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.
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.
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”
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
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.
Core HR processes
to be influenced:
Staffing: Recruitment / acquisition into key or critical roles
3: Learning and
Areas where common
company wide definitions and approaches are required:
1: Key or
of High Potentials
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
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.
Mahoney-Phillips, Chartered Occupational Psychologist
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.
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.
was Chairman of the US Federal Reserve Board 1987-2006
- 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.