One of the effects of globalisation has been the emergence of an internationally mobile group of people who can pick and choose where they work and who are now in much demand.
The difficulties employers face are exacerbated by changes in attitudes towards work and employment. Many employees expect a better balance between work and their personal lives and want to work for a company that shares their values. 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.
Good intentions, deficient processes
The crucial importance of talented people to a business’s success is beyond doubt, and many large companies have formally recognised this by establishing a talent management function.
Yet there is now a well-established body of research that reveals that many companies struggle with their talent strategies and are by no means confident that their approaches will guarantee enough leaders and specialists of the right calibre for their current and future needs.
Despite good intentions, many companies struggle to get off the starting line. Talent planning is often out of line with the business strategy, leading to a sense that HR is better at administrative tasks than working strategically to support business priorities. The big challenge for many companies is to formulate relevant notions of potential and outstanding performance in the midst of rapid business change. Operational heads need to be able to fill talent gaps as quickly as possible, yet there must also be a strategy supported by planning measures that will build the capabilities needed for longer-term business success. An organisation must have the ability to “lean into the future”, and to do this managers and the HR staff who support them need to strengthen their skills in strategic planning and become more adept at identifying the HR and talent implications whenever there is a shift in business direction or the external business environment changes.
There are three main ways organisations can fulfil their need for talent: by buying it, borrowing it in the form of temporary freelancers or consultants, or building it internally through training and development of existing staff. They can also seek to widen their access to talented people, as outlined in Chapter 6.
Large international companies have tended to focus on developing their own staff to create a reliable “pipeline” of highly capable people who can fill critical positions throughout the organisation, not just senior leadership roles. It is an approach that involves joining together disparate HR processes so that they support the talent plan. However, it has potential drawbacks. The notion of a pipeline helps organisations understand where talent flows in, where it flows out and where there are blockages. This is a good starting point but a poor end point because it encourages a belief that the organisation owns and controls talent, and it can encourage a mechanistic view of talent as a commodity.
Outstanding individuals come in all shapes and sizes and organisations need to take a more customised and personalised approach if they are to keep hold of them. They can no longer dictate how and where someone works. Highly capable people tend to plan their own careers and these days often have access to career opportunities anywhere in the world. Furthermore, recruiters can find such individuals at the touch of a button.
New technology is opening up entrepreneurial opportunities to the technically savvy generation Y. Technology is also empowering talented individuals to work where and when they want to.
It is crucial that organisations and individuals are honest about what they want and need. It is no longer a matter of buying and selling talent but of how the two parties broker a deal that delivers mutual but different benefits.
The way that talent management has been managed through processes and programmes has led to the function developing a life and raison d’être of its own, sucking in more and more resources and creating unnecessary bureaucracy. Talent-building processes become insulated from the external competitive environment because too much effort is spent on the operational “how” and not enough on the strategic “why”.
Top managers may be tempted to abdicate their responsibility for talent management to the HR team because it is so heavily associated with programmes and procedures. And talented individuals may become invisible to top management.
The traditional talent management approach works best in a business context that is reasonably stable and where definitions of talent and potential remain meaningful and relevant long enough for career planning purposes. However, a more volatile and unpredictable environment requires a more flexible and responsive approach.
Figure 8.1 demonstrates how firms should focus on building, buying, borrowing or broadening their talent depending on their strategic context.
FIG 8.1 Aligning business and talent strategies
Source: Marion Devine and Michel Syrett, 2013
Low pace of change, low level of ambiguity
The business environment is relatively stable and the future predictable enough to determine strategy over the short and medium term. Firms can make accurate forecasts about the expertise critical staff need to deliver the strategy. Traditional talent management can focus on building the right combination of knowledge and experience among internal staff.
High pace of change, low level of ambiguity
This is a time of rapid change but with a clear outlook on the future. Longer-term learning and development plans are in place to help upgrade the organisation, but some critical skills are needed immediately and must be bought via external recruitment.
High pace of change, high level of ambiguity
There is no basis for forecasting the future and the priority is to anticipate and respond to unexpected events. Borrowing temporary or interim skilled staff is a way for firms to reconfigure their capabilities to explore or exploit a new opportunity. It also enables them to avoid long-term staffing decisions that would make it harder to change course should the need arise (for example, because of disruptive technology).
Low pace of change, high level of ambiguity
There is a range of possible futures and the emphasis is on scenario and contingency planning. The priority is to explore options and pick up on any cues or signals from the external environment. Through broadening their access to talented people, firms can reach beyond their boundaries, both mental and organisational, and tap into new ideas and perspectives from a diverse array of independent or creative thinkers.
New priorities
There is a widespread view among senior managers that talent planning should be strategic and integrated and much less tactical and piecemeal. Asked about the challenges that “keep them awake at night”, those interviewed for this book identified a range of issues that can be grouped into four segments.
One big concern is how to align talent management with the overall strategy so that it can respond to the (often urgent) needs of the business. The other three concerns flow from this: how to redefine talent and potential in the light of strategic priorities; how to deploy talented people across the business for maximum impact; and how to create a corporate culture where a wider and more diverse group of talented individuals can thrive.
Alignment
The organisations and leaders featured in this book are grappling with how to design talent strategies and processes in the context of highly uncertain yet fast-changing business environments.
As the example of Unilever in Chapter 2 highlights, success in global markets depends on seizing opportunities and moving into new competitive areas. The company has ambitious growth plans and is expanding fast into new activities.
This means that business planning must be done in shorter cycles and companies must be more flexible, using scenario and contingency planning in case the strategy needs to change suddenly. They cannot afford a lengthy interval between strategy formulation and implementation and must have people in place who can manage changes in direction or emphasis.
The research and interviews carried out for t
his book revealed the need for organisations to:
make sure that their talent strategy keeps pace with growth targets, so that they are able to fill new roles as they arise rather than playing catch-up by “back-filling”;
create global talent pools and ensure that a small cluster of nationalities do not dominate;
respond rapidly to a shift of business activity towards growing or emerging markets – for example, make sure that managers from these regions are included in the talent pool and that career planning includes work assignments in these markets;
quickly plug skills gaps and amend learning and development plans when the business changes direction and needs a new set of capabilities to deliver the strategy;
remain aligned with business strategy – the top management team and senior managers need to collaborate more effectively with those in HR to make sure that talent management stays tightly focused on business needs.
Redefining who and what constitutes talent
As the examples of Olam International, Mars, Santander UK and Randstad revealed, a big issue is how to define talent and potential in the light of business priorities.
Many companies have been defining what they mean by outstanding performance and are re-evaluating what is the optimum mix of general management skills and specialist expertise. They now need to:
distinguish outstanding leadership from merely good leadership and make sure that talent strategies focus on the latter;
define talent and potential in terms that reflect the context of the business as well as its values, and which remain relevant despite changes in the business strategy or organisation structure;
move away from a homogeneous senior leadership team towards a more diverse pool of talent – not just in terms of culture, ethnicity, gender and age, but also in terms of thinking and attitude, background and experience;
attract digitally savvy employees who are creative and innovative – and create an organisational environment where they can thrive;
find the right ratio between internal and external appointments – for some companies the priority is to inject “new blood” into senior management teams, while for others growing their own is important to ensure a continuity of cultural values and behaviours;
understand the personal attributes needed so that someone’s talent can be developed and harnessed for maximum value – and consider whether critical traits such as ability to learn, self-awareness, resilience and adaptability can be taught or developed.
Deploying talent
The priority is to have the right array of talented people in the right places in the organisation equipped with the right skills and experiences to execute the strategy. Organisations need to:
keep hold of talented young employees long enough for them to be included in talent management plans – an urgent concern is how to manage their expectations and avoid over-accelerating their careers so they consolidate their skills;
improve the progression of talented women into senior and top management positions;
develop managers and specialists who can help create new business models and also work across a range of business models at different stages of their careers;
accelerate the development and career progression of some employees, especially when there is an urgent need to plug a skills gap, or expand the pool of talent to include an underutilised group of talented people;
identify high-potential individuals early enough so that they can be given the right experiences and development opportunities.
Building a culture to attract, recognise and develop talent
A concern about building a genuine rather than “painted-on” talent-based culture has moved from “nice to have” to a major preoccupation among those interviewed for this book. Indeed, some believe that having the right culture is more important than having well-designed formal talent processes. In general, the desire is to create a culture that:
gets the best out of people and encourages them to take risks and stretch themselves to reach their full potential;
ensures the business is seen as the “employer of choice” among its target group of talented individuals;
is perceived as authentic, where cultural values are consistently applied, even when the business experiences challenges and setbacks;
remains undiluted and cohesive during phases of change such as rapid business growth;
encourages senior managers to nurture talented individuals.
The individual perspective
Organisations know what they need from their employees, but where do talented individuals fit in? What do they want from their careers and what is their experience of being “talent managed”?
What is clear is that the kind of people who are so much in demand these days want:
to feel valued and respected;
competitive salaries;
rapid job advancement;
a sense of achievement;
exciting and challenging work;
freedom and autonomy;
a good work–life balance.
Moreover, many have expectations and attitudes that traditional talent management strategies do not really allow for.
Talented people are not like chess pieces that can be moved at the whim of the organisation. They are ambitious, demanding, often impatient, and intolerant of boredom, hierarchy and politics. They know their value and are willing to move jobs and companies to get what they want. They want opportunities to develop their skills, but they may not want to play the talent game for the following reasons:
They have an individualistic approach to career planning – they believe they own their talent and they expect to manage their own career.
They do not automatically want a long-term corporate career – they are well aware of other employment opportunities available to them such as self-employment or working for a charity or a non-governmental organisation.
They do not automatically want to be included in a talent pool or to be given the label of “talented”.
They do not want to sacrifice everything to get to the top – and they are often unwilling to be mobile at certain stages of life.
They think more flexibly about life stages and are more willing than ever before to move jobs frequently, embark on career changes and have spells without employment to concentrate on family commitments or pursue more qualifications.
They have a degree of scepticism, even cynicism, about whether companies live up to their espoused values.
They do not easily give their loyalty to a company – this has to be earned.
Not so strategically talented
Overall, the research for this book suggests a fundamental misalignment between the attitudes and expectations of organisations and talented individuals. The strategies many organisations have adopted with regard to making sure that their need for talent is met are in trouble for the following reasons:
International companies are putting emphasis in the early identification of talent and long-term career planning in the face of increasing numbers of talented individuals who do not have the patience or inclination to commit to a lengthy career with one organisation.
There is a failure to accommodate the desires and needs of the innovative and creative individuals, such as entrepreneurs and mavericks, who can help organisations adapt and stay ahead in a volatile business environment.
For personal reasons and commitments, many talented people are less willing to move around when international companies need or would like them to.
Talented women are being held back or because of corporate inflexibility are leaving large organisations, thus making it even less likely that they will build the more diverse leadership teams they need.
A focus on succession planning implicitly equates “talent” with the “top”, just at a time when talented people seem more thoughtful about their careers and less certain about what constitutes high achievement.
A focus on the “core” of firm-specific
workers and managers, often in full-time posts, ignores the fact that many people with these core skills are electing to work at the periphery of the organisation in part-time, contract and associate roles.
An assumption that talent retention means retaining valued staff in continuous, permanent employment inside the organisation fails to recognise that many talented people now think in terms of a more varied “portfolio” career.
A new model
The solution to the strategic disconnect with reality is a closer convergence between business agendas and the life and career goals of high-flying individuals, and to build pools of talent not just from within the organisation but also from the periphery and outside the business altogether.
This more flexible and inclusive approach to talent management is illustrated in Figure 8.2, which shows different approaches to managing diverse talent pools.
Traditional talent management focuses on the top and bottom left quadrants, where the aim is to recruit talent into the organisation. In broad terms, programme-led approaches are used with large talent pools and for younger talent. As the pipeline narrows and talented individuals become increasing skilled and more valuable, the emphasis is on more tailored approaches. The goal is to retain the talent and make sure that both the individual and the organisation are getting what they want.
FIG 8.2 Managing diverse talent pools
Source: Marion Devine and Michel Syrett, 2013
However, this traditional approach means that young employees and more junior women are often in the bottom left quadrant when they should be in the top left quadrant because of their propensity to leave the organisation when they are not getting the opportunities they want.
A more innovative approach is to “stretch” the talent strategy into all four quadrants – to connect with those who have been overlooked or who have opted out because their needs have not been accommodated, and to forge relationships with people outside the organisation who have the desired skills, ideas, knowledge, experience and networks.
Managing Talent Page 19