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.

Harnessing the power of informal employee networks

Formalizing a company’s ad hoc peer groups can spur collaboration and unlock value

Personal social networks, both within and outside of companies, increase the value of collaboration by reducing the search and coordination costs of connecting parties who have related knowledge and interests. They don’t necessarily fit into the organizational chart. Consider the case of an energy company staffer we call Cole (Exhibit 1). Although he sits relatively far down in the formal company structure, he acts as the hub in an informal network because he has knowledge that others find valuable. Without him, the production group would be cut off from the rest of the organization. His boss Jones, the unit’s senior vice president, is connected in the informal network to only two people, both in exploration.

This is increasingly typical in today’s large, sprawling corporations. Informal networks, slipping through the back channels, cross the lines of geography, products, customer groups, and functions—where the action is—and even through the thick silo walls of vertically oriented organizations.

Why Millennials Matter to You

Sure, you’re going to need millennials simply to put butts in seats, but ...

...But these workers are also change agents who may force you to rethink and improve your methods of recruiting, training, and management — the lifeblood elements of your company. They’re accustomed to working away from their desks, using everything from library computers to smartphones and laptops. They got intense and individualized mentoring from teachers and coaches, and they were never told that their elders should intimidate them. “The world is a flat hierarchy to these kids,” says Peter Johnson, director of admissions at the University of California at Berkeley’s Haas School of Business. “Whether you think it’s a good or bad thing doesn’t really matter. It’s a market condition.”
Many companies have realized they need to change with the times: UPS has begun to abandon its training manuals for hands-on learning in staged neighborhoods; Deloitte empowers its middle managers to offer flexible scheduling to their team members, and Google bypasses corporate hierarchy by making its brightest new millennials managers and granting them direct access to the company’s co-founders, Larry Page and Sergey Brin.

Upgrading talent

A downturn can give smart companies a chance to upgrade their talent.

Downturns place companies’ talent strategies at risk. As deteriorating performance forces increasingly aggressive head count reductions, it’s easy to lose valuable contributors inadvertently, damage morale or the company’s external reputation among potential employees, or drop the ball on important training and staff-development programs.

But there is a better way. By emphasizing talent in cost-cutting efforts, employers can intelligently strengthen the value proposition they offer current and potential employees and position themselves strongly for growth when economic conditions improve.

Companies can maintain their attractiveness to internal and external talent by using cost-cutting efforts as an opportunity to redesign jobs so that they become more engaging for the people undertaking them. A job’s level of responsibility, degree of autonomy, and span of control all contribute to employee satisfaction. Head count reductions provide a powerful incentive to use existing resources better by breaking down silos and increasing the span of control for challenging managerial roles—thus improving the odds of engaging key talent in the redesigned jobs.

Matthew Guthridge, John R. McPherson, and William J. Wolf The McKinsey Quarterly is the business journal of McKinsey & Company.

The Economist again.. so accurate!! :-)