Talent management isn't a new concept to human resources leaders or to major companies, but it takes on new meaning and greater importance in volatile economic times. The definition of talent management varies among industries, companies, and even branches of the same business. That's generally smart because it means managers are molding the concept to fit their firm's needs. The best approach is to define it simply as the work businesses do to get the most out of their people, for the sake of their employees and the bottom line.
HR departments should not own talent management. It should pervade a company's goals and involve the whole workforce, although not necessarily in the same way. Ultimately, you must define what talent management means for everyone in your business. That includes properly categorizing talent, preferably as anyone working for the company in any way, perhaps even contractors. Within this broad vision, your talent management activities might include hiring, training, evaluating performance, developing employee careers, coaching executives, and planning for succession. Create your talent management vision, then teach it and support it.
It takes more than an HR plan
Talent management used to mean little more than grooming high performers for future leadership jobs. Now, according to talent management consultant and analyst Josh Bersin, it is a vital foundation for any business. Properly conducted, it integrates business strategies and goals with the people and skills needed to achieve them. High-impact talent management can improve your decision making when you face calls to reorganize, improve results, handle a rash of retirements, update your compensation plan, or help your industry expand. Good talent managers create plans for handling these issues that do not mimic HR but that apply HR strategies to meet corporate needs. Bersin uses a four-step process he calls the essence of talent management:
- Determine the business challenges ahead. Set goals and plans for up to two years.
- Identify people problems that block these goals. Use models to see what you're missing - whether you need more people, greater expertise, or new capabilities.
- Make a plan to solve these problems. The solutions might require a new recruiting system, fresh branding, or other improvements. Seek simple but specific answers.
- Put the plan to work. This doesn't have to involve a new computer program. Software accomplishes little without an action plan centered on a business problem or change.
This model requires everyone in the organization to understand that the top executives - not HR - must own talent management. That gives HR a supporting role as lead consultants. IT personnel, departmental management, and training staff members might also take supporting roles. Any talent management plan must cover performance, competency, leadership development, and corporate learning. Respect your firm's culture when creating your plan, so it will fit seamlessly into your employees' work lives. Learn from these six companies:
Cisco Systems. Talent management leaders at Cisco predict four impending challenges - a smaller talent pool, a huge age span among employees, a growing need for culturally diverse leaders, and worldwide hiring opportunities, demand, and risks. As this fast-growing $40 billion company works to become a solutions-based business instead of a producer of goods, it seeks leaders who can navigate new markets. Cisco wants to lead its industry starting from within the company, as the CEO's vision statement reveals: "Best in the world; best for the world." The business plan for changing Cisco depends on changing its leaders. Cisco gives each executive an individual motive for personal transformation, and offers a three-step, or three-pillar, method for achieving it. The first pillar defines five leadership goals following Cisco's "C-LEAD model" - collaborate, learn, execute, accelerate, and disrupt. The second pillar helps people advance by using individual evaluations and education, including the Action Learning Forum, where future leaders study and solve an actual business problem. The third focuses on talent management to fuel Cisco's overall goals. As you pursue this agenda, don't bog down. Concentrate on the possible. Pay attention to people, quality, and business achievement.
McDonald's. The burger chain declared its first loss in the fourth quarter of 2002. During the next two years, it underwent unprecedented CEO turnovers, including losing two CEOs in one year. This prompted a transformational change that turned the company around and now keeps it on top. Its Plan to Win strategy set standards for people, product, place, price, and promotion. These systemic changes, including a four-step process for managing talent and planning succession, gave the firm a difficult transitional year, but the effort paid off as it took its first step - revamping its overly upbeat performance management system. Employees accepted scaled-back, more realistic evaluations, saw their pay change to align with their evaluations, and watched higher-ups endure the same shifts. Afterward, the remaining three steps fell into place - designing a talent plan for the future, developing programs to build potential leaders, and creating the McDonald's Leadership Institute, a virtual center for training and connecting new and veteran leaders. In the five years after McDonald's launched these changes, it achieved positive sales and record stock prices. It adapted this strategic plan to fit its unique markets worldwide.
Avon Products. Avon, a cosmetics company built on person-to-person sales, became overextended in 2006. To reverse course, it underwent a major reorganization built on a foundation of talent management. Its core changes included implementing a matrix structure and eliminating seven layers of management. Avon set out to address its talent program's six flaws - it was unclear, complex, too homogeneous, sporadic, too personal, and finally, "meaningless," - because staffers faced no consequences for ignoring its measures. Corporate leaders focused on these six pivotal areas and achieved progress within half a year. First, they worked toward companywide transparency by creating a straightforward 360-degree evaluation system and discarding privacy clauses that prevented some managers from even seeing their employees' assessments. Then Avon simplified its practices, striving to restrict nearly every process to a single page. It individualized its work by tightly matching employee programs to recipients and by overcoming its habit of disproportionately favoring high-potential workers. Avon improved its personnel tools and demonstrated CEO Andrea Jung's commitment to talent management by explaining the example she set. To maintain Avon's well-known warm atmosphere, executives added more hands-on fact-finding to its evaluation process, including skill ratings and senior managers' observations. Finally, managers explained why everyone in the firm should participate in the review. Solving problems with simple, easy-to-perform processes helped Avon cut expenses and increase growth and revenue.
Children's Healthcare of Atlanta. This company has three hospitals, 14 local facilities, and an autism center. It experienced great strain as it tried to maintain superior quality and safety. To tackle its internal and external challenges, the company developed a People Strategy - a vision of what it wants to be and a plan for its operations. The system's leaders envision its strategy as a house. Its business vision and goals are the roof. The People Strategy supports the roof and belongs to everyone in the organization - 7,500 employees, 1,400 physician partners, and 20,000 volunteers. Employee development forms the walls of the house. The foundation is the corporate infrastructure, including an integrated data and technology plan connecting information from many parts of the company. As the company created forward-looking plans for workforce development and training, its leaders pledged to pursue quality of life objectives and its employees made a renewed commitment to excellence.
Ciena Corporation. This global communications company incorporates talent management into its business strategies. Ciena Learning Solutions, an arm of its HR department, integrates employee development activities companywide by working hand-in-hand with every department around the globe. This gives Ciena the flexibility to identify and meet training needs quickly. That tactic works strategically because it connects employee learning and development with products from their inception. Ciena relies on an innovative annual talent evaluation process. Executives assess managers according to 14 leadership indicators and create biographies and growth plans to guide their future development. Ciena offers hundreds of online courses in business, leadership, and sales techniques, among other subjects. Talent managers handle succession planning and select candidates for development based on the company's needs. The firm makes talent management part of its core business, right down to profit-and-loss responsibility.
Liberty Mutual Group. Starting with its CEO, Edmund "Ted" Kelly, Liberty Mutual makes talent management every manager's most important duty. The insurance giant's leaders believe that this explains its growth during the past 10 years. Liberty Mutual throws everything it has at talent management, using a three-pronged focus. The first element is alignment. Employees unite in their commitment to three common and universal ideals - interacting honestly, respecting people, and providing products with good value. The second factor is management development. The company trains managers to handle talent management professionally. Liberty Mutual delineates the responsibilities it expects its more than 47,000 employees to fulfill at every level of advancement. The third prong is measurement. Liberty managers get detailed reports and specific ratings to guide their performance. This includes the twice-a-year Talent Management Metrics Report, which tracks each person's progress toward mandatory training goals and talent objectives. Liberty looks to the future by using employee surveys to reveal any gaps or surpluses in succession planning.
Note: This article is excerpted from Talent Management: Strategies for Success From Six Leading Companies, edited by Larry Israelite.
Larry Israelite is the vice president of human resource development at Liberty Mutual Group, with responsibility for supporting the development of managers capable of functioning effectively in a changing, competitive environment and employees capable of sustaining a high level of performance. Before joining Liberty Mutual, he held learning management positions at Pitney Bowes, the Forum Corporation, John Hancock Financial Services, Oxford Health Plans, and the Digital Equipment Corporation. Israelite received a bachelor's degree from Washington College and an MA in instructional media and PhD in educational technology from Arizona State University.
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