Talent management

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CHAPTER 21

BUILDING SUSTAINABLE TALENT THROUGH TALENT MANAGEMENT Benefi ts, Challenges, and Future Directions Rob Silzer, Ben E. Dowell

Talent management systems and approaches are becoming widely used in many organizations, as this book demonstrates. In this book alone, over 40 companies are mentioned for their often leading - edge talent management programs or processes. We think there are some common themes, benefi ts, and challenges identifi ed in the chapters.

Talent Management Themes Several talent management themes or principles have emerged from this book across organizations, systems, and approaches. These are suggestions or approaches that have been proposed in various chapters for building effective talent management pro- cesses, programs, and systems. (See Table 21.1 .)

Driven by Business Strategy

The most fundamental theme in this book is the importance of having business strategy drive and determine processes and

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C o p y r i g h t 2 0 1 0 . P f e i f f e r .

A l l r i g h t s r e s e r v e d . M a y n o t b e r e p r o d u c e d i n a n y f o r m w i t h o u t p e r m i s s i o n f r o m t h e p u b l i s h e r , e x c e p t f a i r u s e s p e r m i t t e d u n d e r U . S . o r a p p l i c a b l e c o p y r i g h t l a w .

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746 Strategy-Driven Talent Management

programs for talent management. There is widespread agreement that the effectiveness of talent strategies and talent management approaches can be judged by whether they add value and help to achieve business strategies. Gone, or going, are the days when human resources (HR) could set itself, and its processes, apart from the business objectives and goals. This book contains many examples of how strategies can, and should, directly determine the design and implementation of talent strategies and approaches.

Of course, the talent processes must be designed and scaled to meet business needs and specifi c, measurable goals. They also must be adaptive as business strategies change for a variety of reasons, such as new competitors, changes in customer demands, acquisitions, mergers, market shifts, market globalization, tech- nological advances, and others. They must take into account the availability of talent and the feasibility of a particular talent strat- egy. In addition, they need to be integrated with the talent strategies of the organization and other HR functions and processes.

Generally this means that there is no one best way to design and implement talent management. It must fi t the business need, the talent objectives, and the organization culture. The talent management fi eld is moving away from one - size - fi ts - all programs and toward tailored or customized approaches. While some basic components might be similar (such as starting a college recruit- ing program), the specifi c design and implementation plans need to closely fi t specifi c organizational needs. For example, this may be why many corporations have designed their own

Table 21.1. Key Themes in Talent Management Approaches

1. Driven by business strategy 2. Requires differential investment 3. Accepted as a core business process 4. Integrated across HR practices and processes 5. Engrained as an organizational and cultural mindset 6. Practical, effi cient, and easy to use 7. Includes relevant outcome measures 8. Future looking

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Building Sustainable Talent Through Talent Management 747

internal executive leadership programs rather than use generic publicly offered university programs. Ultimately the selected talent management approach needs to add strategic value, and human resources needs to fi nd ways to demonstrate that value to the leadership of the organization.

Requires Differential Investment

There is an emerging view that effective talent management requires organizations to differentially invest in various employee groups and not to invest equally in all employees. This is a logi- cal extension from being strategy driven. Those businesses, orga- nizational functions, and talent groups (such as high - potential individuals or scientists in a research-based organization) that are critical to achieving the business strategies need to receive a dis- proportionate share of resources to achieve the strategic goals.

In the days of limited resources, this means that some func- tions and talent groups will get a greater share of the resources, while other nonstrategic groups will receive a smaller share of the resources. In fact, some of these nonstrategic groups, such as call centers in some companies, are being outsourced and man- aged by external companies, often with the goal of reducing costs and company resources that are provided to them. This has raised some concerns about how far to go in differentially investing in some groups and not others. What is the right balance when deciding the extent of development resources to devote to high - potential talent versus the other 80 to 90 percent of employees? At what point do other employees realize that they are not get- ting a fair share of the resources and reduce their commitment or engagement or look for job opportunities elsewhere?

Simultaneously this puts greater attention on how to identify and invest in strategically important groups. Which groups or functions are more central to the business strategies than others? How do you decide who is worthy to join a high - potential pool? What level of invested resources is needed to build and sustain the talent, and at what point does investing more have dimin- ishing value? What is the impact of investing in one group for a period of time and then shifting resources to another group as the organization strategy changes?

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748 Strategy-Driven Talent Management

Accepted as a Core Business Process

In several companies mentioned in this book, the talent review and planning process has become a core business practice along- side the strategic planning process and annual operating plan reviews. These three are the core business practices that guide busi- ness decision making, work efforts, and investments. Only recently has the talent process started to be accepted as an equally impor- tant core business process. It needs to be aligned with the other business planning processes and might logically follow the business planning and precede the operational reviews.

Talent needs to be seen as a fundamental strategic business resource in the same way as fi nancial assets. As we develop stron- ger measures of the strategic and fi nancial impact of talent, it is becoming clear how central talent is to the success and survival of a business. In the years ahead, we anticipate that talent man- agement will be valued and respected as much as fi nancial management in business organizations.

Integrated Across Human Resource Practices and Processes

It is important that the talent management process, programs, and systems be coordinated and integrated with each other and with other human resource functions and programs. This is for both effi ciency, so various efforts are not working against each other, and for effectiveness, so different program areas are col- laborating to achieve shared goals. Often these shared goals are the execution of business strategies.

Engrained as an Organizational and Cultural Mindset

The highest level of effectiveness is often characterized by hav- ing an organizational or cultural mindset around talent man- agement. This occurs when supervisors, managers, leaders, and executives have a commitment to effectively managing talent to achieve business strategies. They take responsibility and have accountability for building and retaining the needed talent in their own organization. Often this is accompanied by a set of organizational values and beliefs about the business need for talent.

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Building Sustainable Talent Through Talent Management 749

It not only permeates management and executive decisions but also pervades the shared beliefs of the entire organization. It becomes a fundamental premise for the existence and success of the organization.

Practical, Effi cient, and Easy to Use

Processes and programs designed to achieve talent strategies need to be practical. They need to be feasible to develop and implement. We hope that Human Resources is moving past the era of big, complex, and often prepackaged programs that do not actually meet a business need. These programs often deliver many extra features that are unnecessary and may lock the orga- nization into an infl exible system or set of tools that is diffi cult to modify as strategies change. It is both costly and diffi cult to redesign complex programs that have linkages throughout the organization.

Many organizations are trying to design and execute talent management programs or processes that have a clear, strong link to a specifi c business need. That means that the program must effi ciently focus on that need. Large, complex programs often include elements that are not needed and can divert the focus of the organization from what actually needs to be done.

Programs and processes should be easy to explain and use. Managers and leaders should be able to understand a program and see the value and benefi t to their own business objectives. Our experience is that the closer a program is linked to the underlying business need, the more quickly managers and lead- ers will understand and implement it. Managers and leaders have a long list of their own work priorities, and a particular tal- ent management program will get little attention or support if the business link and the program value are not readily appar- ent. Program implementation should be straightforward and easy. The process should be sustainable through normal business cycles and not put unrealistic demands on people. It should also be easy to maintain. For example, if the program relies on an underlying database, then that database should be easy to update and contain only the critical information (and not “ the extra nice to have but diffi cult to update ” information).

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750 Strategy-Driven Talent Management

Includes Relevant Outcome Measures

Ultimately any talent management approach needs to deliver results that help to achieve a business strategy. This is perhaps the weakest link in the talent management process. Human Resources is now trying to identify the outcomes that need to be measured to determine if a talent program is effective or not. While there are outcomes that are frequently measured, such as voluntary and involuntary turnover and retention, it is important to iden- tify the desired outcomes for specifi c strategies and particular organizations. The importance of measuring turnover and reten- tion in a sales force may depend on the strategy of the company (for example, a company may want to retain only the very best sales representatives, not sales representatives in general). Using generic business or even industry benchmarks for these measures may not be helpful or relevant to a specifi c situation.

In addition, we need to develop better metrics for talent man- agement programs. For example, some organizations invest a lot of resources into the development of high - potential talent. Historically there has been a reliance on measures of immediate manager reviews or a lack of failure by the individual to deter- mine outcome success. However, these are very gross measures and do not usually provide a good measure of whether the person actually was developed in the experience. We need to develop better measures of actual development, such as setting and meeting specifi c learning objectives, demonstrating what was learned in a special project or assignment, or demonstrating through performance that real development had occurred.

The eventual success of talent management in organizations rests on identifying the important outcomes and developing accurate measures of those outcomes. Human resources needs to become more sophisticated in providing objective evidence that a program or process is actually delivering the desired outcomes. HR metrics need to be better designed and more data based. HR must hold itself accountable for proving the strategic value of the talent management programs and processes. Part of this effort should focus on evidence - based or data - based decision making. That evidence is often objectively collected data but might also include other sources of data, such as separation interview data

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Building Sustainable Talent Through Talent Management 751

or the collective experience of the recruiting team. The measures need to be determined ahead of time, collected in standardized ways, and objectively analyzed. A data - based approach can signifi - cantly improve the quality of the decisions and also raise the stan- dards for programs and processes.

The decisions regarding programs should focus on what works and what does not. If something is not working, the talent pro- fessionals need to change it and consider other alternatives. Sometimes this may require trying several things to see which works best and letting the outcome data guide that fi nal decision.

So it comes down to three basic steps: identifying the right outcomes for evaluating a program, developing the best possible measures of those outcomes, and making data - based decisions on the effectiveness of the programs and processes.

Future Looking

A paradox in most business decisions is that data - based decision making by defi nition is backward looking, relying on data col- lected on the past. Similarly, when talent management decisions are based on data collected on past events, the results capture the past, not the future. The future is inherently more ambigu- ous and unknown than the past. To predict future success, past data must be extrapolated into future situations and adjusted accordingly. This requires decision makers to consider what future situations might be like and take that into account when making business decisions.

Strategies are also inherently future oriented, focusing on how to approach future, anticipated business situations. The goal of business is to be successful in the future, not the past. This requires that decision makers, including talent professionals, consider data from the past, along with personal experience and insight, to predict what actions to take in the future. Ultimately talent decisions should refl ect data - based judgment, being guided by data but using judgment to extrapolate to the future. This takes a deep understanding of the data as well as the judgment and courage to make predictions about the future.

The ability to make data - based judgments may not be widely distributed. Most people can probably learn to understand the

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752 Strategy-Driven Talent Management

data and to make short - term predictions about this afternoon or tomorrow. However, the ability to predict one year ahead is not common. And senior executives must make predictions about the longer - term future of the business, three to fi ve years into the future. Some do this by sticking close to the data extrapolation, but the most effective executives have visionary skills and know how to adjust linear data predictions for a changing business envi- ronment. Similarly talent professionals will need to make similar data - based judgments about talent and predict their future effec- tiveness and contributions. It seems likely that the ability to make accurate, future - oriented talent predictions will be seen as just as valuable as the ability to forecast future business conditions and identify the strategies needed to address those conditions.

Benefi ts of Strategy - Driven Talent Management The chapter authors have pointed out the benefi ts of various tal- ent management processes, programs, and approaches. Here is a summary of the key benefi ts of taking a strategy - driven talent management approach:

Directly supports the achievement of business strategies Facilitates strategic nimbleness and the ability to adapt quickly to changes in strategy Supports and pursues the effi cient use of resources by selec- tive investment, focused programs, and coordinated efforts Integrates and connects various efforts and programs to allow easy alignment and simple transitions from process to process Focuses everyone on pursuing shared company goals and objectives and encourages collaboration and teamwork Involves forward planning and focuses attention on future strategic needs Becomes a core business practice that provides a distinctive talent brand for recruiting and retention Becomes a mindset that permeates management decisions and holds managers and leaders accountable for talent resources Provides a durable competitive advantage in the marketplace Ensures strong links between talent decisions and business decisions

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Building Sustainable Talent Through Talent Management 753

Reinforces company focus and communication on business strategies Identifi es and retains high - potential talent that fi ts strategic business needs Builds an organizational culture as well as values around talent Encourages and requires objective measurement of talent out- comes and impact on strategy success

As talent management becomes even more widespread, organi- zations should be able to document and measure these benefi ts.

Challenges to the Effective Management of Talent Talent management offers a new approach to addressing many Human Resources issues. Of course, there are many challenges to strategy-driven talent management that need to be considered (see also Guthridge, Komm, & Lawson, 2008; Lewis & Heckman, 2006; Wellins, Smith, & McGee, 2006). Some challenges can be addressed directly, while others may require a more concerted long - term effort. Some challenges involve dealing with organiza- tional issues while others deal with human issues. (See Table 21.2 .)

Organizational - Level Challenges

Poor Alignment of Talent Management Programs with Strategy In the past, senior executives in an organization often did not align talent efforts with the business strategy. Talent strategies and processes were seen as an afterthought, a “ nice to have ” pro- gram, or as unconnected with the business strategy. Fortunately that has changed for some organizations, where the CHRO has taken responsibility for getting senior executives to understand this critical link. Often this is done by using convincing out- come data that demonstrate this link. In other companies, it has occurred only after a business strategy has failed because of the lack of alignment.

Because of a rapidly changing business market or signifi cant mergers or acquisitions, companies make signifi cant changes in their business strategies. This may require a major shift in the talent strategy. For example, it may mean moving away from

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754 Strategy-Driven Talent Management

building a competitive internal information technology function and focusing instead on developing a six sigma operations focus. These shifts can undo years of effort and attention, as well as make the existing pipeline of IT talent less important. A solid tal- ent management approach and habit provides the tools to focus quickly on the new business need and the development of appro- priate talent strategies and processes. Managers and leaders who have a talent management mindset can leverage their knowledge and expertise to quickly refocus on the new strategies. However, these transitions can be highly disruptive to an organization, par- ticularly when groups or functions that were formerly seen as strategic lose their status and are downsized or outsourced.

Subjective Talent Decision Making Relying too much on the views and insights of a single individual, even if that person is the CEO, can be harmful to talent manage- ment efforts. Decisions need to be based on dispassionate reviews

Table 21.2. Organizational - Level Challenges to Talent Management (Order Based on Degree of Diffi culty)

Poor alignment of talent management programs with strategy

Subjective talent decision making

Change in CEO

Sudden shifts in business markets or economy

Lack of alignment with organizational norms and values

Acceptance of differential investment in talent

Complex design

Breadth of talent management expertise required

Costs of talent management interventions

Poor introduction and execution No consensus on defi nitions of leadership or high potential Poor or no outcome measurement

Oversupply or undersupply of talent

Lack of transparency

Differences between talent management and business cycles

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Building Sustainable Talent Through Talent Management 755

of results and the behavior that created those results. Our experi- ence suggests that decisions tend to be better when discussions are based on data from multiple situations across time.

Many organizations have moved to group discussion and decision making, which is likely to prevent some of the poorest talent deci- sions dealing with both talent strategies and talented individuals. There is no substitute for multiple perspectives when making talent decisions. As talent metrics improve and the quality of the outcome data improves, there is an opportunity to signifi cantly improve tal- ent processes and the quality of the decisions about talent.

Change in CEO Most CEOs and executives have developed their own talent frame- work and approach from their many years of business experience. When they begin their new executive role, they often want to install their talent values and approaches in their organization. The most effective executives work hard to fi rst learn the culture and the cur- rent talent approach before making signifi cant changes. However, HR and talent professionals, as well as the other executives, are often powerless to stop a radical change in approach to talent advo- cated by a new CEO. A well - designed talent management system should be able to provide the new CEO with some confi dence that the current system works well in contributing to strategic objec- tives. In addition, an experienced Chief Human Resources Offi cer should be able to fi nd opportunities to address the CEO ’ s concerns about the existing talent management system while also being open to sound new ideas from the CEO. If the current system is well designed, effi cient, and effective, it should be able to accommodate and adapt to a new CEO ’ s specifi c objectives.

Sudden Shifts in Business Markets or Economy Sometimes economic, social, or even political events can have a signifi cant impact on an organization. An example might be the impact of political events in Nigeria on the oil industry there. Usually these are out of the control of the organization. Sometimes it might result in a change in strategy. At other times, it may require pulling back, slowing down, or eliminating some talent programs and processes. Of course, the specifi cs and seri- ousness of the situation usually determine the best course of action.

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756 Strategy-Driven Talent Management

Frequently this precipitates a system and program review. Some programs can be pulled back to a minimal level and still keep operating; others may need to be put in temporary storage or even eliminated. The key is to not lose the basic talent manage- ment mindset and approach. While the strategies and programs may change, the basic fundamentals of how to effectively manage talent should be saved.

Lack of Alignment with Organizational Norms and Values Talent management usually introduces values and objectives that may not always be consistent with existing company values. For example, talent systems often require a sharing of talent across the company to leverage that talent for organizational objectives. However, at the same time, managers and leaders throughout the company are held accountable for delivering monthly, quar- terly, and annual results. Often they want to hang onto the talent that they have developed in order to achieve their own business objectives. This often leads to siloed structures where talent does not get shared across businesses or functions, and there is a lack of collaboration on talent. CEOs and senior executives are often asked to make talent decisions between two confl icting alterna- tives: leave the talent in a position where he can contribute to short - term results or move that person to possibly achieve longer - term business objectives. However, the quarterly pressure for showing strong fi nancial results can make this a diffi cult choice for many CEOs. Usually the best decision is choosing to support the long - term business objectives. This becomes an easier deci- sion if there is a suffi cient supply of available talent so that open- ings that are created by talent moves can be quickly fi lled.

Another example is the choice between building a highly collaborative, respectful work environment that values every employee versus selecting a small group of employees for spe- cial development and differential investment. The move from a egalitarian talent culture to a more discriminating talent culture needs to be carefully managed.

Acceptance of Differential Investment in Talent As organizations focus greater attention on select groups of high - potential talent or strategic talent, there will be fewer resources

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Building Sustainable Talent Through Talent Management 757

(that is, development, staffi ng, and retention resources) avail- able for the remaining employees. This differential, or uneven, treatment may make sound business sense but may not be well received by the employees who are not getting these resources. One major company has started implementing a system where some employees need to pay (referred to as “ investing ” ) for their own development. This seems to be another step in the segre- gation of employee interests and organization interests. At some point these employees may take steps to make that segregation more offi cial by leaving the company. If differential investment in talent benefi ts the company and a small select talent group, but results in other employees disengaging, then it may become a long - term detriment to the organization. Organizations may need to consider ways to strike a balance between investing in strategic talent while also investing suffi ciently to keep other high- performing employees engaged and committed.

Complex Design As in any other function, HR and talent professionals can get seduced by new fads, features, and designs. In the past, they often adopted new initiatives that were popular in other compa- nies in order to demonstrate that they were on the leading edge of their fi eld. Unfortunately this led to a “ program of the year ” approach or the introduction of highly complex, overengineered programs and processes that were neither effective nor useful and that had many unneeded features. The business need often got lost in the elaborate design. Many organizations have moved past keep it simple to keep it narrowly focused on the business need . A new program is no longer a virtue but often a sign of ineffi ciency and ineffectiveness.

Breadth of Talent Management Expertise Required Well - developed and well - implemented talent management systems require talent professionals to have a breadth of expertise and skills. From talent recruiting at the front end through talent reten- tion and outcome metrics, talent specialists need to be able to understand, manage, and evaluate a wide range of processes and programs. This includes skills in talent brands, recruiting, selec- tion, assimilation, assessment, coaching, selection tool validation,

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758 Strategy-Driven Talent Management

development, engagement, retention, and others. In the future, it is likely to also include compensation and benefi ts. The talent professional must know how to use all the tools, techniques, and programs that are needed to achieve the talent strategies. While an individual may initially specialize in one area, ultimately she will need to know the full range of tools and techniques that can be used to achieve a strategy. The person must also know how to decide which ones to use and how to blend them into a coher- ent and unifi ed effort. Individuals tend to use the tools that they know. So talent professionals need to gain experiences in a wide range of areas in order to build a talent effort that meets a spe- cifi c business need.

Knowledge and skill in applying HR and talent management programs and processes is just the beginning. Talent manage- ment professionals also need to understand business strategy and a variety of business functions in order to effectively develop talent strategies to support the business.

Costs of Talent Management Interventions An important criterion for effectiveness in the future will be the effi cient use of resources. Talent programs and processes will need to demonstrate that the cost - benefi t ratio to the organization is very high. Tightly managing resources, both fi nancial and human, will be a central concern. Talent professionals will need to be cre- ative in fi nding less resource - intense solutions to issues. This may mean fewer extra features or more tightly focused efforts or smaller target groups. As business costs in general increase, HR must dem- onstrate that it can be equally effective on tighter budgets.

Poor Introduction and Execution Many talent programs and processes are poorly introduced and explained. Sometimes this is because of the technical or special language that is used; sometimes it is not presented well with clear, simple charts. In addition, there are some talent professionals who like to work on the design and development side and have little interest in ongoing implementation. This often results in pro- grams that are more complex than necessary, that get a big splashy introduction, and that lack solid execution and follow-through. Many programs fail for this reason. As HR departments have moved

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Building Sustainable Talent Through Talent Management 759

away from administrative HR managers and more to HR consult ing roles, there seems to be a diminishing commitment to ongoing execution and follow - through. Another concern is when the program or process gets handed off to new program managers. There is some evidence that with each transfer of responsibility, program guidelines and objectives become more ambiguous and execution becomes more free ranging and less standardized. As these programs and processes drift, they lose their effectiveness and their ability to address a business need. Ongoing implemen- tation and execution need to receive even more attention and resources than program development. The real payoff for a tal- ent program and process happens with careful ongoing execu- tion and follow - through.

No Consensus on Defi nitions of Leadership or High Potential Often executives and managers have their own unique intuitive defi nition of leadership and high - potential talent, which they have developed over their years of experience. This can present hurdles in trying to implement an organization-wide talent or high - potential program and can interfere with talent decisions and moves. An organization-wide model of leadership or high potential can help reduce the number of disparate personal defi nitions that are used to make decisions. Having shared defi - nitions can signifi cantly increase shared talent views and improve the effectiveness of the talent management system.

Poor or No Outcome Measurement In the past, Human Resources gave little attention to developing and using strong outcome measures. This was partly due to a lack of measurement expertise in organizations and limited interest in a data - based approach to human resources. This has been chang- ing since the late 1990s. Unfortunately most organizations still use weak or generic HR measures, such as general turnover data or average time to fi ll jobs. Although these are readily available, they lack the specifi c data needed to measure the effectiveness of specifi c talent programs and impact on strategic objectives.

What is needed now is a leap forward in HR metrics. The right outcomes need to be identifi ed for each talent strategy, and objective data - based metrics need to be designed that best

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760 Strategy-Driven Talent Management

measure these outcomes. As strategy - driven talent management becomes widely adopted, there is likely to be a surge of inter- est in designing and using more rigorous and effective outcome measures. Organizations will need to be able to decide whether a particular program, process, or strategy is working. When there are no data and HR metrics are poor, then decisions are either avoided or made on someone ’ s intuition. What is needed is a data - based approach to talent management.

Oversupply or Undersupply of Talent The execution of a talent strategy can lead to several results: effective supply of talent, undersupply of talent, or oversupply of talent. The undersupply of talent is the most troublesome outcome because it can interfere with strategy achievement. Corrective action needs to be taken to change the talent pro- grams and processes, change the talent strategy, or change the business strategy. However, there may also be some concerns with an oversupply of talent. Perhaps the costs associated with build- ing this talent base may need to be reconsidered (see Cappelli, 2008). Also, the cost of retaining this talent may be problematic if there are insuffi cient career opportunities for members of this talent pool. Accurate and objective outcome data provide both an ongoing metric for the effectiveness of the talent effort and suggestions on how the programs and processes can be adjusted to be even more effective.

Lack of Transparency Organizations vary on how much information is shared about specifi c aspects of the talent management system. How are peo- ple selected for various programs? Who has ultimate decision authority over the career of a talented individual? What infor- mation and decisions about an individual get shared with that person? Historically most companies have kept this information confi dential and tightly controlled. However, in the past decade, there has been more organizational openness to sharing some information. How much gets shared with the individual is still a controversial issue. The procedures associated with various tal- ent management programs, such as the high - potential nomina- tion steps, are now more widely known by managers at all levels.

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Building Sustainable Talent Through Talent Management 761

Organizations are becoming more transparent about talent pro- cesses and programs while still being very cautious about sharing judgments about individuals. Transparency is slowly taking root in corporations for the benefi t of becoming a more effective organization and for the benefi t of the individual.

Privacy concerns are limiting the sharing of information across national borders. For example, the European Union restricts the transmission of personnel data across borders without employee permission, which can create challenges for conducting effective talent reviews and sharing talent across an organization.

Differences Between Talent Management and Business Cycles Typically the business planning cycle is often on an annual or even quarterly basis, while the strategic planning cycle is usually a one - to fi ve - year cycle. Talent planning cycles tend to be more similar to longer strategy cycles. Once a business strategy is set, it often takes some time to identify, build, and implement tal- ent strategies and programs. For example, creating a marketing function with competitive advantage in the market does not hap- pen in one year. Although some short - term actions can be taken to get a strategic function up and running, it takes much longer to fi nd and recruit the best talent, to build a superior performing function, and to fi ll the talent pipeline. Sometimes there may be some time cycle misalignment between business need and talent outcomes. Effective HR and talent professionals should carefully manage executive expectations and balance their expectations for results with the realities of the time required to develop and implement effective talent management efforts.

Employee - Level Challenges

In addition to the challenges at an organizational level are some challenges to effective talent management at the employee level. (See Table 21.3 .)

Manager or Leader Resistance Managers and leaders throughout the organization are being asked to adopt new talent management processes and programs, take responsibility for building talent for their unit and for the

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762 Strategy-Driven Talent Management

whole organization, and make talent decisions that are consistent with organizational values and norms. They are under pressure to take a much greater role in talent management and to do it in ways that are consistent and aligned with organizational talent systems. This often requires a signifi cant change in behavior and thinking by managers and leaders.

Often managers and leaders are resistant to giving up their own habits and approaches to managing talent based on years of personal experience. They may hang on to outdated beliefs such as the “ cream will rise to the top on its own ” or that almost everyone (or no one) has the potential to advance in the organi- zation given adequate development. These old beliefs are hard to change and can interfere with a consistent organizational approach to talent.

Some leaders and managers are more openly aware of their resistance, particularly when it is due to competing priorities. For example, they may be heavily focused on producing short - term results and do not see talent and development issues as a priority or are unwilling to “ sacrifi ce ” short - term results by shar- ing or moving talent. Often they are not measured or rewarded for attending to talent issues. Some resist identifying differences in the level of talent among their employees or are unwilling to address ongoing poor performance or underperformance, which undermines most talent development efforts.

On occasion some overly zealous line managers may want to develop and implement their own talent programs and pro- cesses. Sometimes these managers are talent champions and can pilot - test some corporate programs, and at other times their pro- grams need to be reviewed to make sure they are consistent and aligned with organization-wide programs and processes.

Table 21.3. Employee - Level Challenges to Talent Management

Manager or leader resistance

Individual resistance

Lack of senior leader support

Consideration for life - balance issues

Engaging employees in nonstrategic areas

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Building Sustainable Talent Through Talent Management 763

Individual Resistance Individual employees have their own set of values and beliefs about their work and careers. Sometimes they are not willing to put in the effort or make the organizational commitment that is required to advance their careers in an organization. An equally serious hurdle is when an employee does not see a need to fur- ther develop himself or sees this as the responsibility of the orga- nization. This unwillingness to take personal responsibility for his development and to rely solely on the formal development efforts of the company (such as formal training programs) was a com- mon characteristic in the past. However, now it is inconsistent with norms in many organizations and leads to stalled careers. As talent management introduces talent norms and values to the organization (such as individuals seeking and being open to feedback and coaching), individual employees are encouraged to follow and adopt those norms and values. Resistance to these values is often seen as a lack of commitment.

Lack of Senior Leader Support Some CEOs and senior leaders have little personal interest in tal- ent issues. They either see little value in the area or are much more interested in other areas, such as fi nancial management or new business start - ups. Some hold on to narrow or outdated talent models or believe that people are born with talent and that development efforts are a waste of resources. This is not an uncommon view by executives who believe they have distinctive natural talents themselves and have built their career on it; they may not see the relevance of development to their own career and therefore have trouble seeing it as important for others. They may also be unwilling to “ waste resources ” investing in the development of young unproven talent.

Some CEOs do not make suffi cient time for talent issues and either completely delegate them to someone else, give them superfi cial attention, or ignore them entirely. Sometimes this is because they have a lack of knowledge, a lack of interest, or are focused on other short - term strategic issues. Any of these can be addressed if the CHRO takes responsibility for educating the CEO and demonstrating the strategic importance of talent management.

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764 Strategy-Driven Talent Management

Consideration for Life Balance Issues An emerging view in organizations is that an individual ’ s lack of mobility for career moves due to personal or family issues should no longer eliminate that person from future career opportuni- ties. In the past, these individuals might be eliminated from the high - potential pool and not be reconsidered in the future for further promotions. However, now with the more limited avail- ability of critical talent, organizations are more sensitive to situ- ations that involve dual careers or to family issues (such as not moving children while they are in high school), which is requir- ing more fl exibility by organizations. Another outcome is that this fl exibility has complicated talent decisions and narrowed the options for moving highly talented individuals. Often an organization ’ s plan for a series of talent moves gets disrupted because some individuals are unwilling to make a planned move. This has increased the importance of understanding individual situations and taking them into consideration in talent manage- ment decisions.

Engaging Employees in Nonstrategic Areas As companies differentially invest in strategic talent, they need to identify ways to keep other employees engaged and commit- ted to the organization. This may mean continuing to make some development and career investments in this population. This may be less of an issue in opaque organizations where few employees have information about talent practices and decisions. If employees know that they are not receiving devel- opment resources and career opportunities, they may decide to move to other organizations to pursue better options or where their talent is considered strategic to the company. The lack of investment may take different forms: lack of develop- ment resources and programs, reduced compensation, lim- ited career advancement opportunities, or limited actions to retain employees. There is little research that discusses the impact of differential investment on employees in nonstrate- gic areas, and the potential impact remains a concern in some organizations.

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Building Sustainable Talent Through Talent Management 765

Future Talent Management Talent management will continue to grow in importance for organizations. It will increasingly be accepted as a core business practice that has a direct impact on business outcomes. Talent will be a core asset and treated as respectfully as fi nancial assets. In the next decade, given the right tools and support, Human Resources will continue to evolve into a strategic department, and talent management will be the foundation.

Here are some characteristics of talent management in the future:

Strategy driven and driving strategy A core business practice and highly visible business function Accepted as a core accountability of all managers Talent decisions that are rigorous, objective, and based on strategically important data Programs and processes scaled to the strategic issues identi- fi ed and sustained through business cycles Talent accepted as a primary factor in creating a sustainable competitive advantage for the organization Talent management outcomes are measured with rigorous metrics that are incorporated into company evaluations by business and investment analysts Regarded as a critical career experience for high - potential executive talent Becoming a chief talent offi cer will require a broad set of expe- riences and a high level of skills, abilities, and education devel- oped through advanced training in industrial - organizational psychology or new programs in talent management

Conclusion In order to be effective, talent management needs active support and ownership from the CEO, executives, line managers, HR and talent professionals, and the talent itself. While this seems like a signifi cant challenge, it becomes much easier when a talent mindset is engrained in the organization ’ s culture.

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766 Strategy-Driven Talent Management

The ultimate goal is to build sustainable talent for long - term competitive advantage. This will require hard work by executives, line and HR managers, and talent management professionals. It cannot be successful by pursuing fads or a program - of - the - year approach or by getting distracted by superfi cial issues. It must be focused on people, not process. The talent themselves must remain central to building an effective talent management system.

And fi nally the question gets raised of which comes fi rst: good business or effective talent management? We think the answer is that both happen together and support each other. One boot- straps the other. Talent management can no longer be seen as separate from the business. It is as core to the business as fi nance, and perhaps even more so.

This book has covered a broad range of issues related to talent management. We encourage you to refl ect on the important research questions in Chapter 22 and explore the Annotated Bibliography in Chapter 23 . We also hope that this book will be a useful future reference for you on talent management.

References Cappelli, P. (2008). Talent on demand: Managing talent in an ago of

uncertainty . Boston: Harvard Business School Press. Guthridge, M., Komm, A. B., & Lawson, E. (2008, January). Making talent

a strategic priority. McKinsey Quarterly . Retrieved January 5, 2009, from http://www.mckinseyquarterly.com/Talent/Making_ talent_a_strategic_priority.

Lewis, R. E., & Heckman, R. J. (2006). Talent management: A critical review. Human Resource Management Review 16 , 139 – 154.

Wellins, R. S., Smith, A. B., & McGee, L. (2006, July). The CEO ’ s guide to talent management: Building a global leadership pipeline . Pittsburgh, PA: Development Dimensions International.

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