Successfully identifying, developing, and retaining leadership talent is critical for any organization’s long-term success. That’s why many of them, particularly the largest ones, rely on full-time “talent management” professionals, who work in coordination with other parts of HR.
These talent management people create processes for assessing leadership capabilities and set the strategy for upgrading leadership talent over time. GE’s talent management people, for example, play a critical role, at both the corporate and business-unit level, in filling key positions, insuring smooth successions, driving company-wide review processes, and building tools that managers can use to direct their own careers.
On paper, this approach makes perfect sense. Having great talent is a strategic imperative, so giving the job to a centralized team of “experts” should ensure that it’s done right. A centralized function also enables a comprehensive and objective view of the company’s talent landscape (overcoming the problem of silos hiding talent), and makes it easier to implement solutions, such as leadership training, that cut across the organization and can be delivered cost-effectively.
Unfortunately, the investment in centralized talent management over the past decade has had mixed results. According to a 2013 CEB study, “only one in four HR organizations have effectively integrated their talent management practices…with the company’s strategic objectives.” Similarly, a 2012 EY survey of almost 600 global business executives found that talent management functions often measure the easy things (such as employee retention) while overlooking other factors that are important for organizational success (such as whether the right people, with the right skills, are in the right jobs).
From my experience working with dozens of organizations on aspects of talent management, there are at least two reasons for these mixed results.
The first is that the advent of talent management as a stand-alone specialty has led to overly complicated talent processes that are difficult to understand, at best, and confusing to managers, at worst. Anytime a function becomes a “profession,” with an association, conferences, certification, and the like, it starts formalizing its own language, which only insiders really understand. Just last year, for example, the Association for Talent Development, a professional society for talent development people, published a research study that proposed 15 core functions for talent development and 24 secondary functions that might be important for some organizations. Even if talent management professionals themselves could remember and implement all of these functions, it’s almost certain that managers would find them more confusing than useful.
The second problem is that the rise of a central function makes it too easy for managers to forgo their personal accountability for acquiring and developing the right talent for their business. In all too many companies, how managers handle talent has no impact on their personal rating or compensation. All they need to do is fill out review forms, go to meetings, and assume that HR will make sure that the people issues are addressed. And then, if things don’t work out, they blame HR – despite the fact that they’re in a much better position to assess and develop their own people.
Countering these tendencies is not easy, but doing so can make a huge difference in organizational performance. A good example is Cognizant, a leading provider of information technology, consulting, and business process outsourcing services. Headquartered in New Jersey, Cognizant is consistently listed among the most-admired and fastest-growing companies in the world, having doubled its operating income in the past five years, while adding over 100,000 employees.
To sustain this trajectory, and manage a company with now close to a quarter of a million associates, CEO Francisco D’Souza has made building a high performing leadership pipeline a critical element of every leader’s job. Because he wants Cognizant’s leaders to grow faster than the business, he holds monthly meetings with his top two executives and the Chief People Officer to review progress on executive talent and the overall leadership pipeline. They also regularly assess whether talent development is aligned with the company’s strategic goals. They review new senior leaders who have been added, executive moves between business areas, who’s being developed for leadership positions, where gaps in leadership remain, and what’s being done to fill them. Carol Cohen, who heads their Executive Talent and Global Leadership Development function, leads these meetings and guides the dialogue on strategic people decisions, investments, and organizational insights – but the decisions are owned by the CEO and his team.
Cognizant also drives accountability for talent throughout the management ranks, since the executive team cannot be the only ones focused on this issue. To do it, the company created a simple one-page talent review document that managers use to review potential leaders annually. The document asks, for example, how the manager’s direct reports stack up against Cognizant’s defined leadership capabilities and what future roles are possible for each direct report, based on their career interests, mobility, and strengths. This provides an easy, enterprise-wide talent snapshot that leaders can use throughout the year to plan targeted development and career moves. Cognizant’s managers can’t pass off their responsibility for managing talent to HR – they are expected to own it.
Of course, not every company can replicate what Cognizant has done. The basic principles, however, can be applied just about anywhere: Identify how talent management will help to drive the business, make sure managers understand the connection between business success and talent development, and hold managers accountable for making it happen.
Ron Ashkenas' blog post on Harvard Business Review. Join the discussion.