Time for talent innovation

The business case for taking a board level approach to talent management is strong and persuasive because unlike before, board directors face reputational as well as personal liability when a business gets in to a mess.

CEOs as well as board directors are now very likely to number talent management among their key priorities because boards are now deeply involved in areas like human resources, compliance and succession planning.

Our research demonstrates that the forces driving the increased interest in talent are a potent mix of external supply issues and internal organisational demands such as increasingly competitive global markets, skills shortages, demographic trends and corporate governance.

The key talent in a business often consists of those individuals who can make a difference to organisational performance, either through their immediate contribution or in the long-term by demonstrating high levels of potential.

Measuring potential

The problem most organisations still have is firstly measuring potential and then factoring the potential part into the talent equation to identify their high potentials who have the ability to move up two or three levels in the organisation. Due to this inadequacy, through the last decade talent management practices have undergone evolutionary change for the better.

At the risk of grossly oversimplifying, there is actually a deceptively simple formula put forward by Professor Dave Ulrich for talent that can help top managers in companies to make talent more productive: Talent = Competence + Commitment + Contribution.

Competence means that individuals have the knowledge, skills, and values required for today’s and tomorrow’s jobs. Then competence can be clarified as right skills, right place, right job, and right time. For example, an emerging trend in the workforce-planning domain of competence improvement is to identify key positions and match people to positions.

Competence clearly matters because incompetence leads to poor decision-making. But without commitment, competence is discounted. Highly competent employees who are not committed are smart, but don’t want to put their best effort. Committed or engaged employees work hard; put in their time; and do what they are asked to do. Commitment trends focus on building an employee value proposition to ensure that employees who give value to their organisation will in turn receive real value back.

Foundation

In the last few years, commitment and competence have been the foundation for talent. But, the reality is that the next generation of employees may be competent (able to do the work) and committed (willing to do the work), but unless they are making a real contribution through the work (finding meaning and purpose in their work), then their interest in what they are doing diminishes and their productivity drops.

Contribution occurs when employees feel that their personal needs are being met through their participation in their organisation. Leaders who are meaning makers help employees find a sense of contribution through the work that they do. CEOs who architect abundant organisations embed this meaning throughout the organisation.

Organisations may be a universal setting where individuals find meaning in their lives through their work and they want this investment of their time to be meaningful. Therefore, competence deals with the head (being able), commitment with the hands and feet (being there) and contribution with the heart (simply being).

In this talent equation, the three terms on their own are very unique; if any one of them is missing, the other two will not replace it or compensate for it. A low score in competence will not ensure talent even when the employee is engaged and contributing. Talented employees must have skills, the will, and the purpose; they must be capable, committed, and contributing. HR leaders can engage their general and line managers to identify and improve each of these three dimensions to increase individual ability and gain productivity.

Team

The other point is that talent alone is also not enough. Great individuals who do not work well together as a team or in their organisation will not be successful. Great individual talent may succeed 20 to 25% of the time, but teamwork matters most. In recent years, people have called for human resources to be relabelled as the talent function, with a focus on compensation, engagement, and competencies. However, without attending to teamwork, workplace processes and culture, HR misses opportunities to have sustainable impact.

CEOs and HR leaders sitting in on board discussions in the future will need to offer credible insights on their organisations as well as their key talent. Therefore, in order for organisations to gain competitive advantage they need to develop a strategic approach to talent management that suits their business and gets the best from their people. The value of a tailored, organisation-wide talent management program is that it provides a focus for investment in human resources and places the subject high on the board agenda.

(The writer is a Senior Company Director.)