Talent Management - The Importance of Talent Management

I believe that one of the biggest risks facing many organisations is having the right talent to enable them to compete in the future.
The reality for many business today is that a large majority of its key executives will probably retire in the next 5-10 years. While this may not have been an issues 10 or 15 years ago, pressure have been such that businesses have had to reorganise and resize themselves to a point where the talent pool that would have been ready to step up into key roles are either not ready or not there.
I don’t think this issue is just affects large organisations either. A couple of years ago the Association of Chartered Certified Accountants (ACCA) undertook a study which showed that 30 per cent of small-business closures take place because of the lack of an effective succession plan, as many owners do not make sufficient arrangements in the event of their retirement.

To address this issue, I believe that companies need to integrate their talent and succession planning with their strategic business plans and view talent management as a long-term, continuous process. I therefore propose the following:

1. Think strategically. Talent management requires a strategic perspective. What are the things that might impact your organisation in the future? Will it grow and acquire other businesses, or is the market shrinking and therefore a different leadership approach may be needed? What ‘type’ of managers and business leaders will be needed in the future?
2. Understand key roles. Which functions and roles in the organisation drive the majority of the business’s value? Think broadly, and not just about traditional leadership roles, specialist technical roles such as product development may be as equally important. Once this is complete it is a straightforward task to examine the age profiles of those currently in the key roles. How many of these could retire in the next 5-10 years? How many of these roles have ‘ready now’ successors?
3. Identify the requirements of the key roles. Effective talent management requires clarity on technical and behavioural requirements for the roles as well as specific experience, such as international or specific market experience. All key roles should have the necessary components and characteristics for superior performance clearly defined. These requirements can then be used as a basis to assess people, either internally via a promotion or externally via recruitment.
4. Understand who your talent is. Use assessment centres to identify talent internally.
5. Agree your succession strategy. Once the organisation knows who is likely to retire, and who the potential talent is, objective decisions can be made about how the key roles will be filled in the future. Does the business need to actively recruit and bring in new blood or can all the key roles be filled from within? Should the strategy be a balance of recruiting externally as well as promoting internally?
6. Define career paths for internal promotions Once your succession strategy is clear, establishing career paths and the ability to describe the requirements for pursuing the path becomes easier. Creating effective career paths requires two components, knowing the requirements for the next level and creating clear plan of how to gain the necessary skills, behaviours and experience.
5. Link talent management with performance management. Talent management and succession planning should become a part of the organisation’s performance management and career development processes. Regular performance discussions are important to collect evidence of how potential successors have performed. In addition, the discussions also provide the opportunity for managers to coach talent to ensure ongoing development and readiness.
6. Provide ongoing development. Managers need to support the ongoing development of their talent to ensure that make the necessary progress.
7. Monitor readiness and prepare a succession plan. Senior managers should meet at least annually to initially agree who the potential successors are for the key roles and to subsequently monitor their progress. Who is ready now to move to their next role? Is their evidence to suggest that any of the successors will not ‘make the grade’? If not what needs to be done?
8. Ensure ownership . Succession planning needs to be owned by line managers and needs to be actively led by the Chief Executive or owner of the business for it to be successful.
What I have described may at first to appear a cumbersome process, but none of the above steps needs to be made overly complex. If your business does not focus on talent management and succession planning then the availability of talent for your key roles will be left to the fickle finger of fate. Surely the future success of your organisation is too important for that?