- Posted September 16, 2013 by
Des Moines, Iowa
Business Intelligence and human resources
"Poaching" is the term used by headhunters in the USA, when they capture a valuable human asset from one firm and, for a lofty bounty, install that resource at a competing enterprise. Wall Street headhunters attempting to poach Sergey Aleynikov from Goldman Sachs met with surprising frustration, in spite of lucrative offers to convert his loyalty. Goldman recognized that Sergey was widely known as the most brilliant programmer in the niche of high-frequency trading technology. Goldman knew that Sergey possessed their "strats," meaning the firm's trading strategies. They had no choice but to entrust the strats to Sergey if they wanted him to build them into computer programs to provide a platform for their traders. So each time a headhunter offered Sergey a higher salary, Goldman had no choice but to match the offer. When offers ranged from half a million to a million dollars, Sergey could no longer resist. He left Goldman Sachs for a start-up trading enterprise, and the reaction from Goldman Sachs was fury, panic, and criminal charges against Sergey for stealing their technology.
Sergey did in fact blunder when, just before leaving Goldman Sachs, he copied some of the code he developed for Goldman to a flash drive and took it with him. This common practice of developers to backup or copy their code would have been noted but not acted upon had Sergey remained with Goldman. But in reaction to his departure, Goldman feared the loss of their proprietary technology base, and pursued Sergey with arrest and eventual conviction, and imprisonment !
Retaining Human Resources Competently
Let's say for the purpose of hypothesis that we now live in a purely global free-market economy, and that all profitable enterprise is absolutely dependent upon intelligence. The primary source of intelligence still rests with the highest connections, in other words, affiliations, "good old boy" networks, and "who you know," as they say. However, competitive pressure from technologies capable of mining this information are rapidly diluting the stronghold on information channels traditionally controlled by the elite. Keeping secrets and confidentiality now becomes so costly that the task may defeat the enterprise itself !
While department heads and board members grow paranoid about protecting their unique intelligence base, measures which reduce the freedom of key human resources are counter-productive. People strive to achieve economic success because in the modern world economic success is equal to freedom. Confidentiality agreements are built into contracts, and no one denies the importance of this. Many promise not to work for a competing firm should they resign, as part of such agreements. But restricting the freedom and access of employees to popular social networks like Facebook and Twitter only tempts the gifted and creative to seek higher ground and loftier visibility. Loyalty, in other words, must be garnered through genuine human interest, and not through mercenary tactics. Building sincere relationships based on trust as well as generous and fair compensation are the key to retaining the loyalty of key human resources. Draconian measures simply induce the creative to walk around them like the Germans walked around Maginot Line. In an appeal, Sergey was determined to have been "wrongfully convicted," and walked absolutely free. Goldman Sachs lost their resources, and the lost the loyalty of the best programmer on Wall Street. We live in a cloud and it's high time to face the ever changing facts !