The Red Queen principle
"For an evolutionary system, continuing development is needed just in order to maintain its fitness relative to the systems it is co-evolving with."*
If you believe in evolution, that means a species has to continuously evolve and change to keep ahead of its peers and keep up with its prey. For a business it means, well, pretty much the same thing.
*Van Valen L. (1973): "A New Evolutionary Law", Evolutionary Theory 1, p. 1-30.
Likewise, if a business doesn't continuously move ahead it gets overtaken and devoured by the fitter, faster businesses coming up behind it. The one, genuine source of long-term competitive advantage in business today is people.
Better staff = a more successful business.
So it follows that the difference between a good business and the rest will be in their ability to develop their existing talent...
Can't I just hire the best people?
You can't afford them.
Once upon a time, businesses could get the best people by recruiting them. Under performers were given the chop - off with their heads! - and shiny new people came in and replaced them. But talent is a finite, and expensive, resource; imagine what it would cost you if you had to go out today and hire all new managers from a pool of the very best people available.
Put another way: imagine your organization is a baseball team. It'd be great to get Alex Rodriguez to play for you, but it'd cost a LOT. Instead, by investing in great managers and a great performance management system, you can create long-term succession strategies and development plans for your lower cost team members - and potentially create an A-Rod or two of your own. For less than the cost of the original!
And sure, they may leave for greener pastures (locker rooms?) after you've spent all that time / energy / money developing them, but you can feel smug in the knowledge it'll cost your competitors a lot more to hire them than it cost you...
Keeping up with the Queen
To stay ahead of the ravenous hordes, you'll need these ingredients:
- Great managers who are well supported
- A strong succession planning approach
- Training and development opportunities offered to the best candidates
And the 'emulsifier' that brings this all together? A fantastic performance management system. Here's one we prepared earlier!