Why a winning Talent strategy is vital to allow your people to prosper
Talent is all about having the right people with the right skills available for the jobs a business needs to be done.
This is a simple and powerful idea and when done well an organisation with more of the right talent will do better now, and into the future. It will have more sustainable success which offers better outcomes for customers, better careers and better long-term value for shareholders.
To do this Talent needs to be a strategic function which looks forward. It wants to be about more than matching supply and demand for today’s needs. Talent is a strategy that balances what is optimal for today with what is needed in an uncertain future.
This is hard and difficult work for many reasons.
Firstly it is about human nature. Three core patterns of behaviour are ubiquitous and hard to overcome
It is always tough to get people to trade “a known today” for an uncertain future. This means people have a stronger preference for immediate payoffs than for later ones. This plays out in talent as managers preferring the person who is ready for the job now, rather than the person who will be better in the future but may take a bit longer.
People like people like them who they know. They will look after them particularly if they have recruited them themselves. They are then one of theirs. This is backed up by the research that one of the major indicators of a manager’s performance grade is if they personally appointed them
People massively overestimate their capability and skills in many areas, particularly when they really don’t know a lot. Accurately assessing someone’s capability and suitability for a role is one of these areas where, because we are all human and we can do the job we think we should be experts in picking others. We see this in the common selection tool of an unstructured interview. The most common view on the accuracy of this approach is that it is about the same as random.
Secondly there is the challenge of time lags.
Anything that is worthwhile and valuable takes time to build. It takes time for people to develop the new complex skills and capabilities organisations need to grow.
This means that if an organisation chooses to only focus on local, immediate needs as it appoints people, it will never create the capability it needs for the future. By the time a business needs a valuable skill, it is too late to build it.
For large organisations this paradox becomes even more exasperating. Large organisations have a depth of resources, both in terms of cash and in terms of development opportunities, that small companies do not have.
They can offer international experiences, staff roles in head office, a range of product groups to work in at different stages of market maturity, access to different functions and expensive development courses. They are the ideal development seed bed for talent.
But too many large organisations are full of highly talented people, with top minds, who have stopped working to their full potential. The organisation is struggling to deliver the benefit of their scale to the people who work in it.
When large organisations do not have a strong talent strategy, local managers will end up solving for their immediate local needs. They end up discounting the benefits that the overall business can get from smart hiring and deployment to achieve short term gain.
They hire for the here and now, who can do the job immediately. They hire from instinct, not process, as think they are better than they are at judging people. They end up holding on to and over-promoting people who they know and like. The net results is systemically poor decisions over time.
Big organisations end up working as 1000s of small teams and the organisation ends up losing out on all the potential advantages of scale. This slows the organisation down, slows the careers of its people down and puts the business in a situation where it is learning slower than its smaller competitors.
When it goes right
A Talent Strategy is there to stop this happening. It creates a coherent talent system that makes sure that the organisation balances the future and the immediate and the needs of the whole with the needs of the local. This allows the organisation to change and learn as fast as the markets it competes in.
A good Talent Strategy is simple, speedy and sustainable. Critically it is understood and bought into by everyone in the business.
This is good for the business and for the people in it. It creates long terms competitive advantage.
When it goes wrong
When Talent gets it wrong Talent becomes a functional bureaucracy that slowly suffocates the spirit and innovation out of a business and its people by burdening it with more processes, initiatives and controls.
This normally starts by relying on process and data rather than creating actions through changing beliefs. By spending more time identifying the abstract idea of potential rather than focusing on who is actually progressing.
When it goes wrong, lots of organisations start to give up on Talent. They revert back to letting everyone do their own thing, which takes them back to the beginning of the problem with a sub optimised approach to getting the best out of their people across the board. They revert to a view that everyone is talent so we don’t need to make any choices about where matters.
How to get there - Start from where you are.
There are 5 outcomes we think a Talent strategy needs to deliver to create a winning talent system
Clarity on where you want to make a difference and what to prioritise
Scalable actions based on clear Principles on how success works around here
A coherent and aligned set of initiatives that clearly link to the Values of the business
A credible way of tracking outcomes not inputs
The connection that comes from engaging all of your people in how they can build and develop themselves to be their best
Large parts of this will already be in place and will have value to how you progress. There will be core processes, programmes and tools. Some will be useful in their own right, some will have more value as symbols of what matters.
But our view is that this value is currently hidden and not enough without the strategy that tells you what decisions you want the process to make, what you want the data to measure and how you want to apply those tools.
Strategy is about choices about how you win to create the sustainability that drives real shareholder value. Which is tough. If you look at the FTSE 100 from the start of 2000 to the start of 2020 only 37 companies are still there, the majority have merged, been bought, gone bust or shrunk. Staying alive and growing as a big company is hard.
Sustainable means balancing the needs of today with the future.
It is interesting to observe how there are a group of companies that have made this work over time. They are not perfect and some lose their way over time. But there are companies with sustainable talent strategies.
Companies like P&G, McKinsey, Deloitte, Pepsi, Unilever, BP, Weiden and Kennedy, Blackrock or JP Morgan. In newer industries, companies life Thoughtworks, ARM, IDEO, AKQA, ?What If! and Bow and Arrow have proved they can develop and sustain great talent.
All of these have been winners in their own fields and providers to their industry and to their communities of talent. They have seeded new industries with leaders and innovators and provided the customers, partners and leaders to sustain industries and the communities they work in.
These companies have also been the leaders in diversity in their fields. None are perfect but they are ahead of the curve. It turns out that winning Talent strategies mean diversity. They are better at putting the best person in the job. They are better at setting the frame of what good looks like which everyone can aspire to be.
All organisations need a strategy for their Talent which makes the choices about how to balance the needs of today with the needs of the future and the benefits of the local with the benefits for the whole.
Getting this right takes time, it is not a quick fix, but when you get it right it is a key part of long-term sustainable performance.
To find out more about how your organisation's talent strategy stacks up against what your people need take our talent first scorecard. https://greenhouseproject.scoreapp.com/