. Education: "My Incompetence Fragged your Business"

Mr. Sumser talks today  about a subject near-and-dear to my heart – the massive gap between what the U.S. education system provides and what the companies of tomorrow will need.

Implementing an ATS is a lot like trying to change the United States education system. You start  at your new implementation customer and find out within a couple of weeks that their processes, systems and objectives are almost completely unchanged since the late 50’s (around the time that the U.S. educational system got scared by the notion of pink satellites raining bombs from space). You, being the clever consultant, realize that it is going to take almost a year to get through requirements gathering, specifications development, process design, systems selection, installation, training and process improvements. So (and here I am about to make a real stretch, because ATS consultants rarely if ever do this), realizing that the customer’s business may be radically different in a year than it is today, you start asking questions like “Where is your business going? Who will be your customers a year from now? What kinds of products will you deliver to them? What kinds of skills do you need to deliver those products? And (most importantly for your job) what kinds of tasks will recruiters undertake to find those newly skilled people?” And, still quite the clever if almost completely mystical consultant, you develop your specification against that future need.

You take this spec to the employment manager, who has a vested interest in bringing in cool new technology but who wouldn’t recognize a “web 2.0” if he got caught in it by a giant man-eating spider, and they (the employment manager) laugh and says, not too kindly, “This doesn’t address any of the problems I had last week!” To which you reply, fully prepared (remember, I said this consultant was mythical, so I can endow him or her with powers that consultants rarely display) “Sure, but you won’t have the same problems in a year that you have now.” And the employment manager thinks “Hey, sport, my boss isn’t any rocket scientist, and if I go to them and tell them some story about how the world is going to change when they are confronted with all these problems today I am going to get fired” and instead says “You know, people would be more likely to use the system if they felt it addressed their needs today rather than the possibility of their needs tomorrow, so let’s just focus on what’s wrong today.”

And thus the ATS is implemented and, almost universally, the chorus echoes from the cubicle walls “This doesn’t address the problems I am facing today! It is worthless!” But by that time the notoriously transitory employment manager is on to their next job, a big “Implemented ATS” on their resume.

I take you through this adventure down the modern business rabbit hole as a way of exemplifying why the modern public education system has such a wide gap between what companies will need when their young charges graduate, and what they will produce anyway.

If you were a consultant coming into the education system to help them reform, you would quickly realize that their processes, systems and objectives are almost completely unchanged since the 50’s (sound familiar). Whole language learning has come and gone, as has new math and other erstwhile “fuzzy” programs that were purported to help students learn new and exciting ways to read, write and compute, but each of which failed miserably. You would do a little research and find a recent New York Times Magazine article called What it Takes to Make a Student which shows that, even with the “No Child Left with a Chance” law voted into law (and then ignored by everyone except the people who withhold money from local schools because test scores aren’t going up):

(D)espite the glowing reports from the White House and the Education Department, the most recent iteration of the National Assessment of Educational Progress, the test of fourth- and eighth-grade students commonly referred to as the nation’s report card, is not reassuring. In 2002, when No Child Left Behind went into effect, 13 percent of the nation’s black eighth-grade students were “proficient” in reading, the assessment’s standard measure of grade-level competence. By 2005 (the latest data), that number had dropped to 12 percent. (Reading proficiency among white eighth-grade students dropped to 39 percent, from 41 percent.) The gap between economic classes isn’t disappearing, either: in 2002, 17 percent of poor eighth-grade students (measured by eligibility for free or reduced-price school lunches) were proficient in reading; in 2005, that number fell to 15 percent.

The most promising indications in the national test could be found in the fourth-grade math results, in which the percentage of poor students at the proficient level jumped to 19 percent in 2005, from 8 percent in 2000; for black students, the number jumped to 13 percent, from 5 percent. This was a significant increase, but it was still far short of the proficiency figure for white students, which rose to 47 percent in 2005, and it was a long way from 100 percent.

So, being the clever consultant, you seek to discover what exactly will make for a “good employee of the future.” What skills and abilities will someone need 20 years from now? You quickly that:

• Information gathering will increasingly be mechanized and automated, but this will make interpreting the meaning and value of that information increasingly difficult.
• Most work will be done by distributed groups of individuals who will need to be able to communicate in short hands that are richly descriptive to the respective reader but almost meaningless to people outside the group.
• Information retrieval and number calculation will be nominal problems, highly commoditized across any one of a number of systems.
• Individuals at an early age will expect to be able to form clear objectives, select the team that will achieve those objectives, assess their team by their own standards, share disproportionately in the benefit of the gain if they succeed and be fired quickly if they don’t.
• Teachers will no longer be considered “the font of all knowledge” since it will be virtually impossible to keep up with the volume, diversity and velocity of information needed to bring our kids into the 21st century. Instead of tacit knowledge, teachers will be evaluated on their ability to inspire, innovate, challenge and integrate people and knowledge being applied towards reinforcing the social, intellectual and creative capacities that almost all humans beings natively posses.
• Since society will still, inevitably, require person-to-person (f-2-f in the common lexicon) interactions, and since students will decreasingly have early childhood exposure to the physical presence of other children as they spend more time in virtual play and communication, a special emphasis will have to be spent on teaching emotional intelligence, group dynamics, systems perspective and economic theory (none of which is widely covered today).

(By the way, you will notice that the modern MMORPG video game includes many of these elements, and that John’s assessment that the “My Gamer Fragged Your Honor Student” is a harbinger of bad things to come is exactly right.)

So you go to the school board and provide a spec that recognizes these changes and calls for sweeping overhauls in processes, systems and educational objectives that, since they will take about 20 years to fully implement, should be just about right by the time they are completley integrated into the education system. You present these findings to the district superintendent and… well, you read the rest of the story above. The superintendent says “That’s nice, but the school board isn’t going to get this, the education bureaucracy isn’t going to fund it, the teacher’s union is going to fight it and the parents are just going to want to know how their kids can get ‘A’s’ in this stuff.” And they will be right - especially about the parents, who may be amongst their kids worst enemies in helping their kids prepare for the future.

And where is business in all this? The ultimate consumer of the services and products of the educational system is sitting on the sidelines warming it’s thumb and hoping that the next quarter’s results won’t be too bad. Trying to invest in the K-12 education infrastructure to dig us out of this hole, focusing some time and energy convincing shareholders than investing in education is better than having a corporate jet, investing in their own training systems to address the gap left by the educational system (university level included) and otherwise trying to play a leadership role in solving this huge problem – well, all of that just doesn’t make the strategic radar of the average large business.

Every executive suite should be required to read John's post and the New York Times Magazine article and think of the following: those kids that can’t read and can’t add are coming your way. Millions of them. Your corporate future (and the democracy which made it possible) are hanging in the balance.