Organizations mouth these few words frequently. But what do they really mean? For some, they define a claim about understanding and responding to their employees’ needs in the workplace. For others, they communicate appreciation of employees’ talent for essential work, such as setting, meeting and, indeed, exceeding goals. Unfortunately, for most organizations these words are more rhetoric than commitment.
Talent has been a buzzword for over a decade. According to Fishman in The War for Talent, the competition for talent dominated the nineties as organizations of all sizes and industries vied for those whom they identified as the best and brightest. Top MBA graduates could write their own financial ticket. Seasoned professionals were traded from company to company. That was then; this is now.
Since the economic downturn of 2000, a broader definition of talent management has emerged. The competition for talent has become more strategic than ever before. Dickens best describes the current situation in his introduction to The Tale of Two Cities: “It was the best of times; it was the worst of times….”. Indeed, companies in today’s talent market face a curious paradox. In both uncertain economic times as well as at the height of a boom, effective talent management is essential to achieving organizational excellence. If a company cannot keep its talent, it will be buffeted by the storms of recession. Or in good economic times, it will fail to maximize its competitive edge.
Unemployment claims have dominated the past few years causing employees to stay on board. As the economy inevitably recovers, several experts have predicted that annual voluntary turnover could rise to 20% or more for white-collar workers. Sibson Consulting reports that one out of six are poised to bolt their current job. Walker Information’s survey of 2400 employees found that 34% were at high risk to exit. Accenture claims that half of all US middle managers are actively looking for new jobs or will be soon. Long hours, lower pay and benefits coupled with employee’s perception of ungrateful and greedy senior leadership will surely propel disgruntled employees to jump ship as opportunities become available. One client of mine has lost one third of its senior management team in the first quarter of 2004 alone. We are now embarking on a series of interviews and focus groups to identify and remedy the root causes of disengagement in an effort to save the sinking ship.
The war for talent is far from over. It is just beginning a new chapter. The employers who win will be those who are giving their employees a good reason to stay. People drive results. Talent management drives the building of people capability, and that in turn drives the execution of business results. Strategy defines People Capability which in turn, drives Business Results.
What Is the Essential Work of Talent Management?
A organization’s answers to the following questions will help map out how to manage the essential work of talent management.
Assessment Answers
Where is the organization going and why? What work needs to get done? What are the current and future roles for workers? What competencies (knowledge, skills, and attitudes) does the organization need to get the work done? What competencies does the organization currently have? What are the current and future gaps in the competency continuum?
Assessment informs acquisition and development.
To begin to appreciate the future orientation of talent management, it is helpful to differentiate between performance and potential. Most are familiar with the intent of performance appraisals. They look back on what has been done and what was contributed. Performance is measured against specific objectives. Performance reviews describe current and past behavior and may or may not be an indicator of potential. Measuring performance is about the past.
Potential is about looking forward and predicting what an employee may be capable of in the future. Potential is determined by a combination of observations, assessments, and discussions. Potential is more difficult to determine because it requires inferring future contribution based on current data.
Talent management strategy requires both performance and potential. These metrics complement each other. It is not either performance or potential, or performance versus potential. It is, however, both performance and potential One focus of talent management is to align existing performance appraisal processes with the creation of potential dentification processes. This shift represents a major change in behavior for most organizations, and as with all change causes disruption that must be planned for.
A major technology firm plowed ahead with implementation of their new Talent Process and was baffled by the widespread resistance they encountered. As Daryl Conner has written, you can “pay now, or pay later.” In this case the client had to backpedal and rework their introduction of the new key people process. A few of the critical steps they missed first time around were to define the business need driving the focus on potential; clarify to all employees that potential was not the only path towards promotion and recognition; and equip managers with the skills to communicate and evaluate potential.
Once an organization has assessed its future needs and roles, then it is ready to identify and match individuals to the sweet spot. The sweet spot describes a model that positions the best person in the best job for them. The worker is in a job that: he or she does well; enjoys; and is value added to the organization. The organization benefits when all three are aligned. When people are working in their sweet spot, they demonstrate their best work and leadership.
Talent management is not about promotion based on tenure or political favorites. Talent management is not about hiring likable folks, or winners. It is a constant challenge to have the right people matched to the right jobs at the right time, and doing the right things. Clearly, it is a disservice to put or keep people in roles that are not matched to their sweet spot.
Targeted Selection (TS) is an approach growing in popularity to help accomplish this goal.Implementing TS requires time and a major shift in behavior for most organizations.Working with a major software company, we began with the sales organization. Each major role was assessed for key responsibilities. Each responsibility then translated into targeted questions that would surface an applicant’s talent and experience to be successful. After the interview questions were completed, tools were created to assist managers in conducting and evaluating applicants. Finally education sessions were developed and facilitated across the organizations to introduce and enable managers in the new system. This implementation approach accomplished the change with the least amount of disruption to achieve optimal results.
Obviously, creating a culture where senior leaders focus on finding, developing, and retaining the right talent to drive business results and performance is easier said than done. Excellent talent management demands time and effort internally and externally. The best organizations link together the critical owners of talent—senior leadership, HR, and line management—to drive that improved performance. In the War for Talent, Charles Fishman aptly observed, “All that matters is talent. Talent wins……Leaders must add value as coaches, recruiting the most talented players and enhancing the skills of their current staff. It’s the only way to be ready for the future, not just next month.”
The ability to execute business strategy is rooted in the ability to attract, retain, and develop key talent. Successful talent management creates the most enduring competitive advantage. No company can afford to be unprepared for both the best and worst of times.