Internal talent
Instead of being exclusively geared to getting a small number of employees to the top of the business, the internal strategy needs to focus on making sure that talented people at all levels of the business are deployed for maximum effect – even when an individual does not want to move to the next level, or when there is limited opportunity for promotion. This means that as much attention should be given to high-performing specialists or those employees who occupy critical roles but are not likely to progress further as to the next generation of top leaders.
The talent strategy needs to be designed from the outset to accommodate a broader pool of talent. Close attention should be paid to the needs of women and young employees to make sure that they are given the right work experiences and development opportunities at a time that suits their career aspirations and personal circumstances.
Mavericks and intrapreneurs also need special attention and this may require inventive ways to be found, as discussed in Chapter 6, to build more conducive work environments that will help retain these individuals and give their innovative and creative gifts free rein.
The aim must be to create a compelling employee value proposition supported by a set of values and behaviours to make sure that talented people feel respected and valued and that the people responsible for them are keeping an eye on their development and career progression.
The management of diverse talent pools can range from a programme-led approach, through to more tailored and personalised intervention.
In the bottom left quadrant, a programme-led approach works well when large numbers of talented individuals have similar needs. For example, graduate training programmes are an effective way to begin equipping individuals for a career in an organisation. Other programmes might include learning and development programmes or qualification-based skills training.
However, at some point it may be appropriate to operate in the top left quadrant by taking a more tailored and personal approach to a specific employee or group of employees. This could be for a variety of reasons: there is a strong risk they will leave; they are critical for a current or future role or project; they have a rare talent that would be difficult to replace; there are long-term plans to develop them.
Companies must understand what motivates these high-flying individuals and what they want, and then seek to “broker” an agreement that gets the best and most out of them while satisfying their needs and desires. This requires openness on both sides and highly flexible career planning.
The majority of the companies featured in this book are adopting more tailored approaches to talent management. Olam International, for example, may depend on a programme-led approach to help process the large number of managers that have been recruited, but it relies on its culture to make sure that these managers connect with the values of the business, and the chief executive makes a point of personally meeting new members of the talent pool.
PepsiCo is positioned at the top of the vertical axis because of its move towards “intelligent profiling” as a means of career planning and its aim to “bond” talent by forging strong personal relationships between the top management team and the people in the pool for the company’s 300 critical positions.
The task for organisations that are adopting more tailored and personalised approaches is no longer to “manage” talent but to keep talented individuals fulfilled and feeling valued – the more they feel as though they in a talent pool of “one” the more likely that is.
Peripheral and external talent
By moving across to the top and bottom right quadrants, organisations can build a talent “ecosystem”. The goal is to tap into the talents not only of employees at the core of the organisation but also of those at the periphery, in satellite organisations (such as a joint venture or a valued supplier) and outside the organisation (such as specialist freelancers and independent consultants).
Instead of straining to keep talent “captive” at all costs, the emphasis is on maintaining a relationship with past and potential future employees. This means accepting that it is not always possible, or indeed desirable, to retain every talented employee. Companies maintain relationships with former employees for various reasons, such as business development or marketing, but this can be integrated into the talent strategy.
A programme-led approach in the bottom right quadrant is appropriate when a company wants to create linkages with specific groups of talented people. Talent management managers may have ownership of such programmes or liaise with the sections of the business that oversee these activities, such as Santander UK’s internship programme and Telefónica’s business incubation programme run through its Wayra Academy (see Chapter 6).
Changing direction
Overall, companies might choose to move towards the top left quadrant when they need to retain their talented people or want their most talented staff to commit to long-term career plans, which might include international assignments, as in the case of Mars and Unilever. Another reason for moving in this direction is when a programme-based approach is not meeting the needs of specific individuals or groups.
Companies might opt for the bottom left quadrant and a more programme-based approach when they feel the need for more consistency. For example, some of those interviewed for this book were concerned that judgments about talent and potential were made inconsistently across the business, with too much emphasis on intuition and not enough on objective assessment.
Other reasons for moving down to the bottom left quadrant might be because a company has grown so rapidly that its talent management has become piecemeal and ad hoc. Moving towards a programme-based approach helps create more consistency and makes it easier for the company to ensure that talent activities are co-ordinated in a coherent strategy.
A move towards the bottom right quadrant can be the best way to tap into the talent of large groups. Gulf International Bank, for example, has used co-creation with customers to help it design some of the features of its new retail business. Companies such as Google use crowd sourcing and other forms of “mass collaboration” to gain access to new ideas.
Other programme-led approaches include efforts to fill serious skills gaps, for example in science and technology. This might involve working with government bodies and educational establishments to attract more students into these areas or into related careers.
Movement towards the top right quadrant is determined by a scarcity of talent or the need to access new talent that is not available within the organisation.
Companies that are moving in this direction often do so when they need to tap into rare talent or are looking for exceptionally innovative and creative individuals. In this case, such individuals are carefully tracked and the organisation looks for every opportunity to cultivate a relationship with them.
Companies might also move towards the right side of the model when they lack the ability to develop the required talent internally and it is not realistic to try to recruit. For instance, PepsiCo has all but given up trying to recruit people with digital skills. Richard Evans, president of PepsiCo UK, Ireland and South Africa, admits:
We’ve taken people from Google, we’ve taken people from eBay and the reality is that they haven’t stayed very long … They are in a digital space because they love the digital environment. We do not have the same culture … Our learning is that we have to think of another model here.
Tapping into a bigger and more diverse pool of talent can also improve an organisation’s adaptive ability. If it can create more flexible and responsive relationships with talented people and sources of talent both within and outside the organisation, it is better positioned to engineer a change in strategic direction.
The model for managing diverse talent pools can also be used as a diagnostic tool to assess whether the chosen mode for managing a specific talent pool is no longer producing the required talent output for the business strategy.
An example is Cisco Systems, a mu
ltinational technology company. Back in the early 1990s, its talent strategy concentrated on aggressively acquiring external talent, either through massive recruitment programmes for hardware and software engineers or by buying smaller players in the industry. As part of a turnaround effort in 2001, Cisco changed its strategy from aiming to recruit the best engineers to focusing on its internal talent. It wanted to help these individuals move out of strictly delineated knowledge areas and become more versatile. The goal was to produce a pool of adaptable employees who thrived on change and could move quickly into different areas of the business, or who could “mix” their skills into new combinations in response to external change.
Through Cisco University, the company’s centre for learning and development, employees gained access to personalised career planning and tailored e-learning. They could also post their experiences and career aspirations on various internal websites, and company managers were actively encouraged to try to move people into different work assignments or jobs.
In terms of the talent pool model, Cisco moved swiftly from the bottom left quadrant, where it focused on recruiting large groups of engineers, to the top left quadrant, where it focused on internal talent and a more tailored approach to career planning and learning and development.
Its former approach no longer served the needs of the business. For a time, having the best engineers enabled Cisco to become an industry leader. However, as the technology boom ended, Cisco had to reconfigure its business to become more adaptable and innovative. The talent strategy had to shift, and the way the company managed its internal talent pool also had to change.
Moving up the value chain
The traditional approach to talent management can lead to a plethora of programmes and initiatives and a machine that develops a life of its own, blind to what it is there to achieve. An ecosystem model encourages a more strategic approach in its concentration on the top left and right quadrants.
In the left space, more tailored and personalised approaches need to be brokered by talent managers who have a strategic overview and a keen understanding of the opportunities available to talented individuals across different functions, business units and geographies.
In the right quadrant, relationships with external talent in whatever guise also need to be managed by those who understand the business strategy, how this may evolve in the future, and how the business can benefit from these external relationships immediately or at some stage in the future.
Similarly, it can be argued that talent managers who spend most or all of their time overseeing programme-led approaches are contributing relatively less value to the organisation and should consider moving towards the top quadrants of the model.
New principles
In conclusion, here are eight guiding principles for managing talent in a more volatile and uncertain world, where talent is in demand and talented people have more power and discretion over how they contribute their talent to an organisation:
A deep and genuine commitment to deploy talent for maximum business impact. Both managers and staff recognise that seeding the brightest people across the organisation will have a tangible impact on business performance. Finding and nurturing these high-flyers is everyone’s responsibility, not just that of senior managers or HR. The quality and quantity of talent within an organisation marks it out from its rivals and gives it a vital competitive edge.
A talent plan goes hand-in-hand with the design and execution of the business strategy. The senior executive team is regularly consulted and briefed by the talent director to make sure that the talent strategy is aligned with business needs. Changes in business strategy are swiftly factored into the talent model. The alignment of business and talent strategies helps create a talent management strategy that is agile and is capable of responding to changes in the competitive landscape.
Talented individuals are partners, not pawns, in any process to harness their abilities. The talent strategy is driven by a broader definition of talent so that the organisation benefits from the gifts of a diverse array of individuals, including those from underrepresented groups of employees. Talent planners recognise that the organisation does not own talented individuals and that they can choose whether they bring all their energy, skill and creativity to work. Talent planning is done in a spirit of openness and collaboration, not secrecy or control.
A culture that fosters talent is the bedrock of a successful talent strategy. The management of culture is a major part of the talent strategy. A talent-based culture acts like a magnet to attract high-flyers and helps create an environment where they can thrive. Bright people outside the organisation are attracted by its values and purpose. The chief executive and senior management uphold the values underpinning the culture. Talented people feel respected and valued. Mentoring, coaching and sponsorship allow senior managers to get to know gifted individuals and take an active role in their development.
A successful talent strategy stands or falls on the direct involvement of the chief executive. The active sponsorship of the chief executive emphasises the organisation’s commitment to developing talent and helps to “bond” the senior management team to its values and remit.
Talent managers have close links with business heads and the senior executive team and work at a strategic level to achieve the business plan. The task is handled by a talent management function, with a head of talent who is accountable to the chief executive. Talent heads are skilled in strategic planning and workforce planning.
Talent pools of many should feel like a pool of one. There is open communication between talented individuals and talent managers about how personal aspirations can be matched with business needs. Career planning is tailored and personal. The aim is not to manage talent but to keep talented people fulfilled.
The talent strategy helps build an ecosystem that extends beyond the borders of the organisation. The talent ecosystem helps the organisation tap into the talent that currently resides outside the business. Organisational boundaries no longer matter, and employees at the core and periphery are all included in the talent strategy. Relationship takes precedence over employment. The values that underpin the organisation are extended across the ecosystem, as are development opportunities, with a strong emphasis on shared learning.
Executive summary
1 The war for talent: talent management to the rescue?
Traditional talent management assumes that high-flying employees want to get to the top of the pile and will do whatever their organisations require to get there. However, a new generation of talented workers may not be willing or motivated to stay with one employer for long, whatever the financial rewards and career opportunities on offer. This makes long-term career planning much more difficult for organisations.
In this respect:
The struggle for the best staff has broadened beyond senior leadership talent. There is intense competition among employers for highly skilled people for a wide variety of managerial and specialist positions.
An increasing number of talented people who are internationally mobile can pick and choose where they work – and are now in demand by firms operating in emerging markets.
American and European firms are experiencing serious skills shortages, despite continued high unemployment in many industries. The main obstacle is the lack of people with the right degree of experience, skills or knowledge to fill these positions, indicating a widespread failure of countries to produce enough people with the level of education and skills that employers need to remain competitive.
As business and jobs have become more complex, firms increasingly look for individuals with a range of abilities and experience that might include technological or other specialist skills, broader functional skills, industry expertise and knowledge of specific geographical markets.
The established approach to talent management is beginning to look outmoded and ineffective in the face of the demand for talent and the demands and desires of talented individual
s. Talent management needs to become more flexible and to involve a more diverse range of people both within and outside the organisation if it is to enable a business to change direction as circumstances demand.
2 Devising and implementing a talent strategy
Talent planning must be led by a company’s strategic goals and priorities and should be based on a rigorous assessment of its short-and medium-term talent requirements. This can be done effectively only if there is the active involvement and support of the executive team, operational heads and other senior managers. It also requires that those in HR have greater expertise than is often the case in strategic workforce planning and other strategic planning processes such as scenario planning.
The greatest risk and the greatest irony are that in an effort to become more rigorous and systematic at talent management, organisations may end up building systems that are too rigid for today’s more turbulent conditions.
In this respect:
Developing and implementing the organisation’s talent strategy should go hand-in-hand with the design and execution of the business strategy, to avoid a misalignment between the needs of the business and the output of succession planning.
The task should be handled by a specific (and often global) talent management function. The head of talent should be accountable directly to the chief executive rather than the head of HR – yet a study by Heidrick & Struggles in 2010 suggests that this rarely occurs.
The senior executive team should be regularly consulted and briefed by the global talent director so that: talent strategy is aligned with the business strategy and can deliver in the long term through regular conversations and reviews;
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