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Four steps to reboot reactive talent agendas

Gyan Nagpal     June 2, 2015

Economics is an age old science which studies how market forces allocate scarce resources. As a practice, economics has been around for millennia, and as an established social science for a couple of centuries, if not more. So, it is particularly astounding today - a time when many CEOs rate talent as the scarcest resource in business - to see hundreds of organisations still giving in to the temptation of quick fix and band-aid solutions rather than deep economic enquiry as the cornerstone of their talent agendas.

The fact that this is hurting organisational capability is beyond doubt. After observing the amount of time and money invested in the intricate web of processes, programmes and practices parading as the strategic talent agenda, many leaders are waking up to a painful realisation. As far as talent strategy goes, complexity doesn't necessarily mean maturity.

Recent observations, though, show that the tide is changing fast, with a clear symptom being the vast majority of business heads who report a loss of faith in their HR-led talent agendas. For example, in PwC 's 17th CEO Survey covering 1,344 CEOs in 68 countries, an astounding 93 per cent "recognise the need to change their talent strategy" with a majority (61 per cent) feeling like they haven't even taken the first step. So, where will the answers come from? Not HR. Barely 34 per cent feel HR is prepared for the challenges ahead. They are right.

If you are one of the 93 per cent above, I believe there are four steps you must take to reboot reactive talent agendas and transform them into commercial and forward looking talent strategy.

Discover your talent recipe:

Every business exists within a unique talent context and hence possesses a unique talent recipe. This is, in a nutshell, the ideal mix of internal and external capability you can draw on to grow your business. To find your recipe, you must scan your 36-month horizon and focus on five questions:

~ Speed: In our business, can we radically increase access to real-time skills and capability?
~ Cost: Can we do so without adding significant fixed cost and overhead?
~ Alliances: How can we accelerate internal and external collaboration to deliver the above two outcomes?
~ Flow: How can we smoothen the flow of skills and information across this network?
~ Flexibility: Will our talent model survive industry downturns and disruptions?

As we can see above, to answer these questions we need to broaden the definition of talent. One of the main reasons we suffer today is that we continue to view talent as a limited construct, dealing with: a small subset of people, a key demographic, a group of very senior or a set of promotable employees. Hence our talent agendas are tactical and limited, too. They are also insular and inward looking. This needs to change, because in its true sense, talent is nothing but "capability which creates economic value". It is both internal and external. Employees are key, but ask yourself, in a technology-driven and rapidly converging world, do you still need 60,000 heads? Do they still need to be all full-time? Is the "binging and purging" of headcount after a couple of good and bad quarters still the smart way to go? Remember, some very smart people who can create immense value for your customers, shareholders and employees sit outside your office walls today. Hence, the five questions above.

Answer them and you [will] discover your future talent recipe. We must keep these questions alive, too, for when the business circumstances change, this recipe changes, too. And the best way to test your answers to these questions is through deep diagnosis.

Diagnose: Once you have an emerging talent hypothesis, you must test it through a diagnostic lens. This will tell you if ready sources for talent exist or will you need to build them. Study both the macro factors - like the demand and supply of capability surrounding your business footprint - and the micro factors - like changing employee preferences. Do consider enablers like technology shifts or outsourced capabilities in the same frame as systemic challenges such as chronic shortages of key skills. Here are some questions to get you started -

~ What core demand and supply imbalances affect the skills agenda in our industry?
~ How can we mitigate these imbalances internally?
~ Do alternate sources of contribution exist?
~ Three years on, what new or emerging skills will prove core to our success?
~ What can we do today to build future capability?

Testing a talent hypothesis is a powerful way to shift focus from internal issues to external opportunities or risks. It also helps hedge against the hire and fire employment tendencies we observe in common practice. By swapping the microscope for the telescope, new ideas emerge. Eventually, a couple of rounds in - you will also ask yourself if you still need roles which don't directly contribute value, or entrenched silos with layers of management for insulation. Or can a very different looking organisation with the same logo deliver better outcomes with greater flexibility, collaboration and speed.

Refocus the people managers' role:

The third step is to press reboot on people management practices which are well past their 'use by' date. Our current management toolkit is built of supervisory DNA. It comes from the industrial age, and hence has systems designed for factory shop-floor realities. Overseeing work, driving performance and motivating via monetary incentives are some artifacts of that era that still endure.

The shift from an industrial to a knowledge economy has proven devastating for management. For one, internal or external workers dealing with complex cognitive tasks seek coaches and mentors rather than supervisors and vendor managers. For another, the dispersed, asynchronous and ephemeral nature of intellectual work makes it infinitely more difficult to supervise and control in the short term. And finally, in an age of contemporaneous innovation, flexibility and speed matter more than ever. It is for this reason that we increasingly find managers struggling to integrate effort across the network of alliances, outsourcing relationships, joint ventures or partnerships which form the modern organisation.

In modern business, the art and science of management shouldn't be about overseeing an ever shrinking base of internal resources. Instead, it is more about curating capability or contribution across a network of sources. Welcome to the Open Talent Economy.

So, what is the DNA of 21st century management? When seen from within the immediate team, it is less hierarchical and more democratic. It recognises that for employees not only has the work changed, but the relationship with work has changed too, and that in an age of low loyalty, the only hedge is more honesty. Apart from helping employees find more purpose and meaning in work, the management today is also about amplifying learning, flexibility and employee genius.

But the true area of growth in management sciences is in its perception from the outside. Can it replace "Us and Them" thinking with more collaboration across boundaries? The goal in the open talent economy, is to build, curate and govern contribution networks made up of partners, contingent workers and vendors with real time impact on organisational outcomes.

Put leaders (not HR) in the driver's seat:

If talent is no longer just about fulltime employees, the organisation's talent agenda must invest and grow its talent economy as a whole. The supply of talent, networks of outsourced or contingent work, reskilling and innovating, all form pieces of this talent strategy puzzle. And increasingly, the answers won't come from HR. They come from deep within the business. HR is a powerful function and provides critical value in day to day operations, but it can't do the business leader's job.

What we need more than ever is to see leaders as talent strategists.

(Singpaore-based Gyan Nagpal is the CEO of PeopleLENS Global Associates, and the author of the best-seller Talent Economics: The Fine Line between Winning and Losing the Global War for Talent)


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