The Importance of Talent Management

After working with many different businesses I have concluded that one of the biggest risks facing many organisations is having the right talent to enable them to compete in the future. I see many businesses who have a significant number of key executives will likely retire in the next 5-10 years. While this may not have been an issue 10 or 15 years ago, pressure has 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 also think this will be compounded in the longer term as fewer people stay with one organisation. For example, a recent study estimated that current school leavers will have between 10-14 jobs by their 40th birthday! To address this issue, I believe that more companies need to integrate their talent and succession planning with their strategic business plans and view talent management as a long-term, continuous process. To achieve this I believe that businesses should: • 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 businesses key roles. Which functions and roles in the organisation drive the majority of the business’s value? Businesses need to 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? • 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. • Agree a 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. This will enable the business to actively recruit and bring in new blood to fill roles that cannot be filled from within. • Define career paths for internal promotions. Once a 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. • Link talent management and performance management together. 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 progressed. • Provide on-going development. Managers need to support the ongoing development of their talent to ensure that make the necessary progress. • 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? What I have described may at first to appear a cumbersome process, but none of the above steps need 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 business is too important for that?