Leveraging Talent Advantages During Disrupted Change

talent-management-photo

In his book 32 Ways to Be a Champion in Business, Earvin “Magic” Johnson notes how he developed his entrepreneurial spirit, took advantage of business opportunities, and used his economic power as a force for social change.

As a megastar with the Los Angele Lakers in the 80’s, Magic soon established himself as one of the best to ever play in the NBA.  Unlike other super-athletes who failed to make the transition from superdom after their prime, Magic used his athletic platform to give him access to some of the most successful business leaders in the world.

Loaded with the internal business drive he inherited from his father, Magic began to use his athletic instincts to his advantage in the business world.  Magic found power in building on his core strengths, not being consumed with his weaknesses:  “Rarely can you turn a weakness into a strength. Greatness is achieved by building on strengths and managing your weaknesses so they do not matter.”

Sadly, many professionals are also succumbed by their weaknesses too.  Rev. Joe Tolbert, a dynamic motivational speaker, warns about how culture influences our personal perceptions:  “The world teaches us to focus on weaknesses rather than strengths.” Given the tremendous financial turbulence in the world, today’s leaders need to focus on their talent management if they are to survive.  In this blog, I will examine the concept of talent management.

Talent management is a critical asset for high-performing organizations in a global economy. In fact, finding the best talent and retaining the best people in a business will eventually overtake many other advantages such as technology and capital.  Talent power will rule the future economy.

Talent management is defined as the process through which employers anticipate and meet their needs of human capital.  Yet, employees cannot dismiss talent management as only an employer’s duty.

Since the post-World War II era, workers have enjoyed a lifetime employment model where workers were assured of financial stability.  That is not the case today where younger workers can expect to change jobs frequently.

https://www.youtube.com/watch?v=gRjNHIGlykk

Peter Cappelli, author of Talent on Demand, outlines the dangers of poor talent management. In the past, with a good economy, American businesses could afford to mismanage their talent pool.  Today’s businesses often are short-sided and do not want to develop internal talent; instead, they are depending on others for their talent.

Cappelli explains, “Relying on outside hiring seems to fly in the face of the imperative that organizations should be engaged in knowledge management practices that capture and organize what they know about their operations to improve performance.”  However, these failures in managing this talent pool are often negative.  For example, having too many employees leads to layoffs and restructuring, while having to too few talented people leads to talent shortages.

John Wiedmer, Robert Wiedemer, and Cindy Spitzer, authors of America’s Bubble Economy, wisely forecasted the bursting of America’s bubble in 2008 while other economists were predicting economic fortune for all.  In fact, the authors now predict that an even bigger financial cliff is ahead for the world.  However, they advocate the importance of talent management: “The fall of America’s Bubble Economy will shake up many industries, drive businesses into bankruptcy, derail countless careers, and force dramatic numbers of workers into temporary unemployment.  It will also create thousands of successful companies that don’t currently exist, lead all sorts of people to rethink their life’s work, and make many entrepreneurs and investors fabulously wealthy.”

Most firms would prefer to invest in technology and automation to reduce their labor cost or outsource their labor needs abroad to obtain cheaper resources.  In the case of talent management, these short-term gains can be fatal.  Cappelli further argues for strengthening talent management in organizations: “Growing competition in product markets further weakens the traditional talent management model by sharply increasing the uncertainty associated with planning.”  Therefore, talent management becomes a vital component of corporate strategies for businesses that desire sustainable growth.

Discuss the concepts of talent management for today’s businesses.

© 2013 by Daryl D. Green

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23 thoughts on “Leveraging Talent Advantages During Disrupted Change

  1. In today’s highly competitive business world locating and keeping top talent needs to be a priority for organizations. However, there are countless numbers of firms not following good talent management concepts. Mankins, Michael, and Root (2013) explain, talent is the scarcest recourse in business and is what separates the best companies from the rest (para. 1). In addition, Mankins, Michael, and Root (2013) states, “that companies that are good at managing “A” players keep comprehensive, granular data on where their people are currently deployed, what those people do, how good they are in their current roles, and how transferable their skills may be” (para. 11). Therefore, these companies are able to maintain their top talent and create all-star teams to conquer major projects. In conclusion, a good management program enables companies to know where their key talent players are, where the next generation of talent is, and how to hold on to their top talent. Finally, top talent manage companies know how to use their talent to their fullest and the competitive advantage top talent brings to the company.
    Reference
    Mankins, M., Bird, A., & Root, J. (2013). Making Star Teams Out of Star Players. Harvard Business Review, 91(1), 74-78.

    • Brad,
      You stated:
      “In today’s highly competitive business world locating and keeping top talent needs to be a priority for organizations.”
      My Response:
      I agree with you. Just as it is important to have the right tools to perform a specific task, it is no different with companies hiring and maintaining the right employees for their organization. The employees are the tools and the quality of the work they perform depends on the skills they have attained. Although organizations may hire the right individual for the position at the start, it is imperative that they make sure that individual is armed with the skills for future success. As companies expand into global markets the need for talent management is even more critical. According to Ernst & Young (2010), One-third of organizations have no consistent strategy in place for the development of their employees.
      Reference:
      Ernst & Young. (2010, May).Managing today’s global workforce: Elevating talent management
      to improve business. Retrieved from: http://www.ey.com/Publication/vwLUAssets/Managing_todays_global_workforce/$FILE/Managing_Todays_Global_workforce.pdf

    • Brad,
      You made a valid point when you said, “talent is the scarcest resource in business, and it is what separates the best companies from the rest.” Scholars and practitioners alike have paid a great deal of attention to how retention of higher performing workers influence an organization’s effectiveness. Scholars also claim the turnover of top performing employees results in high replacement costs and decreases organizational morale.

      “People in organizations have been increasingly recognized as a key source for value creation (Kwon, Bae & Lawler, 2010, p. 58). Retention of top performers is a key initiative, however, previous studies indicate it is difficult to achieve because these types of employees tend to leave organizations more often than other levels of performers. Generally speaking, recent studies show that retaining top performers has become even more of a challenge due to organizational market competition for valuable human capital (Kwon, Bae & Lawler, 2010, p. 58). Organizations compete for valuable human capital because it enhances their competencies, but it also depletes a competitors’ advantage.

      Reference:
      Kwon, K., Bae J. & Lawler, J. (2010). High commitment HR practices and top performers. Management International Review, (50), 57-80. Retrieved on April 1, 2013 from http://businesssourcecomplete.

  2. Daryl,

    Thanks for your article. I appreciate how you are linking the ongoing talent management focus that an organization needs to sustain to the current continuous disruptive change our economic cycle. You make a great point when you state that “firms would prefer to invest in technology and automation.” Interestingly it’s the “seen” vs. the “unseen” all over again or the “tangible” vs. “intangible” because let’s face it we have a tendency of investing in what we can “see” which is tangible, measurable results even if they have no bearing on sustainable growth. The challenge is a leadership one and requires a leader with skills in foresight and the courage to invest in the “unsee.” A great visualization of this is “The Iceberg Metaphor” http://fongyang.efoliomn.com/c1. The deep layers of the iceberg represent the investment into the unseen but as you can see the unseen layers are what drive the iceberg not the seen layers. So it is important for leaders to not only invest into the unseen layers (developing internal talent) but to also anticipate (through trends) where the iceberg is headed and how we align our talent to the trends.

    In a whitepaper by Oracle in June 2012 they stated that “Talent management programs have historically focused on the elite—executive leaders and senior management. In 2012, there will be a shift in focus away from the elite to include line managers and even rank-and-file employees as
    businesses leverage talent throughout their organizations in response to challenging market conditions.” Then the article goes on to say “Addressing organizational skills gaps will require a reliance on both build and buy strategies. Recruiting departments will find it increasingly difficult to acquire the right talent.” These two statements support the premise of your article and a talent management strategy would need to consider the shift away from the elite and the skills gap.

    Many executives consider anticipating talent trends as a key determinant of their success. If we are to be anticipatory then how do these trends [below] change how we go about our talent management strategy?
    -25.8% of managers and 43.3% of executives are eligible for retirement within 5 years
    -Organizations have 1.5 succession planning candidates per key role
    -In 2000 Latinos made up 12.6% of the U.S. population; by 2050 they will account for 24.5%

    U.S. Talent Trends for 2012 – an Oracle White Paper
    http://www.oracle.com/us/media1/us-talent-trends-2012-1676872.pdf

    Other Resources
    http://www.tlnt.com/2012/12/19/are-these-the-top-10-talent-management-trends-for-2013/
    http://www.i4cp.com/trendwatchers/2010/12/22/the-top-10-talent-trends-of-2010
    http://www.futureoftalent.org/
    http://www.tms.com.au/tms10n.html
    http://www.ere.net/2011/12/05/10-predictions-for-2012-the-top-trends-in-talent-management-and-recruiting/
    http://www.managementstudyguide.com/current-trends-in-talent-management.htm
    http://talentmgt.com/articles/view/five-workplace-trends-for-2012

    Thanks,
    Rick

    • Dr. Pfohl,
      Thanks so much for your erudite commentary! Your research on the topic was very insightful.

      If managers are not serious about talent management in America, they will soon find themselves behind globally. Can we afford this…again?

      Professor Green

      • Dr. Green,

        I don’t think we can afford this and I think we are paying now for our previous lack of investment in this area. Some might argue that even if the numbers don’t demonstrate it the U.S. is already far behind (it simply takes a few years for the numbers to catch up to what’s really going on).

        With that said, why do you think we are not serious about this topic? Is it an awareness issue? Lack of long-range thinking? How do we move an organization from their current short-term decision making as you mentioned in your post? Are we doomed to make the same mistakes of those before us or can we do something about it? If we can what can we do?

        Thanks,
        Rick

      • Dr. Pfohl,

        You ask some very interesting questions. For me, it goes back to the lack of effective leadership. Most leaders are far too short-sighted and don’t think strategically. Labor is one of the biggest expenses for a company. It might be simpler to raid some other companies human capital chest instead of developing their own.
        It won’t change until you have leaders with a different character traits (i.e. visionary, servant-oriented, spiritually guided, high integrity, etc).

        Professor Green

    • Dr. Pfohl and Dr. Green,

      In response to your questions above, I believe that the lack of American corporate investment in talent management is directly related to shareholder primacy and greed. This profit-first mindset paired with the growing need for instant gratification in the U.S. has intensely narrowed the focus of executives to what can be gained or lost within the immediate future. Investing in talent, especially on the lower tiers of the organization, becomes an unnecessary expense that decreases payable dividends. The Fortune 100 company that I am a lower-level manager at does not offer any tuition assistance for managers or employees below the corporate level and never has in its over 100 years of operation. This impedes the growth of the company and sends a negative message to potentially valuable employees. The reason I have been given for this lack of benefit is that the cost outweighs the benefit. From my perspective, the executives at our company have no interest in employee improvement and development, and I believe this results from the mandates with which they are burdened. Until boards of directors and shareholders place adequate value on talent building, executives and managers will not be inclined to invest in it.

      Thanks,
      Joshua Frye

  3. “Top talent is an invaluable asset: In highly specialized or creative work, for instance, “A” players are likely to be six times as productive as “B” players. Before you can even begin to assemble such a team, you need to have the right talent management practices, so you hire and develop the best people and know what they’re capable of” (Mankins, 2013, p. 1). Recently I accepted another position within the healthcare industry. I quickly learned the difference in hiring processes. I spent one week in this new position before going back to my previous employer. The main reason was due to how HR viewed employees as a number. With this mindset it didn’t matter who they hired as long as the work was done but in order to focus their employees they banned everything even email within the company was disabled. I feel in the hiring process you should be able to trust that your employees have the capability of determining what is right. With that mindset these employees did the bare minimum and no more.

    Mankins, M., Bird, A., & Root, J. (2013). Making Star Teams Out of Star Players. Harvard Business Review, 91(1), 74-78.

  4. Talent management is a newer term that puts a spin on an older concept, team management. Both of these ideas center on managing people and how they perform at work. Part of the talent management concept evolves from the trending idea that having a person who is the best in their field will dramatically improve the competitiveness of a firm. Coulson-Thomas (2012) states that not only can this approach to recruiting be expensive, it can also be ineffective. The perfect example of this can be seen in professional athletics. The New York Yankees maintain the highest payroll in baseball and constantly try to acquire the best players for each position. However, world championships are constantly out of the Yankees’ reach. Perhaps business leaders should learn from the errors of the world of sport before they waste their company’s time and money building an ineffective team difficult to manage team. Their most effective team may have no “superstars” at all. Maybe modeling after the Phillies or Giants (teams who have won championships with “average” professional talent) would be a better idea.

    Coulson-Thomas, C. (2012). Talent management and building high performance organisations. Management Services, 56(1), 36-41. Retrieved from http://web.ebscohost.com.ezproxy.lmunet.edu

  5. The concept of talent management today means that companies should be more concerned with making sure their employees’ talents are a match for the needs of the organization. As more companies are going global in their business dealings, it is important that managers have a good understanding of the cultural differences of the countries they do business with. Talent management programs are a good way for organizations to instill critical skills for success into the minds of their employees. Currently, there is a greater need for companies to address these issues in their talent management programs because nearly one-third of organizations admitted they have no reliable strategy in place for the talent management of their internationally mobile employees (Ernst & Young, 2010). If a company wants to stay competitive and succeed in today’s global business world, they should arm their employees with the tools for success before sending them on a business trip. After all, they are representing the company they work for.

    Ernst & Young. (2010, May).Managing today’s global workforce: Elevating talent management
    to improve business. Retrieved from: http://www.ey.com/Publication/vwLUAssets/Managing_todays_global_workforce/$FILE/Managing_Todays_Global_workforce.pdf

    • Tammy you said-“Currently, there is a greater need for companies to address these issues in their talent management programs because nearly one-third of organizations admitted they have no reliable strategy in place for the talent management of their internationally mobile employees (Ernst & Young, 2010)”. I agree with you in that for a company to be competitive at a global level talent is required. An organization can not get, let alone retain, talented employees without having an innovative strategic plan in place to attract workers who are a cut above in their respective career fields. Furthermore, according to Ernst &Young (2010), organizations have to refocus on recruitment, and development of the roles of middle managers and technicians that are not currently addressed by traditional succession planning methods. This will provide an avenue for management of the talented international employees that is in-line with the vision of the organization to move forward to a profitable future.
      Reference: Ernst & Young. (2010, May).Managing today’s global workforce: Elevating talent management to improve business. Retrieved from: http://www.ey.com

  6. The concept of talent management
    In order to boost talent management in an organization the employers need to have systems in place to facilitate on the job learning, work rotation and training to develop the talents of their employees. The office of the civil service commission has a process by which employers can achieve talent management and this includes; determining the organizations strategy, recruiting and creating motivation for the staff, putting techniques in place to develop the potential of the employees and measuring and evaluating the talent management system (OCSC, 2013). It would be more cost efficient to build on the talents that are already employed to save on the cost of recruiting new employees. Senior personnel in the organization can spend some time coaching the entry level staff on a weekly basis to pass on what they have learnt from being a veteran in the organization and this will also cut the cost of bringing in outsiders to train the employees.

    Office of the civil service commission (2013). Total Management. Retrieved from http://www.ocsc.go.th/ocsc/en/index.php?option=com_content&view=article&id=149&Itemid=281

  7. Sifting through the “Corporate America” resume pool to find talented new blood is not an easy. This task, however, is compounded by issues such as globalization (the talented new employee you would like to hire just happens to live on the other side of the world), people who are not forth-coming on their resumes, and people who have talent that is down-played by their lack of passion for the career they have chosen. This leaves companies with gaps, ddiworld.com (n.d.) notes, between the talent that they have and the talent that they are desperately looking for. A solid talent management plan must be integrated with strong strategic and business plans to manage their accumulated talent appropriately. Furthermore, if a company is proven to have a solid foundation and portrays ethical business activities then talented-ethical employees will come to them. Therefore, in a broad sense the statement you get out of it what you put into it is proven valid.

    Reference: http://www.ddiworld.com

  8. Professor Green-You asked for a response to the topic of how organizations can stop losing top performing staff because they treat the staff as a number not like an important part of a team setting. The response I will give you is that organizations must realize that if they are going to be successful in retaining talented employees in a global business setting then maintaining a “globally localized” HR style must take place. In an article for Forbes, Bersin (2013), relays the idea of HR management that is globally localized which means to place more authority with the local business and improve the
    skills of the local HR department. Only once this is accomplished can an organization successfully manage their global affairs and put forth their best efforts to retain the talented global workforce they have worked so hard to aquire.
    Reference: Bersin, J. (2013, January 11). HR, Leadership, Technology, and Talent Managment Predictions. Retrieved from forbes.com: http://forbes.com

  9. We often hear people say, “its who you know” when they are attempting to earn a job in a desired industry. I think this is a negative way to look at things because you should earn a job based on how capable you are. If you continue to have the mindset that someone can get you the job based on their connections, then how are you going to be the best you? Buidling relationships is definately key in the business world but you have to be able to offer something to the relationship. Unfortunately the idea of “its who you know” seems to be on the rise. “Some, like Ernst & Young, the accounting firm, have set ambitious internal goals to increase the proportion of hirings that come from internal referrals. As a result, employee recommendations now account for 45 percent of non entry-level placements at the firm, up from 28 percent in 2010” (Schwartz, 2013). It would seem as though organizations are not fostering talent because they do not seek it out in the first place. It is very important that when you possess an entry-level position to work extrememly hard to showcase your talents.

    Schwartz, Nelson D. (2013, January 28). In Hiring, a Friend in Need Is a Prospect Indeed. CNBC Personal Finance. Retrieved from: http://www.cnbc.com/id/100412283/In_Hiring_a_Friend_in_Need_Is_a_Prospect_Indeed

  10. The concept of talent management is “the implementation of integrated strategies or systems designed to increase workplace productivity by developing improved processes for attracting, developing, retaining, and utilizing people with the required skills and aptitude to meet current and future business needs.” It is about putting the right people with the right skills in the right position at the right time. Critical success in this area includes alignment with a company’s strategic goals, active CEO participation, and Human Resource management, taking into account processes and accountability (Kehinde, 2012, pp.179-180).
    Talent management focuses on five primary areas: attracting, selecting, engaging, developing and retaining employees. Talent management is critical and ever evolving. It is influenced by such factors as the economy, global expansion and mergers and acquisitions (Kehinde, 2012, p. 180).

    Companies should re-think their talent management practices to keep pace with the reality of a rapidly changing 21st century business environment. Effective talent management is far more than a business goal or objective that has a beginning, middle, and end. It is a perpetual journey toward consistently higher levels of performance efficiency.

    Reference
    Kehinde, J. (2012). Talent management: Effect on organizational performance, Journal of Management Research (Vol 4),2, pp. 179-180. Retrieved on February 3, 2013 from https://www.macrothink.org/jmr.

    • Marsha, in response to your points about talent management in the 21st century business environment, I would like to discuss the concept of human capital in talent management. You quoted Kehinde as saying, “talent management focuses on five primary areas: attracting, selecting, engaging, developing and retaining employees.” I believe the largest failure of talent management by companies in the 21st century is retaining employees. A recent article by Jeanne Meister, a contributor with Forbes.com stated, “The average worker today stays at his or her job for 4.4 years and can be expected to have 15-20 jobs during their working lives.” In my opinion, this statistic is quite disturbing. If you extrapolate the amount of time it takes a new employee to become acclimated and truly contribute, it can be seen that companies may only get approximately three years of service from its employees. If companies desire a quality product or service, they must recognize the importance of retaining employees through talent management and stop shuffling employees through office cubicles.

      Reference:
      Meister, J. (2012, August 14). Job Hopping Is the ‘New Normal’ for Millennials: Three Ways to Prevent a Human Resource Nightmare. Retrieved from http://www.forbes.com/

  11. This was a great post. I enjoyed reading it. The importance of talent management cannot be understated. In my work, poor talent management might be the primary reason for employee dissatisfaction. The question is how do companies effectively manage talent. There are many ideas on how to do so, one being that it requires an effective partnership of human resources (HR) and organizational development (OD). According to talent experts Howard Morgan and David Jardin, the space where the two overlap is Integrated talent Management (ITM). ITM involves the following four primary steps to build towards successful talent management: 1) Measurement of organizational and individual capability gaps 2) Alignment of strategy, organization design, and people 3) Deployment of talent, and 4) Expansion of organizational and individual capabilities. This is a basic structure that can help companies effectively manage their talent using both HR and OD.

    Morgan, H., & Jardin, D. (2010). HR + OD = Integrated Talent Management. OD Practitioner, 42(4), 23-29.

  12. Cappelli (2008) states that the most common talent management failiure is quite simply doing nothing. Many companies don’t just misuse talent management, they fail to use it completely. This is often due to relying heavily on outside hiring for new talent. Often this talent needed to boost a companies efficiency can be found within the company’s own walls. Managing internal talent is a very effective process if done correctly. One way of managing talent is to treat it more like a supply-chain. You must estimate demand for more talent and handle the uncertainty of supply. Some ways of doing this may be keeping in good relations with employees that leave the company in hopes that later they may return, bringing with them the skills that the company previously invested in. Good employees often leave a company to receive better offers somewhere else. The relationship between an employer and the employee may be strengthened by allowing the employee to have some say in advancement plans.

    Cappelli, Peter. Talent Management for the Twenty First Century. Harvard Business Review, 2008.

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