From Talent Compliance To Talent Commitment

Lesley Uren discusses the key findings of a new research report that investigates talent management processes, identifies the challenges to implementation and highlights the best practices for achieving a culture of talent management commitment rather than compliance.  The research draws on the experiences of 58 organisations, from a range of industry sectors and operating across international marketplaces. 
Our research report, From compliance to commitment, investigates the best way to embed talent management within the day-to-day running of an organisation, rather than it being something that happens just once a year or that is the exclusive domain of the HR function.  We wanted to understand how to transform talent management from an exercise in compliance to one of commitment, where managers have a genuine desire to build sustainable capability in their organisations.  
Talent management means different things to different people.  We describe it as having five elements:
 
Attract: Having the right employment proposition and brand to attract talent from the external marketplace.
Identify: Being clear on the kinds of people and capability that will create value or deliver a competitive advantage for your organisation now and in the future.
Develop: Building the skills and capabilities of your people in order to meet current and future demands.
Deploy: Placing the right people in the right jobs at the right time.
Engage: Ensuring the right environment for individuals to deliver their best and remain committed to the organisation.

 

The challenge of talent management 

The logic behind talent management seems fairly straightforward.  Businesses are run by people.  Processes, technology and capital are important, but it is people who make the decisions.  It’s people who create value by using these corporate assets to create products and services that people want.  This must mean that the better the people an organisation has, the better it will perform.  This is the rationale behind talent management – attract, develop and utilise the best brains to get superior business results.  When the term was introduced in the business community in 1998, it was hailed as a panacea – a corporate cure-all for solving a multitude of management problems.  Now, however, the reality is less straightforward.  
There are a few notable organisations that manage talent exceptionally well.  These organisations have been doing talent management since long before the phrase was coined and, rather than seeing talent management as a discrete business process, incorporate the principles into everything they do.  For the majority of organisations, however, we have observed that the challenging is maintaining talent management in the medium to long term.  
Given the considerable resources devoted to this topic, it is unlikely that organisations lack the processes, tools and techniques for talent management.  A more likely explanation is that talent management goes against a natural desire in most people to avoid conflict.  The tricky business of evaluating and differentiating employees, which is the essence of talent management is riddled with potential conflict and emotive pitfalls that can never be fully reflected in a rational business process.  We believe talent management is different to other business initiatives because it involves managing some underlying tensions.  These include:
 
  • The need to differentiate employees in terms of their performance in order to make investment decisions versus the need to treat employees equally to promote solidarity and cohesion.
  • The need to invest in formal processes and infrastructure to ensure that talent management is independent of any one person versus the need to build individual capability in managers, individuals and human resources professionals.
  • The need for simplicity versus the need for robustness to ensure fairness.
  • The need to utilise talent to meet future challenges.  

 

The link to business performance
Our research found that talent management is not perceived to be well embedded despite the bottom line benefits.  Our belief that embedding talent management is a critical challenge was supported by our findings, with the majority of participants (58 per cent) saying it had not yet become embedded within their organisation.  In organisations where talent management was perceived to be more strongly embedded, there were higher levels of total shareholder return.  Over a five-year period these organisations outperformed those where talent management was perceived to be less well-embedded by 67 per cent.
This supports the philosophy of many top-performing corporations, both public and private, that effective talent management is an inherent element of a high-performance and successful business culture.  The single most important factor in successfully embedding talent management is active senior management sponsorship.  In this respect, talent management is no different from any other business process.  However, where talent management appears to differ from other processes is the requirements it places on individuals to have the right attitude and skill set.  A recurring theme in our research interviews was the importance of a “talent mindset” – a genuine belief in the principles of talent management – coupled with the energy to drive the process forward.  
    Organisations that were most successful at embedding talent management simultaneously addressed two aspects.  They focused on building organisational capability by putting in place processes and systems.  But, crucially, they focused on developing high levels of awareness and capability within the three talent management stakeholder groups: individuals, line managers and human resources professionals.  Failure to account for one of these groups is certain to reduce the chances of success in the long term.     

 

Talent management practices
Ten key conclusions emerged from our research and the findings allowed us to create 20 talent management best practices, which have been organised into six clusters (see below).  It would be unrealistic to focus on all practices at once.  The starting point should be discussing and developing a clear and shared understanding of the business issues with line managers.  This kind of conversation should highlight the priority talent management issues, which in turn indicate the priority practices on which to focus.  
A. Context practices
Practices are not “best practices” unless they deliver results for an organisation.  Just because they deliver results for one business, does not mean they will deliver for another – even if both companies are in the same sector.  Much has been written about best practice in talent management and a few organisations have been consistently held up as “exemplars” of these practices.  Deciding which, if any of these, practices will suit your business is all about understanding the context within which your talent management process will sit.  Exactly what do your line managers believe about talent management and identification of high potential?  Do they, for example, fundamentally believe that the identification of talent should be a closed process?  What exactly is the business case for taking any action at all?  What competitive advantage will be gained by paying attention to talent management?
Build an understanding of your context by answering these questions first and the process you design will be fit for purpose.  The context practices to address are: 
  • Adopt a new model for change management that puts mindset first and pays attention to the significant personal aspects of change.
  • Build a business case that addresses the business and the personal agenda.
  • Have a few clear talent principles.
  • Focus on best fit rather than best practice.
B. Definition practices
Being asked to identify talented individuals from within your team without a clear definition of exactly what it means to be “talented” is the managerial equivalent of being asked to hit a hole-in-one without knowing where the green is.  So why is it that organisations still implement talent management programs without first defining what being talented means?  If they do create a definition, why is it that they often fall prey to common pitfalls such as layering their new definition on top of an existing competency framework, or rely solely on someone else’s definition of “high potential” without interpreting it for their own organisation?
Getting this step right is key to embedding your overall talent management program in the longer term.  The definition practices to address are:
  • Have an explicit definition of talent.
  • Consider multiple definitions to maximise competitive advantage.
  • Avoid the definition pitfalls of failing to differentiate between performance and potential, getting caught up in competency frameworks and adopting a talent definition that is too restrictive.  
C. Transparency practices
Once you have identified who your talented individuals are, do you tell them?  This question is probably the most hotly debated of all the many to arise when designing and implementing a talent management program.  For most organisations, the answer is usually arrived at from an emotional rather than a rational perspective.  That is, the answer depends on what you believe.  Do you believe that people can only make decisions about their career and their development within an organisation if they know what that organisation believes their potential to be?  Or do you think that by being open with individuals about their perceived potential you will inflate the expectations of one segments of the population, or crush the hopes of another?
There is another way.  Consider the rational arguments for and against transparency and arrive at a solution that takes into account all the implications of the position you take as an organisation and builds a process to ensure consistent messages are delivered.  To be effective, it would seem that you need to choose either one end of the spectrum of the other – there is no such this as a "little bit transparent".  The transparency practices to address are:
  • Understand the implications of varying degree of transparency.
  • Ensure consistent messages.
  • If you are going to be transparent, be very transparent.  
D. Simplicity practices
Unlike sales or finance processes, there’s a tendency for talent processes to become disconnected from each other and from the core business.  How is it that talent management can start off as a simple and practical set of tools and techniques to become, only a few years down the line, a set of disparate activities lacking focus and clarity?
It seems that, as support for talent management and development builds, the scope of the work increases and more people want to be involved and give their input.  Inevitably, new pieces get bolted on to the original process, some of which are helpful and ensure the work continues to meet business needs, while others (in our experience, the majority) obscure the end result or over-complicate matters.
The key to avoiding this is to keep things simple.  The simplicity practices to address are:
  • Focus on people and roles.
  • Link talent to your existing business and human resources processes.
  • Provide managers with simple yet impactful tools.
  • Stick with it.
E. Capability practices
Delivering a difficult message well requires a superior set of skills.  Delivering a message well that is both difficult and complex, requires an even more sophisticated level of skill set.  Most of the messages line managers are asked to deliver as part of the talent management process fall into the category of difficult and complex.  
It’s obvious that having to deliver a message to someone that they’re not high-potential is going to be difficult.  But what about the complexity and risk of having to have a conversation with a highly ambitious, talented individual in order to communicate that yes, they are perceived as high-potential, but that does not mean promotion in the short term as the organisation thinks the individual still has maturing to do in their current role?  What if you deliver that message badly and the individual chooses to look for short-term promotion elsewhere?
Effective, well-embedded talent management is either delivered or not through conversations between individuals and their line managers.  A quality conversation cannot be achieved without some investment in building the capability of individuals, line managers and the HR team.  The capability practices to address are:
  • Build line manager will and skill.
  • Build human resources capability.
  • Develop individual career management skills.
F. Action practices
The previous five categories have focused on the foundations of talent management.  Without these, it is unlikely that talent management will live up to its full potential in delivering bottom-line benefits.  Ensuring these elements are covered is not sufficient, however.  Without taking action on developing, deploying and engaging talent, the work is unlikely to yield significant tangible benefits.  The action practices to address are:
  • Manage data to make decisions – the data you collect will link to the information you need to achieve the talent management objectives specific to your business.  
  • Differentiate the development deal for different types of talent.
  • Mobilise talent by encouraging and enabling employees to take on new roles or new challenges in their current roles.  

The full article was originally published in Strategic HR Review in March/April 2007.