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The Alliance: Managing Talent in the Networked Age Hardcover – July 8, 2014
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Daniel Pink interviews Reid Hoffman / Ben Casnocha / Chris YehDaniel H. Pink is the author of Drive, To Sell is Human, A Whole New Mind, and other books about business and behavior. Every so often a company comes along that transforms the world of work. LinkedIn is one of those companies. Since its founding more than a decade ago, it has become the place where professionals build, maintain, and nurture their networks. For millions of people from all over the globe, LinkedIn is a source of opportunities, talent, even inspiration. But its founder, Reid Hoffman, isn’t content with merely building a hugely successful company. He’s also established himself as one of the most interesting thinkers in Silicon Valley. His first book, The Start Up of You, written with longtime collaborator Ben Casnocha, encouraged individuals to think of themselves as entrepreneurs, even if they were collecting a W-2 paycheck. Now Hoffman and Casnocha (with Chris Yeh) are back with a new book, which takes a smart, fresh, (and occasionally bracing) look at the evolving relationship between the bosses and the bossed. It’s a terrific and accessible read that provides business leaders with both insights and tools to handle a world in which talent is paramount. Pink: One of the many things I like about The Alliance is that you take on the notion that successful companies are “families.” Explain. Hoffman / Casnocha / Yeh: Some CEOs like to refer to their companies as families. The concept of family is a powerful one, and describes how the best companies treat their people: with compassion and respect. Yet we believe that using family language is a big mistake. The problem is that families are permanent--you can't fire your kids, no matter how many times they may forget to take out the trash. Companies are not permanent. The instant you lay off an underperforming employee, or someone leaves to pursue a better opportunity, the illusion of family is shattered. The only way to maintain the fiction is for people to lie to themselves and each other. This underlying dishonesty is corrosive, and prevents the kind of trust that is necessary for a close, high-performance relationship. Both sides need to be honest with each other about the fact that the employment might not be permanent. Pink: The big idea in this book is the “tour of duty.” How did you come up with that concept? Hoffman / Casnocha / Yeh: We realized the employment relationship was broken. The family model was no longer affordable, but the opposite approach of treating every employee like a free agent doesn’t build the high trust, collaborative relationships necessary for innovation. Many Silicon Valley companies began using the Alliance and tour of duty frameworks as a way to manage the employer-employee relationship for the modern era. One of us (Reid) deployed it successfully when founding LinkedIn. In order to attract great people, he avoided vague talk about loyalty and instead made an explicit deal with employees: if they signed up for a tour of duty of between two to four years and made an important contribution to the business, Reid and the company would help advance their careers, preferably in the form of another tour of duty at LinkedIn, or at a different company if that's what was best for them. This approach provided a crisp focus and a mutually agreeable time frame for discussing the employment relationship. It improved retention of great employees at LinkedIn. The paradox of the tour of duty idea is that acknowledging the fact that an employee can and might leave your company in the future improves your ability to construct a tour of duty that convinces him or her to stay. Pink: How does a sense of purpose factor in to your analysis of talent and its place in modern organization? Hoffman / Casnocha / Yeh: A sense of purpose matters hugely for employee engagement and effectiveness, but you don't get that through a single, company-wide mission statement. Most corporate mission statements are little loved and have little impact on the day to day task of recruiting and retaining great people. Click here to read the full interview
Business Insider’s list of business books every professional should read before turning 30
"The Alliance shaped career conversations in a way that was way more visible and healthy than I'd ever seen done." Pat Wadors, Head of HR for LinkedIn; as seen in Business Insider
an insightful look at the new employer-employee relationship (especially for those of us on-boarding Gen Y and soon Millennials). Ken Tencer, CEO of Spyder Works Inc., Globe and Mail
This book will force you to see the future, it will show you new models of work, and it has the eminence and perspective to make your entire team think an important new book which is well worth a read.” Forbes
an essential handbook for dealing with the challenges of managing an ever more connected, ever more mobile workforce.” Barnes & Noble
In a provocative new book, the father of social networks reveals a startling new way to reframe the relationship between employers and employees.” Fortune magazine
Readers will discover in this engaging book that the relationship between employee and employer doesn't have to be branded as It's complicated.’" TD magazine (Association for Talent Development)
For those of you who haven’t read The Alliance, Reid, Casnocha and Yeh make a compelling case for a third model that treats employees as allies.’” Human Resource Executive
ADVANCE PRAISE for The Alliance:
Jeffrey R. Immelt, Chairman and CEO, General Electric
GE is competing in its third century. The key to sustained performance is developing competitive leaders in every era. The Alliance captures the essence of modern talent development: trust and mutual value creation helps both employer and employee compete in the marketplace. The authors lay out a framework that helps big companies as well as start-ups develop their people more effectively, while creating a competitive team.”
Kenneth I. Chenault, Chairman and CEO, American Express
Engaged employees are the key to success in any business. The Alliance is a terrific book that offers real-world insights on how to build loyalty, inspire creativity, and manage winning teams for the long term.”
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The employees are expected to be loyal and committed, and to work in the best interests of the company until they retire. This is despite the clear but rarely ever stated, understanding that your job might disappear as a result of a restructuring, or a decree from a boardroom in another country. Should you, in turn, inform you company that you have accepted an offer of better employment, you might be asked to leave immediately. This is instead of working out your notice period, because you cannot be trusted to work out your time in the best interests of the company. After all, you have left before your retirement.
No thoughtful person should be unaware of this imbalance – the employee must commit, but the company cannot be expected to.
The days when “employers and employees committed to each other, for better or worse, through bull and bear markets, until retirement did them part,” are over. Loyalty is scarce, long-term ties are rare. The past will not, and cannot return
The Alliance, Hoffman’s latest book, addresses this problem. You cannot get a person’s talent working for the good of the company if you do not have their commitment. Employees who fail to fully invest in their current positions are constantly scanning the marketplace for new opportunities.
What we can expect, and what the book sets out to sketch is a framework that encourages a different employer-employee relationship.
Reid Hoffman is an internet entrepreneur, venture capitalist, and author, best known as the co-founder of LinkedIn, The Alliance describes a relationship based on both employer and employee adding value to each other: “Help make our company more valuable, and we will make you more valuable.”
This is a team where mutually adding value secures the bond. It is not a family were commitment is unchanging. No one asks their child to leave because she scored an “F” in biology,
The Alliance has already taken root in the high-tech, start-up community of Silicon Valley. The secret of success in Silicon Valley is really about the way the companies build alliances with their people. Talent is Silicon Valley’s most valuable resource, and they treat this resource accordingly, explains Hoffman. Most people will know about the geniuses of the Valley, but few about it’s management practices. Employers use the alliance to recruit, manage, and retain incredibly talented, entrepreneurial employees.
Hoffman uses the term “Tour of Duty” to describe how employment is understood. The term comes from the military where a tour of duty refers to a single specific deployment. A soldier will see a number of tours of duty in his career, each for a predetermined time, and to accomplish a specific task. One might be to assist with the evacuation effort after the earthquake, and another to secure a hospital in a remote area.
In the business context, a tour of duty is a clearly defined task to be achieve within a finite period of time. It is an ethical, reciprocal, commitment between employer and employee. The company commits to honouring its obligations to the employee during this tour of duty, and the employee commits to honouring the needs of the company for this finite period.
The expectation of value from each party are made explicit, and are accepted by the other. You, the employee will be exposed and trained in the merchandising methods of the firm for the next 18 months, and will learn about our state-of-the-art systems. This, we agree is something necessary for the career you desire to pursue, here or somewhere else. You will fulfil your task thoughtfully, and will look for ways the company can improve their systems and alert us to new possibilities.
There are three general tours of duty. The most basic one is the Rotational Tour. This is a fairly structured tour designed for entry-level staff, often to get acquainted with the company and to be exposed to various facets of the business they might wish to contribute to. Google, for example, puts recent college graduates through a structured, twenty-seven-month Rotational tour that exposes them to three different roles each for nine months. Both the staff member and the company benefit from this fixed term commitment.
The second level tour of duty is the Transformational tour. This tour will be tailored to the specific needs of the company, and the specific aspirations of the employee. It is called “Transformational” because it is intended to transform both the company and the career of the employee. An initial transformations tour will last between and two and five years.
Violating the commitment during what is essentially a short period, would not be in the interests of any mature employee. Who would hire talent that did not honour commitments made, and who would choose to work for an organization that does not honour commitments made to employees?
The third tour of duty is only offered to those employees who are a perfect cultural fit with the organization. The employee “sees working at the company as his last job, and the company wants the employee to stay until he retires.” This is called the Foundational tour of duty.
Mutual respect underlies this alliance. Expectations are required of both sides, as well as the satisfaction of each other’s needs. The duration of the relationship is, for the most part, relatively short, making commitment possible to honour.
The book describes all aspects of the implementation, and forewarns of challenges you might encounter.
Our workplaces will benefit from this re-think.
Readability Light --+-- Serious
Insights High --+-- Low
Practical High --+-- Low
*Ian Mann of Gateways consults internationally on leadership and strategy and is the author of Strategy that Works.
The ideas are expounded upon a bit more in this book, but I think they stayed too high level to be that much more valuable than the blog. The other issue I had was that I thought the writing plugged LinkedIn too much. 'LinkedIn' seems to appear on almost every other page, and this got really annoying about a third of the way through the book.
Though it is not very long, you may have a better experience not reading every word and just skimming through each chapter. Overall, more disappointed than not.
This book may say it is about Silicon Valley but "The Alliance" is a timeless, universal concept that can help millions of businesses.
The Alliance is a book that, within its simple prose, ostensibly advocates for a reworking of what the authors present as the current model of the employer-employee relationship. The authors presume the present relationship is comprised of “free-agent” employees constantly seeking better opportunities within the context of instability due to an “at will” employment environment, which employers utilize to maintain flexibility and adaptability in an increasingly competitive environment. The authors contrast the present work environment with a vaguely defined “traditional model of lifetime employment” in which employers provided lifetime employment, and in return employees maintained their loyalty to the employer. Needless to say, to the extent lifetime employment regime has existed in the past, it did so in a very limited, post-World War II time period.
As the authors see it, the problem is that the present work environment has resulted in eroding trust by employees of employer management, with the attendant loss of employee loyalty to the organization. The authors think the issue of loyalty so important, they emphasize the following twice; “A business without loyalty is a business without long-term thinking. A business without long-term thinking is a business that’s unable to invest in the future. And a business that isn’t investing in tomorrow’s opportunities and technologies – well, that’s a company already in the process of dying.” (Hoffman at 7 and 153.)
II. Proposed Framework
The tool with which to effectuate the authors’ framework is the “tour of duty.” The tour of duty attempts to mitigate the fluidity of employee talent by binding employees to multi-year tours, without attendant employment stability for the employee. Without going into the technicalities of each, the book identifies three types of tours of duty, (1) rotational, (2) transformational, and (3) foundational. For this writing, the differentiation between three types of tours is less important than their commonalities. The authors write that “the tour of duty represents an ethical commitment by employer and employee to a specific mission.” (Hoffman at 23.) Depending on the type of mission, these tours of duty take years to accomplish. The authors describe the rotational tour as “a structured program of a finite duration.” (Hoffman at 29.) They give an example of investment bank rotational tours that are from two to four years in length. (Hoffman at 29.) The authors envision the initial transformational tour as taking from two to five years. (Hoffman at 31.) The foundational tour is described as being the employees’ life’s work, in which both the employer and employee expect the employee to work until their retirement.
III. The Alliance Framework Specifically Benefits Employers, while Abstractly or Tangentially Benefiting Employees.
To paraphrase a piece of advice I once read; If something has a direct benefit to a class of people, and a theoretical, abstract, or amorphous benefit to everybody else, the proponent’s intentions are to benefit the former, not the latter. The Alliance concept directly benefits the employer, in exchange for abstract benefits to the employee. In effect, The Alliance is an attempt to leverage the benefits of “traditional model of lifetime employment,” i.e. employee loyalty, without having to make the commitment of lifetime employment to the employee. As the authors themselves write, “The Alliance…is a way to invest in the long-term future without sacrificing adaptability.” (Hoffman at 20.)
The authors identify with specificity the benefits to the employer of their proposed framework. The benefits to the company are summarized in one sentence, upon which the authors spend the rest of the book expanding; “An ideal framework encourages employees to develop their personal networks and act entrepreneurially without become mercenary job-hoppers.” (Hoffman at 7.) The employer gains loyalty/stability from employees, harvests the employee’s network and “network intelligence,” and capitalizes on employee “entrepreneurial thinking and doing [which] are the most important capabilities companies need from their employees.” (Hoffman at 14.)
To accomplish this, employers rely on an alliance, which serves as an instrument that in the end mitigates the potency of the single power employees have, i.e. to seek other employment. The authors argue that employers that recast careers as successive tours of duty attract and retain entrepreneurial employees. (Hoffman at 24.) Yet, employees who partake in these tours of duty are essentially dissuaded from taking better opportunities during the course of the tour, because of the consequences the authors explicitly spell out; “If an employee departs the company in the middle of his tour without any investment in a transition, he breaks the employment alliance and has to face the consequences. First and foremost, the employee will take a major hit to his credibility and reputation…[T]he employee will also suffer practical consequences. That employee will forego future benefits, such as distinguished alumni status…and favorable references.” (Hoffman at 86-87.) In an Orwellian passage, the authors write, “Someday (hopefully soon), we expect an employer or individual employee to be able to simply say, ‘They broke the alliance,’ and for the person on the other end of the phone to know what that means.” (Hoffman at 87.) The Alliance, in effect, stabilizes the employer’s workforce by reducing employee turnover, under threat of ostracism in the employment marketplace.
IV. The Alliance Framework is not Universally Applicable, Not Particularly Beneficial for Employees, and Could Have Implications for Human Resources and Legal Liability Implications.
The Alliance fails to present a universal model to change the employer/employee relationship. The framework that The Alliance advocates seeks to remedy a particular employment phenomenon that is not universally distributed. The Silicon Valley tech industry relies on a highly educated and highly trained workforce. These employees predominately hold degrees in S.T.E.M. fields. The number of jobs far outpaces the availability of workers, resulting in the fluidity of employment relationships not found in other sectors. At best, the framework would be applicable to these particular set of circumstances, including highly fluid employment environments that are project focused, like the launch of a new technological product.
Even if the alliance framework were more widely applicable, the concept does not appear to offer any real advantages for the employee. While stabilizing work turnover and making available employee “network intelligence,” the benefits to employees appear to be tangential and abstract, i.e. making employees “more valuable by making them more adaptive and skillful.” (Hoffman at 20.)
On the downside for employers, the creation of personalized tours of duty and the heavy management investment in individual employees, including the drafting of specific tours of duty, is resource intensive and would necessarily impact the work of Human Resources, particularly because of the implications of employment law vis-à-vis the quasi-contract nature of said agreements. The legality of provisions within these tours of duty could impact liability of the company. For instance, would promises of the manager be attributable to the employer for purposes of litigation? As discussed in this class in some detail on August 3rd (“Transactions Within the Employment Relationship”), “Numerous actions might be required or requested that affect the status of employment or working conditions. Such transactions often trigger rights, responsibilities or restrictions determined by federal, state or local laws.”
For instance, does a tour of duty that is expected to last several years take into consideration the possibility of an employee’s pregnancy? Would such a regimen impact any class of employee more harshly than other classes? These are questions that would necessarily implicate the overall function of the organization, and for which the expertise of Human Resources, by necessity, would be involved.
The Alliance framework attempts to address and mitigate the fluidity of a particular employment condition found in a niche industry, but is not universally applicable to more traditional employment environments. To the extent the framework can be utilized, the benefits to the employer are well defined, whereas the alleged benefits to employees are abstract and theoretical. The implementation of such a regime would necessarily require a significant commitment of resources, as well as the expertise of Human Resources.