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STRATEGIC TALENT MANAGEMENT

T he dramatic changes that are taking place in the world are trans- forming work and organ izations so signifi cantly that traditional approaches to talent management are, at best, obsolescent. In

many cases they are obsolete. Th ey were designed for an era of stability, predictability, bureaucratic management, traditional fi nancial account- ability, little information technology, and slow change. Today we are in a world of rapid change, diversity, the high strategic importance of human capital, globalization, triple- bottom- line accountability, and radical advances in technology. In most corporations, all of these as- pects are pres ent today; and many of them are dominant themes.

Talent management needs to change in ways that respond to how organ izations, work, and workers have changed and will continue to change. Doing this requires using the six talent management princi ples that will be reviewed in this chapter as a guide. Th ey need to be the basis of all talent management practices and systems that an organ ization uses.

TA L E N T M A N A G E M E N T S H O U L D B E S T R AT E G Y D R I V E N

As is shown in fi gure 2.1, talent management needs to be driven by an organ ization’s strategy and the capabilities it requires for it to be eff ec- tively implemented. Every strategy is only as good as an organ ization’s ability to implement it, and its implementation is only as good as its

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C o p y r i g h t 2 0 1 7 . B e r r e t t - K o e h l e r P u b l i s h e r s .

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 .

EBSCO Publishing : eBook Academic Collection (EBSCOhost) - printed on 5/10/2020 12:01 AM via TRIDENT UNIVERSITY AN: 1457718 ; Lawler, Edward E..; Reinventing Talent Management : Principles and Practices for the New World of Work Account: s3642728.main.ehost

Strategic Talent Management 17

talent’s ability to execute it. Because of this, organ izations need to be sure that the capability demands of their strategy (e.g., agility, low- cost production, etc.) can be met with re spect to how talent is managed. If they cannot be met, then the strategy needs to be changed. Th is relationship between strategy and talent is why fi gure 2.1 has a two- way arrow be- tween “Strategy” and “Capabilities.”

Th e fi ve most impor tant talent management practice areas are iden- tifi ed in fi gure 2.1. To some degree they are in de pen dent of each other, and they will be treated separately in the chapters that follow. Yet they are interdependent in many ways and need to fi t with each other. Th us, they are connected by two- way arrows in the fi gure, and as we examine each one of them, we will consider issues of fi t with other talent man- agement areas. Only by using talent management practices that fi t an

Strategy

Figure 2.1

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18 Reinventing Talent Management

organ ization’s strategy and fi t together to create an integrated talent management system can an organ ization be eff ective.

Th e real ity that talent has become the key resource of many corpora- tions mandates that it be a major determinant of most corporations’ business strategies and that it be managed in ways that support strategy implementation. Much of the writing on talent management empha- sizes that strategy should drive the talent management practices of corporations. Given the importance of talent, it is hard to argue against this point. To be successful, a strategy needs to be supported by the right talent management practices. But thinking of strategy as deter- mining talent management is not the best way to state or think about the interaction of the two.

Yes, talent management needs to be infl uenced by an organ ization’s strategy, but its strategy needs to be driven by the talent that is available to it and how it can be managed. A strategy that cannot be implemented or executed eff ectively because of talent availabilities and defi ciencies is not a good strategy. It is just as likely to lead to poor orga nizational per- for mance as one that is based on incorrect assumptions about fi nanc- ing, marketing, or production.

Perhaps the most obvious area in which talent should drive business strategy involves the availability of talent. Th e key to implementing every strategy is the ability of an organ ization to recruit and/or develop the talent it needs to implement and operate the strategy. Th us, there are a number of questions that every organ ization must ask when it devel- ops its strategy: What is the right talent, and do we have it? If we do not have it, can we recruit and/or develop the talent we need to implement this strategy? Can we structure and design talent management practices that will lead to the type of talent we need to be motivated and willing to commit to the eff ectiveness of the organ ization? If the answer to either of the latter two questions is no, then the case is clear: the strategy will not be eff ective and should not be adopted.

Th ere are numerous challenges to an organ ization’s recruiting the talent it needs to implement a strategy. For instance, there simply may not be people in the labor market that have the right skill sets, or the organ ization may not have the assets it needs to make an attractive of- fer to the right talent. Th ere are also many reasons why it can be diffi - cult for an organ ization to develop the talent it needs; these include the

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Strategic Talent Management 19

willingness and ability of current employees to develop new skills and competencies, or the lack of the expertise needed to develop the skills of both existing employees and new ones.

In many ways, there is a great deal of similarity between the factors that are critical in recruiting new talent and those that are involved in obtaining fi nancial capital when a new organ ization is formed. New organ izations do not have a track rec ord, and they need to sell the prom- ise of future payoff s to talent. Not surprisingly, one of the major things that causes the demise of many start-up organ izations is their inability to attract the kind of talent they need to be successful.

At the forefront of any discussion of talent availability should be a consideration of alternative approaches to accessing talent. For a host of reasons ranging from agility to cost and availability, the best way for an organ ization to get the talent it needs may not be by employing it on a full- time, permanent basis. Consideration needs to be given to the wide variety of talent access approaches that are available today and will be increasingly available in the future. Th ese include contract employees, gig workers, employees borrowed from other organ izations, workers hired through temporary agencies, and a host of other ways to temporarily obtain talent. Organ izations increasingly need to think of themselves as being made up of constantly changing teams that assem ble talent to meet the per for mance demands of a changing market.

It is increasingly common for organ izations to take into account the availability of talent when it comes to implementing a strategy that has been deci ded upon. Talent availability is increasingly driving decisions about where organ izations locate their operations. Further, an increas- ing number of organ izations are using technology that allows talent to work anywhere, and at any time.

Most executives do recognize that implementing a strategy depends not only on having the right talent but also on being able to motivate and direct the talent to behave in ways that are strategically appropri- ate. But what it means to operate in strategically appropriate ways and how this can be accomplished is not always well thought out during the strategy development pro cess; instead it is left for “ later.”

Leaving talent management considerations for later is a big risk, because it may not be pos si ble to design an organ ization that has talent management practices that are conducive to the implementation of the

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20 Reinventing Talent Management

business strategy. It is during the development pro cess that organ- izations need to deal directly with how the organ ization can obtain and manage the right talent for a strategy to be implemented successfully. Th e next question should be, Does our organ ization have these practices and, if not, can we implement the right talent management practices?

Simply adopting a series of best practices with re spect to rewards, per for mance management, recruiting, se lection, and development is rarely the right answer to creating strategically appropriate talent man- agement systems. Diff er ent strategies require diff er ent systems. Organ- izations must start with an understanding of what the talent management options are and an understanding of how the many options that exist impact the be hav ior of individuals and organ izations.

Overall, developing strategic talent management practices is a critical and challenging task. To be done well, it requires an extensive knowledge of the alternative methods of talent management as well as an under- standing of how they relate to the kind of orga nizational culture, compe- tencies, and capabilities that are required to implement and operate a strategy. It also requires realizing that talent management practices may soon be outdated, especially with the way work and organ izations are changing. Few “silver bullets” exist that can solve all talent management prob lems or can be strategically relevant for years or even de cades.

TA L E N T M A N A G E M E N T S H O U L D B E B A S E D O N S K I L L S A N D C O M P E T E N C I E S

Traditional organ izations are built with a job- oriented, hierarchical mind- set. As a result, how employees are treated and managed depends more on the job they are doing than on their per for mance, skills, com- petencies, and needs. In the traditional hierarchical bureaucratic organ- izations of the past this may have been defensible, but it is not in today’s world of work and will be even less so in the future. Th e management of talent needs to be designed to focus on the needs, skills, and competen- cies of individuals. Th is is the single most impor tant thing that the tal- ent management system of an organ ization can do to ensure that the organ ization will perform eff ectively and be prepared to deal with a dy- namic environment. It means focusing on what skills individuals have

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Strategic Talent Management 21

and on what skills might be needed for an organ ization to be eff ective and evolve in an agile, strategically appropriate way.

In a job- based organ ization, how talent is treated is primarily deter- mined by the hierarchical position it has. Th is includes how and how much employees are paid, how they are selected, the training they re- ceive, their mobility, where they park their cars, where they work, what kind of furniture they have, and so on. In a skills- and competency- based talent management system, the key drivers— pay, recruiting and se lection, training and development, where someone is located, and how someone is treated— shift . Such a system is focused on what skills an individual has vis- à- vis what skills the organ ization needs to be eff ec- tive. Par tic u lar attention needs to be paid to determining and develop- ing the skills that make a diff erence in orga nizational per for mance.

An organ ization will develop the per for mance capabilities that are aligned with its strategy, and the ability to change its capabilities when the strategy calls for it, only if a skills- and competencies- based focus exists. Th us, it is critical that the organ ization’s talent management sys- tem and practices be based on skills and competencies.

TA L E N T M A N A G E M E N T S H O U L D B E P E R F O R M A N C E F O C U S E D

Th e talent management systems in an organ ization need to be focused on the type of per for mance it requires from its talent to be strategically successful. Th e types of per for mance needed may vary from individual excellence to outstanding levels of group, unit, or orga nizational per for- mance. Most bureaucratic talent management systems fail to take into account the complexity and importance of diff er ent types of orga- nizational per for mance. Th ey usually promise promotion and merit- based salary increases to the “best performers” and on the basis of se niority. Th is oft en is not the right approach, particularly with re spect to promotions and to creating talent management systems that support orga nizational eff ectiveness. It ignores or fails to focus on the critical per for mance be hav iors and talent development motivators that are needed to make the organ ization eff ective and that therefore should be the focus of talent management systems.

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22 Reinventing Talent Management

What is needed to develop talent management systems that are cor- rectly per for mance and development focused is a strategic analy sis of the type of per for mance an organ ization needs from individuals, groups, and the total organ ization to implement its strategy. Th is needs to be followed by a pro cess that uses the results of such an analy sis to motivate and develop the kinds of be hav iors the organ ization needs at all levels and in all segments to be eff ective. Th ese be hav iors then need to become the key to what is rewarded, how talent is recruited, and how it is developed.

We can take as an example an organ ization in which cooperative and team be hav ior is very impor tant. Th e right approach to rewards may be a group- or organization- wide incentive plan (e.g., a profi t- or stock- option plan) rather than a traditional merit salary increase plan. It may also include training and development that focuses on cooperative team be hav ior. Fi nally, it might include a recruiting and se lection sys- tem that is targeted at hiring talent that performs well in team- based organ izations.

An impor tant feature of every organ ization should be the attraction and retention of high- performing individuals with key skills. Th is ties directly to the real ity that in today’s work world the individual per for- mance of key contributors plays an increasingly impor tant role in the overall per for mance of many organ izations. Because of the growing complexity of work and organ izations, individuals can increasingly be the diff erence between an organ ization that is successful and one that just survives or, for that matter, fails. Th e real ity is that more and more people are in critical positions in organ izations because their individ- ual per for mance has a major impact on the overall per for mance of their organ ization.

Increasingly, it is not enough to have someone who just gets the job done. For many types of work, organ izations need people who get work done at higher levels than that being done by their competitors. Th is can only be accomplished by having talent management systems that focus selectively and strategically on the per for mance of individ- uals, teams, and the organ ization as a whole. Par tic u lar attention needs to be focused on work that is done at very diff er ent levels of ef- fectiveness and has a key impact on orga nizational per for mance. Stra- tegically impor tant work that is performed at very diff er ent levels of

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Strategic Talent Management 23

eff ectiveness by individuals and groups is where the right talent man- agement systems can have the largest positive impact on orga nizational per for mance.

Overall, talent management practices need to be aligned with each other and the organ ization’s strategy and structure to create the mix of individuals and work units that can perform at a level that makes a dif- ference. Th is can only be done if they focus on competencies, their im- pact on per for mance, and competitive advantage rather than on issues of fairness, se niority, and hierarchy.

TA L E N T M A N A G E M E N T S H O U L D B E A G I L E

Th e rate of change in what organ izations need to do, how well they need to do it, and how fast they need to do it is continuing to increase. Th e only way to respond to this is to have an organ ization that is agile. Th e only way to create an agile organ ization is to have talent management practices that create talent agility.

What does talent agility require? It takes having talent management systems that are able to respond quickly and strategically to constantly changing labor markets and business strategy conditions. It is not a matter of having one or two agility practices; it requires a totality of management practices that allow organ izations to adjust the kind and the amount of talent they have and the be hav ior of their talent on a con- tinuous and rapidly changing basis.

Th ere are a variety of types and degrees of per for mance change that organ izations need to make in a rapidly changing environment. As a result, no single approach to creating an agile talent management sys- tem exists that is ideal for all organ izations. Organ izations may be able to develop a suffi cient level of agility simply by constantly training and developing the employees they have. For de cades this was adequate in the automotive and telecommunications sectors, but today it is unlikely to be suffi cient because it cannot produce the rate of change and amount of change that is needed. It also may be very costly because of training costs and lost work time. To change more rapidly and at a lower cost, these sectors and others need to change their talent by hiring individu- als who already have the skills they need or using talent that is not employee based.

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24 Reinventing Talent Management

Th e best approach for an organ ization to take depends on the na- ture of the business it is in, the labor market conditions it faces, and the rate and kind of change that is needed. What is clear is that an organ ization’s talent management policies and practices need to be driven by the kind of change that it faces and by the specifi c needs that it has for talent and per for mance. Once those are established, it is a matter of putting in place the types of reward systems, career develop- ment programs, se lection programs, employment arrangements, and other talent management policies and practices that will lead to the levels and kinds of agility that the organ ization needs to respond to its environment.

Historically, organ izations including General Electric and IBM were admired for their career approaches to talent and for the kind of devel- opment programs they had for their talent. Th ey provided careers, not jobs, and off ered extensive development and training experiences. Many rewards were based on se niority and hierarchy, and employees might re- ceive gold watches aft er twenty- fi ve years of work for the com pany. Today’s rapidly changing environment has made many of those approaches obso- lete. As already noted, in most cases organ izations simply cannot change rapidly enough by using training and development programs to change talent. Because of this, they cannot promise their employees a career, much less a job.

What an organ ization can promise is information about what its cur- rent business and talent needs are and updated timely information about how those needs are changing. Further, they can make themselves an attractive place to work for individuals who have the skills and capa- bilities needed at a given point in time. Th ey also can adopt what Netfl ix does with re spect to severance: the com pany promises its employees high pay while they work there, and a generous severance package if they are no longer needed; but what it cannot (and does not) do is prom- ise every one long- term job security. Th e reason for this is obvious: like many organ izations, Netfl ix cannot predict with a high level of certainty where the business environment will go and what its future talent needs will be.

All that most organ izations are able to do is control what happens today and put in place agile talent practices that will enable change. Th ey know their staffi ng needs will change in ways they cannot predict.

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Strategic Talent Management 25

Th us, instead of talking about job security, they need to promise to fully inform individuals about what they think the organ ization’s future will hold and to treat people appropriately given the business situation.

Creating an agile talent management culture in an organ ization is not a matter of simply changing one part of its talent management sys- tem. Every part needs to be changed, starting with the attraction and se lection pro cess and continuing through the per for mance manage- ment pro cess. Th e emphasis needs to be low on long- term commitments and high on communicating what the talent management situation is and what the organ ization will do to help individuals adjust to any changes that may occur.

Th e most diffi cult talent management agility issue is balancing reten- tion and realistic promises about what the future holds. Putting great emphasis on promising a future for individuals whose skills may be out- dated can lead to short- term retention but serious long- term prob lems for an organ ization, including wrongful discharge lawsuits and a cul- ture of mistrust and deception. On the other hand, not retaining talent can lead to recruiting prob lems, extremely high levels of turnover, and all the costs and dysfunctions that are associated with turnover. Organ- izations must create talent management practices that do not over- promise with re spect to the future and underdeliver with re spect to the pres ent. Th ey must deliver a workplace experience and culture that at- tracts, retains, and motivates the kind of talented individuals that are needed to operate an agile organ ization. Talent management cannot be based on se niority and security.

TA L E N T M A N A G E M E N T S H O U L D B E S E G M E N T E D A N D I N D I V I D U A L I Z E D

Th e talent management pro cesses and practices of most organ izations adhere to a “standardization and equal treatment approach” that is ori- ented toward treating people who hold similar positions in the same way. Standardization is said to be the key to fairness, and fairness is said to be the key to good talent management. Sameness also leads to econo- mies of scale. Treating every one the same makes training, rec ord keep- ing, and a host of other talent management practices less complex and less costly.

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26 Reinventing Talent Management

Certainly, sameness does represent one approach to fairness, but it is not the only approach or necessarily the best one. An alternative to sameness is to defi ne fairness as treating individuals the way they need to be treated based on their needs, abilities, and per for mance and what is needed to make their organ ization eff ective. Based on what we know about the future of organ izations, work, and workers it is clear that treating every one the same is unlikely to be the best approach from either an orga nizational eff ectiveness point of view or an individual preference point of view. People diff er, and organ izations need to focus on how to take advantage of and accommodate these diff erences in light of their needs for per for mance.

Th e growing diversity of the workforce immediately makes the idea of similar or identical treatment being the best treatment for every one null and void. What is good for a seventy- fi ve- year- old is not likely to be as good for a twenty- fi ve- year- old, even though they may be doing relatively similar work or working in the same function or unit. Simi- larly, what may be the best career model for an individual with a key orga nizational skill set may not be the best for an individual with a skill set that is not critical to an organ ization’s source of competitive advantage. Th e same is true for an individual with a competency that is scarce and in demand versus one who has a competency that is easily available in the labor market.

Standardization needs to be replaced by a reasonable approach to segmentation and individualization when it comes to how talent is man- aged. Th e challenge is to create approaches to compensation, job secu- rity, development, se lection, and other talent management practices that are legally defensible and fi t the diversity of the workforce and the rap- idly changing business environment that dominates today’s world of work.

Th e operationalization of a segmentation approach can be facilitated by giving individuals greater choices so that they can create a work en- vironment that fi ts their preferences. It also can be enabled through technology that makes pos si ble administrative systems that allow indi- viduals to make choices about when, where, how, and why they work.

Th e emphasis needs to be on reasonable individualization because without clear limits there is the danger that every employment deal in an organ ization will become a personal deal that is constantly changing.

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Strategic Talent Management 27

Th is could result in a level of complexity so great that it overwhelms any administrative capability that an organ ization can create and manage— even while taking advantage of the power of modern information technology.

Th ere is no simple, generally applicable solution to the challenges that are created by the need to treat diff er ent segments of the workforce dif- ferently. But it certainly is much more impor tant and pos si ble to do it effi ciently and eff ectively today than it was before the web- based talent management systems that currently exist were available to help compa- nies administer their human resources (HR) programs.

It is increasingly impor tant that organ izations develop and imple- ment segmented, individualized management practices in all areas concerned with how they manage talent. Th ere are few organ izations that should promise the same treatment to all employees when it comes to key talent management issues. Of course, to some degree organizations never have; executives have always been treated diff erently from other employees; hourly and salaried employees have always been treated dif- ferently. Th e reasons for this range from legal requirements to the diffi - culty and cost of implementing diff er ent practices for multiple groups of employees.

Th e diff erence today is that organ izations have a greater need to adapt and expand their approaches to treating people diff erently than they did in the past when they treated employees the same under an umbrella of fairness and effi ciency. Th ey need to communicate that the traditional job- level- based approach is no longer eff ective; it cannot be made to fi t a workforce that varies as much as the individuals in today’s workforce do— not to mention diff erences in when, where, and how they work. Companies need to replace the old approach with one that provides more choices and is aligned with the work to be done.

TA L E N T M A N A G E M E N T S H O U L D B E E V I D E N C E B A S E D

Given the importance of talent management practices and systems in organ izations today and their greater importance tomorrow, they need to be based on evidence, not just common sense and experience. Th is is true in the case of decisions about how individual talent should be treated when it comes to hiring, pay increases, work assignments, and

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28 Reinventing Talent Management

promotions. It is also true with re spect to which talent programs, poli- cies, and practices are put in place in an organ ization. Given the increas- ing importance of eff ective talent be hav ior in organ izations, it is time to move beyond the practice of relying on what “seems right” and what “makes sense” with re spect to talent management. Decisions need to be made based on research evidence and data.

Th ere is an enormous amount of existing research that establishes what makes for eff ective talent management. It ranges from research on the eff ectiveness of secrecy with re spect to pay, to how to select and develop highly talented individuals. Unfortunately, too oft en this evi- dence is not taken into account when decisions are made in organ izations. Man ag ers and executives assume that common sense and experience are their best guides when they are making hiring and other talent man- agement decisions. All too oft en they are wrong. For example, based on their interviews of job candidates, many man ag ers are confi dent that they can pick the best candidate. But research shows that hiring decisions based on unstructured interviews simply do not predict per for mance.

Th ere is no magic way to create more evidence- based talent manage- ment, but it is pos si ble for organ izations to move in that direction. One approach is to do research. Today many organ izations have a great amount of internal data on per for mance and be hav ior as well as signifi - cant data analy sis capability. It is thus pos si ble for them to validate their se lection activities and other talent management decisions. Simi- larly, in many situations it is pos si ble to mea sure per for mance to deter- mine which talent, and which talent management practices, are best. In addition, it is pos si ble to gather data about the attitudes and be hav iors that predict turnover, absenteeism, and other critical aspects of the workplace. Fi nally, it is also easier to calculate the cost of turnover and other talent management outcomes that need to be taken into account when decisions are made about talent management.

Th ere is one additional factor that comes into play when organ- izations gather, analyze, and make talent policies and decisions based on data from their workforce. It eliminates the “not in ven ted here” re- action, which oft en leads to organ izations ignoring evidence from stud- ies done in other organ izations in the belief that it does not apply to them because they are diff er ent. Of course, they can still take talent

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Strategic Talent Management 29

management actions that are not based on an analy sis of their organ- ization’s data, but it is less likely in part because it will make them look bad. Google, IBM, and 3M have impressive HR analytic groups and have stated that having them increases the chance that their talent man- agement decisions are evidence based and eff ective.

Of course, organ izations do not have to do their own research to fi nd out what talent management practices are eff ective. Th ere are over 100,000 studies of talent management in the academic lit er a ture, and a number of very readable books that cover se lection, training, compen- sation, and development. Th e bad news is that most of them focus on outdated best practices and must be read with caution when it comes to reinventing talent management; the good news is that there is a grow- ing number that are relevant to how talent management should be reinvented.

Perhaps the best way of stating what needs to happen is that talent management needs to move from the category of gut feeling to the cat- egory of evidence- and data- based decision making. Organ izations need to consistently and regularly ask and examine how their talent manage- ment programs and policies are working, what their costs are, and what outcomes are produced. Th ey need to experiment with new approaches and determine if they work based on per for mance data. Th ey need to use data to develop and manage individuals and their careers, and they need to provide data to individuals that will guide them in their career choices and decisions about skill development. In short, talent manage- ment needs to become much more data based and much more evidence driven.

Th ere is a good chance that if organ izations move to a more evidence- based approach to talent management, this will aid not only the organ- izations but also their talent. It is particularly likely to help organ izations develop a more talented, productive, and cost- eff ective workforce because they will know the right way to treat talent and develop it. On the individual side, talent with additional data will be much more in- formed about how to develop skills, what career choices are best, how best to perform the work, and how long to stay in a job and with an organ ization.

In short, evidence can lead to better data- based decisions and prac- tices that have the potential to create win- win situations. Th ere is an

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30 Reinventing Talent Management

increasing reason to believe it is imperative that individuals and organ- izations make more data- based decisions; they are a requirement in a world in which work is changing rapidly and both individuals and organ izations constantly need to make key talent management deci- sions that aff ect individuals, organ izations, and society.

C O N C L U S I O N

Th e talent management princi ples and practices covered in this chapter are all focused on meeting the six work and workplace changes that were presented in chapter 1 and are intended to respond to one or more of these changes. Table 2.1 pres ents an analy sis of how impor tant and eff ective a response each of the six talent management princi ples is to the six major changes.

All of these talent management princi ples are impor tant responses to multiple changes in the world of work. All of the workplace changes, with the exception of diversity, argue strongly for talent management to be strategy driven, skills based, and per for mance focused. Th e need for agility is strongly driven by the increased prevalence of technology; this change in the business environment makes it imperative that an organ ization build and adopt agile talent management practices. A second very impor tant driver of the need for talent agility is change, which is oft en technology driven as well.

Table 2.1 Talent management princi ples and changes

TALENT MANAGEMENT

PRINCI PLES

CHANGES

Globalization Technology Diversity Sustainability Change Critical Talent Average

Strategy driven 2 3 1 2 2 2 2

Skills based 2 3 1 2 3 3 2.3

Per for mance focused 3 2 2 2 2 3 2.3

Agile 2 3 1 1 3 2 2

Segmented 3 2 3 1 1 2 2

Evidence based 2 3 2 1 2 3 2.2

Copyright © Edward E. Lawler III and Center for Eff ective Organ izations at USC. Notes: 1 = little or no importance; 2 = moderate importance; 3 = very high importance.

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Strategic Talent Management 31

Segmentation as a talent management practice is strongly driven by the two changes that lead to more diverse organ izations: globalization and diversity. Technology and talent are also impor tant reasons to focus on segmentation because they increase the need for talent to be dealt with in a targeted and individualized way.

Fi nally, an evidence- based approach to talent management is needed to deal with the importance of talent and the many complex issues that technology pres ents. Given the advances in technology and the result- ing importance of talent, it is simply not prudent to allow decisions about the individuals who manage technology and drive strategy to be subject to decisions that are not based on the best evidence and data available.

As far as the changes are concerned, technology is pervasive in the way it aff ects organ izations. As a result, having technology be anything other than a major driver of an organ ization’s talent management princi ples runs the risk of creating organ izations that lack the talent they need to develop and produce competitive products. Th e same real- ity is the reason that the importance of talent makes evidence- based, skills- based, and performance- focused management so impor tant. Th e rate of change and the importance of talent also contribute to the high importance of having skills- based talent management systems.

Overall, the six talent management princi ples are useful and impor- tant guides in deciding which talent management practices will be ef- fective in the new world of work. Th us, as we review how organ izations should manage their talent, we will analyze whether par tic u lar talent programs and practices follow these talent management princi ples and focus on those that do because they are the practices that will create an eff ective strategic talent management system.

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