Beyond Practice: A Talent Strategy That Transforms
We are often asked to help individuals or their organizations with ‘talent strategy’. This includes being asked to train human resources practitioners in strategy development. This experience has enabled us to observe firsthand, and subsequently research, both best-in-class and less-than-optimal talent practices.
What Gets in the Way of Your Talent Strategy
Over time, we have categorized our observations into four common shortcomings of talent strategy. These get in the way of organizations achieving optimal results from implementing their strategy.
The first of such shortcomings is attempting a strategy without a strong foundation in place. The foundation is the talent or human resources (HR) work required by any organization simply seeking reliable, routine performance. This foundation is not a strategic response to a business need. However, the foundation is relevant to your Talent Strategy to the extent that the absence of fundamentals undermines a company’s ability to perform well. Higher-level HR strategies are sub-optimized unless the foundation is robustly in place.
The second phenomenon we observe is a talent strategy comprising activities that aren’t directly related to the business strategy. This sometimes takes the form of sophisticated tools or technologies, but whose value is not immediately and intimately relevant to the organization’s goals. It can take the form of chasing a “bright, shiny object”, against unrelated business plans or external market forces. Consider the excitement a few years ago at the prospect of removing performance ratings or reinventing Performance Management. Companies lined up to follow suit, regardless of their particular business circumstances.
The third phenomenon we see is talent strategies pursued by individual leaders, a business unit, or a particular geography, but not because the enterprise requires a specific and disproportionate effort in that place. Rather, the decision to invest in talent is based on one leader’s views or the local availability of resources. The decision to invest doesn’t relate to a competitive advantage for the enterprise. The fact that a leader has the ability to invest in a strategy doesn’t mean they should.
Finally, and perhaps the most concerning for those who value credibility within their HR department, is the idea that the strategy can simply be to “train in” a talent mindset. We see significant investments in educating leaders on Talent, without a strong foundation of practice, without a strategy to speak of, and without an approach to driving value for the enterprise in the long term.
The Three Components
Observing these strategic “missteps” has enabled us to articulate a point of view on what excellence in talent strategy looks like. We see it as a systematic approach to building three distinct, but interrelated, domains. We depict these for convenience as a hierarchy, but will say more about the relationship between components later.
The strategic view of talent practices implementation.
Excellence in talent management requires a strong foundation built on a few core practices.
We define the “foundation” as the essential, critical practices that apply to all employees, designed to achieve optimal performance. These practices are labeled as “critical” because they directly influence the successful execution of roles. Whether in a fledgling start-up or a vast multinational company, these practices ensure consistent delivery by employees. Failure to effectively set up one or more of these elements can result in suboptimal outcomes. Without pinpointing what is critical, we cannot provide clarity. By emphasizing the “minimum,” our objective is to deliberately reduce the number of generic solutions, favoring strategic responses tailored to specific business or market needs. Without determining what constitutes the “minimum,” we cannot maintain focus. What is deemed “minimum” and “critical” can vary based on the size and scope of an organization. However, we challenge any routine practice that applies universally to employees without supporting a distinct, identifiable business strategy.
Consider online 360° feedback or universal classroom training. While both can bolster performance, it’s unlikely that either is pivotal to the outcomes or results of every employee. As such, their inclusion in an integrated talent strategy, designed to address specific business or market needs at certain times, may or may not be fitting. The potential risk of diluting or dispersing your investment should prompt a focus on particular business needs, elevating your efforts to a holistic talent strategy level.
Investment dilution isn’t solely about the financial aspect. It’s not just the hours HR, or even business leaders, allocate to implementing the core practices. The discipline of concentrating on a select few critical tasks performed to a high standard is also an investment in “share of mind.” Every leader acknowledges the importance of this. By narrowing down the foundation to what is genuinely “minimum” and “critical,” you liberate your capacity to make strategic contributions to the business. Our approach equips you with the discipline to concentrate on impactful factors amidst an environment filled with complexity and distractions.
For us, the foundation encompasses four talent outcomes for which HR is accountable:
- Timely hiring of workers,
- Minimal time to achieve optimal performance,
- Sustained high productivity, and
- Mastery of necessary skills.
Certainly, other fundamental aspects, like pay or compliance considerations, exist. However, these fall outside the realm of Talent Management.
2. Integrated talent strategy
Every organization needs a strong foundation to drive business performance. But the best go further by ensuring they have an Integrated Talent Strategy. An integrated talent strategy formulates a targeted talent response to business priorities and external conditions. In other words, the distinguishing features of an integrated talent strategy are:
- It draws on a range of activities across the spectrum of potential talent solutions to address a specific business priority, and
- It is unique to the business that it supports.
First, an integrated talent strategy draws on all of the core practices from the foundation and supplements those with solutions that address specific business needs. Using the analogy from earlier, an integrated talent strategy might include a decision to implement 360° feedback. If such a strategy were implemented, it would be in light of a particular business need, for example, to improve the quality of cross-functional relationships. That strategy might include the use of other interventions, such as aligned goals, investment in team building, rolling out shared KPIs, and formal training on “managing in a matrix,” and so on. It is the sum of these initiatives that drives the needed cross-functional cohesion. Organizations should consider implementing a range of solutions, which represent a strategic response, rather than having excessive resources dedicated to the core.
Implementing an investment in a company-wide engagement survey might be appropriate within an integrated talent strategy, for example, if labor turnover is disproportionately high compared to the market, impacting business performance. But in the absence of that or some other compelling reason, your talent investment might be better spent elsewhere.
As for the second point, our mentors guided us (in our early days as talent leaders) to beware of generic strategies. A talent strategy should respond to the business need, and as such, a strategy for one organization may bear little resemblance to the strategy of another.
Often, in the classroom or when coaching HR leaders, we challenge them with this same thought experiment. Let’s do it together now. Imagine you remove your logo and any other company identifiable information from your talent strategy. If someone finds it at a large conference, will they be able to guess the company it belongs to? If not, you may have an opportunity to fine-tune your strategy. When you achieve a laser focus on a human capital issue of strategic importance, you mitigate a talent risk that could hold your business back. It is that critical.
One way in which your strategy might differ from others, including competitors, is its focus on the capabilities that are core to how you intend to compete. If your business strategy depends on innovation, your integrated talent strategy is likely to contain talent responses specific to Research and Development. If your business strategy seeks growth from new geographies, especially developing markets, your integrated talent strategy is likely to prioritize developing international or cross-cultural management skills, emphasizing cross-country talent moves, and more.
With any human capital intervention planned, an appropriate strategic question is, “To which group should this apply?” Whether your company pursues a low-cost strategy or one of high-tech innovation, your integrated talent strategy will disproportionately address human capital issues that support how your business chooses to compete. If its source of competitive advantage is, for instance, low-cost products, then the integrated talent strategy is likely to disproportionately support areas such as procurement, supply chain, or manufacturing, as opposed to innovation, marketing, or research and development.
The best strategies have disproportionate investment in the capabilities that result in a sustainable competitive advantage. As such, this investment, being specific to certain employee segments and incremental to the foundational solutions, is a sure sign that Human Resources is acting as a business partner.
3. Talent mindset
The final element of our approach relates to leadership and their mindset regarding investment in talent. While most leaders intellectually understand the value and potential of human capital, few have what we refer to as a ‘talent mindset’. Those with a talent mindset firmly believe that better talent delivers better results and hold themselves and others accountable for producing talent in the best interest of the greater organization.
We see a talent mindset as an outcome: companies that create a strong foundation of core practices that deliver high performance routinely and that have robust integrated talent strategies that directly contribute to business results produce leaders with a ‘talent mindset’. Over time, leaders who live in such a talent system see the outcomes delivered. They also view first-hand how a well-executed talent system that is intricately tied to the business delivers a return on that investment. Their beliefs in talent management are strengthened. As a result of such beliefs, those leaders reinforce the system.
Because leaders see that value, they hold themselves and others accountable for executing the core processes, as well as the work within the integrated strategy. They also understand that they build and manage talent for the benefit of the entire organization, even if it means that they will make certain sacrifices on behalf of their specific business, for the greater good.
Putting the Model to Work
It’s time to get practical. Let’s look at how this model can be applied in your organization.
Recognize that You Start Where You Start
The good news is that you don’t need a clean slate, a new leader, or even an excessive budget to move beyond today’s “strategy” and towards transformational talent management. We are pragmatists. Organizations “start where they start”. There is always value in assessing the current state and determining the utility of what’s in place.
Challenging the way we do things can be difficult when we’re the ones responsible for it. This may happen because we initiated the process or are the current owners of it. It can be challenging because the process we oversee is closely related to the size of our role or the seniority of our position. Sometimes it’s hard to question a process when we have a relationship with the team members who oversee it.
In such cases, it may be appropriate to have a Talent Practices Audit done by a credible third party capable of objective evaluation. While this may disturb the status quo and the “sacred cows”, the clarity and potential credibility that come from an independent assessment can help you move your talent agenda forward.
Transforming Your Talent Function
While you can use the model to evaluate your practices at any time, we believe there are two essential use-cases for our model, which take the user beyond talent initiatives or processes towards a transformational talent strategy.
The first use case is when you are asked to create a Talent Strategy. The model provides an approach to build a comprehensive response to that request.
The second use case is as an evaluative tool. You can evaluate any single talent initiative, current or proposed, and ask whether it fits within the model, and if so, should it?
Use Case 1 – Implement a Talent Strategy
Your boss, Head of HR, tasks you with launching a talent strategy for the organization. You say, “Sure thing!” and walk away thinking, “Oh, my, where do I start?” Despair not — using our model, building a robust, business-aligned talent strategy becomes easier.
But before we move to the steps of how you would do it, an important caveat. We are often asked whether this model is by definition sequential. Do we believe, for example, that it is impossible to have an integrated talent strategy without a strong foundational core? It is our view that to move towards excellence, you first need to build a core. Then, you need to have a strategy that integrates aspects across the talent life cycle, including incremental efforts to build winning capabilities delivered through leaders that execute your intent in ways that are sustainable. We believe it is possible, pragmatically, to progress various elements of this strategy “out of sequence” on one condition: if every action taken is still in full alignment with the business strategy. For example, implementing executive coaching as part of an integrated talent strategy but in the absence of good feedback may still be appropriate if done in support of the business strategy. However, we would also argue that when these things are built sequentially, there is a multiplier effect that leads to the most optimal outcome.
So, what are the steps to building a comprehensive talent strategy?
Step 1. Frame the Foundation. As with constructing a building, you first secure the foundational core so that your business gets the essential talent outcomes it needs. Can you hire the right talent at the right time for the right roles? Are there clearly defined onboarding processes and workflows that guarantee a smooth transition for new hires and those having role changes, in ways that minimize time to optimal performance? Have you hardwired practices and accountability for everyone to deliver high performance, day in and day out, through aligned goal setting, fair assessment, and powerful feedback on the outcome? Do you deliver just-in-time skills to individual contributors and leadership capability to people managers?
Remember that the foundational practices must follow two criteria: they are minimal and critical. These practices may reflect the specifics of your business. For example, in the fast-food industry, swift, hands-on, and fail-proof onboarding is a must. However, your competitors are likely to have the same, which dampens its competitive potential. Similarly, the labor market or legal requirements might force certain specifications to the foundation.
While the foundation may not be differentiated, as noted above, it is essential. It is the engine of the car. It may get very sophisticated add-ons to enhance performance. But if the engine is faulty, our car won’t run.
Step 2. Bridge to the Business. As the next step, you must answer the question “What talent conditions must exist for us to realize our business strategy?” For that, for each key business priority, you would identify a long list of possible talent responses. Prioritize responses that address multiple objectives simultaneously. Eliminate single-use options unless there is a unique, specific need. This saves resources, but more importantly, provides clarity and focus. Pressure-test for feasibility by using an impact vs. ease of implementation grid, giving preference to low-hanging fruits and solutions that yield high impact for low effort. In the end, you should have a tight bundle of a few highly integrated, mutually reinforcing solutions squarely focused on securing the required talent for each key business priority. Some of those solutions may apply to several priorities, which potentially signals a need for a centralized effort to execute.
Involving select business leaders in this process of identifying the talent constraints to business performance will increase its accuracy and credibility, also co-opting them as Talent advocates. It’s a terrific opportunity for them to practice their talent mindset.
Too often, work (strategy) is created to fill the capacity of the team available. In our model, resource allocation follows strategy development, with resources aligned to the work the business needs most. This reallocation may not always happen overnight, due to existing capability. However, your opportunity is to accelerate value delivery by continuously, iteratively channeling resources in line with your Strategy.
Step 3. Activate through Accountability. This final step, done well, is the most challenging. Your goal is not to complete the list of tasks that improve your foundation or are listed in your strategy. Your goal is twofold: to deliver the human capital outcome while building talent management capability so that employees and their leaders become self-reinforcing.
You can’t activate the strategy on your own. The talent work is delivered in daily, routine interactions between managers and employees. So, for each activity, you need to create:
- clear expectations for outcomes,
- high standards of performance, and
- accountability for consistent and routine execution.
Imagine your strategy includes ensuring all employees have a development plan in response to falling revenue per employee. A barebones solution could be an easy-to-use template that everyone fills in — done! Will this meaningfully advance our talent agenda? Probably not.
Clear expectations for outcomes.
Your goal is not a development plan. The goal is a lift in performance. With this clarity, you can insist on the standard of performance you believe is needed to deliver that outcome.
High standard of performance.
To achieve these expectations, development plans must be of high quality, which requires correct identification of a development priority, breaking it down into manageable pieces (we call them “microskills”), defining the relevant experiential, relational, and formal (70/20/10) learning activities, and writing them up in a way that’s positive, time-bound, and inspiring. That is a skill. A skill that must be built at scale if we are to ensure “everyone gets a plan”.
Accountability for consistent and routine execution.
But to achieve the outcome, you must instill accountability. You can deliver accountability for execution in a variety of ways: you can create a formal process and workflow, you can use transparent communication to create peer or employee pressure, you can implement metrics, for example, plans completed or employee satisfaction with plans, or you can require leader oversight. If you create accountability for consistent execution over time, you will build capability. But you do much, much more. Firstly, when people practice a behavior, they get better at it. But more importantly, at the same time, they are unconsciously updating their belief systems. Getting managers and employees to practice talent activities, over time, convinces them that it’s the right thing to do. It’s basic psychology: humans don’t like discrepancies between their beliefs and behaviors.
Research, practice, and experience agree: that when an organization successfully cultivates a talent mindset, everyone becomes a talent manager. Collectively, they drive your talent agenda — one action, one conversation, one employee at a time. And they demand that accountability from others.
Use Case 2 – Let’s Do What “Google” Does
You now have a framework for developing your Talent Strategy. But you can use the same thought process to understand and evaluate the role and impact of any talent initiative.
We all read articles from Forbes, Business Insider, or Harvard Business Review. Trends, best practices, and even fads are attractive. We’re asked, or even ask ourselves, “why don’t we do this?” Before embracing any initiative, you have the tools you need to evaluate its potential contribution.
Before implementing your colleague’s suggestion of a forced distribution of performance ratings, you’ll go through a structured thought process: Is it a foundational practice for ensuring strong, everyday performance? Does it support a strategic purpose, that is, will forced distribution of ratings solve a human capital opportunity specifically needed to drive a business outcome? Does it perpetrate a talent mindset?
When you shift your perspective from an initiative to the outcome it promises to deliver, your thinking becomes strategic. Too often, the emphasis of HR is on the process itself, or the HR function that delivers it. Such emphasis risks the clarity and focus needed for peak performance. You must be able to differentiate between outcomes and the function or processes that will deliver them.
The table below contains a description of some common human capital outcomes with the relevant processes and accountable functions. While there may be variations in how these are executed in each firm, the idea will remain the same.
Outcome-focused talent perspective.
For example, a suggestion to implement a significant change to the Talent Review process can be assessed against the outcome it is intended to deliver. If you already have an “accurate view of available talent”, changing processes will disrupt continuity and capability building, with the potential to slow the process of building a Talent Mindset. On the other hand, if today’s process results in an inaccurate assessment or insufficient talent availability, there are genuine grounds to consider a change.
And when change is a strategic choice, that change should result in the leanest possible process for the outcome needed.
A Final Thought
Our goal for the practice of Talent Management is for it to be deeply strategic. Talent Management must execute the work that enables the organization to win through talent.
This mandate requires discipline.
By putting in place a few, lean practices, expertly executed, you’ll deliver strong routine performance. After that, you focus resources on activities that directly contribute to business performance. Your Talent Strategy is dynamic, responding to changes in the business. Also, make sure to review your strategy at least once a year.
Investment in areas that become inconsistent with the business’s long-term strategy or lose their ability to effectively deliver core services must be modified or discontinued. The result of such disciplined reviews is a blueprint for how to honor what exists today while creating a roadmap to move towards greater sophistication and maturity of your talent practices. When done in such a way, you create a multiplier effect where the elements of the model act to reinforce and support one another, delivering disproportionate value.
The views expressed here are solely those of the authors and do not represent those of any affiliated organisation.