Why it’s time to build an effective talent management strategy
By Trudy MacDonald, MD of Talent Code and TEC Speaker
Good companies and effective leaders have realised they need to do things differently. The current economy means that businesses have to work smarter and find new ways to achieve more, without increasing overheads.
Against this backdrop, talent management has emerged as one of the key areas where business owners can improve their performance. In fact, a recent survey from software provider SABA found that 69 per cent of Australian companies are looking to talent management to attract and retain the right people. A further 75 per cent are concerned with having the right skills in place as part of a succession plan.
It isn’t just the economy that is driving this change either. New technologies, disruptive business models and a competitive business landscape all mean that all organisations are searching for tactics to become more efficient and cost-effective in a way they haven’t had to in the past.
The good news is that organisations are responding, with talent management ranking as the biggest goal for HR departments according to the latest Michael Page Global HR Barometer. However, many still aren’t turning this goal into concrete improvements, with a poorly defined strategy representing one of the biggest issues.
What is the risk of a poorly defined talent management strategy?
The metaphor I use for an organisation here is that it is like a sphere. The centre of gravity needs to be at the front of the sphere so it maintains momentum and moves forward.
That centre of gravity is composed of the leadership team, the owner and any of the other high-level stakeholders who drive the business forward.
In the ideal situation, all these groups are collectively at the front of the sphere and concentrated on moving the business forward and literally building momentum.
However, if that centre of gravity is divided, with the leader at the front and the rest of the team further back, the sphere will be standing still. A company that isn’t moving forward might not be sounding alarm bells to the leadership team, but it means the enterprise will be quickly overtaken by competitors that are building and sustaining this momentum.
Among the signs we see that a company isn’t maintaining its performance is:
- Financial – they won’t be hitting revenue targets.
- Sales – the company isn’t winning new clients at the rate it could be.
- Flat-lining rate of growth – the business isn’t expanding across the board.
Often these are all signs that a small business has reached a hump that it can’t overcome, because they have never taken the time to re-evaluate what they are striving to achieve.
While these might not sound closely related to talent management, the two are actually deeply connected. Each of the above warning signs might be coming from different departments, but when we drill down, the core cause is that the company has never taken the time to define what greatness looks like.
Shaking up the leadership team
When we talk about defining talent management and greatness within an organisation, it’s important to look at the leadership team and work out what they should be focussing on, the outcomes they need to deliver and the behaviours they need to demonstrate. Recent research by PwC states that ‘78% of CEOs intent to make a change to their strategies for managing people.
What will often happen here is that the executive team has settled into a comfortable place. We are all creatures of habit and leadership teams that have been in place for a while will become comfortable with business as usual.
In terms of talent management, this often means that senior leaders are tolerating mediocrity and aren’t holding people accountable to the degree that they need to be.