Background:
The test case begins by highlighting Jared Gordan, President of Industrial Products Division of Compunext. He is known for turning around the division from a loss to a strong industry competitor. He is also known for developing a skilled and capable workforce. The article describes him as a positive roll model and motivator for staff, developing his teams skills and knowledge as they grow into the position. The problem is that during the four years Gordan has worked to turn around the division and staff, leadership from other divisions within the corporation target recruiting his talent without warning or consultation with Gordan. The process in the story is called “poaching”
Gordan responds to a recent poaching by confronting the division director that recruited the current employee without a courtesy call or warning. The peer manager apologized for not warning Gordan of the recent offer. The author notes that this has happened multiple times.
Gordan also addressed the issue with “Sue” the corporate vice president for human resources. Sue viewed the poaching as standard practice, even positive for the organization because it spread Gordan's talent throughout the organization. (Kesner, I.F. 2002.)
Sue stated that his skill at recruiting and developing talent was well known throughout the company and is the reason that other divisions poach from his organization. She also stated that competitors saw the change in his division's labor force quality and were also headhunting Gordan's staff. Both were a surprise to Gordan. (Kesner, I.F. 2002.)
Gordan expressed his frustration and not wanting to be the “farm team for the rest of the company” or “a backdoor training facility for corporate.” Gordan then shifted the conversation from frustration to offering a model that worked in another company he worked for in the past. His goal was to stabilize staff loss and introduce a managed recruitment and advancement process. (Kesner, I.F. 2002. pp. 4-6)
Sue retorted that the poaching, organizationally, is a good thing because the larger divisions need the talent and can provide the employees greater opportunity and growth. Sue also stated that corporate had offered the divisions more support in recruitment and staff development, but it was rebuffed as “interference” (Kesner, I.F. 2002. p. 5).
The test case closed with Gordan stating that he accepts the current environment, but will not allow it to last.
I see support for and against Gordan's position in the test case.
Facts:
-Gordan is a turn around manager who is known for developing good talent.-His company sees his ability to find and develop staff as a positive contribution to the organization.
-Leadership, peers, and staff allow talent to leave his division without telling Gordan.
Assumptions:
-Staff are leaving for other positions, and not returning. There is more to the promotions than just money and opportunity. Even though Gordan is good at training and developing his staff, there are other contributing factors to the low retention rates. Gordan need to consider what is missing in his teams work environment; lack of opportunity or pay is so low that it is hard to retain quality staff. Gordan does not exit interview the leaving staff member nor does he follow up with other people who have left his division to see what he could have done to retain more allegiance. -Division heads had no regard for courtesy and actively pursued poaching other divisions. The result of poaching caused internal competition and barriers between divisions that breakdown horizontal linkages (Daft, R. 2007) Corporate leadership do not manage the competition or the level of decentralized decision making in the vertical hierarchy (Daft, R. 2007).
-Gordan was the last to know that leadership, peers and competition respected his skill at recruiting and developing skilled and dependable employees. This is a break in the hierarchical linkages between corporate leadership and the decentralized divisions (Daft, R. 2007. p. 93). Corporate leadership needs to manage competition within the organization and develop a coordinated effort to process inter-corporate transfers, and promote divisions to matrix and allow for better horizontal coordination. (Anand, N., & Daft, R. L. 2007)
Also, his contributions were not recognized by leadership, commended or rewarded. Alternately, Gordan also lacked “The People Test” (Goold, M., & Cambell, A. 2002. p. 5). He was able to develop staff's skills in a positive environment but either his personality or behavior cased his staff to lack loyalty and left for better opportunities without talking to Gordan first. In the larger perspective, the organization overall lacks what Goold and Cambell describe as one of the toughest organizational challenges “coordination among units” (Goold, M., & Cambell, A. 2002. p. 9).
References:
Anand, N., & Daft, R. L. (2007). What is the right organization design?. Manuscript, University of Alaska, Anchorage, AK. Retrieved from http://faculty.cbpp.uaa.alaska.edu/afgjp/PADM610/What is the Right Organization Design.pdf
Goold, M., & Cambell, A. (2002). Do you have a well-designed organization?. Manuscript, Harvard Business School, Harvard University, Boston, MA.
Kesner, I.F. (2002). The coach who got poached. Case Study, Harvard Business Review, Harvard University, Boston, MA. Retrieved from http://hbr.org/2002/03/the-coach-who-got-poached/ar/1
Idalene F. Kesner is the Frank P. Popoff Professor of Strategic Management at Indiana University’s Kelley School of Business in Bloomington.
Daft, R. (2007) "Fundamentals of Organizational Structure." Organization Theory and Design (9th ed.), pp. 88-125 (Chapter 3)
Jack, this is an interesting example. Do you see the poaching practice as problematic for the organization? If you were tasked with fixing this issue, what sorts of changes would you make to the organizational structure? Do you also think that organizational culture might also be playing a role in the perpetuation of the poaching practice? If so, would making changes in the organizational structure be enough?
ReplyDeleteHi Jack,
ReplyDeleteYour example this week made me feel for Jared and his struggle to keep his skilled talent. It made me think back to last week when we read about expanding the surface area to better understand the environment, most importantly, sharing the knowledge of the environment with others internally. I'm surprised that Sue did not tip Jared off that his talent was being sought after.
If Jared knew about poaching from competitors, possibly from coworkers or Sue, would he have addressed the questions in the "people fit test"? I agree with your first assumption and that Jared probably needed “career paths and development initiatives” to keep his talent(Goold & Cambell, 2002).
Erin
Jack,
ReplyDeleteYou had some really great points in your article. I agree that management should have recognized his efforts much earlier than they did. But my favorite point of yours is this:
"Division heads had no regard for courtesy and actively pursued poaching other divisions. The result of poaching caused internal competition and barriers between divisions that breakdown horizontal linkages (Daft, R. 2007) Corporate leadership do not manage the competition or the level of decentralized decision making in the vertical hierarchy (Daft, R. 2007)."
I think a good lesson for Jared is to keep the greater good in mind, which is the overall performance of the company. While it can be frustrating for him to continue to "farm out" his employees, perhaps they'll be a better fit elsewhere in the organization.
I see this more of an organizational culture/structure problem than Jared's individual problem. There's a definite lack of trust, respect and collaboration among teams. I would suggest HR implement a transfer process; perhaps after six months with the company, an employee is eligible to put in for a transfer to another team. The current system of essentially selling to the highest bidder (or the biggest talker) is perhaps beneficial to that individual employee's level of job satisfaction, but it won't be beneficial to the team in the long run, as Jared spends all his time recruiting rather than focusing on other jobs, and the current practice doesn't allow for a solid on-boarding process for new employees, ultimately hurting company culture.
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ReplyDeleteHaving worked for a company that explicitly forbid poaching, I think the culture of allowing such a practice enables employees to seek greener pastures or explore their creative potential by moving beyond their point of entry. After reading Jack's post, which I think is an excellent overview and breakdown of the case study, I felt there was one glaring omission by those who created the report: maybe Gordan has interpersonal communication issues that need to be addressed by HR. I agree that people are bolting for a reason beyond financial considerations. Since the company allows the practice, and so many choose to depart from his team, someone needs to explore the possibility that he needs to improve his people skills.
ReplyDelete