October 2009
Talent Strategy
Volume 1, Issue 3
Published by Business Intelligence for talent professionals. To register for your free copy, go to: www.business-intelligence.co.uk
Time for talent managers to boldly go … Despite the general enthusiasm for talent management, there is a surprising lack of agreement about what is involved in delivering a successful talent strategy. Companies differ about all aspects of the activity, from the boundaries of talent management through to the role and responsibilities of the person in charge. As our article Scoping the role and capabilities of the talent manager shows, there is a surprisingly wide variation in what companies look for in a head of talent. But as Mairi Bannon of Strategic Dimensions explains, many companies fail to think through the role in real depth. The result is that in more cases than you would expect, the incoming head of talent is left to work out for themselves what the new job is all about. Which could be a blessing, or a curse.
a greater need to ensure that their talent strategies are well grounded. As Deloitte’s recent report, Shaping Up: Evolving the HR function for the 21st century argues that organisations need sound advice on how to restructure their organisations while retaining key talent. The problem, says Deloitte, is that most HR departments – for which also read talent management functions - are not up to the job. There is a clear opportunity here for those who understand the nature of the challenge and the right way to tackle it. If companies are unable to write the brief, then savvy heads of talent could take the initiative and become corporate heroes. Providing, of course, they succeed in defining the role and remit that the business recognizes will deliver the goods.
The irony is that companies have never had
Poaching: a waste of time and money “… chasing talent doesn’t work and just costs the companies doing the chasing a lot of wasted money.” Jeffrey Pfeffer, professor of organisational behavior, Stanford’s Graduate School of Business, claims in his blog that the evidence shows that plucking high performers from one environment and expecting them to do just as well elsewhere is wishful thinking. Several studies show that a successful
talent-performance recipe involves putting together a number of ingredients. Before McKinsey’s War-for-Talent crusade sparked a corporate stampede to acquire stars at any cost, Harvard Business School professor Boris Groysberg had plotted the performance of 1,052 stock analysts working for 28 US investment banks between 1988 to 1996.
Why talent managers can be confused about their career options (p4) ! Competencies -part two(P3) ! Home-grown leaders are best (p6) How Avon ! How toapplies make talentyour management brand a (p7) talent magnet (P7) ! Why poaching doesn’t work (P1) ! Leadership capabilities for tough times (P2) ! The ideal talent manager (P4) ! Developing an engaging brand (P7)
In this issue: Staff poaching - 1
Defining competencies – 3
Home-grown leaders – 6
Leading in tough times – 2
The talent manager’s role – 5
Brand power – 7
He found that once transplanted to a new firm, a star’s performance falls, the performance of the group the star joins drops, the market value of the company hiring the star falls, and the star doesn’t stay with the new employer for very long. Nor is it only analysts who are subject to this rule, says Pfeffer. • Individual professors’ research productivity depends in part on where they work • Cornell industrial relations professor Lawrence Kahn found that in some baseball teams with great managers, players do better than their long-run average performance. Others under less able managers do worse than their career records would predict.
Star investment analysts lured to work in new companies disappoint their
“What’s true for the relatively individualistic occupations of securities analyst, professor, and baseball player is even more likely to hold for typical organisational jobs where interdependence among people in performing tasks is even higher,” points out Pfeffer. This echoes quality guru W. Edwards Deming argument that systems and work environment are powerful determinants of performance.
new employers.
“There are no short cuts to efforts to build systems that develop the full potential of existing employees and cultures which provide the collaboration, mentoring, and learning opportunities that help everyone do better,” concludes Pfeffer. See The Risky Business of Hiring Stars and The Effect of Colleague Quality on Top Performance by Boris Groysberg and What Were They Thinking? Unconventional Wisdom About Management, Jeffrey Pfeffer.
Leading in tough times
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What does it take to lead companies through the current economic maelstrom? McKinsey put the question to 14 CEOs and came up with six ‘musts’: • Confront reality • At board meetings, put strategy centre stage
• Be transparent with employees • - and investors • Build and protect the culture • Keep faith with the future. Nothing revolutionary here in the recipe for managing through the crisis, admits McKinsey. But CEOs’ replies provide a lesson about some time-honoured principles of effective leadership. Not least the importance of open communications with all levels, summed up in the quote from Terry Lundgren, chairman, president, and CEO of Macy’s: “The only way to address uncertainty is to communicate and communicate. And when you think you’ve just about got to everybody, then communicate some more.” There were no dissenters. “The CEOs we interviewed could not overemphasize the power of openness at all levels,” says McKinsey. Communications is the antidote that turns fear into resolution, paralysis into action. “People will take any hill, walk into the worst situation, if they have faith in your leadership and know what your strategy and objectives are,” says Edward Breen Chairman and CEO, Tyco International. “Several CEOs chose to highlight how a strong culture had helped them in hard times and how important it is not to sacrifice that culture when a company comes under pressure.” Maintaining the balance between today’s pressures and tomorrow’s needs was another important principle according to the article. Many CEOs interviewed emphasised their goal of ensuring that their companies should emerge from the recession with a competitive advantage. Among other things, this involved ensuring that talent was not squandered through short term cost cutting. Leadership lessons for hard times McKinsey Quarterly, www.mckinseyquarterly.com
The key to developing effective competencies By Ge of f R ya n, E uro pea n rep rese ntati ve o f C om petenc y Internatio na l How to identify the competencies that count, Talent Strategy Issue No2, raised concerns about the use of non-validated approaches to the development and use of competency models. A failing that can lead to organisations unwittingly or unknowingly undermining their own efforts to improve their talent management initiatives. This is a situation can arise when people are being rated on characteristics or competencies that have not been validated within the organisation. As a consequence, talent management decisions can be based on potentially inaccurate information. This can then lead the organisation down a path where people are being selected or promoted on premises about what is required for superior performance in the job that are not valid. Performance then is more likely to deteriorate over time rather than improve in order to reach a higher standard which should be the aim of any talent management programme. Organisations need to be sure that their competency models are related to performance measures. In other words that the competencies used to rate people can actually predict their measured job performance. One study conducted by Competency International revealed that the client’s competency ratings used generally to assess all their managers had a correlation of only r .03 with profitability results. Whereas competency scores derived from a Behavioural Event Interview Validation Study had a correlation of r .73 with profitability for the same sample of managers. A similar pattern was found with quality performance in that the internal competency rating had a correlation of r .27 compared to the Behavioural Event
Interview Validated Competency Scores correlation of r .58. While there can be many reasons for this wide difference in the strength of correlations, three of the major ones are • Use of non-validated or non-existent competencies, i.e. made up from various sources, books, focus groups or discussion panels etc. • Inability of Managers to make accurate judgments of behaviour without being trained appropriately3 • Having a one size fits all approach to competency which does not recognise differences over job families or functions.
“Ensure that competency models are related to performance measures.”
One simple test that can be applied is to see how well a competency model is related to results, is to correlate scores on the competencies in use with performance measures in use. Such measures should preferably be hard, objective data e.g. profit growth, sales growth, production or error rates etc. rather than managerial ratings of performance which can be subject to considerable variation due to various rater issues of bias etc. Although correlation does not imply a causal relationship it will still show the effectiveness or otherwise of the competency models in use. As a rough rule of thumb, anything less than a correlation of r .4 should give cause for a more detailed examination of the competency approach in use.
The right competencies can predict measured job performance
The next article will examine some of the ways in which approaches to competency modelling and its applications can be improved so as to give more effective results within talent management initiatives. For more information: www.competencyinternational.com
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Scoping the talent manager’s role and capabilities A n i nter view with Mairi Ba nno n a nd Juli e S ha rr of Strate gic Dimensi ons. “Salaries of over £150,000 are offered by some organisations.” Mairi Bannon ”
The fact that there are top-draw rewards for talent managers is a sign that talent management’s stock is rising. According to Mairi Bannon, a founding partner of London-based executive search firm Strategic Dimensions, “Salaries of over £150,000 are offered by some organisations for people to head up talent.” What qualifications, capabilities and skills will get you the job, though, is less easy to predict. A scan of the job specs for top talent positions reveals that
The job FMCG European HR & Talent Manager
Oil and Gas Talent Manager
Manufacturing/ Mining Talent Manager
there is no common agreement about scope and remit. The diversity of talent roles and requirements are summarised in the table below based on Strategic Dimensions data.
All organisations want someone who has done the job. But many only have a vague idea of what they are looking for in a talent manager. “There is no consistent pattern in the emphasis companies place on the role,” says Bannon. “It could be succession, management development, recruitment, or leadership development.” All of which makes it hard for aspiring talent supremos to know which capabilities and skills are likely to take them to the top. “People are being appointed and then left Accountabilities Key Capabilities to work out what they should be doing,” • Talent identification & • Adaptability says Bannon. succession • Business judgment • Career management champion It is •not Change only that there is a degree of • Resourcing/recruitment • Achievement vagueness in somedrive job descriptions. • Generalist HR support • Team workers There are more fundamental problems • Best practice • Talent developer that• affect the way companies frame their Influencer • Assessment • propositions. Initiative talent One of the most • Sustainability • Project management experience common failings is the absence of a clear • Data analysis experience • CAPs business context for talent management. • Process management • Managing talent management “Systematic and business • Writtenstrategic communications toolkit Interpersonal skills planning is often not well managed at a • Promote effective leadership corporate • In-depth of talentthrough and level knowledge and this feeds to • Design a senior executive leadership development lack of defined needs in talent,” she says. development strategy • HR function experience
Implement leadership • Multi-regional/cultural experience programmes • co Active Ho w mparole nieinsprofessional ca n helpnetworks • Deliver managerial skills • General themse lve s business/technology/people workshops management concepts/learning While different companies and sectors • Monitor best-practice expert thought leaders have own challenges, there are Build an internal development • their Influencing skills network Change several keymanagement activities that should be part Financial • Design and implement group of the • talent Recognised talent/succession expert portfolio, says Bannon. Services Talent talent, succession, frameworks • Best-practice benchmarking The starting point is for companies “to Manager (Centre and processes • Advice on talent implementation of what talent of Excellence) Best practice guidance to divisional work out commercial plansmeans for their organisations.” talent teams • Change management Networking anddeveloping relationship building Part• of this involves a • Strong communications workforce strategy, not to be confused • Implementation and monitoring skills withCoaching lower-level workforce at senior leadershipplanning levels activities, with forecasts forexperience key roles, Hospitality VP • Create a global resourcing • International resourcing Global Talent community • Best and practice knowledge capabilities skills. • Identify measures to evaluate • Employer brand experience “Few businesses are looking at this effectiveness/drive improvement • Relationship building skills aspect of organisational needs,” says • General management • Delivery focused Bannon. “And it’s development/succession • Planning skillsnot something that is HiPo development programme • Process currently foundimprovement/change on talent job specs.” management Talent identification and assessment are Global centre of excellence knowledge other areas where companies could make Source: Strategic Dimensions •
Many talent managers are left to discover what they should be doing for themselves
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better use of in-house talent capabilities. “There needs to be more organisational context for assessment. At the moment there’s a tendency to rely on external
capabilities and skills are likely to take them to the top. “People are being appointed and then left to work out what they should be doing,” says Bannon. It is not only that there is a degree of vagueness in some job descriptions. There are more fundamental problems that affect the way companies frame their talent propositions. One of the most common failings is the absence of a clear business context for talent management. “Systematic strategic and business planning is often not well managed at a corporate level and this feeds through to lack of defined needs in talent,” she says. Ho w co mpa nie s ca n help themse lve s While different companies and sectors have their own challenges, there are several key activities that should be part of the talent portfolio, says Bannon. The starting point is for companies “to work out what talent means for their organisations.” Part of this involves developing a workforce strategy, not to be confused with lower-level workforce planning activities, with forecasts for key roles, capabilities and skills.
better use of in-house talent capabilities. “There needs to be more organisational context for assessment. At the moment there’s a tendency to rely on external assessment services which look at potential without understanding the business.” Despite this soft focus around the talent role, there are signs that talent management is maturing as an employment market. “Up to five years ago, when people looked for ‘talent’ managers, they couldn’t find candidates with experience who had done the job,” says Julie Sharr, senior consultant, Strategic Dimensions. “You had to look creatively at the creative potential of individuals . Now there’s no shortage of second-generation appointments to these posts.” On a wish-list basis, it is clear that the prime goal for most companies in developing talent management is to “attract and develop the most appropriate people for the mid- to long term,” says Bannon. But the lack of clarity about the talent manager role is handicapping companies looking for managers who can help them achieve this goal. More information: www.strategicdimensions.com
Companies would benefit from developing workforce strategies Mairi Bannon, Strategic Dimensions
Lack of clarity about the talent manager role is a significant handicap.
“Few businesses are looking at this aspect of organisational needs,” says Bannon. “And it’s not something that is currently found on talent job specs.” Talent identification and assessment are other areas where companies could make
Unfulfilling jobs means that one in five are dissatisfied While the recession creates a demanding work environment for many people, there is a worrying underlying factor that will undermine talent programmes. A sizeable proportion of the working population, about one in five according to psychometric testing specialists SHL, find their work unfulfilling. The problem is particularly acute among younger workers. How much of this is down to round pegs in square holes and how
much to poorly designed jobs and uninspiring working environments is not clear. Either way, as a result of this dissatisfaction, there is a strong desire to look for other employment when the job market permits. If they want to hang on to their people, it is a good reason why icompanies should aspire to create a great place to work environment with prospects to match.
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Home-grown leaders have the advantage Are home-grown leaders likely to do a better job than those who are bought in? While examples can be found to support both cases, the majority of UK companies do not even give themselves a chance to test the home-grown proposition. Just over a third have leaders who have been promoted internally but then only a similar proportion have processes and programmes to develop future leaders. Large gaps between leadership best practices and organisations’ actions Alice Snell VP, Taleo Research
A new report from Taleo, Grow Your Own CEO, looks at some of the implications for organisations that follow the make or buy path to appointing their top people. Part of the exercise involved assessing the views of staff working for leaders sourced internally or externally. The report shows that staff are likely to have a higher regard for a chief executive who has worked his or her way up through the organisation than one who has been hired-in. •
Only a third of UK companies have development programmes for future leaders.
The two thirds of companies who recruit from within have leaders regarded as good or very good, compared with 51% who generally recruit from outside the organisation.
The report also looked at the impact of staff development on a wider scale. It found that those companies that provided programmes and performance feedback inspired loyalty. •
Three-quarters of staff said that they would be more committed to the organisation if they had a clear view of promotion and job opportunities. A similar proportion said that regular performance feedback would improve their commitment.
The report is based on a study of UKbased organisations with an average employee size of 1,600. While it focuses on the implications of leaders appointed in-house and externally, the report also
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cites other research that shows a performance gap. Organisations that appoint externally-recruited leaders have to wait longer for results. According to a study by Mellon, the median time to full productivity for external executives is 26 weeks and internal executives16 weeks. “The findings of the Grow Your Own CEO study highlight large gaps between leadership development best practices and organisations’ actions,” says Alice Snell, vice president, Taleo Research. “To have the right people in place at the right time, companies must have a robust talent management strategy - enabling leaders who strengthen an organisation to be identified, developed, and retained.” All other things being equal, companies that put an emphasis on developing and promoting people to the top score more highly on a number of fronts, from commitment and loyalty to superior productivity. More information from: www.taleo.com
How to turn your brand into a talent magnet Google gets it. Apple, Nike, Harley Davidson and other exceptional organisations are also alive to the full implications of cultivating a great brand. More organisations in sectors ranging from government and schools to engineering firms have woken up to the role of brand power in everything from guiding strategy through to marketing and talent management. Not least, they recognise the brand’s role in attracting the best and brightest and then motivating them to go that extra mile. For Google, recruiting for cultural fit or Googliness, is a key requirement. And the company sets out to retain its core brand values in all aspects of its organisation and management. For the Googles of this world, brand values run seamlessly from their corporate vision and strategies, their corporate culture to their customer proposition. Not all companies enjoy this consistency and clarity. Others have either not made the connection, or their brands has lost their focus and original zing. The brand as the summation of all that the organisation represents is one of the most valuable assets that any organisation possesses. When it is strong and well-focused, the brand informs everything a company does. In these circumstances, it embodies the spirit of the enterprise, its purpose and future direction. Muddled or weak brand values mean that neither customers nor staff have a compelling vision of the business and what it stands for. Typically, the brand dream burns brightly in the early years of the enterprise. But as the business grows and matures, the essence of that dream becomes cloudier. Founders – the original dreamers – move on. The market, competition and customers change. In these cases, the
solution is to revisit, and if necessary, reinvent the original dream that inspired the organisation in the first place. Where companies miss a trick is in the way they approach this brand renaissance. The usual standbys of focus groups, brainstorming sessions and endless analytical projects rarely produce inspirational and innovative results. There is, though, another way of opening up the hidden potential of the brand. The Brand Dream Model was developed in response to the need to get to the essence of the brand in the most direct and practical way.
Pioneering an experiential approach to discovering the power of your brand.
The process involves exploring the three interlinked circles that make up the model: • Traditions – the roots and history of the brand from its beginnings to the present • Behaviour – how the brand is reflected in working practices, values and so on • Dream – what the brand stands for in the hearts and minds of the consumer. What is special about the process is that it uses an experiential approach to complete each part of the model. This involves left-brain activities rather than brainstorming to get at the essence of the brand. The approach has helped companies from a wide range of sectors, including Kraft Foods, Iverify and schools to reinvigorate their brand dreams. There is another major bonus. The process is most effective when it is inclusive, involving the participation of representatives from every level of the company from the board to the receptionist. That ensures that the brand becomes transparent and evident to everyone. Read the full story in Brand Enigma, Duncan Bruce and David Harvey http://www.amazon.co.uk
The Brand Dream process puts you in direct touch with the unique features of your brand – using a simple but powerful model.
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Creating the Talent-Driven Business -
M aster talent management best practice
Creating the Talent-Driven Business A Business Intelligence-CRF Research Report
“…concise, accessible and very current ... well researched ...” David Adams, Group HR Director, Harsco
Special Offer : 50% off for Talent Strategy subscribers
! Identify the talent gaps in your organisation ! Apply smart ideas for improving talent processes ! Learn from AstraZeneca, Cisco, BAE Systems and many other companies ! Develop an effective talent strategy ! Build a solid case for investing in talent ! Measure the returns from talent management ! Win buy-in from business managers Find out more about Creating the Talent-Driven Business and download your complimentary extract: www.business-intelligence.co.uk
New Talent Management Network launches awards T alen t S tr ategy www.businessintelligence.co.uk Phone: +44 (0)208 971 3265 E-Mail: David.harvey@businessintelligence.co.uk
To find out more about the New Talent Management Network:
marc@newtmn.com www.newtmn.com
The New Talent Management Network will be launching two exciting initiatives this Fall. They will partner with the Human Capital Institute on the first ever Talent Innovation Awards, created to recognize and share information about practically innovative developments in our field. The nomination process will start soon, so visit www.newtmn.com for updates. Also, the 3rd Annual State of Talent Management study starts in November and it's all about you! The research describes how talent management is being practiced today, how TM groups are structured and managed, even how much TM practitioners are paid. We're proud that Business Intelligence will be joining the process as a media sponsor in 2010. Again, stay tuned to www.newtmn.com for more information.
To better serve our members, we've launched an easier to use job board and will be better supporting City Groups. The new job board allows you to post and review talent jobs and, as always, posting is free for all NTMN members. We have active City Groups in Boston, New York, Cincinnati, Atlanta and the San Francisco area, but want to support our friends outside the States. If you want to start a local City Group outside the US, email Marc Effron at marc@newtmn.com and he'll explain how easy this can be. Marc Effron The New Talent Management Network, The world's largest network of talent management professionals marc@newtmn.com www.newtmn.com www.twitter.com/ntmn www.marceffron.com
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About Talent Strategy Talent Strategy is published by B usiness I ntelligence , a trading name of Optim a Publishing Ltd, publis hers of Creating the Tale nt-D riven Bus iness and ot her strategic HR and per for mance -impro veme nt researc h repo rts. The p ublisher welco mes suggestions for case studies, news, press releases, resea rc h, analysis on all aspects of talent ma nage me nt. Co ntact david-harvey @busi ness-intel ligence.co. uk Advertising in Tale nt Strategy Talent Strategy is an ideal c ha nnel for tale nt manager re crui tment or pr omotio n o f talent mana geme nt softwa re and ser vices. Call +44 (0) 2 08 971 3 265 for details www.b usiness-i ntelligence.c o.uk
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