Managing Talent is Vital for Your Organisation’s Future Prosperity

Managing Talent is Vital for Your Organisation’s Future Prosperity I believe that one of the biggest challenges facing many businesses today is having the right talent to enable them to successfully compete in the future. I have worked with many businesses who are having to face up to a tough reality that a number of their key executives are likely to retire in the next 5-10 years – many of them without many natural successors. I didn’t see this issue so starkly 20 years ago, and probably two things have happened over the intervening period. For some pressure has been such that they 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. For others, growth has been dramatic, with business expanding globally. This has meant that the talent, skills and experience required to lead teams across many countries has not had the opportunity to develop fully. Also, I don’t think this issue just affects large organisations either. A couple of years ago the Association of Chartered Certified Accountants (ACCA) undertook a study which showed that on average 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 to hand the business over after they retire. Whether your business is a large or small one, I believe it is vital to address this issue for the future success of the business. Companies need to integrate their talent and succession planning strategies with their strategic business plans and view talent management as a long-term, continuous process, not a one off action. This requires us all to think and do things differently. For example, in my opinion managers need to do a number of things: • 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? • Understand the organisation’s key roles. Which functions and roles in the organisation drive the majority of the business’s value? This requires us to think broadly, and not just about traditional leadership roles. For example, what specialist technical roles such as product development, which may be as equally important are needed? 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? • 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 the promotion process, or externally via recruitment. • Understand who your talent is. Clearly you need to know who has the potential to fulfil the key roles. Information can be picked up through your internal performance and development management processes or in conjunction with a formal independent assessment process. Discussions can then be had with the individuals concerned. Do they have the desire and motivation to progress? Progression may mean extensive travel and/or working in a different country to their native one, which does not suit everyone. • Finalise your succession strategy. Once you know 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. The business may have all the talent it needs or may need to go to the market to recruit specific talent. The business may wish to 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? • 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 a clear plan of how to gain the necessary skills, behaviours and experience. • 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. • Provide ongoing development. Managers need to support the ongoing development of their talent to ensure they make the necessary progress. This might be through work opportunities and projects, coaching or specific training courses. • Monitor readiness and prepare a succession plan. Senior managers need to meet at least annually to 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 there evidence to suggest that any of the successors will not ‘make the grade’? If not what action needs to be taken? • Ensure ownership. Talent management and succession planning needs to be owned by line managers and needs to be actively led and sponsored by the Chief Executive or owner of the business for it to be successful. What I have described above may at first to appear to be overly complex, but each step in itself can be made quite simple and need not take an inordinate amount of time. However, 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 business is too important for that?