Talent Management
Talent Management Principles
Russell Connor About the Author: Russell Connor is the Managing Director of Dynamic Link (www.dynamic-link.com/). Dynamic Link uses a Work Levels framework to create an integrated approach to talent management.
Acknowledgements: Dynamic Link recognises the important contribution of: Peter Taylor, Deputy Managing Director of Bioss Europe, Ram Charam from articles in HBR and The Leadership Pipeline ISBN number 07879-5172-2
Overview: According to the 2009 Pricewaterhouse Coopers Annual CEO Survey, a majority of CEOs (79%) feel they need to change their strategies for managing talent. Talent management is a critical business issue but without a comprehensive and integrated methodology, Talent Managers are unlikely to be able to respond to the new imperatives. This article introduces the key concepts and principles that talent managers need in order to make a strategic contribution. Introduction According to the Pricewaterhouse Coopers Annual CEO Survey, business leaders are emerging from the financial crisis with a healthy respect for risk, volatility and flexibility and a different view of the growth imperative. Few, if any, see a return to benign growth and most are bracing for continued volatilty. It is not surprising then that a majority of CEOs (79%) intend to increase their focus and investment on how they manage people through change, which includes redefining employees’ roles in the organisation. They feel they need to change their strategies for managing talent. The scale of these intended changes suggests that, for whatever reason, existing practices did not support the business when the crisis hit. Pricewaterhouse Coopers conclude that there are three major human capital failures that were brought to the surface as a result of the downturn: Existing reward models are broken, CEOs were unable to move talent around quickly when the crisis hit,
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Employees lack the key skills needed to operate and compete in the new emerging environment. Whilst there is now the opportunity to address the strategic issues that CEOs are grappling with, unfortunately Talent Managers often lack a sophisticated methodology and integrated diagnostic tool-kit that can really provide the necessary insight to affect change. In addition the subject continues to be bedevilled by the misuse of such terms as capability and potential and can be wrongly limited to the issue of succession to the top jobs. The purpose of this paper is to introduce key concepts and principles that enable talent managers, wherever they are in an organisation, to make a strategic contribution by addressing both supply and demand issues. In making this connection, it is not simply about meeting broad aggregated needs. It is about shaping demand through clarifying the link between strategy and the capability of the people delivering this. It is about providing the right people at
Talent Management the right time through genuine strategic resourcing and development that ensures that the investment has the intended impact and creates strategic advantage for the enterprise. Use of these key concepts and principles transforms Talent Management into being an integral part of a new science that creates the necessary link between the business strategy and the resourcing and development agenda. A Note of Caution You can be blinded by ‘talent’. Enron provides a good example. In retrospect the seeds of Enron’s demise could be seen as having been sown many years prior to the financial scandal that enveloped the organisation. American Human Resource Management was characterised by the search for individual stars which, when spotted, were golden handcuffed with share options, incentive plans and cash rewards. Enron had a history of closely working with McKinsey. It epitomised the approach advocated in 1‘War for Talent’ and entered into a scramble for graduates from the best business schools. Without doubt Enron assembled some of the highest potential people in the world. By all accounts it was a great place to work. It believed in giving high potential people whatever headroom they felt was required to develop new business markets. There are many lessons to be learnt from the collapse of Enron. A major one relates to how high potential people were utilised. It was evident at Enron and is apparent elsewhere that raw ‘talent’ without wisdom is insufficient to build and sustain success. However, talent managers should not get locked into a futile quest for people demonstrating both youth and wisdom. Wisdom can be organisational wisdom that ema1
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War for Talent - Michaels, Handfield-Jones & Axelrod
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nates from processes.
managers,
polices
and
Talent Management is therefore not just about filling the company with ‘best’ people. It is about organising, structuring and supporting people to ensure that they make the best possible contribution. The Foundation for Talent Management Succession and talent management is not a static process. It has to be seen as fluid and dynamic, but controllable. Irrigating the desert is a good analogy. Left to nature, the odd flood creates abundance then drought. If you want the desert in constant bloom, water from far away sources needs to be channelled and managed and then utilised at the right time in the right space. Companies that set out to build the talent pipeline often give up in exasperation. It involves getting to grip with slippery concepts such as potential, capability and talent and to formulate a dynamic model. A dynamic model of talent management depends on developing an understanding of the work challenge at different levels in the organisation. Some companies have levels of work models, many of which are based on the original work of 2 Elliott Jaques. He identified that the required number of levels was dependent upon an organisation’s overall purpose and context. He described these levels in simple and robust terms and focused on the type of decisions that need to be made at each level. Jaques’ integrated model brought together work and people with robust definitions. These ideas have been extended and developed into a body of work that can be summarised as Work Levels. Work Levels provides a dynamic model that can underpin talent management. Without the robustness of an integrated approach that treats work and people as 2
Requisite Organisations - Elliot Jacques
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Talent Management two sides of the same coin, trying to manage talent is rather like trying to carry water in one’s hands. With an integrated framework at the heart of its approach to talent management, organisations can move beyond just addressing the replacement of the CEO. It is also possible to ensure that the talent pipeline is full at every level. The focus can change from replacement plans, which are predicated on tomorrow being like today, to seeing the essence of talent management as ensuring that people are placed into positions where they can make their most valuable contribution. When talent management embraces a set of ideas that sees organisations as dynamic entities, it becomes possible to look at pools and flows through the business to ensure the supply of right people to meet the demand at the right time. An integrated Approach As described, Work Levels framework incorporates work and people as two sides of the same coin. Therefore it is possible to address both the demand for jobs and the supply of people in an integrated fashion.
Demand
Work Levels Frameworks Methods Tools Support
Supply
Identification of talent pools and gaps. Improved talent retention and the recruitment of best available candidates
Talent Management, using the Work Levels framework and associated diagnostic techniques, involves:
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Identifying the strategic thrusts and likely consequences, Identifying whether there is sufficient growth of capability and flow of talent to meet requirements, Taking ‘snap shots’ of capability and developing replacement plans for key positions, Identifying the pool of talent that is available internally, Establishing the investment and development priorities and methods. Certainly Talent Management should not confused with, or limited to, old style succession planning. These time-consuming exercises often produce charts that no-one refers to when a critical appointment is to be made. Old style succession plans cannot provide the necessary link between the business strategy and the resourcing and development agenda. In line with the post financial crisis, today’s CEO wants more sophisticated information than ‘is Mary ready to replace John’. The CEO needs to know whether someone: Is ready for a completely different level of job, Can be stretched further in the role that they have, Has the potential to grow to meet future demands, Can convert their potential into performance now? In addition, and beyond the focus that inevitably gets placed on senior management succession, the CEO needs to have visibility as to how closely the workforce matches the current demands. This detailed and highly valuable data is available through utilising Work Levels based diagnostic methods. By using job profiles and person profiles that share a
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Talent Management common language and the same dimensions it is possible to automatically measure the extent to which people match jobs. Benefits Talent Management using Work Levels becomes an iterative process. For instance, by analysing supply side issues and analyising investment opportunities it is quite possible that new insights will change the demand and refocus the strategy. An approach to Talent Management that is based on Work Levels will enable organisations to: Target the management development spend to achieve real business impact, Ensure that people are well matched to the work they are to undertake, Have the appropriate level of leadership resource now and in the future, Discover hidden talent, Ensure that the development of a strategy is an iterative process taking into account business drivers and current and future capability.
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