Leveraging staff strengths…and getting the wrong talent off the bus. NiQ Lai, Head of Staff Engagement, City Telecom (CTI) highlights the importance of leveraging staff strengths, and while many talk about retaining staff, he shares how HR should also be ruthless sometimes about getting ‘the wrong talent off the bus’ in order to help promote business success.
Spend the most on people.
CTI spends most of its money on people—notably the amount spent on talent is more than capital expenditure and marketing combined. Lai explains, “We are a people company, that’s our primary asset. When we say talent is our key asset, it’s more than just a cliché, it’s in our numbers.”
Vertical model
Many companies are run from the viewpoint of efficiency. Lai argues that this doesn’t work and in his organisation they have taken a different approach—using a vertical model, aimed at improving customer intimacy. In Hong Kong they have five distinct regions, each with its own CEO who is responsible for the entire value chain of the customer experience. Lai believes through this system what they lose in scale they gain in intimacy. Such a system takes smart people and management talent and is therefore very challenging. All CEOs come from different disciplines and bring different skill sets, but must develop fully as executives, to run an integrated operation. Each of the 40 mini CEOs is responsible for P&L and Balance Sheets. They have a lot of autonomy and can spend the allocated budget how they want, but there are downsides if they don’t meet their budgets.
Injecting power bars
Lai notes that looking at a standard career growth chart for the first ten years in most organisations one can see steady growth, then employees make Senior Manager, Vice President or Director level, then it starts to flat line with only 3-5% productivity growth for the next 20 years. CTI tries to give such staff a career jolt, injecting a ‘power bar’ into their career development. Anyone who has worked for the same boss, in the same job nature for five years is required to move to another department—severing any connection with their old department.
Lai cited the Head of Talent Management at CTI as an example who, with many years experience in HR, is now spending three months in marketing. Lai explains that if they find they like marketing and can secure a position at their current pay scale; then they can remain in that post. Alternatively, if they return to HR, then this is also good as it will be with more passion and awareness of the company.
Teammates also get the opportunity to show they are capable of future leadership. “It’s clearly a win-win situation but you have to be committed. This is not an opportunity—this is a requirement. One talent left the company because they did not want to change their role,” explained Lai.
Talent infinitive programme
In 2010, 70% of the top 33 talents had, or were in the process of gaining a post-graduate degree. Lai calls this the ‘Talent Infinitive Programme’, which CTI has invested over HK$3 million in. The organisation sponsors employees through the Chinese University MBA programme to the tune of around HK$190,000 per person. Lai admits that this seems like a big expense, but by the same token notes that those talents generate around HK$200 million in revenue—so even if they only emerge 1% better at what they do—that would deliver HK$2 million dollars of benefit.
It is a possibility that an employee will complete the MBA, improve their CV and then leave. However, Lai believes that if you have good people there will always be a market value for them, and you can’t retain them by restricting their growth.
Talent development is not only found at the high end but is instigated throughout the whole hierarchy. They have put people who did not finish a University degree, through a three or four year programme to achieve a certificate, diploma, higher diploma, then a full degree.
BMW policy
Lai also has a vision that he has named his ‘BMW policy’ involving his wish to fill the company car park with BMWs because that shows a high level of success. The organisations also adopts a ‘grow the pie benchmark’ rather than internal competition, with the five district heads being encouraged to constantly benchmark against each other. The aim being to encourage healthy competition while still stimulating innovation and giving people enough autonomy to grow. Nothing beats direct engagement and although they have websites and monthly video meetings, Lai also ensures that they have at least two town hall meetings a year.
Every year, irrespective of good or bad economic times, the organisation also hosts an offsite trip. In previous years staff have gone to Japan where they worked hard, had a good time and learned how to ski. HK$2 million was spent on the trip, but Lai points out that, within months, the cost savings and innovations easily covered the expenses incurred.
Getting the wrong talent off the bus
Lai also highlights the importance of HR being able to get the wrong people off the bus. Every year CTI terminates 5% of their salary base. Not talent, but salary base, meaning they can’t simply terminate the most junior people. Lai admitted this is contentious, but the alternative is to do nothing and focus resources on coaching the bottom 5%—when it is much better to focus resources on the top 95%.
CTI intentionally builds an intense culture—having no inflation factor in the company, so that employees do not get automatic salary reviews. They only offer productivity gain sharing, so the bottom 20% will have no increment, while the top 20% will have 20% increment.
Lai said there is intentionally a wide divergence and if an employee is an under-performer, they will find CTI an extremely unpleasant environment. Conversely, Lai believes if you’re passionate it’s a great place to be.
Paul Arkwright
Publisher
