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Monday, June 19, 2006

High Attrition, Panic, and Stupidity

What do you do when you are faced with high attrition rate of your talented employees? Simple, you start hiring mediocre. Surprised? Well, this is what an organization is doing of late without realizing “the axe on one’s own feet” effect it will create sooner than later.

Any body with an iota of organizational wisdom will feel that this approach is nothing sort of stupidity and any rationale organization would never take such a measure. As irrational as it may sound, I have come to a conclusion that nothing – intelligent or dumb – is impossible in organizations. When sanity gives way to insanity is hard to see, at least for insiders.

Coming to the policy of hiring mediocrity, this is nothing sort of an acute organizational myopia. As the events unfolded, this particular organization was seeing high churn of its talented people. High caliber professionals hired were not staying long. Well, the problem was three pronged.

First, the culture of the organization was a closed one with high centralization and decision making authority with only 2-3 top people. So, high caliber professionals were supposed to behave like pawns in the hands of under-qualified key decision makers. Indeed a tricky situation.

Second, the organization paid peanuts compared to other similar organizations.

Third, talented employees were not supposed to challenge their boss’ wisdom. It was considered to be a blasphemy to take an opposite stance.

So, it was not a surprise after all to see mass exodus of talent from this organization. But what really surprised me was the inclination they showed towards hiring mediocrity. Well, openly they would never say that they hire mediocrity. But there seems to be a tactic understanding within the circle of people who matter to hire mediocrity as they feel mediocrity tends to stick to their organization.

In this particular organization, the recent inclination towards mediocrity and hatred for talent is because of the following perceptions:

  1. Mediocrity comes cheaper.
  2. Mediocrity sticks because they don’t have many options.
  3. Mediocrity doesn’t challenge the wisdom of his bosses.
  4. Mediocrity has low aspirations and is less ambitious.
  5. Decisions are after all in limited hands. So you need people who can do the dirty work for you.
But then this organization misses many points that might hurt it in days to come. It perhaps doesn’t realize that soon it will find itself in the following soups:
  1. Leadership vacuum.
  2. Zero bench strength.
  3. Loss of productivity.
  4. Decline in value addition at various levels as people tend to get struck with routine and mundane work.
  5. Reduced risk taking ability and low initiative.
  6. Decline in the sum total of organization’s IQ making it difficult for it to remain competitive and agile.
  7. Rule of mediocrity.
In this new age of business, when leaders talk of competing on the strength of their people, the approach adopted by this particular organization seems to be self-defeating. But what can one do when a man is hell bent on destroying himself. God bless the organization!

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