A Relook At War of Talent

“The War of Talent” became a frequently cited phrase in boardrooms of companies

around the world after its conception in 1997 by McKinsey & Company. In the report where that
phrase originated, talent in human capital was said to be the most important resource in the
coming decades. According to Ed Michaels, a McKinsey director, “all that matters is talent.
Talent wins.” It was also stated that the aging population and shrinking middle-aged working
group – demographic factors which we can do little to change – will accrue to the impending
talent crisis. What this study implies is that talent is a zero-sum game amongst companies; and
that a battle is raging, whether they know it or not, to snatch up the top talents and retain them.
What the study assumes is that talent is a scarce resource, and that talent is innate – you either
have it, or you don’t.

Perhaps a bigger problem that we have now is that the implications of the study seems to
be adopted by companies worldwide, and particularly in the United States, where large bonuses
and pay checks are given to lure and keep the few “stars” of the company. We believe that this
“talent-mindset” cannot sustain companies in the long haul, or solve the talent crunch. We must
then inspect some of the inherent assumptions of this crisis, and re-examine the sources of this
mega-trend.

This paper essentially challenges the assumptions on the grounds that talent is inborn.
This is a profoundly mistaken concept, as it ignores the nurture aspects of grooming talent and
skills. The focus here would be on the way companies gauge talent, and the underlying
educational systems – a vital environmental component that could either bring out a person’s
talent or stifle it.

The founding of formal education systems

By definition, education is the transmission of accumulated knowledge, skills and values

from one generation to another. Reality, however, has evolved such that formal/public education
is now the process of training and developing people in knowledge, skills, mind and character in
a structured and certified programme. This structure of education that we have now is in actual

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fact a 19th century model, also known as the Manufacturing model, which is premised upon
manufacturing principles of linearity, conformity and standardization. It was designed to create
human resources for the industrial economies of that era, where the workforce typically
comprised of 80% manual and 20% professional labour. Great emphasis on conformity and
standardization was crucial for rapid industrial post-war development then, especially given the
technology of that era.

With such needs in mind, national education systems were structured accordingly –
academic success was (and for the most part, still is) best achieved by conformity. The concept
of different learning styles had not yet come into existence then, meaning teaching was
conducted on a “one-style-fits-all” basis. Subjects most relevant to working life, i.e.
mathematics, sciences and languages, were prioritized and particular sorts of academic ability
were emphasized. The typical grading system makes it such that each student is assessed on how
well the fixed grading criteria is fulfilled and how many prescribed answers the student manages
to give in any given test. Rigorous examinations and standardized testing comprising of multiple-
choice questions and/or questions with prescribed answers were (and still are being) used to
filter, determine and label talent. Along with breeding widespread conformity, this established
system of early labeling has also ingrained inflexibility and bred the stigmatization of mistakes
as well as much apprehension towards risk-taking. These implications will be further elaborated
on later in this paper.

Nonetheless, for the first time, there was a formal and structured way to “mass-equip”
citizens with skills that would advance the economy of the nation. Resultant rapid development
in the leading nations set the stage for other nations to adopt a similar system.

Alas, the global economy has since progressed from the industrial era. Consequently, the
unquestioned continuation of this model is detrimental on three levels: the demand for new kinds
of talent in the workforce, the inability to recognize and meet new human resource needs, and the
erosion of other kinds of talent.

Demand for new kinds of talent

At present, we are witnessing the emergence of the knowledge economy, which involves
an increasing demand for intellectual labour. What this entails is a highly educated and skilled

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workforce, defined in the McKinsey report as “smart, sophisticated (employees) who are
technologically literate, globally astute, and operationally agile.” More practically speaking,
institutions and organizations today need more than the basic literacy and calculation skills
which once suffice in the industrial era. According to the enGauge 21st century skills report that
was further developed by the Metiri Group, skills needed currently are four-pronged: digital age
literacy, inventive thinking, interactive communication, and state-of-the-art quality results.

Digital age literacy entails not only an understanding of digital technology and its
application, but also how to use visual imagery to communicate ideas – especially with the
increasing usage of graphic user interface of the World Wide Web. It includes ‘information
literacy’ which is involves accessing, evaluating, and using information accurately, creatively,
and efficiently.

Included in the second prong of inventive thinking are: resilience, adaptability and self-
direction to be able to react to changing conditions in the highly interconnected world today.
Skilled workers must be able to manage risks, anticipate changes and understand the
interdependencies in systems. Curiosity was also an important quality to inspire life-long
learning that is needed when environments change and new solutions and ideologies are needed.
Equally as important for inventive thinking is the courage to take calculated risks – something
that formal schools today discourage and stigmatize.

The third prong of interactive communication is about social and personal skills in
essence. The complexity of today’s environment requires astute decision-making on the part of
people of different levels and disciplines. While there is a high degree of specialization by each
decision maker, teamwork and collaboration amongst these specialists is ever more important in
accomplishing complex tasks and constructing new solutions. On top of this, the new digital age
worker has to be able to maximize communication using relevant and up to date technology.
Included in this prong, is the need for personal and social responsibility to make ethical decision
when confronted with a dilemma.

The fourth prong of state-of-the-art results focuses on achieving high standards and high
productivity in the workforce when students graduate. What are needed are crucial soft skills
such as the ability to prioritize, plan, and manage for high quality results. A certain degree of

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real-world application must also be infused into the curriculum, as such experiences present
students with invaluable insights into the domains of knowledge and tools that they learn about.

Altogether, the four prongs point to a massive need for talents and skills that are not
being nurtured in the current formal education system. In other words, the basic training children
of today are put through are not sufficient to equip them with the skills required in the workforce
of today and tomorrow. Skills such as creativity, resilience, risk-management, courage to take
risks, working in teams, and being socially and ethically responsible are not fully reflected in the
criteria to progress to higher institutes of learning and in the grading system that defines ‘talent’
today. Way back in the 1990s, Hank Levin concluded from his studies that the performance of
students on current examinations do not correlate with how productive they will eventually be in
the workforce. Even so, decades later in 2010, high productivity in the 21st century is still not the
focus of schools – the institutions that determine whether a child is ‘talented’ or not.

Inability to recognize and meet human resource needs

Another side of the talent crisis lies with the current corporations’ lackluster attempts to
define talent and create systems that promote an environment that stimulates productivity.
Underlying this inertia is the incredulous assumptions about talent. On the part of defining talent,
elites in corporations declare that ‘a certain part of talent eludes description: You simply know it
when you see it’ (Michaels, Handfield-Jones, and Axelrod, 2001). Whatever this alludes to, it is
imperative to actually know what talent is in the 21st century context in order to examine the new
human resource needs. Unfortunately, “talent, as conceived by political and business elites in the
global war for talent, tends to be narrowly defined in terms of formal education credentials,
market value and business interest” (Brown & Tannock, 2008). An appropriate example would
be Britain’s Highly Skilled Migrant Programme, which characterizes highly skilled labor
according to their history of past earnings (i.e. the more you were paid in your previous job, the
more skills and talent you have, and thereby more welcome to immigrate to Britain) (UK
Treasury 2004).

Such an ill-conceived and rigidly-defined criteria for hiring talent does a disservice to the
companies looking for them. Furthermore, talent is more often than not, capricious in nature and
context-based. Boris Groysberg has supporting evidence of this in his study of the ‘lone-star

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myth’ – which is the fallible believe that a company can achieve success with just one or two top
performers. The apparent truth is that without other equally talented and supportive co-workers,
these top-performers would most likely not meet the expectations of their employers, nor stay in
the company for long. There are also convincing evidence that great business systems are more
crucial than great employees (Jeff Pfeffer). Big companies such as Toyota and McDonalds beat
competition not because of superior people, but because of strong and efficient business systems
within the company that ensures excellence across functions and divisions. Besides, ostensibly
average people can perform well in great systems, and even the most dazzling employee can, and
will, sizzle out in atrocious systems.

All these conjectures underlying the war-talent fever developed from the idea that talent
is ingrained in a single person, and that alone matters in succeeding. While hiring the right
people is undoubtedly important, it should not come with an ignorance of other components that
are equally crucial the equation of labour productivity and maximization. What this calls for
instead, is an urgent need to question the fundamental labeling of talent, which points back to the
issue of education – the main nurture factor that shapes and matures talent in individuals before
they enter the workforce.

Erosion of other kinds of talent

As abovementioned, the current education system places emphasis on a particular

subjects and particular sorts of academic ability. The implications of such an emphasis have been
rather succinctly summed up by Freeman:

“More than this, stocking up on one kind of talent can lead to the erosion and destruction of
other kinds of talent. Most rich nations now face shortages in teaching, health and caring
professions, as the mostly highly educated of their youth flock to higher paid, higher status and
more glamorous positions in law, business and finance.” (2005)

This is an alarming trend most ostensibly because these professions facing shortages
belong to realm of public service, which forms the foundation of any one nation. Having the
most educated and motivated of youth flocking to selected industries in the private sector and
leaving potentially “second-rate” individuals to shape public policy and educate future
generations paints a worrying picture of the future. This definitely warrants a change in values

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and priorities imparted and ingrained into the minds of the rising generation starting with the
education system.

The notion that formal or public education of today is apt in developing the workforce of
the future is not just illogical, but also perilous. Ignoring its role in the impending skilled labour
crisis will not address the problem either. Instead, businesses, governments, and other institutions
today must pay attention to the education system, ultimately because human resource has always
been the one and only conductor of orchestrating all technology, systems, and innovations
throughout our history.

As Sir Ken Robinson succinctly wrote: “It is often said that education is the key to the future.
It is. But a key can be turned in two directions. Turn in one way and you lock resources away;
turn it another and you release them.” Thus, it is high time for us to relook at this global-mega
trend of the talent crisis.