Business Leaders Have to be Involved In Talent Planning

The “new business normal” is that there is no normal. What determines success today is very likely going to be markedly different three years from now and across our functional surveys at CEB we find that senior leaders have yet to wake up to and plan for this new reality.

It’s not as if senior leaders are oblivious to the rapidly changing business environment, individually they see it: 74% of leaders report substantial changes to their own jobs in the last three years. What most senior leaders ARE oblivious to is their responsibility in planning for and developing the talent to win in the future, just 15% of our organizations rated themselves as effective in planning for future talent needs.

This failure to plan has enormous consequences for business and careers. And you can see that insecurity ( from lack of planning) manifested across functions. Just 10% of CFOs believe that their company has taken the time to identify and build the capabilities needed to win. Not surprisingly, just 27% of CFOs have confidence in their strategy.

The data to change is compelling: 83% of leaders now believe there’s more business risk associated with talent decisions. CEB data shows that Business leaders with deep talent benches have, on average, 12% higher profit than those with weak talent benches.

So, why aren’t senior leaders involving themselves deeply and leading those talent discussions?

In my experience working with midsized companies (50-2B a year) many business leaders think it’s “an HR issue” not a business issue and that’s a critical misjudgment. 7 in 10 don’t think HR is effective at workforce planning. A result that’s troubling on the surface, but underneath that survey lies the heart of the issue. Leaders don't view workforce planning as their role, they throw it over the fence and blame HR. Yet they need to lead and own their own workforce planning because HR will never be able to fully create a talent plan for their business without their help. HR can develop approaches, engage, coach and enable, but it will never have the insight to create workforce plans without senior leader involvement.

Not surprisingly, the data backs that up. Of all the drivers we surveyed in our succession planning work, the biggest differentiators between companies that had deep benches and those that didn’t were:

• LEADERS (not HR) Identify Emerging Talent Challenges and Trends
• Companies Forecast roles based on future strategic needs (not replacing current employees who may already be irrelevant)
• Companies identify changes needed to existing roles.

The critical difference between companies with deep bench strength and those without is that in companies that have deep benches senior leaders are involved in uncovering talent problems and solutions with HR's help.

The wake up call is now as the sand is shifting underneath leader’s feet as I write this. Just 37% of managers agree "That Senior Leaders Demonstrate the Required Abilities to Achieve Critical Objectives." 94% of HR leaders who lack confidence in senior leaders cite lack of strategic fit.

In other words, if senior leaders don’t start taking the lead in planning for the talent they need to win in the future, others may be planning to replace them.

See our Middle Market Whitepaper "Avoiding the Growth Talent Trap" and our blog Business Leaders: If You’re Not Making Talent Decisions, You Won’t Succeed

See also:

• Death by Incrementalism
• Fixing Performance Management
• Apple's Capability Ecosystem
• Emotional Intelligence and the Orca Brain
• 4 Signs of Cultural Fail
• Death of the Corporate Bully
• 13 Mistakes to Avoid
• Apple's Magic Formula
• 13 Things Strong Companies Avoid
• Building Winning Teams
• Teach Insight to Influence
• Stop Cascading Strategy
• Business Leaders Have to Drive Talent
• CFO vs. CHRO