Rich Language

"We must be even more rigorous in our application of this global talent plan than the capital mavens are in the budgeting processes (since they are just trying to manage for risk, and we must be willing to design for opportunity)."

Budgeting is a pain in the butt. Nobody who goes through it likes it. There are lots of reasons for this, but at the heart of it all is this dull feeling that the entire exercise is a futile effort to try to shift blame.

When budgets get blown it is taken as a sign of one of two things: the person who created the budget was either dishonest or incompetent. In most cases neither of these is true. In most cases the person is being punished for not predicting the future accurately. We have to ask ourselves if assessing for a person's prescience is a central component of being a recruiter. "OK, you have the job, as long as you can tell me who will win the football game tonight."

Budgeting is usually a game of risk management through cost control. It is almost completely pointless as far as it goes. People who are perceived to have a lot of value to an organization can routinely blow through their budgets and get praised. People who don't deliver value can actually get dinged for under spending their budget. Go figure. The reason people hate budgeting is just really doesn't seem to matter.

So what should budgeting be? Budgeting is a test of assumptions. At its heart it is a learning vehicle (learning is adaptation, so the faster you learn, the better you can create your own future). The budgeting process creates time and space to predict the future. But it also provides us with an opportunity to be explicit about why we believe (hope?) in that particular future. What are the underlying changes that will occur in markets, in people, in the world, in my cube that will bring in X amount of money, or cause me to spend Y amount of cash?

This is really important because all learning comes from mistakes. If you accurately predict something will happen, you don't learn a darn thing when it comes to pass. But make an inaccurate prediction and all of a sudden you get confronted directly with your ignorance. The budgeting process allows us to detail the assumptions that drive our predictions, and generate more detailed and powerful maps of the future by way of that learning. Learning is the second pillar of “Talentism” (talent being the first).

So "budgeting" is a detailed language for describing the quantitative results of predictions about the future. The language is inherently poor at describing the assumptions that drive the numbers. When you enter "$1,000" in the column of "cell phone expenses" you are describing a prediction about the future (“I will spend this much on my cell phone”). The number is almost entirely meaningless. Exceed it, miss it, who cares? But the assumption, "I will increase the number of candidate contacts next year by 30% due to an increased number of immigrants from Singapore, and they like to use cell phones to contact people" is really meaningful to the business and to our collective learning. What if you advise a client (hiring manager) that you expect 30% of your candidate flow to come from Singapore nationals next year, and you find out that the client ate bad sushi in Singapore once and would prefer not to hire from there? Lower the cell phone budget number and get that guy into counseling.

So the following questions apply:

1 - How rich and detailed is the language of talent acquisition and management? Are we explicit about the assumptions behind the numbers? Does our language provide for enough description and nuance to allow for an accurate exploration of the assumptions behind our models?

2 - Are we forecasting for risk management and cost control or for opportunity and market making? Do we think like business people or bean counters?

3 - If talent is more expensive than capital, then what does it take to create a "Talent Budget" that is more descriptive, more evocative, more detailed and more important than the standard financial budget?

As a tactical exercise, look back at the prior year's headcount forecast and see how accurate it was. If it wasn't accurate (and we both know they never are) then spend a quiet evening with a nice glass of wine and start peeling that onion. If you arrive at "The hiring managers screwed me" then prepare your resume because you are about to be outsourced. If you arrive at "I didn't know enough about my hiring manager's business to be able to alert them to assumption shifts that were going to invalidate their model" then you are in fact a business person learning the new economic model of "Talentism."