Talent Management & Succession Planning
Winning the War for Talent 2.0
In 1997, a groundbreaking McKinsey study exposed the "war for talent" as a strategic business challenge and a critical driver of corporate performance. Then, when the dot-com bubble burst and the economy cooled, many assumed the war for talent was over. It's not.
Subsequently in 2001, the authors of the original study revealed that, because of enduring economic and social forces, the war for talent will persist for the next two decades. McKinsey & Company consultants Ed Michaels, Helen Handfield-Jones, and Beth Axelrod argued that winning the war for leadership talent is all about much more than frenzied recruiting tactics. It's about the timeless principles of attracting, developing, and retaining highly talented managers - applied in bold new ways. And it's about recognizing the strategic importance of human capital because of the enormous value that better talent creates.
Can companies win the “war for talent”? Will we be able to define and implement a retention strategy that will give us the stable, committed, capable workforce required to achieve a competitive business advantage? Consulting firm and research organization reports, published books and articles, and internal company retention studies suggest that everyone is following the same overall plan. How will this approach give a company an edge?
Few, if any, organizations today have an adequate supply of talent. Gaps exist at the top of the organization, in the first- to midlevel leadership ranks, and at the front lines.
Talent is an increasingly scarce resource, so it must be managed to the fullest effect. During the current economic downturn we may experience a short ceasefire in the war for talent, but we’re all seeing new pressures put on the talent running our organizations.
Results-based Talent Management System
So, what do we mean by talent management? In the broadest possible terms, it is the strategic and tactical management of the flow of talent through an organization. Its purpose is to assure that the supply of talent is available to align the right people with the right jobs at the right time based on strategic business objectives. The term “talent management” is often used to denote e-recruitment and automated applicant tracking systems. This emphasis on staffing and recruiting is more appropriately called the talent acquisition phase of the Integrated Talent Management (ITM) Framework (see Figure 1), an important but preliminary step in the overall process.
Figure 1: Integrated Talent Management (ITM) Framework
Reference: Sattar Bawany (2014), “Winning the War for Talent 2.0 in Asia Pacific” in Talent Management Excellence Essentials, Issue 01.2014 (January 2014).
The Integrated Talent Management (ITM) Framework consist of the following elements:
- Talent Acquisition: Proactively recruiting world-class, diverse leadership talent and providing on-boarding support for them to accelerate their assimilation into their roles.
- Talent Development: Developing and executing learning and development programs, processes & assessment tools to grow current and future leaders
- Performance Management: The process of creating a work environment in which people can perform to the best of their abilities.
- Succession Planning: towards developing a leadership pipeline or assuring near-term leadership continuity by thoughtful consideration of the availability, readiness, and development of internal talent (including High Potentials) to assume critical “priority” leadership roles.
- Talent Engagement: Identifying the level of engagement of employees to optimize their contribution and reduce attrition as well as to enhance retention.
- Organisational Results: Achieving favourable and desired results is obviously the ultimate outcome expected out of any effective integrated talent management system. However, it is a lagging indicator and business leaders will have to focus on the organisational climate which will have an impact on the other elements of the Integrated Talent Management Framework as explained earlier. The flow of effective communication and the systems of recognition and rewards are integral parts of the climate which influence the talent’s performance effecting productivity, creativity and in driving results with the right impact. The climate is impacted by a values-driven leadership team.
Best Practice Approaches to Talent Management
From our experience in partnering with clients across diverse industries globally, we have found the following are common "best practices" used by companies to develop executives and leaders. These are what we hear from our clients:
- Linked to Strategy: “Our executive development efforts are directly linked to our organization's strategy. It's clear how these efforts help address our marketplace challenges and/or achieve our strategic objectives”.
- Top Management Driven: “Our top executives champion our executive development efforts. We have a senior, line executive advisory board. Our top executives attend the programs as participants and also teach when appropriate”.
- Strategy & System: “We have a strategy and long-term plan for executive development. Our programs and practices are part of a continuous system and process rather than stand-alone, ad hoc events”.
- Leadership Profile, Feedback and Individual Development Plans: “We use a custom-designed [linked to our vision, values, and strategies], multi-rater leadership instrument/inventory to provide confidential development feedback to our executives. Our executives have individual development plans based on that feedback”.
- Top-Down Implementation: “Whenever our executive and leadership development efforts are aimed at organizational change, our top management attends the programs first as participants. Then the programs are cascaded down throughout the organization”.
- Action-Oriented Learning: “Our executive learning experiences are action oriented. Whenever feasible, we use some form of "action learning" where participants apply what they are learning to real, current business problems and opportunities”.
- Succession Management: “We have an effective succession management system that ensures we have the right executive, in the right job, at the right time. We seldom are forced to hire from outside the organization to fill a key executive job opening as a result of not having a qualified internal candidate prepared”.
- Integrated Talent Management System: “We have a well-integrated talent management system (succession management, external and internal executive education, on-the-job development, coaching/mentoring, etc.) rather than independent stand-alone processes”.
- Measurement: “We set clear, measurable objectives when we create new executive development strategies, systems, processes, and programs. Then we measure the business impact using metrics that matter to senior management, and communicate the results effectively”.
- High Potential Identification and Development: “Our organization has an effective process for identifying "high potential" talent and accelerating their development”.
Your organization can create a new product and it is easily copied. Lower your prices and competitors will follow. Go after a lucrative market and someone is there right after you, careful to avoid making your initial mistakes. But replicating a high-quality, highly engaged workforce is nearly impossible. The ability to effectively hire, retain, deploy, and engage talent—at all levels—is really the only true competitive advantage an organization possesses.
For further information
What has been your experience? What are your ideas? We would love to hear from you.
Call us at (65) 6789 0977 or email us for a no obligation discussion on how CEE could partner with your organisation to develop a sustainable Talent Management Strategy.