Talent management: Where does talent management fit in?

One of the major issues for HR departments is the influence they can bring to bear on an organisation.

Being an HR director does not automatically give you a place on the board. Chief executives and chairmen/women in large corporations can be seen as being distanced from the workforce. Yet, those who are seen as revolutionising the way organisations do business have much closer access to both employees and customers.

Every organisation must create channels of influence. These must include ways in which talent management can be explored and the contribution of each employee is recognised and valued.

Creating the business case

Talent management should not be seen in isolation. It represents one of the most naturally evolving processes of developing your organisation's people.

Any strategy to introduce talent management must be considered carefully and positioned within the broader context of not just attracting, retaining and motivating talent, but also addressing financial issues - such as return on investment and cost savings. Answers to the following key questions will help decide if talent management complements and fits in with broader business issues:

The development of an organisational or employer brand can be very useful in developing effective talent management policies.

Developing an employer brand

'Branding' as a generic term is often assumed to belong to the marketing function. Organisations, however, are realising that directly, or indirectly, most brand promises are delivered by people, not products.

Pick up any business magazine that talks about 'branding' and it is likely it will be discussing the broader aspect of organisational, corporate or employer branding. Add to this the desire of many organisations to be an 'employer of choice'.

What is interesting is how this type of branding is defined. Terms such as corporate branding, organisations as brands, or more recently, employer branding, are different ways of describing the same process. What is clearly being recognised is that having strong consumer brands is not enough - organisations need to broaden their focus to consider other aspects such as:

Branding an organisation means focusing on the key components and encouraging consistency across all functions. Like any piece of machinery, one part cannot operate without the other. Cross-functional working breaks down the traditional divisions between marketing, sales, distribution, manufacturing and HR.

The branding process links new service/product development and the development of employees. It links the distribution chain with the customer. It builds relationships and not just agreements with external suppliers. It takes the most senior managers and involves them in the front line of the business. It puts the customer at the heart of the organisation and builds everything else around them.

Customers are the lifeblood

An organisation doesn't just service its customers; they become its lifeblood. People do not just make promises, they deliver them, not once but over and over again, consistently developing a better and better service. An organisation differentiates itself in the marketplace through its people, its products, its processes and its premises.

The brand of organisation should encapsulate a common belief based on shared vision, goals, aspirations, behaviour and practice.

Everyone who is touched by your organisation's brand should share these common perceptions. Importantly, this is not just an internal process. In the broader context of employer branding it means the way organisations position themselves externally as well as internally. This will have a particular relevance in the way organisations promote themselves in the recruitment marketplace, or in supplier contracts.

The most fundamental part of the process is built on behaviours, based on self-esteem, confidence and pride in the organisation. People must take responsibility for meeting challenges and providing innovative and creative solutions to problems. They will then rise above the mundane and gain tremendous personal and team satisfaction from providing excellent customer service.

These concepts are not fundamentally new. What is different is gaining senior-level commitment and linking all the stages together in a holistic way. By bringing all the initiatives together under an organisation's 'brand concept', not only is there more coherence, but there is a constant benchmark. All employees should ask: Does this action, this behaviour, this response, really reflect the brand? And, in doing so, they create an organisational conscience so powerful that organisational success should follow.

Reflecting the brand

A strong brand image is as relevant to an organisation as it is to a product or service. The people behind the product must perform in such a way that is consistent with the brand values their organisation propounds and projects.

True competitive advantage will be achieved by those organisations that can attract and retain employees and can build customer loyalty through the clear transmission of the overall brand. They will be the success stories of the 21st century.

The businesses that will succeed will recognise there is a need to do things differently. Value-based leadership, emotional intelligence, and intuition are no longer seen as being outside the corporate agenda. They are recognised as an important part of individual and organisational development.

Senior management now recognise that their 'talent bank' will be greatly depleted if they do not help key people fulfil their potential.

Built on common sense

Talent management, like many HR processes, is built on common sense. However, even though organisations may know what makes sense, they often lack the focus and commitment to apply it. In this guide, we have reviewed the approaches adopted by our case study examples, gathered together research from other studies, conducted our own survey and analysed models suggested by other authors.

Fundamentally, talent management needs attention to make it happen. It also needs a holistic approach. Like customer service, quality standards, and health and safety, you cannot just give the responsibility to one person. There has to be a belief and a commitment from the CEO and senior executives that spreads through the line management to the newest recruit.

Individuals joining an organisation must feel they are valued and that their contribution will make a difference. It is easy to say this is happening, but far harder to produce concrete evidence. We will look at methods of evaluation later in this guide.

What is talent management?

In any discussion about talent management, or management of high potential, it is important to first emphasise the development of all individuals.

No organisation should focus all its attention on developing only part of its human capital. What is important, however, is recognising the needs of different individuals within an organisation's community.

In their search for an effective process for managing talent, most organisations recognise the need to do it differently. But often the challenge is to identify how and where to start. One of the underlying principles of this guide is to identify models, and case studies, which provide relevant examples of how to move from the theory to practical application.

One of the most comprehensive summaries of the key issues around talent management is contained in The War for Talent, by McKinsey & Company consultants Ed Michaels, Helen Handfield Jones and Beth Axelrod.

It was based on in-depth research surveys of 13,000 executives at more than 120 companies, and case studies of 27 companies over a five year period. The report identified five imperatives that companies need to act on if they are going to win the war for managerial talent and make talent a competitive advantage.

These are:

They define a talent mindset as "having a deep-seated belief that having better talent at all levels allows your company to outperform its competitors. It also means having leaders and managers at all levels who embrace a talent mindset. Leaders make talent management a top priority for themselves and their leadership teams."

The war for talent

In The War for Talent, the McKinsey consultants examine each of these key strategies and use a case study approach to illustrate how companies have addressed these issues. All their recent research indicates it is an issue that is not going away; for at least two decades, a company's ability to attract, recruit and retain talent will be an important issue.

They are not alone, other writers endorse the same view.

In his best-selling, ground-breaking first book, Maverick, Ricardo Semler suggested the following:

"To survive in modern times, a company must have an organisational structure that accepts change as its basic premise, lets tribal customs thrive and fosters a power that is derived from respect not rules. In other words, the successful companies will be the ones that put quality of life first. Do this and the rest - quality of product, productivity of workers, and profits for all - will follow."

In his latest book, Seven-Day Weekend, Semler continues this theme:

"Employees must be free to question, to analyse, to investigate and a company must be flexible enough to listen. These habits are the key to longevity, growth and profit."

An emotive word

Talent is quite an emotive word. We may have our own interpretation of what it means, but it is not solely about retaining creative people. However, it is often the people who think differently who become frustrated and leave; there are only so many times that you can take rejection of the ideas that are important to you.

Bennis and Biedermann in Organizing Genius make some very important points about talented individuals and organisations.

In their case studies of seven great groups, they identified some critical factors about how talented people work together. In their summary of the lessons learned, they suggest the following about recruiting talented people:

"In great groups, the right person has the right job. . . Too many companies believe people are interchangeable. Truly gifted people never are. They have unique talents. Successful groups reflect the leader's profound, not necessarily conscious, understanding of what brilliant people want. They want stimulus, challenge and colleagues that they can admire. What they don't want are trivial duties and obligations. Successful leaders strip the workplace of non-essentials. Great groups are never places where memos are the primary forms of communication."

Leadership style and talent retention

In his book Working with Emotional Intelligence, Daniel Goleman mentions a landmark study of top executives who didn't succeed. The two commonest traits of these failures were:

Rigidity. They couldn't adapt their style to changes in the organisational culture, or they were unable to understand or respond to feedback about traits they had to change or improve. They could neither listen nor learn.

Poor relationships. The single most frequently mentioned factor; they were over-critical, insensitive, or demanding and alienated those they worked with.

He contrasted this with star performers. "Superior performers intentionally seek out feedback, they want to hear how others perceive them, realising this is valuable information. That may also be part of the reason people who are self-aware are better performers. Presumably, their self-awareness helps them in a process of continuous improvement".

Knowing their strengths and weaknesses, and approaching their work accordingly, was a competence found in virtually every star performer in a study of several hundred 'knowledge workers' carried out by Carnegie-Mellon University, which stated "Stars know themselves well".

Goleman developed this theme in his recent book The New Leaders. In it, he suggests that the singular talent that sets the most successful CEOs apart from others turned out to be a critical mass of emotional intelligence (EI) competencies.

This is because, Goleman believes, the most successful CEOs spent more time coaching their senior executives, developing them as collaborators, and cultivating personal relationships with them. From a business perspective, he suggests that in those companies where the CEO exhibited EI, strengths, profits and sustained growth were significantly higher than for companies where the CEOs lacked those EI strengths.

He also cited the following research from Gallup:

"In a tight labour market, when people have the ability to get an equivalent job easily, those with bad bosses are four times more likely to leave than those who appreciated the leader they worked for. . . Interviews with two million employees at 700 US companies found that what determines how long employees stay - and how productive they are - is the quality of their relationship with their immediate boss. People join companies and leave managers," observed Marcus Buckingham of polling company Gallup Organization.

See our survey

In our talent management survey , you will see how the respondents showed similar views. When asked what support they wanted from a line manager, there was remarkable similarity in their responses.

Open and honest feedback was high on their agenda. Also, there was an important link between freedom to operate and the setting of clear goals and expectations. The building of relationships between the individual and their manager is also important, as was the nature of that relationship. Typically, respondents wanted managers who had the "ability to listen, to coach, to offer support coupled with loyalty, trust and integrity". This underlines the points highlighted earlier when discussing what talented people wanted from an organisation.

Why corporate social responsibility matters

Whitbread plc established a dedicated Community Investment Programme in 1981 and was recognised as Company of the Year in 1998 in the Business in the Community (BitC) Awards for Excellence in Corporate Community Investment.

Whitbread realised it was important to look beyond charitable donations. As Ian Anderson, former community investment director at Whitbread said in Corporate Fundraising (see details in Resources):

"An unexpected side-effect from the encouragement of employee volunteers has been the development of staff, both as individuals and in groups. Management observed positive changes in areas such as confidence, teamwork, communications and presentations skills. . . The provision of financial donations to the community by business will always be important, but will always be of a limited nature. Donations of gifts in time and gifts in kind can add so much to the fabric of the community and can play to the strengths of commercial organisations by using all their resources."

What motivates people at work?

Goleman stresses the importance of a balance between people's needs to manage their own career and to commit to shared goals at work. The more support employees get from their organisation, the more trust, attachment and loyalty they will show.

Goleman, in Working with Emotional Intelligence, cites a study of men and women at the end of their careers, which asked them what were the ultimate sources of satisfaction. Their response was: creative challenges, stimulating work and the chance to keep learning. He says traditional incentives aren't always suitable in getting people to perform at their absolute best.

"To reach the top rung, people must love what they do and find pleasure in doing it."

This is also borne out in recent research by Roffey Park. A survey of 372 managers found that just under 77 per cent of respondents cited job enjoyment and personal achievement as the factors that motivated them the most at work. This was followed by personal drive (74 per cent) and challenges (70 per cent), recognition (65 per cent) and being part of a successful team (64 per cent). The research also found that lack of recognition (54 per cent) and poor management (53 per cent) were the biggest demotivators.

Talent management is for the many

Talent management is not about a special few people. Real talent management is about playing to everyone's strengths. It is about championing diversity and encouraging creativity and innovation. But above all, it is working to create an environment where the organisation buzzes with energy and people have a sparkle of anticipation when they enter their workplace.

Being responsible for creative and innovative ways of managing and developing talent in people can be exhilarating. But individuals also need nurturing. Like plants, they should be free to grow, but they also need nourishment and daily watering with positive feedback if they are to thrive.

There is a need to see people as individuals able to exercise personal choice. Asking, and getting answers to simple questions like the following can help.

The aim should be to create the right job, for the right person, in the right place.

What about people who are different?

Traditionally, organisations have struggled with innovative and creative people. Yet, look at what pioneering entrepreneurs James Dyson, Ricardo Semler, Richard Branson and Julian Richer have done for their people, their customers and their businesses.

As part of the background research for Managing the Mavericks by Kaye Thorne (one of the authors of this guide), a survey was undertaken with creative and innovative people identifying what they would like an organisation to offer to them. One of the questions asked was: If you could change one aspect of organisations that would encourage the nurturing of talent, what would you recommend? Here are a sample of their responses:

A very evocative statement

We asked the same question in our survey and had very similar responses.

One very evocative statement summed up the thoughts of many: "Foster an environment in which individuals are valued, talent is nurtured"

What is interesting is the balance between freedom and systems. A major issue in large organisations is tracking people. Very often individuals feel their talents go unnoticed.

Equally, there are very real concerns that the middle management layer hides and diffuses the impact of real talent.

This frustrates both senior management, who despair of the lack of initiative and potential within their organisation, and those new and embryonic talents, who get held back because their views may be different from the accepted norm.

This was echoed by one respondent who recognised that perhaps he hadn't shouted loud enough: "My reluctance to shout about my talents means that nobody notices". What he wanted was "real appreciation of my worth by people who are interested in me".

Yet again, the importance of on-going conversations were highlighted. This underlines Goleman's work on EI and the skillset required by managers.

"Clarity around understanding expectations of individuals and matching these to organisational requirements, and having a 'real' conversation about this."

Another important point is the need to develop an organisation's talent pool. McKinsey mentions this and so did our respondents. "Keep a continuing sense of what you need to develop for tomorrow as well as to deliver today - develop bifocal vision and have strategies that encompass the long and the short term," said one respondent.

Encourage the speak-up culture

The case study interviewees in Managing the Mavericks were each asked for one piece of advice they would give to CEOs.

Their common advice is to "get close to your people, give commitment, follow through, don't give out mixed messages, allow communication to come up through middle management, but actively seek it, don't allow it to be changed and modified by those who do not want others to hear".