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NINE BEST PRACTICES FOR EFFECTIVE TALENT MANAGEMENT Part 2

In this article by Development Dimensions International, a talent management consultancy, the authors discuss on the 9 nest practices for talent managment. In part 2 of the article, we would like to share their thoughts on the first 4 best practices for talent management.

The authors are RICHARD S. WELLINS, AUDREY B. SMITH and SCOTT ERKER.

The original article can be viewed here. http://www.ddiworld.com/DDIWorld/media/white-papers/ninebestpracticetalentmanagement_wp_ddi.pdf?ext=.pdf

TALENT MANAGEMENT: DDI’S VIEW
For four decades, DDI has helped thousands of organizations around the world achieve superior business results through hiring, developing, and retaining exceptional talent. Through both this experience and extensive research, we identified a number of best practices we believe should serve as the foundation for a talent management system.

Best Practice #1: Start with the end in mind—talent strategy must be tightly aligned with business strategy. Effective talent management requires that your business goals and strategies drive the quality and quantity of the talent you need. Procter & Gamble, for example, views “business decisions and talent decisions as one.” And research put forth by the Aberdeen Group showed that best-in-class organizations are 34 percent more likely to connect succession management strategies with organizational strategies.

Below are statements made by organizations whose specific business goals and strategies drive their talent needs:
> “We acquired one of our largest competitors and have redundant talent. How will we ensure we retain the best? Who will oversee the integration? What is the right management team for our new company? Who will help us focus on quality and cost containment, while pursuing new markets? And which employees will best fit the new culture?”
> “We are a global automobile manufacturer that has steadily lost market share. What sort of talent are we going to need to shake up the status quo, rejuvenate our brand, and give us the action-orientation required to turn things around?”

> “We are introducing a ‘blockbuster’ drug that requires us to double our sales force in the next eight months. In addition to sheer numbers, we also need to add the right kind of talent—sales reps who take a consultative approach with physicians.” The real scenarios described above represent clear-cut examples of why matching talent to business needs is so powerful. These organizations all hold a common belief that business success hinges on having the right talent in place—at the right time. Each of the organizations described above is proactively addressing its talent needs. But far too often, the connection between talent and business strategy is considered long after strategic plans are inked.

Best Practice #2: Talent management professionals need to move from a seat at the table to setting the table. When we gather groups of HR professionals for events, we often ask them who owns talent management. They point to senior management. Many have a seat at the table, where they’re involved in discussions about business and leadership strategies that were previously held behind closed boardroom doors. But securing the right to listen in is not enough. Talent managers need to own parts of the process and serve as partners, guides, and trusted advisors when it comes time to talk talent. Research shows this is no easy feat. In fact, it looks as though either HR nor senior leader is at the helm of the talent management ship. DDI regularly takes the pulse of leadership practices around the world. In the most recent report, the Global Leadership Forecast 2008/200912, leaders were asked to rate the overall quality of HR. Only a quarter offered a very good or excellent rating, and just 30 percent of CEOs viewed HR as a strategic partner. On the flipside, those critical CEOs face challenges of their own. Top corporate leaders, such as former General Electric CEO Jack Welch, report spending about 50 percent of their time on their people.13 They got involved in recruiting top talent, grooming high-potentials, and reviewing talent pools. Speaking on the topic of talent management, Campbell’s CEO Doug Conant tells us, “I would say CEOs, on average, understand and appreciate talent more than the everyday person because they know they can’t do their jobs without it.” Yet, we find evidence in our Global Leadership Forecast14 research that not all CEOs share this mindset. We asked both CEOs and HR professionals how often CEOs are actively engaged in four distinct talent management activities. Though half of CEOs took credit for personally developing or mentoring other executives, ratings from both CEOs and HR were startlingly low in all other categories, as illustrated in Figure 1.

If talent management is a core part of any organization—if it can be hard-wired into the fabric and operations of an organization’s most essential functions—HR and senior leadership must work together. The most successful initiatives are driven by HR with active and enthusiastic support from the CEO and other senior leaders— who provide the resources, the budget, the communication and support necessary for success. But HR needs to step up and play a critical role—more so than in the past. One wouldn’t question who owns the marketing process, or the financial oversight of an organization— that’s clearly the domain of the top marketing or financial officer and their teams. Likewise, HR needs to own and put in place professional talent management processes. And they need to get closer to the business. One way to do this: Work with line managers to develop business plans that integrate talent plans, including advice on the ability to meet the business goal with the talent on board. When gaps exist, talent management professionals need to offer solutions to close them. In short, talent management professionals have to be trusted business advisors that execute the organization’s talent management process.

Best Practice #3: You must know what you’re looking for—the role of Success Profiles SM. Numerous studies show that companies with better financial performance are more likely to use competencies as the basis for succession management, external hiring, and inside promotions. Research highlights include:
> The Aberdeen Group found 53 percent of best-in-class companies have clearly defined competency models, compared to just 31 percent of other organizations (which post less impressive performance).

> Aberdeen research also shows that best-in class organizations are 45 percent more likely to have models for key positions16 and 64 percent more likely to have models for all levels of their organizations than other organizations.

> Research from the Hewitt Group illustrates that top global companies consistently apply their competency models across the organization, and their competencies are significantly more aligned with overall business strategies. Eighty-four percent of top global companies demonstrated alignment, compared to just 53 percent of other organizations.

The power of competencies broadens when organizations use what we call “Success ProfilesSM.” There are two reasons this approach is more effective than mere competency models. First and foremost, Success ProfilesSM are designed to manage talent in relation to business objectives—they should reflect key plans and priorities as well as change with new strategies. Additionally, they go beyond just competencies to include four complementary components:

> Competencies: A cluster of related behaviors that is associated with success or failure in a job.
> Personal Attributes: Personal dispositions and motivations that relate to satisfaction, success, or failure in a job.

> Knowledge: Technical and/or professional information associated with successful performance of job activities.

> Experience: Educational and work achievements associated with successful performance of job activities. The end result: detailed definitions of what is required for exceptional performance in a given role or job. Success Profiles can be used across the entire spectrum of talent management activities—from hiring and performance management to development.

Best Practice #4: The talent pipeline is only as strong as its weakest link. Many organizations equate the concept of talent management with senior leadership succession management. While succession planning is obviously important, our belief is that talent management must encompass a far broader portion of the employee population. Value creation does not come from senior leadership alone. The ability of an organization to compete depends upon the performance of all its key talent, and its ability to develop and promote that talent. Many people know this as a Leadership PipelineSM. Figure 2 illustrates DDI’s approach to managing talent using a
Leadership PipelineSM strategy.

The Aberdeen Group19 found evidence to support the importance of a Leadership Pipeline approach in a 2008 report on succession management. They found the bestin-class organizations they studied are 40 percent more likely than all other organizations to focus on developing a Leadership Pipeline across all levels of the organization. A more encompassing approach to managing talent is also essential to proactively manage career transitions. Each level in our model has different, but overlapping, Success Profiles, as well as its own set of transitional challenges. Effective talent management requires not only developing people for their current roles, but also getting them ready for their next transition. For example, individual contributors being considered for frontline leadership positions
must make a critical transition from defining success based on their own performance to the performance of the team they manage.
Similarly, the operational leader being groomed for a strategic leadership position must shift from a business unit or functional perspective to that of an enterprise guardian. A planned approach to transitions is especially important as organizations place more
emphasis on “growing their own leaders” rather than making often risky outside hires. The bad news is that few organizations have
proactive succession processes in place at lower leadership levels. Our Global Leadership Forecast study revealed that only 28 percent of the companies we surveyed have a system in place for key individual contributors and just 38 percent have one for frontline leaders.