Moving from Talent Review to Talent Outcomes
There are three big differentiators for business in today’s VUCA business environment: Strategy, Leadership, and Culture. The quality and leadership bench strength of companies are positively correlated to business performance. According to CEB research, A change in leadership bench strength leads to a 0.5% year-over-year change in revenue and profit. Companies with stronger bench strength have 1.9x greater revenue growth than companies with weaker bench strength and companies with stronger bench have 2.0x faster profit growth than companies with weaker bench strength.
Most mature companies have been engaged in running organizational talent reviews for years. This process is a well-oiled machine but the real question is: Is it producing Talent Outcomes? When speaking to other HR and business Leaders, they constantly complain they can’t fill critical roles that drive business value. Their current leadership pipeline is producing few qualified leaders to meet the growing demand.
The history of succession management goes back to Boards of Directors wanting to mitigate risk at the top of the organization typically starting with CEO succession. It seemed like a logical idea to cascade this approach further down the organization, however, it uses a lot of people resources on an annual basis without a proper return on investment. This raises a question to most companies on how to prepare leaders for critical roles. The business environment is changing quickly and requires a refresh of talented leaders. This can only come about when organizations create an eco-system to produce “ready now” talent. Human Edge has developed a model that addresses this challenge and provides organizations a roadmap to produce “ready now” talent.
The inner circle includes the key processes. It begins with Organization Planning based on the latest business strategy answering the key question: Which talent is needed to create a competitive advantage? This is the basis for a talent strategy. Once a business has their talent strategy in place then they can segment their talent and identify critical roles, feeder roles and talent pools. The next step is talent identification where an organization determines where is the entry into their talent pipeline. Most companies don’t go deep enough to identify talent and accelerate them to become future senior leaders. Once identified and accelerated it usually takes 10 years to get an early talent to a senior leadership role. Without acceleration of talent, it can take 20 to 25 years to produce qualified leaders for critical roles.
Organizations then focus on the development opportunities to develop their future leaders. This includes mentoring, coaching, programs and most importantly on-the-job experiences. Then when these critical roles become open, senior leaders can take bets on the leaders they have been grooming. It’s important organizations also provide the right support as they stretch their leaders otherwise they might underperform or even fail also know as the “hero to zero” syndrome.
In order for companies to fully develop “ready now” leaders, they will need to focus on the outer circle which is building a talent culture. It requires multiple areas of focus. One is not more than important another, it is when they all working together that produces results.
Senior Leader Ownership – includes senior leaders owning, supporting and role-modeling talent management activities. They ensure talent discussions are part of their normal business activities and carve out time in every senior leadership meeting. Not only do senior leaders take ownership but they have joint accountabilities for talent management.
Clear Governance – is critical for the movement and deployment of talent. When governance is clear then the decision of who will fill key roles is at the right level. Instead of filling only an open role senior leaders and HR ensure they are moving talent through a series of key roles to prepare them for future bigger roles.
Process and Tools – easy to use and technology-enabled processes and tools for leaders are critical in ensuring the time spent is on quality discussion and not on the filling in templates.
Leader Skills – when leaders have the ability to give feedback, mentor, coach, and develop their direct reports then there is a greater likelihood that development activities will translate into capability growth.
Leader Accountability – when leaders are held accountable for talent management and are promoted and compensated for these behaviors they will then they dedicate the appropriate time and resources to developing talent. They will become talent champions and firmly believe that human capital is critical to the organization’s success.
Analytics – when companies start connecting business and human capital data they start to have a greater understanding of their talent risks and where they have leakages in their talent pipeline. Using analytics can also drive senior leadership ownership and leader accountability in an organization. As predictive analytics is more widely used it will help companies make more selected investments in talent with the greatest growth potential.
If you would like to find out the strength of your talent eco-system, request a free assessment from Human Edge by contacting at [email protected]