Talent management is an extremely valuable – and very often overlooked – business capability that directly, and significantly, impacts the business performance and financial results of companies of every size. The term talent management has been around for a while now. Unfortunately, for the most part it has been (fairly effectively) hijacked by HR software vendors who use it to describe whatever it is their tool does. Popular, but not accurate. Nor is it another word for ‘strategic HR’. As you’ll read below, talent management and HR (strategic or otherwise) are very different things.
Note: This longer structured article provides the foundations (definition, purpose, key roles, and activities) of talent management within an organization. It will be the basis for most of the other content and articles on the topic.
A Practical Definition of Talent Management
Let’s begin by establishing a practical, actionable definition of talent management.
- Simply stated, Talent Management is the people side of running a business.
It doesn’t directly include things such as products, marketing, distribution channels, pricing, strategy, etc. It just deals with the people that make all those things possible! (Does that help you start to realize why this function is so valuable for an organization?)
- Or a more sophisticated option…Talent Management is the process of optimizing business performance – by converting human potential into extraordinary results – through the systemic leverage (positioning & equipping) of talent.
The Purpose of Talent Management
Why should talent management be a priority for your leadership team? Why invest the time and effort? Well…
- Simply stated, the purpose of talent management is to increase business performance (i.e. make more money) with the people you already have.
- Or, the purpose of talent management is to improve business performance and increase financial results by more intelligently managing your people.
Why the focus on your people and how you manage them as a strategic advantage? Well, there’s one very simple reason (besides the tremendous impact it has on your company’s results). Your people are truly the one thing that by definition your competition can’t have at the same time you do. They can copy your products, and steal your marketing ideas, but they can’t work with exactly the same people you do. They may try to take your people. But they can’t have them at the same time you do. So who you have and how you manage (position and equip) them will always be something you control that determines your current and future success. And any business leader worth their salt knows there’s an awful lot out there that we can’t control, so it’s nice to know and use what we can.
Finally, A more valuable (albeit ‘consultant speak’) version…
- To create and enhance the organizational capability and capacity to consistently execute strategy, and deliver on business and operating plans – where customer and business value are actually created.
While this description is clearly a ‘mouthful’, let’s take a minute to break it down and understand its key pieces. Creating the ‘organizational capability and capacity…’ Here the point is that we’re not just developing a single leader or manager who know how to get things done, rather it’s about building an entire team of people (a cultural expectation) that understands how to execute strategy. So you’re not dependent on one person. ‘Execute strategy’…strategy is worthless if it can’t be executed. We all know there are a lot of great strategies sitting on a shelf somewhere just gathering dust. And they have no value. Only executed strategy, creates any value. ‘Where customer and business value are actually created…’ often there is far too much emphasis on, and credit given, for the creation of the plan, and not enough on the implementation of that plan which creates happy customers and therefore profit for the company. The focus should be on creating the value for the customer and the business; not on only thinking up ways to do it. And that all involves, and is driven by, your people. So we need to optimize our leverage of the talents and strengths of our people to create that organizational capability. That’s where the value of talent management is found.
The Key Role(s) of Talent Management
- The single most important people in talent management are your business leaders responsible for architecting and orchestrating strategy execution and who generally run your business.
- Your executives empower these business leaders, and
- Your HR team equips (with tools and processes) and supports them; but…
- Those mid-level managers and people leaders are the key role for the success (or failure) of your talent management function.
Talent management strategy can be planned at top levels of an organization, but it always comes down to the interaction between the manager and the employee, or the leader and the follower. It’s mostly theoretical, until that interaction takes place. Talent management is ‘personal’. In an organization of much size, on a day-to-day basis the top leader are simply too far removed from those people that deliver to the customer to truly change the outcome. So talent management comes down to those leaders ‘in the trenches’ with the team working with your customers, vendors, and partners.
Talent Management Framework Components (Roles & Activities)
Roles/Responsibilities:
There are three primary roles in any talent management system.
Managers/Management Team:
- Achieve business objectives (within cultural norms/company values), while
- Growing the team’s capability and capacity to do and achieve more in future.
(In future articles you’ll see how calling out this second objective changes the entire talent management approach.)
Executive/Senior Management:
- Provide leadership,
- Establish and model company culture/values,
- Set strategy/direction, and
- Provide/allocate resources
Human Resources:
To best equip and support the company’s talent management function (which is the responsibility of the business management team), HR should focus on adding value to the managers/management team. In other words, in the manager/employee relationship the focus should be on the manager. This may require a change in perspective for the HR department, as some HR organizations seem to feel they should focus on representing (defending) the employee, rather than improving the management of the employee(s). And while other HR departments position themselves as the ‘policy police’, fortunately this is far less often the case these days. HR needs to be able to (think in and) speak the language of business and talent management excellence, with credibility, to be a valuable service organization within a business.
So to support talent management excellence across the organization, HR should…
- (Re)Structure as “professional services” service organization structured around the following service areas:
- advisory services (talent management, organizational structure, strengths-based culture, etc.);
- tools & processes (integrated solution suite, not individual expertise areas);
- partnered services (such as recruiting or training programs);
- support services/service provider (such as compensation and benefits).
- Change their mindset and capability from a reactive mostly ‘support’ organization to proactive ‘expert professional service’ organization.
(A future article will present the case, and justification for this restructuring. However, the primary justification is designing the structure and services based upon how HR’s internal customer needs and experiences them.)
Talent Management Activities:
Business requirements, and market opportunities, trigger talent management activities of…
- Positioning and repositioning talent. The best talent managers constantly work to better leverage the strengths/talents of their people to improve performance and expand capacity before simply adding more people.
- Acquire and position talent into team(s) to achieve objectives, execute business strategy and take advantage or market opportunities.
Annual Calendar / Cycle of Activities:
- Performance Planning & Management including Goal Setting – tied to business planning (with lesser emphasis on compensation)
- Talent Assessment (track and capture) – build valuable employee profile that enhancing talent management capability
- Talent Development (job; future career; person) utilizing the talent/knowledge/skill model
- (Re)Positioning Talent (including org structure, team structure and succession)
- Reward – based upon what the individual values (money, time, opportunity, development, etc.); don’t just focus on ‘motivation through money’ as the solution for all – or the ‘least common denominator’ to improve/incent performance
- Talent management metrics, analytics and scorecard (that ‘tells the story of talent management side of the company’)
So that’s some of the foundations of talent management. Other articles will provide some of the foundational principles upon which talent management excellence (and value) are built, as well as drill into each of these areas in much more detail. The goal of all of these articles is two-fold: 1) to enhance your thinking around talent management, and 2) provide you with actionable ideas to apply in your everyday interaction with your leaders and team members that improve your company’s performance.
Note: This model does not include typical HR support services/activities of: Compensation (Planning & Administration) and Benefits (Plan & Admin), Employee/Labor Relations, Recruiting, Termination/Layoffs, Payroll, Diversity, Regulatory Compliance, Occupational Safety, Risk Management, etc. While those are ‘business necessity’ type personnel related activities that must be done, they aren’t directly high value talent management activities.
