9
TALENT MANAGEMENT REINVENTED
Creating an effective strategic talent management system that fits the new world of work, workers, and organizations is not just a matter of adopting a few of the different talent management principles and practices that have been discussed in the earlier chapters of this book; it requires adopting an integrated set of policies and practices that fit with an organization’s strategy and its environment. This point was made in chapter 2 and is basic to figure 2.1, which shows a need for the five major talent management systems in an organization to be integrated with each other. Previous chapters have outlined the practices and policies that need to be adopted by organizations in each of these five areas. Adopting them is fundamental in creating organizations that have strategic talent management systems.
For talent management to be a strategic advantage for an organization, integrated systems are required. Simply changing pay practices and selection practices is not sufficient to produce the kind of organizational performance that will provide competitive advantage for an organization. Indeed, just adopting a few changes in an area or change in just a few areas runs the risk of making any organization much less effective than it would be if it used an integrated set of traditional performance management packages. When it comes to talent management, reinvention is a systemic issue and not a single policy or small set of changes in practice. It requires an aligned and congruent set of policy and practice changes that involve all five major areas of talent management.
Figure 9.1
Figure 9.1 shows the key practices that need to be utilized in each of the five talent management areas. Some organizations may practice a few of them, but that is not a sufficient reinvention of their talent management systems for them to become strategically effective. Indeed, it is unlikely to do much to increase—and may even decrease—the performance of an organization. Overall, the effectiveness of an organization is only likely to be significantly improved if most, if not all, of the principles and practices are adopted. The reason for this is simple: they reinforce each other in ways that make them mutually effective. It takes a combination of them to produce the kind of behavior and performance that organizations need in today’s highly competitive, rapidly changing business environment. Together they create a strategic talent management approach that is strategy driven, skills based, performance focused, agile, segmented, and evidence based.
TALENT MANAGEMENT CHANGE
Creating talent management systems that include the principles and practices described in this book and fit the new world of work is relatively easy in agile, high-involvement organizations that value people and believe in information and power sharing. They “fit!” Instead of massive change in how these organizations manage talent, what they need is systematic learning, testing, and further development. Many of them already practice some or many of the talent management strategies and practices described in earlier chapters. But what about traditional bureaucratic organizations? Should they and can they change their talent management approach?
One thing traditional organizations can and should do, if they have not already done so, is to adopt those universal best practices that can help improve performance in both traditional and agile, high-involvement organizations. These practices range from improving their performance management systems to being sure that they have valid data-based attraction and selection systems as well as reward systems that motivate performance.
Changes in information technology and systems now make it possible for most organizations, even traditionally managed ones, to greatly improve their talent management practices and systems. They can make them faster, more responsive, more segmented, and more user-friendly. But unless traditional organizations change the way they are organized and managed, they will not gain all the benefits that are possible from changing their talent management practices—and indeed, adopting some of the practices may make them more dysfunctional. The primary reason for this is that the practices are designed to make talent a key source of organizational effectiveness, and this is not possible in a traditional bureaucratic organization. As a result, some of the changes in talent management suggested in this book may make them less effective. For example, making pay rates public may lead to mistrust, while segmentation may lead to unmanageable administrative complexity; both could lead to employee dissatisfaction. Paying for skills and involving peers in performance reviews and selection decisions may have a negative impact on performance and talent engagement.
Overall, many traditional bureaucratic organizations can (and most should) change how they manage talent, but this should not be a standalone change. It needs to be part of an integrated change effort that is targeted at changing all the points on the star model (see figure 8.1); changing only one or two points on the star is likely to make the organization less effective. Similarly, changing one or a few talent management practices is not likely to have a significant positive impact on organizational effectiveness.
The reality is that large-scale change in how they are managed is needed for traditional organizations to effectively reinvent their talent management practices. Perhaps the most important implication of this is that a talent management change process that is directed toward creating strategic talent management processes and practices cannot be led by the chief human resource officer (CHRO) and the human resources (HR) function. It needs to be led by the CEO and the top management team. The reason for this is clear: change needs to be organization wide and affect multiple systems. There definitely is a critical role for HR to play: it is to be the expert resource and to be willing and eager to change its talent management systems when the time is right. What it cannot and should not try to do in a traditionally managed and structured organization is lead a talent management system change effort that is not part of a larger organizational change effort that is supported by senior management.
One final point concerning strategic talent management change is worth repeating. In most organizational change efforts, talent management change should not be a stand-alone change. It is best positioned as part of an overall change effort that covers all five points of the star. It should not be the lead change; it is best positioned as a change that is part of an overall effort to create an agile, highperformance, strategy-driven organization. It also can be effective in situations where it is a catch-up change that reinvents talent management so that it fits an already operating high-involvement organization.
CONCLUSION
The time has come for organizations to manage talent in ways that are innovative and maximize the contributions that individuals can make to organizations. Talent is an increasingly important asset of organizations; it needs to be managed in ways that increase its value and utilize it effectively. This can only be done by taking a more strategic approach to talent management and abandoning many of the traditional approaches that have been best practice standard operating procedures for decades. There is no single change in practice that will make talent management a key strategic contributor to organizational effectiveness. It can only happen if organizations adopt an integrated, strategically driven set of principles and practices that recognize people as an important asset and maximize their contribution to organizational effectiveness. What is needed to do this is a comprehensive set of talent management principles and practices that are strategy driven and drive an organization’s strategy.