OCTOBER 10, 2005

Online Extra: How HR Can Be "Actively Harmful"

Author Marcus Buckingham says talent-development systems in place at nearly every big company are focusing on the entirely wrong things

Marcus Buckingham graduated from Cambridge University with a master's degree in social and political science in 1987 and headed to the U.S. to work for the Gallup Organization. There he dug into the company's data on management -- including 80,000 recorded and transcribed interviews with managers from companies such as Disney (DIS ), Merrill Lynch (MER ), and Marriott (MAR ). Through his research, Buckingham developed a unique point of view on what great managers do and whether the systems in place in big companies today are worthwhile (he thinks not).

While at Gallup, Buckingham did lots of research and consulting on his own and co-authored two influential books: First, Break All the Rules and Now, Discover Your Strengths. Last year, he left to found The Marcus Buckingham Co., based in Los Angeles, and he now writes, speaks, and consults on management issues.

Buckingham recently spoke by phone with BusinessWeek Senior Writer Nanette Byrnes about his unconventional take on the business of talent development. Here are edited excerpts from their conversation.

You argue that many of the ideas that we take for granted are off base. For example, it's popular to talk about a company's culture, but don't you argue that there's really no such thing?
If you go into an Office Depot (ODP ), for example, with 1,100 or so stores, you'll find one store where 80% of people can strongly agree that they know what's expected of them and a store right down the street where 5% would.

Suddenly you realize that culture is actually local, and that General Electric (GE) doesn't have one culture nor does Office Depot or any other company. They have as many cultures as they do managers. People join companies, but they quit their boss.

Yet despite the importance of managers, you argue that companies don't do what their own best managers do.
At Gallup, we had over 80,000 tape-recorded and transcribed interviews with great managers and average ones. I looked at the great managers we interviewed from a whole bunch of companies and decided that what they were talking about doing was very, very different from what I was reading about in management books.

Great managers do a number of things differently [from average ones], but one of the major things is, they spent a disproportionate amount of time amplifying a person's strengths and 20% of their time trying to manage around a person's weaknesses.

And how's that different from conventional thinking?
Most management books I saw were saying management is all about transformation, and that you've got to show people where their areas of opportunities are -- usually euphemisms for weaknesses.

The bottom line for a great manager is: Don't try to put in what God left out, try and draw out what God left in. Management isn't about transformation, it's about release.

Is there a simple way people can figure out what their strengths are and if they're using them at work?
One question to ask is what percentage of your day at work do you spend doing things you like to do? That's a pretty good way of getting at strengths -- things you have an appetite for. When you ask that question, 17% of Americans say 75% of their day is spent doing things they really like to do, 32% say between 50% and 75%, and 51% say less than 50% of their day.

You don't seem to be a big fan of how HR is done today.
Benefits administration, payroll, all that stuff they used to do is being outsourced. They still get involved with the selection of people, but you've got a whole department there that's in desperate need of a job.

I think HR is a hugely important function if they could only understand what their job is. The question should be: How do we with deliberateness and focus identify and amplify the strengths of each employee? Because right now, we are crap at it. I mean, at least according to the employees.

So the tools HR uses, like peer review and setting goals, are O.K., they're just aimed at the wrong objective?
The tools are actually damaging. The underlying problem with HR is that they think when people come to a company they're endlessly malleable. We want to make you a leader? O.K., we'll send you to leadership training course and we'll make you a leader.

What will happen is once your competencies and weaknesses are defined, they don't just live in a drawer, they'll get put into a performance-appraisal program. You'll get rated on each of these -- by you, your manager, your direct reports, and your peers. So we identify your leadership gaps, sometimes called skill gaps, and we focus on them and together you and I put together a developmental plan. You've got thousands and thousands of employees around America diligently identifying their skill gaps and then working to fix them. That's what I mean by actively harmful.

So what's the answer?
I think you should measure by outcomes first. I would say, "Here's the outcome we want, what's your way of getting here?" And each person is going to have a slightly different answer, and that's O.K. We don't want clones, for crying out loud.

Despite all this misdirection, companies seem to have done O.K. Does talent even matter?
There's no question that we're moving into a time where the knowledge worker is coming into his own. Look at Best Buy (BBY ). It's in a fight for its life with Wal-Mart (WMT). Wal-Mart can sell consumer electronics far cheaper than Best Buy can, so how do they win? Rightly they're saying, "We better have people in the front line willing and able to answer questions." Brad Anderson, the CEO, says we need to unleash the power of our front-line employees.

In airlines, hotels, the car business, competition is so tight. You're looking for your edge. Things are so easy to copy these days, from Web sites to products. The judgment of the employee has value. That's a macro shift that has been going on for awhile. We've reached that tipping point.