Talent management: Implementing the new process

Despite much rhetoric about the importance of talent management, McKinsey, in its 1999/2000 research, found that only 26 per cent of the 6,900 managers surveyed strongly agreed that talent management is a top priority at their companies.

Some changes have occurred since the McKinsey research, which we believe has resulted in talent management climbing the HR agenda.

Whether this rise has resulted in significant steps forward within organisations remains to be seen. Making talent a strategic priority in an organisation can only come from engaging senior management in a dialogue that demonstrates failure to do so will greatly impact on future competitiveness.

It also goes without saying that once talent is established as one of an organisation's top priorities, it has to be resourced and constantly kept on senior management agendas.

Step Two: Aligning talent management to business strategy

This is perhaps the most difficult and challenging element of creating a talent management process.

It requires those responsible for the development to fully understand an organisation's operating environment and the impact the marketplace has on the competency and capability requirements. It requires the organisation to develop a clear 'storyboard', showing the links between business strategy and attracting, developing and retaining talent.

To develop an appropriate talent management process, HR has to talk to senior managers about the marketplace forces that are impacting on the business and the competitive pressures that drive the strategic intent of the company. Only with an in depth understanding of these, together with a knowledge of the key business drivers, can HR begin to formulate the talent capabilities required in the organisation.

Having this type of conversation with business leaders can be daunting for many HR professionals. Processes are, therefore, often developed in isolation from business realities and exist in a vacuum divorced from other HR processes.

The real test of the validity of such a process comes from being able to demonstrate a clear path from left to right on the schematic model (above). This, we would argue, should be the first real test of alignment and should form the foundation on which to move to the next stage of implementation.

This seems a relatively simplistic statement, but a completely integrated talent management process cannot be designed and implemented overnight.

Priorities need to be established based on the needs of the business. At this point, it is necessary to return to the original rationale for the talent management process and focus on what needs to be addressed in the immediate short term. Questions that arise at this juncture include: Are we seeking to solve a hiring or retention crisis? Are we seeking to dramatically improve organisational and business performance? Or are we simply trying to remedy an existing process that is not working?

The answers to these questions will determine where to start, at what level in the organisation and the overall scope and coverage of the process. One word of caution at this point - developing an integrated talent management system covering recruiting, developing and retaining talent requires considerable resources, time and effort from what may be a stretched HR function.

A further point to assess is the state of 'organisational readiness' for the introduction of new talent management approach or a major overhaul of an existing system. It may be necessary to select a pilot area, such as a function, business unit or geographical location, in which to test the process.

The complexity of introducing a talent management process into today's matrix structure should not be underestimated. Often, major changes will need to be brought about in terms of mindset and capability of those senior managers owning the talent process. The implementation may require a major overhaul of existing recruitment and resourcing processes, management development processes and recognition and reward programmes. Existing performance management systems may be inappropriate and inadequate in providing objective data on potential talent pool candidates.

Making the right decision on where to start will have a significant affect on the acceptability of the process to the organi-sation. Agreeing the changes with selected and like-minded senior managers may ease the introduction or transition process.

Step Four: Identifying talent

Much has been written in research literature about the reliability, validity and predictive validity of talent identification processes. What is clear is that there is no common school of thought, or agreement, on the most reliable approach to use. But HR professionals and line managers do need to be prepared for tough conversations about people that need to be based on objective performance data - not on intuitive judgements or hearsay.

Boardroom discussions need to be lifted in terms of their quality and focus if a talent management process is to be successful. Talent needs to be assessed and developed in a consistent way across an organisation and conversations about individuals need to result in clear, defined action plans and open and honest feedback. The talent management process should therefore:

A range of tools exists for identifying talent from formal assessment and development centres, through performance management systems to assessment by line managers.

One thorny issue that inevitably arises is trying to distinguish between current job performance and future potential. Strong evidence suggests that assessment centres, if properly constructed and combined with job performance data, will give a better predictive validity of future job performance. But many organisations are reluctant to introduce them due to concerns about what happens with the data generated.

Also, removing the 'pass-fail' phenomenon is extremely difficult but not impossible to achieve. The assessment connotation has been softened in some organisations by the introduction of development centres. This helps shift the focus from assessment to development and certainly seems to be more palatable to participants and the impact on the culture of the organisation.

The decision on which approach to use is a delicate one, and a number of factors or questions need to be considered:

Many of these questions will provide insights into how acceptable a more formal and rigorous process of talent identification would be to the organisation.

An alternative approach is to equip line managers with the knowledge and skills necessary to identify and assess talent within their own sphere of control.

This would involve them evaluating existing job performance in a rigorous and consistent way, and give them the ability to assess those who have the potential to move to more senior positions in the organisation.

Critical to all of this is objective and reliable evidence that is gathered and synthesised by senior managers. This may involve the development of high potential criteria against which to assess individual and competency models that reflect future organisational requirements.

Step Five: Keeping talent management on the agenda

For talent management to succeed, it has to be kept on the senior management agenda. Sustaining a rigorous process within a rapidly changing environment, where business pressures may result in a challenge to its position as a strategic initiative, is difficult.

The value of the process in delivering a steady supply of talent has to be reinforced regularly and one way is for HR to hold an annual retreat with senior management.

The purpose of this is to discuss talent strategy, review the overall talent pool and ensure the process is still aligned to the business strategy. If possible, accountability for developing talent needs to be incorporated into the objectives and priorities of all senior managers in the business.

Continuing with the traditional approach to succession planning may not deliver the talent pool required for the future.

A typical process in most organisations is for senior managers and HR to visit the corporate headquarters and present charts and slides outlining lists of succession candidates meeting the corporate definitions of 'talent'.

In many instances, those listening to the feedback have a limited knowledge of the individuals being discussed. So what are the differences between a traditional succession planning system and a robust talent management system?

A robust talent management system will provide a series of forums or meetings at which there is a discussion of both talent strengths and weaknesses at functional, division, business unit or regional level. This is accompanied by a review of individuals within that grouping, which is undertaken with a degree of intensity, challenge and clarity of purpose.

The result is a series of action plans that address the talent gaps at the organisational level, together with development and succession actions for each individual.

The number of such forums or meetings will depend on the size and structure of the organisation.

The matrix structure provides additional complexity and in these situations it is not unusual to find both functional and geographic forums running in parallel.

This provides additional challenges to HR in servicing these forums and ensures talent plans are consolidated at each level in the organisation.

What makes a robust talent management process?

If we believe talent management is worthwhile, then it could be argued that it should have the same level of importance, rigor, and energy devoted to it as does the annual budgeting process.

It is interesting to ask the question as to whether this is the case in your organisation. If people, and therefore talent, are our greatest asset in producing real competitive advantages, the two processes should be equal in terms of management attention.

A key question

In our survey, we asked: Looking back over your career, how do you feel that your talent has been handled?

A balanced picture emerged, with some individuals feeling their careers had been handled reasonably well and that they were provided with challenges that both developed them and led to successful outcomes for the company. But some felt there had been little or no planning regarding their career development or assessment for succession roles.

Step Six: Creating the talent development agenda

Reviewing talent in a robust and objective way is insufficient in itself to create the necessary talent pool. It needs to be accompanied by an aligned framework of development programmes and experiences that provide talent pool individuals with the necessary competencies to move at an accelerated pace through the organisation.

Research suggests that a formal training or learning programme provides around 16 per cent of an executive's development. The remaining 84 per cent comes from planned development experiences delivered through coaching, projects, challenging assignments and focused job experiences.

Through their own research, the authors found a clear correlation between breadth of managerial experience and the development of leadership competency. Planned experience, therefore, is an essential ingredient in the development discussions that are held at talent management forums.

Opportunities have to be created in organi-sations to facilitate real-life development experiences. Organisational structures may have to be 'flexed' to accommodate key talent. Waiting for suitable development jobs to become available is becoming an unacceptable approach to developing talent. The impact is significant in terms of conventional organisational structures and cost control.

The emergence of external mentoring and coaching is not accidental. It reflects the need to continually expand the range of options to develop talent.

Embarking on a new talent management process or refurbishing an existing one is a journey, not a destination. It should not be embarked on lightly, and needs to be correctly positioned, owned by senior management, resourced appropriately and its contribution measured in terms of return on investment.