How McKinsey & Co. created “The War for Talent” in 1998 to Spread a “Myth of Brilliance”


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In the two decades leading up to the Great Recession of 2007, large companies around the world believed that to attract and retain “top talent”, they had to offer exorbitant compensation.

It was global consulting firm McKinsey & Company that sparked the hysteria. In 1998, they introduced the word “talent” into the ever-growing lexicon of corporate discourse when they titled one of their quarterly briefings to clients and prospects “The War for Talent”. These breezy, slogan-laden infomercials were designed to persuade businesses to spend hard-earned cash on ancillary services they usually don’t need. Most went unread in executive inboxes or deserved, at most, an occasional washroom scan.

Realizing the short attention span of most of their readers, McKinsey sprinkled their briefings with catchy captions. On this infomercial in particular, they would not have been moved in the dispatches of a journalist in a war zone.

“There is a war on talent, and it will escalate,” one proclaimed. “All are vulnerable,” warned another.


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Usually patronized as junior partners by their peers in charge of ‘core’ business functions such as finance, supply chains and marketing, disliked and underappreciated human resources managers in large corporations people have found this heavenly briefing manna. It offered them something they could happily put in front of their colleagues, boards and CEOs that wouldn’t make them roll their eyes and yawn, because this briefing indicated that the difference between good and bad companies. was not the processes they followed or their effectiveness. they were, but the smart people who run these companies. Senior executives like them.

The beating heart of the briefing was a graphic, which McKinsey ominously referred to as “Exhibit 1”. He indicated that some demographers associated with the United Nations had guessed that in two years the number of thirty-five to forty-four years in the United States would begin to stabilize at about 15% below its expected peak. Looking back, that prediction was hokum. But the conclusions they drew – that the boards of directors of large companies should ruthlessly separate from each other to retain the talents of a handful of capable senior executives – were scandalous at best. It did not take into account educational trends, nor the fact that each year more and more graduates and MBAs entered the workforce. He also didn’t mention immigration, or that in the increasingly globalized executive market, talent could come from almost anywhere, regardless of local demographic trends.


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To future historians, the “war for talent” may seem like one of the most elaborate corporate conspiracies of all time. Future economists might simply view this as a market bubble as irrational and inevitable as any bubble before or after. But others, who recognize that most of us are also suckers for flattery, may view it with more sympathy. After all, those who benefited from the pay hike greatly appreciated the assurance that they were worth every penny they received.

The McKinsey & Company team that wrote the viral Quarterly scented another opportunity. They quickly turned it into an extremely hollow but nonetheless top-selling business book, unsurprisingly also titled The war for talent. Other large consulting firms quickly got to work, and HR leaders around the world saw their departments shift from boring back office providers to core business functions that deserved top seats. the world hierarchy. large companies.


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It didn’t take very long for some observers to declare the talent account to be nonsense. Jeffrey Pfeffer, professor of organizational behavior at the Stanford Graduate School of Business, published an article titled “Fighting the war for talent is dangerous to the health of your organization”. There he made the seemingly obvious argument that companies succeed because they are collaborative, and that overvaluing individuals is likely to create a corrosive culture. Shortly after, in a 2002 issue of The New Yorker, Malcolm Gladwell delivered a gutted review of what he dubbed “The Myth of Talent.” He felt it was all started by overpaid McKinsey executives who were buying the myth of their own genius.

As compelling as they are, the protests of Pfeffer and Gladwell were muffled by the sound of the boxes as stock markets and commodity prices soared everywhere. This, however, had very little to do with “top talent”. On the contrary, it was made possible by a billion new customers in Southeast Asia embracing consumerism, and because in the United States and Europe, recently deregulated and rapidly expanding banks had persuaded themselves, as well. that governments, the clever algorithms they used to fragment and then bury assets had finally ended the “boom and bust economy” – the cycle of slumps and recessions that punctuated the upward trajectory of economic growth during the twentieth century.

This excerpt from “Work: A History of How We Spend Our Time” by James Suzman was published with the permission of Bloomsbury India.

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