Oracle Open World Session – “Preparing for the Future of Talent Management”
Posted by Mark Bennett on November 16, 2007
Our session on Tuesday, November 13th at Oracle Open World, “Preparing for the Future of Talent Management”, presented some thinking around what companies and their HR organizations should consider in order to achieve strategic success through their talent. Talent is becoming scarce and it has a dominant impact on profits and company value, so getting the most benefit from your talent is key to obtaining sustainable competitive advantage.
Many of the ideas presented originated from both “Beyond HR: The New Science of Human Capital,” by John Broudeau and Peter Ramstad, and the recent “HR Transformation v2.0: It’s all about the business” paper from Mercer Human Resource Consulting.
The upshot of the session was that the questions for companies to ask themselves are:
1. How does your talent help you win? – Understand how your strategy utilizes your talent in order to best execute that strategy. How well you execute your strategy often outweighs the actual selection of strategy. In fact, your talent’s capability to execute a strategy could very well be seen as a constraint on what strategies make sense.
2. Where do you need to invest in your talent to win? – Find and focus your investment to improve performance in your “pivotal” talent. That is, the roles in your organization and the competencies within those roles where improvement in performance results in the best overall increase in value to your company through strategic success.
3. How much investment is needed to win? – Determine at what point further investment to improve performance in a given role or competency no longer results in optimal increase in value to your company. Shift investment beyond that point to other areas where it continues to add the most value.
In other words, the future of Talent Management is really Strategic HR, and when properly applied, it results in Employee Engagement in a self-reinforcing cycle. That is, to effectively execute your strategy, you need to engage individuals’ energies with their roles, and your strategy in turn sets the stage for having engaged employees if you properly link your roles and competencies to their strategic impact.
The following will help HR become an effective partner in helping the organization to answer those questions:
1. Since how well you execute your strategy is often more important than what strategy you select, HR’s role in understanding the talent capability of the company to execute its strategy is crucial.
2. Following on #1, to be strategic, HR shouldn’t just be a part of the strategy. Instead, it should also be a force to help shape strategy. HR can do this by explaining the constraints of the company’s talent during the shaping of strategy, or how those constraints can be relaxed in order to better execute the selected strategy.
3. In order to accomplish #1 and #2, HR must develop business understanding and strategy skills to talk the language of business so that business and line managers will listen.
4. Beyond that, HR must also help develop talent management skills within the business and line managers themselves so that they can make better decisions regarding talent.
There is of course more to be done, but this is a good start for companies to take in preparing for the future of talent management.