WashingtonExec recently spoke with Tom Monahan, chief executive officer of CEB, headquartered in Rosslyn. Monahan also serves as CEB’s board of directors’ chairman. CEB is a member-based business advisory firm that employs about 2,500 local employees and more than 3,500 employees worldwide in 55 office locations. The company focuses on talent management, HR, finance, sales, IT and financial services. About 90 percent of Fortune 500 companies are its clients.
Monahan, who holds an undergraduate degree from Harvard University and an MBA from New York University, regularly blogs on topics such as leadership, talent and business risks. Read his blogs here.
He also enjoys teaching Sunday School and along with his wife and daughters, is active in causes that facilitate the global participation of women and girls in economic life. CEB is known for it service to the community, and last year allowed time off for its staff to donate nearly 13,000 hours of community service.
Monahan spoke to WashingtonExec about business risk, social media and CEB’s strategies for growth and talent management, as well as Talent Neuron and KnowledgeAdvisors, two companies it recently acquired.
WashingtonExec: What is CEB’s general strategy for growth? Is there a current business trend that’s particularly exciting for CEB?
Tom Monahan: We currently work with the majority of Fortune 500 companies and a similar proportion of companies around the world. For 30 years, we’ve partnered with our members to help them uncover the key drivers of performance and help them feel confident in their own ability to transform the business. We tend to work on perennial, classic business challenges under the premise that these problems have actually already been solved by another progressive leader at some point in the past. That’s where the power of our network comes in, and how we cultivate a true “best practices” approach.
One of those perennial challenges, amplified by our current environment, is how to achieve growth and avoid stalls along the way. What we have found is that increasingly, having the right people in the right roles working to their highest potential is the key driver of business performance. That is why we have augmented our traditional strengths in functional management expertise with talent management solutions for clients across the employee lifecycle. That is to say, it’s not just about finding and hiring the right people, it’s also about empowering them to do their best work and helping their colleagues to do the same. We call that network performance, and it’s crucial for companies today relying on productivity growth to drive positive outcomes for their businesses.
“Gut instinct seems to be an ingrained behavior in hiring and staffing decisions, but one that should come into question when you look at just how much money a bad hire costs.”
WashingtonExec: Companies that form your membership network consistently rank talent as one of its pressing concerns. Could you speak a bit about CEB’s talent management strategy?
Tom Monahan: People often mistakenly confine talent management to the HR office, but we see in our work across the C-suite that having the right people is a foremost concern for them in executing strategy, whether that is in finance, IT or anywhere else in the business. Finance, for example, needs folks who can go beyond accounting and reporting to provide guidance to its non-technical colleagues on what the numbers mean for the business. This involves a skill set that includes strong communication skills and the ability to present information persuasively, which are skills that most CFOs were not screening for, or even knew they needed until recently. Likewise, in IT, we are finding the very nature of roles and skills needed to fill them are changing so rapidly that some positions are completelyobsolete while others now in fashion may not have existed even three years ago. This type of rapid change means CFOs and CTOs can’t sit around and hope HR will sort things out for them. Progressive leaders understand the need to be proactive, to drive the talent conversation and to have their own strategies in place, hopefully in collaboration with HR to achieve their objectives.
Our strategy is to provide a comprehensive suite of offerings that give business leaders the confidence to engage, measure and assess their talent in the continuous manner that a rapidly-changing environment demands.
WashingtonExec: What are your thoughts on companies continuing to hire based on gut instinct, versus the use of talent acquisition tools?
Tom Monahan: I’ve written recently about the fact that most corporate managers take a more rigorous approach to managing their fantasy baseball teams than they do with managing the teams they are responsible for at work. In this age of big data and analytic obsessiveness in corporate America, one area we haven’t seen this carry over to is in the assessment and evaluation of people. Gut instinct seems to be an ingrained behavior in hiring and staffing decisions, but one that should come into question when you look at just how much money a bad hire costs.
I mentioned earlier that talent management is more than just what goes on in the HR office, but HR teams still have the largest stake in making sure a company has the right talent strategy in place. When you talk with the average HR executive, very few will tell you that they actually have changed a decision they’ve made in the last year based on data. Less than one in 10 HR executives tell us they are getting good return on investment from introducing analytics into their processes. That level of dissatisfaction is a real problem, and one we’re actively trying to solve.
WashingtonExec: CEB recently acquired Talent Neuron and KnowledgeAdvisors. Could you tell us about the significance of these acquisitions for your company?
Tom Monahan: The challenge with bringing analytic rigor to talent is part cultural and part technological. Once you convince people that there may be a better way than their instinct to manage their people, well, you have to prove it. Our recent acquisitions support our mission in providing tools for a more methodical and ultimately, more effective way of applying the science needed to make the practical applications, well, practical.
“Once you convince people that there may be a better way than their instinct to manage their people, well, you have to prove it.”
WashingtonExec: How do you guide companies in respect to business risk?
Tom Monahan: Two ways come to mind. We found that more than half of all growth stalls, or moments where a business stops growing, can be attributed to talent either in direct or indirect ways. So I think the primary way we are focusing on helping companies cope with risk is in ensuring they avoid situations where they are caught flat-footed with regard to having the right people in the right roles.
We want our members to be able to see around corners so that when their technology business moves to the cloud, for example, they are confident in having enough of the right software engineers in place to evolve seamlessly with the business. We want our members focused on customer service to have staff capable of smartly utilizing data to help provide their customers with an effortless experience.
The second involves culture. Culture is almost as fashionable of a term as big data these days. We work with a lot of our members to understand the impact of creating positive cultures and climates. Creating a culture focused on integrity and encouraging employees to speak up when they see an ethical issue is not just a driver of metrics like better shareholder return, it can be a key survival mechanism. Often we find when something goes really wrong at a company, someone in the firm knew about the problem long before it made headlines. Creating a culture based on employee trust, with the ability to course correct when needed is crucial and something we spend a lot of time guiding our members on.
WashingtonExec: How important is social media to CEB?
Tom Monahan: It’s ever more important to us, both in how we work, and how we engage with executives and their teams. First, as a global organization of some 4,000 employees in well over 50 offices, we have used Salesforce.com’s Chatter internally to share key business updates, celebrate success and foster collaboration. It took a committed effort to embed its use in CEB’s culture but now that we’re there, the benefits are obvious. Second, as a company we’re active on the major social networks as we want to be able to support our members — and leaders generally — wherever they operate. In the past year in particular we’ve seen social channels such as LinkedIn become increasingly effective in sharing CEB’s insights. Finally, we operate a social network just for our members, where each month they ask each other —and CEB’s experts — thousands of questions about the challenges they face, safe in the knowledge that they’ll get straight answers from true peers, free of bias and sales pitches.
WashingtonExec: Outside of business, what do you enjoy doing in your spare time?
Tom Monahan: First and foremost I enjoy anything that gives me time with my family, especially spending time on causes we care about and getting outside to ski, hike or engage in other sports. I also enjoy food — growing, making and — most importantly, eating. Finally, I love to engage with entrepreneurs and growing businesses.
