Can You Win With Talent In An Age of Uncertainty?

I was invited to have a conversation with the full-time MBA class on “Building Your Future Talent Pipeline Today”. As I arrived at the Business School on Wednesday 18 May, I restructured my presentation strategy in my head. My objective was that by end of my interaction with the MBA students, they should understand the need for:

a. Balancing developing talent in-house with buying it on the open market

b. Managing the uncertainty in talent-need forecasts

c. Maximizing return on talent investments

d. Replicating the advantages of the external job market by creating an in-house market that links available talent to jobs

I opened the session by asking the students to define talent management by choosing from two option I put on the screen. Option A says that talent management is about developing employees or creating succession plans. It is about achieving specific benchmarks such as limiting turnover to some percentage and having the most educated workforce. Option B said that talent management is about helping the organisation to achieve its overall objectives (i.e. creating value in order to make money). This requires understanding the costs as well as the benefits associated with your talent management choices.

I enjoyed the heated debate in the auditorium. To be fair to the students who chose option A, there was a time when talent management was all about what was described in option A. It was built on engineering principles that we can achieve certainty through planning workforce plans that determine the number of employees needed at a future point, pipelines of talent that people enter and exit at a predictable point and rate and succession plans that map individuals to jobs. That highly methodical model which served many global organisations well is no longer the model of choice. 

What then is talent management? Option B is based on my favourite definition of talent management taken from the book, Talent on Demand: Managing Talent in an Age of Uncertainty by Peter Cappelli, the George W. Taylor Professor of Management at the Wharton School. He defined it as “The process through which employers anticipate and meet their needs for human capital”. It gives you and your organisation a better chance of attracting and retaining talent effectively and cost efficiently. It will help you understand how you can increase the performance of employees in your organisation. As a talent acquisition professional, it will increase your value/worth to your organisation and enhance the meaning derived from your work as you become a more confident and trusted practitioner.

What brought about the movement from option A to B? Quite simply, the world moved on! Change happened. We saw the effect of deregulated markets and the influx of products and talent into hitherto protected markets. Increased competition from foreign goods challenged companies to seek innovation. Unpredictable supply of internal talent stretched capabilities. We saw the end of psychological employment contracts and complacency. Business forecasting failed to predict economic downturn and upswing. Many companies that were caught unawares resorted to head hunting of required skills by going after the most treasured talent of competitors. The pressure to show return of investment forced many organisations to explore new ways of getting the right people on board.

Talent management is a daunting operation through which you are trying to forecast highly complex issues which extend beyond human resources. What options do you have for developing employees? You can explore:

a. Executive Coaching

b. Developmental Assignments

c. Assessment Centres

d. High Potential Programmes

e. Forced ranking performance systems

f. 360 degree feedback programmes

You can follow the example of the best football clubs in the world by investing more time in the early identification of talent and potential and instilling your values in them. Will that stop good employees from leaving to take up better opportunities? No, but you stand a better chance of retaining them. Peter Cappelli reminded us that business strategy has moved away from the assumption that we can plan our way around uncertainty, heading instead towards a model where the key competency is the ability to react and respond quickly to new opportunities. He added that talent management must move in the same direction if it is to support this new orientation in strategy.

A new paradigm to consider is that we must recognise the limits of our ability to predict or forecast the future. Like we see in major league soccer with football clubs having youth academies and still buying established stars, we must accept that there are benefits of both worlds (“make and grow your own talent” and “buy finished goods”). We must embrace a new approach to developing internal talent using work-based learning and opportunities. We have to consider new ways of matching individuals to development opportunities and jobs with less emphasis on the “Chess Master” model.