How can companies balance efficiency with retaining and nurturing their top-performing employees?

LAST WEEK, I went to a dinner party that gave me a bout of indigestion. It wasn’t the bruschetta and penne alla luganica that did it but another guest’s tale of woe at work.

My fellow diner had been an executive at a well-known, global business. She had been with the company for almost a decade and had spent most of that time gradually moving up the corporate ladder, taking on bigger projects, working with increasingly important clients and, until recently, doing her job to the satisfaction of her managers.

That all changed when she was told abruptly that she was no longer right for the business and, after a tortuous dance of negotiating a deal, was promptly out the door.

People lose their jobs all the time and for all I know, my friend’s former employer may have been quite justified in getting rid of her. But I was struck by how cack-handedly her career was handled by the company. While she is certainly not alone in having a promising job go sour, her case highlighted how big organisations, in spite of their heavy investment in “talent management” processes – and in expensive PR campaigns broadcasting their excellence to attract the best recruits in the first place – can still do a poor job of getting the best out of their people or, when the time comes to part ways, botching the divorce.

Part of it has to do with the very nature of big organisations. In spite of their rhetoric, they are not usually designed to get the best out of individuals but rather geared to maximising efficiency through strict processes, systems and structures. Organisational culture triumphs over the logic of nurturing employees as a means of adding value to the business.

Nowhere is this clash more pronounced than in professional sport, where the ability of employees – the athletes – to do their job has a direct effect on the success of the overall enterprise. Top leagues already have the best talent available, so for executives the challenge is to provide the conditions to enable the best players to perform. But even here, big business gets itself into a tangle.

Take the National Hockey League, ice hockey’s premier body, which has for years been trying to expand its audience and commercial reach. In January, Sidney Crosby, one of the sport’s best players, was concussed in consecutive games after suffering a number of hits to the head. He hasn’t played since. Other players have also been sidelined for varying amounts of time, and a debate has raged over whether to rethink the rules of the sport or to leave them as they are so as not to compromise its tradition of “physicality”.

The NHL has sided with the latter argument. Tinker with its culture, the game’s executives say, and the sport would be irretrievably weakened. Once again, organisational culture, it seems, supersedes all else, even the health of its talent. I can’t help but wonder if the NHL’s bosses haven’t had a hit to the head themselves.

For a company, the big mistake is to put procedures before people. Look at Nokia. The Finnish telecommunications group is a case study in how to miss the boat by not listening to the right internal voices. Over the past decade it has been outsmarted in smartphones by Apple in spite of having created a prototype for a web-enabled touchscreen handset years before its rival.

As Mary McDowell, Nokia's head of mobile phones, put it to the Financial Times: "Somewhere along the way, the process became the product."

And that is the problem. Too many businesses have drunk the talent management Kool-Aid and forgotten that oversight of their best people needs to be about human interaction rather than adherence to codified practices. Procedures may be efficient in the short term, but they mean companies often fail to get the best out of the creative workers that they need to avoid the type of groupthink that can lead to terminal complacency.

So how can organisations balance efficiency with retaining and nurturing the best employees? Sheryl Sandberg, Facebook’s chief operating officer, offered a potential solution in an online video for i magazine. You need to identify people who can solve problems by bringing others along and who “don’t cause organisational friction”. They, she says, are the best people to nurture. She may be right, but employees who create organisational friction often provide the jolt that changes the way a company – or an industry – thinks.

I’m sure she can think of at least one 26-year-old who fits that description.

LUCY KELLAWAYis on leave. Copyright The Financial Times Limited 2011