Making talent a strategic priority

Companies like to promote the idea that employees are their biggest source of competitive advantage. Yet the astonishing reality is that most of them are as unprepared for the challenge of finding, motivating, and retaining capable workers as they were a decade ago.

Too many organizations still dismiss talent management as a short-term, tactical problem rather than an integral part of a long-term business strategy, requiring the attention of top-level management and substantial resources. Everyone spends time on today’s business—and attribute very little value to doing anything else.

Senior executives frequently acknowledge their failure (and that of their line managers) to pay enough attention to these issues. Researches have highlighted the obstacles that executives face, including short-term mind-sets, minimal collaboration and talent sharing among business units, ineffective line management, and confusion about the role of HR professionals (Exhibit 1).

To manage talent successfully, executives must recognize that their talent strategies cannot focus solely on the top performers; that different things make people of different genders, ages, and nationalities want to work for (and remain at) a company; and that HR requires additional capabilities and encouragement to develop effective solutions. Only in this way will talent management establish itself at the heart of business strategy.

Insanity: Doing the same thing over and over again and expecting different results."

Albert

Driving radical change

Transforming an organization requires clearly articulated aspirations, as well as the ability to generate energy and new ideas.

Ideas
The power of the big idea is implicit in the aspiration. Less well appreciated is the way each theme and the initiatives underlying it depend on a flow of good ideas. Leaders should guard against common pitfalls. The first is the common misapprehension that generating ideas is an esoteric art requiring unusual levels of personal creativity or the teachings of the latest innovation guru.
Another misapprehension is the willingness to be satisfied with ideas that are merely good enough, which cannot be energizing, because such ideas don’t stretch an organization and its people. Established orthodoxies must be broken and innovation encouraged, so don’t let unconventional ideas fall victim to hierarchy, bureaucracy, or silos (or all three).
Leaders can avoid these traps by clarifying their expectations right from the start and reinforcing those expectations throughout the transformation. They should emphasize that practical, small-scale solutions can be as useful as big, groundbreaking ideas and take care to provide guidance on what needs improving and where orthodoxy and conventional thinking are best challenged.

Four types of ideas are particularly important:

Why change? In a turnaround, the overall reason for a transformation is usually obvious. But leaders trying to, say, globalize an already profitable company need to explain carefully what they want to achieve. Ideas for articulating the “why” are essential—both for the overall transformation and for a small part of its implementation, such as a local alteration to the work flow of a single product line.

What to change? Leaders must encourage the organization to take a hard look at which functions, geographies, or product lines to change. Which processes need streamlining? What aspects of operations are outdated? What new market opportunities can be tapped? Project teams will inspire new ideas by drawing on people from different, and seemingly unrelated, parts of the organization.

Whom to change? Transformations are about changing not only things but also people. Leaders must identify key roles that will have to be adapted to support the objectives of the transformation. In addition, they must select teams of change agents to drive it at all levels of the organization. Crucially, they need to agree on how they will change themselves to “live the change.”

How to change? Practical and specific solutions that demonstrate how to reach financial or operational targets are especially valuable. Will reducing waste by installing a new process help to achieve the goal for a particular plant, for example, or should the shop floor be reconfigured? Ideas on the processes for instilling change and building new skills and on fresh ways to engage people are always needed as well.

Wise leaders establish disciplined processes for generating and developing ideas. The first phase of every initiative, for instance, should allow time and space for creativity. Incentives should encourage people not only to come up with ideas but also to share them widely.

The McKinsey Quarterly, the business journal of McKinsey & Company.