Every one of these 300 jobs has six people racked and stacked behind them. This means that we need 1,500 to 1,800 leaders in the pipeline. Not all of them will make it. Some will plateau. Some will fall short. Others will leave. Others will join. But we have to make sure that we always have a full pipeline of 1,500 to 1,800 people to fill these 300 critical positions.
For the last four years, I spent about 30% of my time on this group of potential C-suite successors.
The role of heads of talent
The role of the talent director is to consult and brief the senior management team regularly, with the aim of making sure that the talent strategy stays aligned with the business strategy and is adapted as the strategy changes, and that it is producing the desired results.
Becky Snow is global talent director at Mars, a global chocolate, confectionery and pet-care business. She describes her role as:
Setting a guiding, shaping strategy, then engaging the leadership and business units behind the essence and framework of that strategy so they can find their own way of tapping into it.
She also looks after what she describes as the “infrastructure of talent management”, which is the tools, processes and competency framework used by her team of regional talent directors. As part of her global role, Snow is responsible for succession planning for the top of the organisation, including their career development. However, she stresses:
One of our key roles is talent brokering to ensure there we keep our most promising managers visible and mobile across the business units. This mobility also helps prevent these units from becoming insulated in how they think and operate.
Much of Snow’s time as talent director is spent talking to the company’s business heads to make sure that they take responsibility for decisions made in their domains:
It is about encouraging the leadership to think more long term and this brings us to the most important shift we need to make, which is at all levels of the organisation to hold our associates (ie, staff) accountable to their responsibility to develop talent as a competitive differentiator.
Staying agile
The planners of talent strategies are facing a radically different set of circumstances than those confronted by their predecessors. Marielle de Macker, managing director of group HR at Randstad, observes:
The world is certainly changing and becoming more volatile … It is therefore important to develop enough agility to respond in an appropriate way to this change but also to be able to predict what is coming – to see around corners. The challenge is not for talent managers to learn new tricks, tips and skills but to develop this raw capacity to see change coming and to develop the appropriate judgment about how best to respond.
A number of those interviewed for this book spoke of the need for firms to adopt a more agile approach that balances long-term planning with the ability to change direction quickly.
To be able to “lean into the future”, HR staff need to strengthen their skills in strategic planning and become more adept at identifying the talent implications whenever there is a shift in strategy or the business environment changes. Scenario planning can help them do this, as can other “futuring” techniques used to question current assumptions and explore different models for the business and new ways of organising and performing highly skilled work.
At least once every two years there should be time set aside to anticipate how various new trends could affect the demand and supply of talent and the way skilled work could be organised. For example:
innovations in technology;
shifts in the external environment (using PESTLE – political, economic, social and technological, legal and environmental – analysis);
corresponding changes in organisational structuring including delayering, reorganising and restructuring;
changes in the business model, including mergers and takeovers, outsourcing and strategic partnerships;
virtual working and flexible working;
demographic trends, such as an ageing workforce;
changing employee expectations about careers and employment.
Conclusion
The experiences of Unilever and Olam International illustrate the importance of recruiting and developing the right mix of high-calibre managers, leaders and specialists to support and grow their businesses.
Both companies have placed the highest priority on devising talent plans that reflect the priorities of the business. Talent managers have worked closely with operational managers to identify the capabilities that employees need if they are to deliver the business strategy. Their focus has been on the immediate operational needs of the business and the actions that will help deliver longer-term success.
An effective talent plan is closely tied to the company’s strategic goals and priorities. Talent managers can undertake a rigorous assessment of the company’s talent requirements in the short and medium term. But probably the most important factor contributing to an effective talent plan is the active involvement and support of the top management team, operational heads and other senior managers.
Few firms believe they have formulated agile talent strategies. Part of the problem is that HR managers need greater expertise in strategic workforce planning and other processes such as scenario planning.
However, a major barrier to HR playing a more strategic role is that talent management activities require much time and effort. The operational demands of talent management often leave little room for HR staff to think about wider issues. The greatest risk – and the greatest irony – is that in the effort to embed more rigorous and systematic talent management, firms may well be building systems that are too rigid for today’s turbulent conditions. Chapter 3 looks at this issue in greater detail.
3 Managing the talent process
If you are not careful, you get so wrapped up in the process, turning the wheel, getting everything done, that you can completely forget the point of it. I see my goal being to lead the leaders to lead the talent. Therefore I try to focus on what’s most important, what’s most critical for the business, not on covering every person or role.
Becky Snow, global talent director, Mars
IN THE EARLY YEARS of this century, Nokia, a multinational communications and information technology company based in Finland, had an enviable reputation as a magnet for some of Europe’s best and brightest engineers and managers. But in 2006, it introduced a new strategy, aimed at creating a reliable pipeline of talented people who could occupy roles within senior and middle management that had a critical impact on its performance.
Nokia had previously relied on fairly informal processes for identifying such roles within the organisation. However, the leadership team decided the company needed to be more systematic about how it defined these roles so it could groom people to fill these positions.
Regular workshops were held at which managers of each business unit worked with the HR team to look at their business goals and leadership capabilities, and a “talent map” was introduced using a nine-box grid to identify performance and potential (see Figure 1.1). Those with “star potential” in the upper right box were steered towards experiences and job assignments that would help prepare them for a more critical role in the future.
Nokia developed a “return on investment” matrix to help it quantify the potential benefits and risks of moving individuals into new, more stretching roles. The four quadrants mapped risk of failure against potential impact. Managers could then map the result against the cost of the individual’s development.
This analysis was designed to make sure that the most money for personal development was allocated to managers who could potentially make a big impact in a role but who ran a high risk of failing. To give these managers the best chance of success, “a strong transition plan and support” were put in place. Nokia hoped that this risk-based approach would encourage managers to apply for more challenging roles and business leaders to give these individuals a chance to prove themselves.<
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The new approach for measuring performance and potential was adopted across the international business in line with Nokia’s “egalitarian” culture, which gave business units considerable discretion on how to implement talent management. An internal review conceded, however, that while managers were clear about the competencies needed for a critical role, they were less clear about how to define potential. Cultural differences across regional units also influenced decisions about who was marked out as a rising “star”.
Nokia’s approach to talent management was well thought through but did not work. By 2011 it was clear that it had failed to understand how the market for mobile devices had shifted. Rivals like Apple and Samsung seized Nokia’s dominant share of the market, while Stephen Elop, the new chief executive, in an infamous leaked memo, admitted that the firm “fell behind, we missed big trends and we lost time”.
Elop’s verdict was that Nokia had failed to adapt to a very different and intensely competitive marketplace. The firm continued to do the wrong things very well. Elop says:
We poured gasoline on our own burning platform. I believe we have lacked the accountability and leadership to align and direct the company through these disruptive times.
He also pointed to a lack of collaborative ability, a quality that the firm urgently needs if its strategic partnership with Microsoft is to succeed against the “ecosystems” built by Apple and Samsung (see Chapter 6).
The Nokia example is a cautionary tale for business leaders and the managers that develop their best people. However large and well-oiled the machine for bringing on these people, it will fail to deliver the right results unless it also instils the need to keep a watchful eye on the bigger picture.
Processes and pipelines
As earlier chapters have outlined, a decade of talent management has led to many international companies focusing on the option of “building” a small number of high-flyers over several years. The mantra of the processes involved has been consistency, compliance and standardisation across international and global businesses.
This has arguably led to an industrial model of talent management, with concepts like talent “pipelines”, “systems” and “infrastructure” becoming common parlance. The goal is to help gain an end-to-end view of talent management, but there is a tendency to think of talent more as a commodity rather than people who need to be trained and developed in ways that are individually tailored.
A strength of the model has been that it has brought professionalism and thoroughness to a process of selection and development that is otherwise prone to nepotism or cronyism and a tendency for managers to recruit successors in their own images. It has drawbacks, however. Organisations can become locked into a potentially narrow and rigid set of definitions of talent and potential and a management system that becomes increasingly complex and unwieldy as it develops a life of its own.
Eric Olsen at Heidrich & Struggles believes that HR staff are particularly prone to a tendency to construct overly complex talent programmes:
In the FTSE 100 companies we studied, we saw a drive towards process. The only way these directors feel they can make an impact is to get involved with process, TM becomes a tight path of HR procedures, competency frameworks, etc. Yes, these are nice processes but they often don’t really address the broader issues.
Roselinde Torres, senior partner and managing director at Boston Consulting Group, also highlights the need for HR to help develop more “customised” approaches:
Talent management is no longer about one size fits all. When you consider developed as opposed to developing markets, you need different types of leadership and you need to reconfigure your talent, especially in areas like research and development.
There needs to be a move towards a more customised and streamlined approach. In the absence of this, HR conducts a tremendous amount of activity with very little result.
Other managers overseeing talent management concur. David Smith of Accenture thinks that many companies have dug themselves into an administrative pit. As he puts it:
A lot of companies are stuck in a HR, administration led view of talent management. They tend to work in deep functional segments like performance management, recruitment and compensation. They need to take a more strategic view and look at the whole question of how they are going to attract and recruit talent into the organisation.
Becky Snow is well aware of this danger for a global business like Mars. She describes talent management variously as a big “tanker” and a “big machine”. She warns:
If you are not careful, you get so wrapped up in the process, turning the wheel, getting everything done, that you can completely forget the point of it.
There is also the danger that talented people get lost in this machine and begin to feel undervalued and ignored by the organisation. This is particularly true for younger staff, as Sandra Schwarzer, director of careers services at INSEAD, an international business school based in France, reports:
Organisations that recruit MBA talent are often very strong on finding the right individuals and selling their organisations to them. But where they fall down is that once these individuals are on board, [there is not enough thought] about what happens to them.
Some of our alumni, for example, go on rotational programmes and get great experience, great exposure to the company’s operations. But often after about three years, they feel like they are on their own … Talented people are often left inside the different business units and get lost.
According to Snow, it is important to stop trying to build a perfect system.
I see my goal being to lead the leaders to lead the talent agenda. Therefore I try to focus conversations with our leadership team on what’s most important, what’s most critical for the business, not on discussing every person or every role.
New complexities and challenges
The old rules for talent management focused on standardisation and simplification; the new rules are intended to help companies adapt to change. Interviews carried out for this book suggest that companies are rethinking three aspects of their talent strategy:
A broader view of talent. There is growing evidence that firms are no longer focusing exclusively on a small group of high-flyers who will become the next generation of executives. Companies are looking for a more diverse set of talented leaders and specialists. They are turning to untapped sources of talent, both within the organisation and externally.
Redefining talent. Companies are analysing what it means to be successful in their context and are redefining the skills, knowledge and qualities that constitute talent. The outcome is a variety of definitions of what constitutes “talent” rather than the previously narrow view focusing on leadership succession.
Leveraging talent across the organisation. The priority is to make sure that talented people are moved around the organisation, both to plug skill gaps and for personal development.
A broader view of talent
The traditional focus of talent management is on a small cadre of managers who are groomed to be the future leaders of a firm, focusing on succession planning as the main means to this end. However, this view of talent is too narrow for the many firms where the contribution of talented staff really does mean the difference between success and failure.
Often talented people are defined as those who have a disproportionate impact on the success of the business or who can generate significant added value (whether this takes the form of revenue, knowledge, reputation, and so on). The underlying principle is that the organisation needs talented individuals at all levels, not just at the very top.
Chapter 2 outlined how Olam International has gone through a transition in how it thinks about talent. As a result of its strategy of growth through vertical integration, the company has switched from needing general managers to needing “domain experts”, leaders who can build new businesses in highly specialised fields. It has created two management groups or “streams” from which th
ese roles can be filled:
The country management stream consists of roles with direct responsibility for bottom line results for operations in local markets. Typical roles include regional controllers, country managers and profit centre managers.
The functional stream consists of roles in areas such as finance and accounting, treasury and shipping, manufacturing and technical services. However, the focus is on organisation-wide abilities that can be applied across the organisation and applied internationally.
The people filling these roles are directly responsible for the profit and loss of a business or a section of businesses in more than one country. They are also part of a team of global business heads overseeing global strategy, resource allocation and logistics.
Olam has three talent pools to help fill these roles:
The first, the global assignee pool, is for those individuals who are earmarked for global roles and who need to be exposed to international assignments.
The second focuses on developing regional and national management teams.
The third consists of graduate trainees.
Santander UK, a British bank wholly owned by the Spanish Santander Group, takes a similarly broad view of talent. It has expanded its definition of talent to include “exceptional functional and cross-functional talent” and has been piloting a talent assessment tool that reviews cross-functional/organisation skills, functional skills and a range of leadership skills linked to specific behaviours.
Managing Talent Page 6
