The Alliance: Managing Talent in the Networked Age

Security of tenure in employment is an increasingly elusive arrangement and the traditional psychological contract that traded loyalty and hard work for a job for life is a quaint relic of a bygone era. Employers simply cannot guarantee that any more and employees have responded by tempering their commitment and engagement levels. However much they may profess loyalty to a firm, if a better offer comes their way, they will jump ship.

A new, honest and more realistic contract is required in this new environment, a subject addressed here by Hoffman, one of the co-founders of LinkedIn, along with Ben Casnocha and Chris Yeh, two other US-based entrepreneurs.

Rather than thinking paternalistically about employees as family members, the analogy of professional sports teams provides a better model. Sports team don’t promise life-time careers and transferring between teams is normal and healthy. However, the principles of trust, mutual investment and mutual benefit that families represent, still apply. Teams win when their individual members trust each other enough to prioritise team success over individual glory. Paradoxically, winning as a team is the best way for team members to achieve individual success.

Companies need to think of their employees neither as free agents nor family but as allies. This alliance begins with managers acknowledging that great employees might leave the firm and with employees being honest about their aspirations. Do this right, the authors say, and you’ll be able to recruit and retain the entrepreneurial individuals you need to make your firm thrive in a world of flux.

Companies often fail in this respect. There's an interesting tale about an executive called John Lasseter. Lasseter was an animation executive at Disney and pitched his bosses about his vision for movies with computer-generated animation. The story goes that they listened to his pitch, then sent him back to his desk. A few minutes later, he got a phone call telling him that he was fired because he was too distracted by crazy ideas.

A number of years later, he ended up working on this same vision with Steve Jobs building what was to become Pixar. Disney eventually bought Pixar, in a move that cost $7 billion, with Lasseter becoming chief creative officer at Disney Animation Studios. Lasseter would have been more than happy to develop his original vision within Disney but his managers wouldn't let him, to their huge cost.

One of the key ideas in the book is the notion of tours of duty – for example, giving an employee a two-year contract to achieve specific outcomes with the promise of rewards, one of which generally involves an additional tour of duty. Defining an attractive tour of duty lets you point to concrete ways that will enhance the employee’s personal brand, at the company and beyond its confines.

It’s an approach much favoured in Silicon Valley.

There are plenty of other advice here on good hiring practices. Connected people should be favoured. This should not be a crude measure of how many LinkedIn people someone has in their network but rather should measure the strength of the network.

Within defined boundaries, companies should also encourage employees to have conversations on professional social media platforms around industry issues for example. You should want your employees to be discoverable within a professional context and should push for policies that allow employees to build their personal brands and establish thought leadership.

Another recommendation here is for an “interesting person fund” – a fancy term for licence to lunch. HubSpot, for instance, has formalised this into a Learning Meals policy. For example, when managers travel to different cities they organise dinners with other entrepreneurs and interesting contacts that they can learn from.Hosting relevant events at company offices, encouraging active professional organisation memberships and encouraging employees to share what they have learnt with the wider organisation all pay dividends. The beauty of the alliance, the authors say, is that it creates a model for work that encourages companies and individuals to invest in each other and in the process to have more honest conversations.

This is an insightful book, strengthened by the practical experience of the authors in establishing and running firms in fast-paced change environments.