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Talent Wants to Be Free: Why We Should Learn to Love Leaks, Raids, and Free Riding by Orly Lobel.

Yale University Press

Excerpted from Talent Wants to Be Free: Why We Should Learn to Love Leaks, Raids, and Free Riding, by Orly Lobel, published September, 2013, by Yale University Press. Reprinted by permission of Yale University Press.

It's a war out there. We need good employees, and we are fighting over the most talented people. Our natural reaction to loss is to try and hold on. Managers, CEOs, and even economists often have those same kneejerk reactions and default to a control mentality. But what does control really do? Are they guarding the castle or self-inflicting injuries? Here is the conflict: companies desperately need independent minds in order to be competitive, but the act of jealously guarding those minds wilts their independence and stagnates economic growth.

So how do we strike the right balance? We begin by looking at the different global efforts to win "the balance of the brains." President Barack Obama has declared this century's new Sputnik moment to be about future innovation. We recognize that the yet-to-be-invented depends on the ability of countries and industries to nurture and retain talent. But we don't know how to achieve this competitive edge. As the war over talent has become global, two important developments in the labor market collide: great expectations from workers at all levels and zero expectation of long-term employment. The only remedy for this inevitable collision will come from a deeper understanding of human capital management.

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As the industrial era has given way to a digital era, we've loosened controls over the ways people work in their daily job routine, but not in how, where, and why they work. This gap is where the edge of innovation lies. I suggest that we have before us two paths, two competing models for thinking about the war over talent and human capital controls. The first, the Orthodox Model, tells us that to reap the fruits of innovation we must control. This sentiment runs though debates about ownership, intellectual property, corporate investment, finance, and economic growth. Even though it has been challenged on many fronts, it has remained in full force with regard to human capital development. The alternative path, the Dynamic Model, will serve us as we explore the wisdom of human capital strategies: innovation is positively linked to dynamic flows of information and people, stemming from motivational and aggregate benefits of the freedom to move among ventures. As we move along this path, we will consider new evidence about the benefits of looser controls–benefits that span inventors, companies, industries, and regions. In order for innovation to flourish, all of us, managers, competitors, economists, and lawyers, must learn to overcome our control mentality. …

Managers must face the dilemma of whether to train employees who are likely to move elsewhere rather quickly. Businesses are anxious about the fast turnover and zealous poaching of their best employees by their competitors. They also worry about whether their recruitment efforts will result in litigation. Beyond the tangible concerns, the anxiety around the clash between need and reality means that we have to grapple with the ways in which commitment has evolved. The dynamics of work commitment have changed, and performance is now decoupled from stability and long-term security. Workers who no longer receive the promise of job security wonder what type of reciprocal commitment they can expect from their employer. Focusing on management approaches within the organization, strategists are intent on understanding these new dynamics.

Rosabeth Kanter of the Harvard Business School advises, for example, that employers build active commitment rather than loyalty; professional pride rather than long-term attachment. Now that we see more clearly the patterns, the missing link appears before us: connecting the goals of commitment and innovation with the ongoing dynamics of the talent wars. Put more simply, the acute question on the minds of managers today is: How do we meet the challenge of keeping our best performers from leaving and taking their ideas and skills elsewhere? And how should we react when, inevitably, some of these most talented people become competitors?

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