Managing Talent

by Marion Devine

  The pre-work is geared to help teams “hit the ground running,” says Willner. Team members work on a wide variety of tasks, ranging from supply chain management to implementing an HR policy or a new customer relationship management (CRM) system. IBM eschews Western-style hotels in favour of local accommodation to give the team an authentic experience of working abroad as well as getting along with a diverse group of colleagues. Willner believes this experience is succeeding in giving younger managers a more global and informed outlook:

  They learn about leadership and teaming and diversity and how to listen and learn how to do business somewhere else. They also learn a lot about themselves.

  Procter & Gamble

  Procter & Gamble (P&G), a multinational consumer-goods company, is a classic example of a company that has adopted a “build” approach to attracting and retaining talent. It adopts a cradle-to-grave philosophy. Over two-thirds of its leaders were recruited as university graduates and it was in one year able to attract about 600,000 applicants worldwide – of whom it hired about 2,700 – by emphasising opportunities for long-term careers and promotion from within. The website targeted at potential recruits states:

  Our success depends entirely on the strength of our talent pipeline, which we build from within and manage with a disciplined process led by the CEO and the senior leadership team.

  P&G has established a plethora of elaborate systems and processes to deploy talent. It has tied its talent management processes to its strategy for growth, which means a focus on winning in the emerging markets of China, India, Latin America, the Middle East and eastern Europe. The company is building what amounts to a global talent supply chain management process, co-ordinated worldwide but executed locally. Hiring and promotions are the responsibility of local managers, but high-potential prospects and stretching assignments are identified globally.

  New hires tend to be local talent. Line managers in China, for instance, hire Chinese recruits. The days when managerial roles in emerging markets usually went to expatriates are past. Now, local hires are considered growth prospects for the firm and are expected to become managers in that market. Stretching assignments and senior positions, however, are managed by the global HR group and overseen by the global executive team.

  The emphasis on hiring local people helps create a more diverse pool of talent for the entire corporation, especially at more senior levels: 300 or so senior regional and country managers come from 36 countries, with 50% from outside the United States; the top 40 come from 12 different countries, with 45% from outside the United States.

  As high-potential employees advance, they move through a portfolio of senior-level jobs that are categorised according to strategic challenges, size of the business and complexity of the market. Leadership positions for businesses or countries are earmarked for either novice or experienced general managers.

  A relatively small country-manager position – in Taiwan, for instance – is considered appropriate for first-time general managers. Such assignments then set up the incumbents for placement in larger countries, such as Italy or Brazil, which in turn can lead to roles in clusters of countries, such as eastern Europe or the UK. These last roles then become springboards for leaders who demonstrate the potential to become senior managers.

  P&G offers formal training and development programmes and sometimes enrols managers on external executive education programmes. The lion’s share of development, however, takes place on the job, with the immediate manager’s support and help from mentors and team members. A typical marketing manager, for example, will have worked with a number of different brands over a period of time. A finance manager will have gone through various assignments, ranging from financial analysis to treasury to auditing to accounting.

  Most high-potential managers are also placed in important multifunctional task-forces or project teams from time to time. New postings and task-force participation are expected to challenge employees, and they signal to managers that P&G will always offer new opportunities.

  People and positions are tracked in a technology-based talent management system that is sufficiently robust to accommodate all the company’s more than 135,000 employees but is primarily used to track 13,000 middle- and upper-management employees. The system captures information about succession planning at the country, business-category and regional levels; includes career histories and capabilities, as well as education and community affiliations; identifies top talent and their development needs; and tracks diversity. It also makes in-house talent visible to business leaders, who no longer have to scour the company to find candidates by themselves.

  To keep the system relevant, P&G has instituted a global talent review – a process by which every country, every function and every business is assessed for its capacity to find, develop, deploy, engage and retain skilled people, in the light of specific performance objectives. For example, if the company has stated diversity hiring objectives, the review is used to audit diversity in hiring and promotions. Determinations made in these reviews are captured in a global automated talent development system and can be accessed by decision-makers through their HR managers.

  The processes used by P&G are well-established but the managers who run them are conscious of the way talent management is being transformed by changing demographics and the new demands of candidates from generation Y and women (see Chapter 4).

  P&G’s head of HR, Sonali Roychowdhury, argues that the processes adopted by the company are “social” as well as technical. As she concludes:

  In the current scenario and increasingly becoming stronger there are three major trends that I see shaping the talent management space: one is the overall talent management approach moving away from the traditional “checking the box” approach of competencies to more a social process; second is the increasing importance of the use of technology specially as an integrator of all the functions in talent management; and finally the relevance of diversity in the talent management strategy going forward.

  Talent management needs to be understood as both a formal and a social process. Traditionally competencies have been analysed following a formal structure and primarily focusing on final results. Currently it is a formal structure process, one-fits-all approach. Today, that cannot work any more; today we need to have a more targeted approach to be able to leverage the talent of different people and deselect those who do not fit a particular mould.

  Results are of course important but how those results are achieved is becoming equally important; that’s why I think talent management today is as much a social process. The softer aspects of talent management will be the differentiators in the future. In P&G we look at the numbers, the results, but also the way those are achieved. This focus on the process helps us identify skills that people have that otherwise could have been missed.

  Our talent review process includes senior leadership, mentors, managers observing the individual in a series of assignments/situations (meetings, management interactions, accelerator experiences – often spanning years) from which they get intimate insights into “how” results are achieved (the context in which the results were delivered, influencing skills, peer interaction, collaboration across different cultures, social intelligence, ability to form and sustain productive networks internally, etc).

  This is then converted into an actionable assessment of potential and destination roles that the individual would be a good fit for. This results in customised talent plans for individuals and finds a fit for different skills throughout the organisation.

  Conclusion

  In the past decade there has been growing use of a process-led approach to talent planning, focusing on a small cohort of high-flyers who are destined to become future top leaders. Such an approach works well when the business environment is relatively stable and companies are reasonably confident about their strategies and the capabilities to execute their plans successfully.

  The benefit of an HR process-based “machine” is
that it helps ensure consistency and a useful end-to-end view of how and where talent needs to enter and move across the organisation. The drawback is that it can become so resource intensive that companies spend too much time and energy on administration and operational issues rather than assessing whether it still supports the business strategy.

  Companies in uncertain or highly competitive conditions are rethinking their approach to talent management. They are not necessarily dismantling their systems but are looking at the question of how to build in more flexibility.

  They are reconsidering their talent requirements in the light of their strategic priorities and moving towards a broader view of talent. They are widening their focus beyond leadership succession to include technical and functional specialists and any individuals who have a “disproportionate” impact on business performance. These employees are increasingly required to have a complex set of skills and attributes in order to operate across different business models and different business contexts.

  International companies, especially those with growth ambitions, need their talented staff to be highly mobile. To guarantee that talented individuals have both sufficient depth and width of experience, companies are resorting to longer-term career paths.

  This is a tall order for talent planning and it presupposes that talented people are willing to be developed and deployed at the whim of the company. This may not necessary be the case.

  Companies cannot afford to presume that they “own” their talent. Nor can they treat talent like a commodity or lump their most valuable employees into an amorphous “pool” of talent. Instead, they need to take a more tailored approach and work with talented individuals to agree a career path that benefits both parties.

  The next chapter looks at how companies can take a more tailored and differentiated approach to their most valuable employees.

  4 The individual and the organisation

  One of the things that surprises me is the number of times the net generation, born after 1980, comes up in the conversation – and that it has higher expectations and wants the opportunity to be mobile. But to what extent is this generation different? I think we are very often talking about aspects of organisational life that are important to an increasingly large proportion of our employee base. Increasingly, all our employees are demanding more focus, doing meaningful work and having greater autonomy.

  Jon Ingham, human resources and organisation development consultant

  OUT OF TALENT MANAGEMENT CONFERENCES and summits the world over has come the conclusion that certain categories of employees may not be willing to play the talent management game according to the current rules.

  Attention has focused on two groups in particular: generation Y, otherwise known as the net generation or millennials and broadly defined as those born between 1980 and 2000, who may not have the patience to play the waiting game required to reach the top of organisations; and women, who either face additional barriers to promotion than their male counterparts or are not prepared to pay the personal price required of aspiring senior managers.

  Indra Nooyi, chairman and CEO of PepsiCo, says the “evolving expectations” of these two groups of employees are at the top of her list of challenges for talent management:

  Millennials – they want more flexibility. They talk about career lattices, not ladders. They want challenges of major proportions early in their lives. They want autonomy, they want on-demand training and abundant recognition. If you look at all the needs they present to us, it is just exhausting.

  She also points to the needs of women (and increasingly men too):

  Globally, the number of highly educated women entering the workforce will overtake men in the next five years. That is a pretty profound change. Men and women today are expecting more time for their personal lives. Dual careers, working mums and ageing parents – I don’t think we can ignore those trends any more because they are very real when we think about how to manage our people to keep companies successful.

  The problem is that the bar has raised and we need to clear the bar to reach the super-talented next generation to keep companies moving forward.

  This chapter aims to sift the truth from the ocean of assumptions made by researchers and commentators about the real needs of women and members of generation Y, to examine the extent to which these needs are really different from those of the rest of the labour force (in the sense that a growing proportion of their colleagues share their scepticisms about the talent game and also the need for a corporate helping hand) and to highlight the implications for career planning and personal professional management as it is currently practised.

  Generation Y: separating fact from fiction

  Members of generation Y are sometimes portrayed as lazy, selfish, immature and overly dependent on their parents, leading to labels like the “me first” generation and the “tethered generation”. More positively, they are hailed as “digital natives”, whose technological savvy ensures they use technology and social networks for every aspect of their personal and working life.

  In the United States, some 80m people belong to generation Y. Globally, it is estimated that they number around 3.6 billion, making up nearly half of the world’s population. It is estimated that by 2025, three out of four workers globally will be from this generation.

  Generation labels

  Give or take a couple of years either side of the generation, the various generations have been grouped as follows:

  The millennial generation or generation Y: those born after 1980 and the first generation to come of age in the new millennium.

  Generation X: those born between 1965 and 1980, originally called the “baby bust” because of falling birth rates.

  Baby-boomer: so named because of the spike in the birth rate in the West after the end of the second world war, beginning in 1946 and ending with the availability of the birth-control pill in 1964.

  The silent generation: adults born between 1928 and 1945 whose “silent” label refers to their conformist and civic instincts.

  The greatest generation: those born before 1928 who Ronald Reagan, an American president, famously said “saved the world” through fighting and winning the second world war.

  Emily Lawson of McKinsey makes the point that while baby-boomers and people from generation X (see box) are in reality Western concepts and phenomena, the traits of people from generation Y are more global. She comments:

  Generation Y is the first one of these that you can start talking about globally. They do all know each other, they do talk to each other and they listen to broadly the same music. They surf the net and they play video games. They own the same technology.

  The one thing about generation Y is that they do have global expectations and global awareness, which would have been much harder for the baby-boomers to acquire at that age. They are also getting, in orders of magnitude, information about the world. I certainly think they have a different skill set in how they manage and distil information and in how they manage their lives.

  Research by Ashridge, a UK business school, however, found that although many aspects of generation Y apply around the world, such as their focus on self, loyalty to their peers rather than respect for hierarchy, and a preference for a strong work–life balance, there are other areas where characteristics are more prevalent in one region rather than another. The 2012 report, Culture Shock: Generation Y and their Managers Around the World, concludes:

  In India, technology is a strong driver of Gen Y in the work environment. In the Middle East, the multinational aspect of business combined with an increasing number of locals educated abroad and returning is affecting how Gen Y approaches work. In China, the one child policy has created a very strong view of a spoilt and cosseted generation.

  In the UK, a lack of career direction with frequent job experimentation and orientation towards “fun” at work is noticeable. In Malaysia, although more loyal to their companies than elsewhere, Gen Y seeks international
experience and varied careers. None of these characteristics is unique to a geographical region. They apply everywhere, but have a stronger emphasis in different parts of the world.

  People from generation Y are a crucial section of the workforce in the West as the bulge group of “baby-boomers” born between 1943 and 1963 is beginning to retire. Although they will soon make up the greatest proportion of the workforce, there will be fewer of them from which to choose (compared with baby-boomers and generation X).

  Nooyi says that any company doing the maths must have cause to worry:

  Any way you look at it, if you are running a global enterprise today, you have got to worry about what talent is out there … In the West, 75m baby-boomers are nearing retirement. There are only 30m Gen Xs coming up behind them. There is going to be a talent shortage.

  The technological prowess of people from generation Y is a trait that many companies are eager to harness, as Lucian Tarnowski, founder and chief executive of BraveNewTalent.com, argues:

  Something that nobody can debate – and there are lots of debates about whether young people are naive and overambitious – is that the youngest people entering the workplace today, for the first time ever in history, are an authority on something that actually matters. Young people are the authority on the internet, on social media, on the change that this is bringing about.

  Gen Y is living the change whereas when my parents graduated, they were not an authority that mattered yet. The NetGen understands the implications of technology and the daily use of technology better than the CEOs of the organisations they are being hired into. That has changed the playing field and changed the workplace and the culture of the workplace.