Strategy is all
Dr. John Mahoney-Phillips offers support for the business case to be made and borrowing from the world of strategic HR management (SHRM), offers a simple framework that can help HR directors evaluate their talent management function and to position talent management as a way to create strategic value for their organisation.
There is a strong case to be made for organisations to focus on the management of talent. Even in these times of global crisis the economic and demographic case suggest that companies who can create an advantage in the attraction, development and retention of talent will create more long-term value than those organisations who don't.
Macro economic trends will impact the need for talent. Regardless of the current economics, the demographics of talent remain and they are stark! Alan Greenspan recognised that we are: "at the leading edge of what must surely be the biggest shift from work to retirement". But it is not simply retirement that will impact the supply of talent. The shift to retirement, even if delayed for a few years with the current economics, has to be viewed alongside an increasing life expectancy that will create an amplified need for old age support and decreasing fertility that will ultimately restrict the overall supply of talent. According to leading economist George Magnus in his book The Age of Ageing this is not just a phenomenon in more developed economies but is replicated in less developed economies, just with a slightly longer time lag. The impact will be considerable, increased care costs, slower growth and less people to produce the wealth needed to support the economy. The consequence of this is that we will need, almost certainly, much higher levels of creativity and productivity from a smaller number of people, there will be a premium on talent, individuals with the skills to implement the creative solutions that will drive the higher levels of productivity needed.
Organisational change will also drive the need for talented individuals. It is often said that the only thing that will not change in organisations is the need for change itself.
"Why is Talent Management so damned fuzzy? There is simply no consistent way in which Talent Management is defined"
Future talents will be: people who have to cope with fast moving organisational design changes; people who are able to cope with managing through influence; those who continually learn and adapt their style; and those who are adept at building alliances and working collaboratively with complex stakeholder groups. We already know that these attributes are not abundant and so we might reasonably assume that the talents who possess these skills will be the common target of many organisations.
We also know that external hires cost more, are less likely to succeed and take longer to be productive than internal promotees; why should we expect this to be any different in the future? These arguments do much to support the comments of the Professor of Trade, Finance and Business at Yale last year, he said "[Talent] issues are at the heart of our rapidly changing world economy and will continue to present formidable challenges to business leaders".
Why is Talent Management so damned fuzzy? There is simply no consistent way in which Talent Management is defined. In some cases Talent Management seems to be the new millennium term for HR, in other instances it is an unconnected, incomplete and inconsistent set of processes. Many talent management systems have started out as succession planning, and been shaped by the, typically HR, leader who owned the process. These processes are then inherited by new incumbents and expanded or rolled out into business lines that are unsure of the purpose and value. The question of who owns talent, and whether we are talking about governance over the process and definitions or the talents themselves has, too often, not been asked. Whilst we might agree that Talent Management includes succession, what remains unanswered is ‘what else is it'?
What is the current state of Talent Management? The lack of clarity around Talent Management has already reduced its impact and potential contribution to organisational success. For example:
- Companies go out to hire significantly more often than they promote internally
- There is a limited choice and lack of information on the full range of potential internal candidates
- There are often huge pools of junior talent, and the focus is more often on lists of names than it is on action and development plans
- Managers avoid (and are allowed to avoid) difficult forthright discussions with and about their people. Talent evaluation as a core management skill is simply not part of many companies DNA.
- External agencies, governing bodies and shareholders are more interested in succession and the strength of the leadership team and are demanding more accountability in this area - an indication they are not currently satisfied.
In terms of a strategic framework for Talent Management, I'd like to propose a framework borrowing from the world of strategic HR management, and put a ‘stick in the ground' by proposing a range of HR systems that should be included, at least in part, within the Talent Management definition. These processes are critical and necessary if Talent Management is going to be strategic and add value to the business. Strategic Talent Management needs to significantly influence five HR processes and ensure a common set of organisation-wide definitions. The definitions and strategic processes are shown in the table below.
Strategic Talent Management
Core HR processes to be influenced:
1: Strategic Staffing: Recruitment / acquisition into key or critical roles
2: Performance Management
3: Learning and Development
4: Succession
5: Reward
Areas where common company wide definitions and approaches are required:
1: Key or critical roles
2: Identification of High Potentials
3: Benchmarking assessment of key succession candidates
A framework alone is not enough, it's about dialogue too. The framework outlined above only comes into play when it is the basis of a strategic dialogue between a ‘talent professional' and the business. For example, HR business partners would be initiating discussions on how and where talents could impact the business plan e.g. Where would talent improvements provide strategic gain? Where will talent or strong and quick succession create a market advantage? What are the time-lines for these strategic gains? Posing these questions within, and as part of, the business strategy implementation phase will allow talent professionals to influence the recruiting, development and reward activities and better position the business to realise its strategic goals.
This framework is an attempt to offer an aspirational basis for talent professionals and Talent Management functions within organisations. I have no doubt that in some places, and in some organisations, there are close facsimiles to this model and the strategic dialogues that I hold as the basis of realising the value of Talent Management are a reality. However, we need to hear those voices and to correct, with practitioner evidence, the perception that Talent Management is just an enthusiastically pursued HR topic du jour with no relevance to line management and limited strategic impact.
Dr. John Mahoney-Phillips, Chartered Occupational Psychologist
Bio
Dr Mahoney-Phillips is a, Associate Fellow of the British Psychological Society, a Chartered Scientist and Global Head of Human Capital at UBS. His interests are in the role and identification of high potentials, board level and leadership succession, Performance Management and Organisational Design.
Acknowledgements
Thanks for original comments on this article to: Alexander Campbell, Group Director HR, Al-Futtaim, Dubai, and Mark Mula, Global Head of Learning & Development Pfizer, New York.
Foot notes
* Greenspan was Chairman of the US Federal Reserve Board 1987-2006
References
- Greenspan, A. Testimony before special committee on ageing, US senate, 15th March 2005.
- Magnus, G. (2008) The Age of Ageing.
- Byrnes, N. (2005). Star search. BusinessWeek, Ocober 10, v.74
- Garton, J.E. Conference Board, comments from 90th anniversary Gala Panel discussion.
Created on: 13-Sep-10 12:22
© theHRDirector.com
