Building talent communities
Danny Kalman, April 07, 2015
Talent management strategies have evolved a lot over time, with the focus switching from talent as an audience to talent as a community.
The sum total of all of the potential outputs of individual talent in an organisation will be the organisation’s theoretical competitive position. If these potential outputs are sufficiently different from the outputs of competitors, then that will be the organisation’s potential competitive advantage. If these potential outputs are converted to real outputs they will be the organisation's actual competitive success over time. Seems simple, right?
Delivering this people management objective through the effective identification, attraction, development, management and retention of talent is a key focus for HR. It can be problematic though, because there is not enough talent to satisfy demand.
A convergence of external macro-economic factors, internal organisational dynamics and changes in approach toward careers and development has created a dynamic context for talent. Of the many forces that affect its supply and demand, three stand out:
- Globalisation and its effect on the movement of labour
- Demographic change and its effect on attitudes and behaviours
- Changing structure of organisations from hierarchies to networks
From hierarchies to networks
This diagram portrays the classic traditional approach to talent
management: a logical fixed structure overseen by a CEO or MD. The flow of talent is mostly upwards, and the focus is on a few people who have been evaluated as being suitable to fill executive roles.
The diagram below shows an organisation based on networks or projects. Reporting lines are less clear since the market may be volatile or unpredictable, demanding either a rapid response or different set of skills. A specialist in one part of the organisation working with another specialist elsewhere may be critical to the successful delivery of a project, product or service. These are highly talented and skilled individuals who probably do not feature in a succession plan or even a talent pool.
When combined with an environmental context that is characterised as volatile, uncertain, complex and ambiguous (VUCA) these forces create a significant challenge for those developing talent strategy in global organisations.
As a result, approaches to talent management have evolved. During the first ‘war for talent’, the preparation of succession plans might have been considered as Talent 1.0, and the attraction of high-flying chief executives as Talent 2.0. The focus on graduates, people with high potential and specialists could be known as Talent 3.0. The ‘new now’ of maximising the potential of a multi-generational, multicultural, cross-organisational, inclusive talent workforce is Talent 4.0. The focus on talent has rarely been sharper. Organisations need to make their people before they make their products.
Talent 4.0 is a 360-degree initiative
Talent 4.0 is neither top-down nor bottom-up. It is an enterprise-wide, 360-degree initiative that covers the role of talented people in taking ownership of their own development on the one hand, and the board of directors giving the go-ahead to investment in talent on the other. Talent is not defined in an exclusive or inclusive way but one that simultaneously provides for both. It gives as much attention to career paths of the majority of employees as it does to succession plans.
There are a number of priorities if this approach to talent management is to be successful:
Providing insight into the value of people to organisational success
This means applying ‘outside-in’ thinking to provide intelligence drawn from labour market data and relating this to the business context. For example, a shortage of technology skills in one geographical area may lead to such alternative approaches to product design and development as using a different geographical location, working with development partners or completing a merger or acquisition. But it also means engaging in the process of business strategy-setting and making sure that the subject of talent becomes ingrained in the dialogue of strategy. If talent issues are strategic issues then the talent agenda becomes an integral part of the business agenda.
Making the business case for Talent 4.0
Relying on adages such as ‘people are our greatest asset’ to persuade executives to support the concept of making people before making products is no longer enough. There are strategic reasons for doing so, but these must be backed up by a business case if they are to secure a level of resource that may put people investment in competition with other strategic projects, such as product management or technology. On the assumption that an organisation’s resources are finite, part of the strategy process will be about resource allocation. Securing a level of resource that will allow the delivery of Talent 4.0 is the objective. Advances in talent analytics will support this case.
Ensuring an organisation-wide understanding and buy-in to the talent definition
You must engage the organisation’s stakeholders in the idea that everyone has talent, and that talent is a non-hierarchical, inclusive concept. If the delivery of Talent 4.0 is to be successful, executives will have to turn the concept into practice in their business units around the world, line managers will have to create career paths and opportunities for members of their teams that might see the most talented people moving to new roles outside of their areas, and shareholders will see more focus on people and may want to understand why this is going beyond the chosen few of the succession plan. Equally, employees in a dispersed workforce will need to recognise that opportunities exist but are not automatically awarded. The benefits of making your people before making your products are earned, not given. Willingness to learn, willingness to take ownership and responsibility for one’s own career, and willingness to acquire new skills in a rapidly changing landscape are important.
Having an inclusive/selective talent strategy with equal emphasis on each area
The approach will require the development of a strategy that balances the need to fill key positions (succession planning; selective roles) with the need to develop the potential of the whole workforce in an inclusive way. Gaining acceptance of this idea and promulgating belief will ultimately come about when there is:
- Visible evidence of the strategy in action
- Transparency in the process, perhaps with surprising and unexpected appointments
- Workforce mobility
- A performance management process that is embraced rather than rejected as a chore
- A willingness to work in cross-functional or cross-business unit teams to create innovative products, services or processes
- Improved business performance
Making the chief executive the chief talent officer
Critical to success will be the role of the chief executive as talent champion. For most chief executives this will merely be putting a name to what they do anyway. But it is worth ensuring that this is sustained by engaging the chief executive in all the talent processes, by clarifying what is expected through his or her leadership in terms of a culture of inclusivity and potential, and making sure that these attitudes and behaviours are emulated by executives and managers throughout the organisation.
Joining up talent management activity with business activity and other people management strategies
Of prime importance will be to ensure that talent management is not a standalone activity. On the one hand it is a critical part of business management; on the other it needs to be joined up with other parts of HR throughout the world. Since, for most organisations, there are likely to be many variants on the way that talent is defined and talent management administered, this objective will be challenging and will require a sustained commitment from everybody working in people management, be they talent managers, business partners, reward specialists or those responsible for employee engagement.
Delivering talent management brilliantly and having excellence in implementation
Organisations must spend as much time on implementation as on strategy-setting. The creation of a coherent project plan for the delivery of the talent strategy necessitates the creation of goals and targets, the allocation of responsibilities and actions, risk management and thinking through and anticipating implementation issues as they will occur throughout the world. A cross-functional, multi-discipline project team for delivering talent strategy will be the vehicle by which these measures are dealt with.
Making sure there is involvement from all of the organisation’s stakeholders
The success of talent management practices depends in large part on stakeholder involvement, top-level support and the integration of talent management with a global human resource information system. Those responsible for delivering the concept of making your people – that is to say, talent managers or people specialists – are likely to have more influence than power. Their success will therefore depend on a broad range of stakeholders who will need to be engaged in both setting and delivering the strategy.
Conclusion: The world is an open market for talented people
People management works best when the interests of the organisation coincide with the interests of individual employees. For the business this means achieving its stakeholder objectives. For the employee it means satisfaction at work, a balanced life and visible career prospects.
Investment in people at work is not an act of faith; it is a business strategy. The attraction, development, management and retention of talented people are critical to the success of all organisations. Talent 4.0 is an approach that can help to deliver this.
Danny Kalman and Paul Turner are the co-authors of Make Your People Before You Make Your Products, published by Wiley. Kalman is a talent management specialist with 20 years’ expertise in global talent management. Turner has worked at universities in Birmingham, Cambridge and Nottingham