In this section, we’re going to focus on two things that are important for ensuring you have the talent you need to sustain and grow the business.
First, I want to take you through a
talent-strategy framework that is a basic building block for having strategic talent conversations in your organization. If you are an HR business partner, this is a helpful guide to talent conversations with the managers and teams you support.If you are leading a
talent-strategy process for an entire organization,this framework is flexible enough for you to roll up results from the various business units and functions and get a total view of your strengths and talent gaps as an organization.
Second, we will look at issues related to bringing in leadership or high-level professional talent from the outside. Boris Groysberg is a professor in the Organization Behavior unit at Harvard Business School, and he’s written extensively about talent management and leadership. In his book Chasing Stars: The Myth of Talent and the Portability of Performance, he gives a fascinating perspective on possible talent outcomes when bringing in talent from outside.
As part of your talent-planning process, it’s important that you have a strategic framework, or principles, as a guide when engaging the organization. While you can create high levels of complexity (as I have seen in some organizations), having something simple and understandable that you can use as a working document is helpful in engaging managers and teams in being accountable for implementing your talent strategy. When I am doing a talent workshop for customers or prospects, I begin with this framework. I explain how to use it as a living document to get information in real time, and as a guide to organizations in understanding the current state of talent capability and capacity.
Think about what you need to deliver to produce results and win in the marketplace
What business capabilities do we need to build to deliver on the business strategy?
What are the most
critical capabilities needed
the achievement of
Given the capabilities we need to build,
What kind of people do
What are our critical roles?
What are our critical behaviors?
What kind of leadership will drive our success?
Bench strength for key jobs
Recruiting, retention, attrition, metrics, and trends
What’s our plan to close skill and performance gaps?
What do we need to do to
How will our talent strategy help us deliver on business strategy?
Moving people through your bench
Designing roles for
Coaching and mentoring
What are the most critical capabilities I
need to build quickly with an external infusion of talent?
Where will I find strategic hires?
How will I onboard external talent to shorten the learning curve?
Filling in a thin bench or an empty bench
Every business, function, or operating unit has goals or results it is committed to delivering in the marketplace. Sometimes there is a formal strategy document, or it could be as simple as the performance goals for a fiscal year.
It could also be a defined set of business outcomes by quarter, or high-level commitments that then get translated down to team and individual goals. Whatever type of framework you are using in your organization, the execution of those goals and plans depends on the people in your company. The first question you have to ask is: If this is what we have to deliver, how are we going to do that? What are we going to need to do to be successful?
If you are facilitating a team or individual manager
discussion, capture the answers and go on to step 2.
You may ask what capabilities you need to build. What are the most critical capabilities and skills needed to achieve your desired results? Examples of this could be if you want to enter new markets, you may need sales skills and capabilities. Or it could be that technology will drive your growth—but where will the skills and capabilities come from in order for that to happen?
As you are identifying these skills and capabilities, be specific. If you need sales skills and capabilities, is it for large accounts? Is it around developing new territories? Or is it harvesting in the territories that you have? The more specific you can be about what is needed, the better the decisions you will be able to make about how to build capability and capacity in those areas.
In addition to demonstrating skills, think about attitudes and behaviors. What does success look like for a particular role and how are you going to translate that into tangible actions? It is helpful when determining what kind of people and how many to look at critical roles within the organization. I think of critical roles as customer-facing or revenuegenerating, or roles where you need a unique skill that is in short supply or hard to find in the market today. Another consideration is leadership. Put simply, do you have the leadership capability and capacity necessary to deliver on your plan?
Do you have leaders that can
build the teams needed to deliver
exceptional business performance?
If you are going to grow the business
aggressively, can your leadership
pipeline deliver the talent you need?
If not, how will you grow it, and how
many people will
Ultimately, when you determine what you need to deliver on your strategy, you have to take stock of what you have. What is your current reality? Find gaps and determine how you will fill them.
You may be wondering why I add real.
Over my years as a practitioner, I have
seen a lot of output from talent reviews.
Sometimes there is a bench chart or
succession chart done for the sake
of presentation, and everyone knows
that if those jobs were to come open
tomorrow the people whose names
are on the chart most likely would not
be picked to fill those roles. At times,
this can be done for a board review to
look at the strength of talent. It could
be embarrassing to see a succession
chart with no successors so, on
occasion, people place the most
likely names even though they may
not be the most
Another phenomenon is where you see one name as a successor for three or four different roles. This is a renaissance type of practice. To have a talent strategy that gives real, actionable information, you need an accurate view of what you have. So if you have roles with no bench strength behind them, then leave the boxes blank. If you have talent pools that look more like puddles, say so. If you have talent pools with few or no names in them, be honest about it. The only way you can build something significant is if you understand where you are starting from. This is the only way to have an accurate view of how to proceed.
When you look at your critical roles, ask yourself: Do you have talent pools for those roles? This is where having workforce analytics is important. Augment your view of current reality with data: What is your recruiting performance? How many open jobs do you have? How long do people stay after they join your company? I always find it fascinating when people don’t connect recruiting performance to their talent strategies. A few years back I was talking to a company with around 300 workers. They had announced that they were going to triple in size over the next year to year and a half. At the time I met with them, they had 100 openings they had been recruiting to fill for months—it was a slow process.
So how do you go from 300 to 900 employees when you’re having a hard time filling 100 jobs already? The math doesn’t seem to work. That’s why it is so important to have a realistic view of your talent and the challenges and realities of recruiting in today’s market.
This is also where you want look at skill and performance gaps. Maybe you have the talent, but she is not performing at the right level to execute your business strategy and deliver on performance goals. The solution needs to include development to build the capabilities where you have performance gaps. The same is true for leadership gaps—you could have good leaders that need to be further developed in order to improve business performance.
Generally, talent and performance gaps don’t close on their own. You need purposeful action and accountability. When thinking about closing talent gaps, you have two options: a build strategy or a buy strategy. Sometimes people include a borrow strategy in this (which is essentially an internal process using secondments from one part of the business to another), but I tend to include that in the build strategy. Your talent is going to come from either the inside or the outside.
Build strategies work best when you have time to develop and grow people—you have to take a longer view with a build strategy. If you choose that as your primary option for closing gaps, keep the following in mind:
Rushing someone through a series of short-term assignments and then putting them in a role beyond their current capabilities is not helpful to the person or the organization. Recognize that you are committing to a series of development moves over a period of years.
Build strategies require resources. This may be an investment in coaching or targeted learning. It could require hiring people for the purpose of giving them a number of development experiences before they land in their permanent role. Make sure you have the resources for a number of years to ensure the success of those types of programs.
One thing you retain with internal build strategies is legacy knowledge. Institutional memory is very important, and continuing to build on that is a great benefit.
Moving people through your bench and building their capability in a number of different roles is extremely helpful to the organization. You can build cross-functional knowledge and capability, which are very helpful in getting things done in an organization.
Finally, build strategies create stability. People are more likely to stay when they have career opportunities in an organization. For the last several years, Deloitte has surveyed why people leave organizations. 86 percent of people leave a job today because of a lack of career development. Build strategies provide visible development and deliver on your career value proposition.
If you opt for a build strategy, you have a number of tools that can help. Within your talent engine you have the development-planning process. For most organizations, this means that every individual has a development plan. This should not be the “once-a-year” discussion it sometimes can devolve into—it needs to be continuous and in real time. The development of an individual needs to be part of the manager/employee relationship and reflect the changes that happen over time. Different preferences emerge, key capabilities are recognized, investments in learning occur, organizations respond to market changes—all are part of the development dialogue.
As part of succession reviews,
you may want to look at creating
roles specifically for the purpose
of development assignments. You
would design roles or career pathways
that deliver the opportunity to build
Learning is an important component to build strategies—think real-time, self-directed learning, social learning, leaders developing leaders, and formal learning where it can help close knowledge and capability gaps.
Coaching and mentoring can be an active and valuable component of your build strategy. You can use internal or external coaching, or, as advocated by Box of Crayons (Michael Bungay Stanier), you can develop coach-like practices for all leaders.
Performance management, goal setting, and feedback in real time are key to developing talent. Linking performance to a development plan that really does get actualized in an organization can be a powerful development tool.
Finally, there is the use of assessments.
There are very effective assessments
that are predictive of performance
and potential. The Gallup Leadership
Dimensions Assessment is an
excellent tool for identifying
top- quartile performers and
your best bets
Often. organizations go outside for talent when they want a fresh perspective and infusion of new knowledge and ways of doing things. A buy strategy is a great option if you are looking for hard-to-find skills and talents, and need to jump-start your organization in building those skills. One of the most obvious reasons people go to the outside for a particular role is that they either have a very thin bench for that role or perhaps the bench doesn’t even exist.
While going to the outside may be much faster than growing the talent internally, you have to pay careful attention to onboarding successfully and shortening the time to productivity. Helping to build relationships with the new hire is important to success, along with building the internal network that can help the new hire get things done.
Looking at a buy strategy is the perfect segway into the myth of talent and the portability of performance. Going to the outside to fill a key role is not necessarily instant success.
There are no guarantees. 50 to 60 percent of executives fail within 18 months of being hired or promoted. (HBR, November, 2017). Why is that? Failure rates of new hires, particularly at the executive level, are often because the organization wasn’t as expected, the work or opportunity wasn’t as promised, or there was just a poor fit. Yet bringing in external talent has been a strategy for many organizations.
If you go to the market to bring in a lot of outside hires, I recommend reading Chasing Stars: The Myth of Talent and the Portability of Performance by Boris Groysberg Princeton University Press, 2010. I had a chance to sit down with Groysberg a few years back and found his research incredibly insightful. I want to share with you my key learnings and why I think this is an important piece of work and still extremely relevant today.
There are myths around hiring outside talent that have been perpetuated for years:
The talent we don’t know is better than the talent we have because they are shiny and new, and we love that—it’s like a honeymoon all over again.
All of the success they have had in other organizations guarantees they will be successful in our company.
Performance is highly portable because we believe the capabilities are a sole function of the person.
In Chasing Stars, Boris and his research team sought to understand what happened with Wall Street equity analysts when they went from one firm to another. Wall Street firms sought to hire each other’s top performers because they believed the best way to increase profits was by bringing in another firm’s top talent—except it didn’t really work that way.
What actually happened (and I am simplifying here) is that someone else’s star was not necessarily a star in the new organization. In fact, there was a decrease in performance when joining the new organization. Many people struggled in the new organization and eventually ended up leaving.
What does that mean for your
organization? What they found in the
study was that what made the person
successful in their organization wasn’t
just them: it was their network, the
infrastructure, whom they relied on
to help them get things done. Work
processes and the firm’s culture and
practices also played a role. So without
the networks and the people who
helped them get things done, the new
analysts would underperform in their
new firm. Bringing in outside hires was a
multimillion-dollar decision that often did
not pay off. While individual talent was
important, performance was linked to
many other things, both tangible
I have seen this story repeated so many times in my career—an organization hires someone that they believe can be bench for their CFO and within six months they wonder if this person can be a financial manager. Before long, you realize the role is not a fit for the new
superstar. It didn’t work out and they didn’t come anywhere near meeting the lofty expectations. That is the moral of the story about chasing other people’s stars. Sometimes it can work out, but it is not a slam dunk.
It seems like the messages describing the current talent market are everywhere. Over the course of the past two weeks, while running through airports, I have seen talent headlines in major periodicals—Forbes, Harvard Business Review, and Fortune to name a few.
Since the beginning of the year there have been stories in the Wall Street Journal and New York Times highlighting innovative perspectives on where and how to source talent.
This talent market didn’t just fall out of the sky. As a matter of fact, there have been warning signs for years, with researchers telling of the market to come, the causes of attrition, and what to do about it.
One resource that I thought was
an extraordinary contribution to
understanding how to retain talent
is a book from 2005
by Branham: The 7 Hidden Reasons Employees Leave.
At a conference in 2009, I heard Leigh speak about his book. In the presentation he did at the conference, he showed a rather stunning slide projecting the shortages in the talent market over the next decade. That slide is imprinted in my memory and it was eerily accurate. He projected that by 2015 there would be a talent gap of around 7 million workers. Since 2015 the number of open jobs has vacillated in the range of 5.2 million to 7.2 million.
Forbes, Special Issue, February, 2018: Why Competition Is the New Union. Well-Paid Workers Produce Bigger Profits
Harvard Business Review, March–April, 2018: HR Goes Agile
Harvard Business Review, March–April, 2018: Cocreating the Employee Experience
Fortune, February 2018: You’re Hired, Companies Are Fighting for Talent… Here’s How to Profit from the Ultra- Tight Job Market Right Now
Everyone month, according to the US Bureau of Labor Statistics, between 3.2 and 3.4 million people change jobs. This is voluntary turnover because jobs are plentiful and people are taking advantage of a market with great opportunities. At the beginning of 2018, estimates place the number of open jobs at roughly 6 million, with an unemployment rate of 4.1 percent heading to a historic low of 3.6 percent by the end of the year. Branham had it right and his projection was stunningly accurate. In 2009, recall that we were in the throes of the “great recession.” As the economy tanked, the amount of talent on the open market rapidly increased, and the talk of any future shortages just disappeared as if the economy would be on shaky ground forever and companies would always have their pick of talent.
Then, in November of 2015, the Wall Street Journal
released Demographic Destiny. This was a giant
In a nutshell, here is what we learned from Demographic Destiny:
“Quite frankly, companies are running out of qualified workers.”
The falling unemployment rate that began in what was seen as a weak economic recovery was a function of the fact that the number of workers has been declining for years. As a matter of fact, the unemployment rate was cut in half from the beginning of the recession. If you factor in that talent isn’t just about the number of people available for a job, but the quality of those people and the suitability of the person for the job in your organization, the pools of qualified talent diminish even further. As they say, fit is everything, and in today’s complex market, fit for many organizations is a challenge.
There are realities of talent availability that are undeniable. The working population is shrinking and that is an alarming drag on economic growth. In the United States, by 2050, the working population as a percentage of the total population will shrink from 66 percent to 60 percent.
Economists monitor the workforce participation rate as a signal of an available workforce, and there is a stark reality staring us in the face just a few years away. By 2022, the workforce participation rate will drop to 62 percent having an impact on economic growth. Growth projections have been adjusted downward from 3 percent to 2 percent due to the shortage of talent.
There is an inverse relationship between the unemployment rate and voluntary turnover, meaning that as the unemployment rate falls, voluntary turnover increases.
When jobs are plentiful, people are more confident that if they don’t like where they are, they can find a new position within six months.
There is a residual pent-up demand from the years that the economy was uncertain and people stayed in a job they disliked.
There is a pay premium that comes along with job-switching. If you think about every job switch bringing with it a pay increase of 10 to 20 percent, it is lucrative to change jobs—and particularly enticing if the new opportunity brings with it potential for development and career growth.
When jobs are plentiful, there is a bit of a phenomenon that surfaces around trying out a new job. By that, I mean that if there is an opportunity that an individual has always had an interest in, it is more likely they would try it out in an economy where jobs are plentiful. There is a perception that there is less risk in doing that if there is a lot of opportunity in the market.
If you have had any interaction with the real estate market recently you have probably heard the phrases “it’s a buyer’s market,” or it’s a seller’s market.” Real estate markets are local and reflect buying patterns within a region. Employers and candidates think about the job market in much the same way. Job markets are evaluated as to whether they are an employer’s market or a candidate’s market. Over the last several years, we have seen a shift from it being an employer’s market to a candidate’s market. The recruiter sentiment survey showed that by the middle of 2015, recruiters clearly saw that it was a candidate’s market and the world had become very challenging for employers.
What does that really mean? In a candidate-driven market, employers need to offer a compelling value proposition to attract candidates. Salaries increase, there is significant room for negotiation, signing bonuses are lucrative, and other perks are offered to attract great candidates. Employers often shorten interview cycles and take less time in the decision-making processes, recognizing that candidates are often juggling multiple opportunities—so it’s not uncommon in certain circumstances to interview and make an offer in the same day.
An example of how this is playing out in the market is demonstrated with computer science-related jobs. At the time of writing, there are 530,000 computer science-related job openings, yet in 2015, we only graduated 60,000 students in that discipline to fill them. By the time we get to 2020, there will be 1.4 million computer science-related jobs, with only 400,000 people to fill them. Within two years we will be short of 1 million workers. So where will these people come from? One option is to rethink the education pipeline to those jobs. Does everyone need a four-year degree in computer science to get a job? Taking a new look at that question is essential.
In 2012 I was invited to Tillamook, Oregon to work with a farm cooperative that is Tillamook Creamery, the producer of exceptional dairy products. The taste of their ice cream that has just been made is incredible, by the way. Tillamook is on the Oregon coast and a bit remote. After landing in Portland, you travel through beautiful forest for a couple of hours before you get there. If you’ve grown up there, it can seem a bit isolated. What was playing out in Tillamook at that time was that students would finish high school, go off to college, and often not come back for jobs in the local area.
Tillamook Creamery wanted to explore ways that they could build a local pipeline for their open roles. So there was a summit, of sorts: leaders from Tillamook, the president of the local community college, the principals of local schools, the sheriff, the chief of police, heads of social service organizations all gathered to discuss how to create such a pipeline to fill local job vacancies. It involved looking at the skills needed and exploring how the community college could create certificate and degree programs that would develop the skills and competencies to fill positions at local companies. That meeting was visionary and was a response to a local need.
Fast-forward to November, 2017 and CNBC reports that IBM is focusing on “new-collar career opportunities.” They are referring to jobs that don’t necessarily require a four-year degree. By the end of 2017, IBM had committed to hiring 6,000 employees with unconventional backgrounds. People can come from community colleges, certificate programs, coding camps, or direct work experience in other organizations. IBM has made a commitment to invest US$1 billion to supplement the development and training of this workforce over the next four years.
In the fall of 2017, Jobvite published Its annual job market research. It reported that 54 percent of people who begin a new job today know on the day that they start that they only plan to stay in that job for one to three years. Other attrition data suggests that, on average, people stay in a job for 18 to 24 months. Further, the Jobvite report states that 85 percent of people in roles today are open to a new opportunity.
Just think about that—those 85 percent are the people you probably think are happy, committed to the organization, making a significant contribution, and not actively looking. Now, your organization is vulnerable and at risk.
As more focus is given to the passive candidate, using social tools for talent acquisition, and building longer-term relationships with potential candidates, the people you thought would stay in your organization are at risk of leaving.
For years we have heard that people join the company but leave the manager. I think that is still as true today as when it was first proposed. People leave bad managers, plain and simple.
Managers who bully and demean employees. At a recent conference I attended, the seminar leader had asked the group for examples of bad managers they had experienced. Everyone in the room contributed and the list was extensive—people talked about managers who verbally abused them, who were divisive, and who appropriated the work of team members and passed it off as their own. The list went on for pages and pages on a flip chart. It was clear that these were not isolated, one-off incidents; this was an epidemic.
Managers who are not truthful, who foster mistrust, or who are not inclusive (i.e. who play favorites or create cliques).
Managers who do not follow through on their promises.
Managers who are self-interested and self-promoting at the expense of their people.
Managers who do not develop
their people, or promote them for other opportunities.
A great practice I am beginning to see more and more in the marketplace is companies doing frequent pulse surveys where people are asked to rate their managers. This makes sense. If managers drive significant attrition, identifying these issues early on and dealing with them can stem the tide of attrition in certain cases.
At the beginning of this section I mentioned the work of Leigh Branham and the reasons why people leave. I want to revisit that again as a way to explore how you can work on retaining people in this tight talent economy.
What I really like about how Leigh talks about the disengagement pathway is that it is so clear to see how it happens. When visualizing his stairway model, you immediately start thinking about people you have known who have left an organization and you can recognize each of the steps they took.
Disengagement doesn’t usually happen all at once. It can be gradual until the day it’s not—and then it’s over; the decision to leave has been made, and it’s just a matter of time before the individual has played out all of the actions that have led to a new opportunity and they resign.
The job or workplace
is not as expected
The job doesn’t fit their
talents and interests
There’s little or no feedback
There’s no hope for career growth
They’re feeling devalued
They’re feeling overworked or stressed out
They have no trust or confidence
How someone gets from any one of these issues being a deciding factor to actually leaving is a pathway of disengagement. They go from day one to questioning their decision to join the organization. This can lead to disillusionment, and over time that leads to searching for options. Once an individual receives an offer they then decide to quit or stay. A point Branham makes is that up until the time people start searching for options, this is recoverable. The manager, a good manager, can turn this around.
In the earlier section on Working Human, the answers to how you can redirect
the pathway from attrition statistic to contributing employee
Focus on living our values
and demonstrating them to
Treat your people like they matter: Value them
Connect with each individual and recognize that everyone is different. Honor those individual differences
Authenticity matters—do what you say you are going to do
Focus on creating great employee experiences. Look at what you do in the organization, not just from a process point of view, but also from the perspective of behaviors, attitudes, and feelings
Invest in learning, career
Have a way to recognize and reward employees beyond the yearly performance-management process
Focus on relationships and have the the social, mobile, flexible tools to support a connected workforce
You can’t solve today’s talent shortages by thinking you can just find new people in the market after someone leaves your organization. You need to think about how to take care of the people who are already in your organization. Value them, their contribution, and their aspirations for growth, and you will have a higher probability of retaining them in the long term.
We need leaders who add value to the people and the organization they lead; who work for the benefit of others and not just for their own personal gain. Leaders who inspire and motivate, not intimidate and manipulate; who live with people to know their problems in order to solve them, and who follow a moral compass that points in the right directions regardles of the trends.”Mary Kay Ash
The Chemistry of High Performance has been a long journey. We wanted to share ideas around what organizations need to pay attention to today in order to create better business performance.
There was no one recipe for success— there were a lot of recipes depending on your starting point. The key was to understand the needs of your organization and how to put together that unique combination of elements that would lead to success. Like chemistry itself, the combinations of different elements lead to different results.
In some ways I think that How You Win is in every section. But there are some big messages that are essential to winning in today’s talent marketplace.
The only sustainable, differentiating force
in your organization today is your people.
I am not the first to have said that, but
it is more important today than ever.
Your competitors can buy technology;
they can (in some cases) replicate
your strategy; and they can follow you
into new markets. But the one thing
they don’t have is your
people—their skills, abilities, energy, passion, drive to succeed, desire to win, ability to connect, and their humanity. Those elements cannot be replicated—and they most certainly are a competitive advantage.
If you think about all the chemical elements in this book, the success is in the interplay of talent, culture, technology, purpose, values, passion, inspiration, strategies, processes, and ways of working. It is all here for you.
Something like this is never a lone endeavor, and I want to take this opportunity to introduce you to all the people who helped along the way.
First, I owe my heartfelt thanks and eternal gratitude to Haley Vote. She has been an amazing editor and friend. Haley possesses an infinite amount of patience, there were times writing deadlines gave way to other work. She has stewarded this project from start to finish and has been my personal champion.
In the Finding People element, Bill D’Amico and Talemetry contributed their ideas of candidate CRM. I appreciate their contribution of ideas and research.
Paul Nolan from DDI was a helpful thought partner and contributor to the relationship section in Finding People.
Keith Ayers was so gracious in sharing his perspective and work on going beyond engagement. Getting to passion is so important in organizations. His insight was invaluable.
Hank Ostholthoff and Adam Fridman helped bring to life how purpose and values contribute to business success. They allowed us to preview their book The Science of Story with you, and their insight and research made this a better piece than it could have been without their help.
Jeffery Moss brought a fresh idea to HCM Innovation by sharing his work on building talent pipelines with recent college grads.
The approach is new and different, and gives organizations a new option for early career hires. I am grateful that Jeffery shared his work in this book.
I first met Michael Bungay Stanier when he was dressed like a box of crayons— he actually heads up Box of Crayons in Toronto. His work on creating coach-like manager behaviors is moving teams forward in a positive direction and I appreciate his sharing his perspective with us.
Barry Conchie is the best person I know in the leadership space. He contributed his thoughts on High-Potential Talent, and I am so thrilled you had an opportunity to see his work.
Lynn Barnhart was a supporter of this project and helped steward it to its completion. I appreciate her dedication of resources to making this happen.
“What we call the beginning is often the end. And to make an end is to make a beginning. The end is where we start from.”T.S. Eliot
Thank you for reading along the way, and for your kind words and gracious notes.