Part 2: Silent Damage – The Consequence of Poor Talent Strategy

The first article in my ‘Rethinking Talent Strategy’ series discussed how easy it is to settle for reassuringly popular talent strategies. In this second article, I look at the three most common consequences of poor talent strategies and how they impact the performance of the businesses they are meant to serve.

1. Impaired Progress

You know this is happening when you hear phrases like, “we could go faster if only we had the right talent”

Invest too late in building the skills you need for the future and critical projects will be put at risk because you don’t have enough of the right people to deliver them.

The visible consequence of this shows up every time you have important roles or projects that need to be resourced and the same (small number of) people are put forward as candidates each time. The ‘special few’ are already overloaded and you have no obvious alternatives either to back-fill the work they are doing today or to assign to the new roles.

The invisible (and much more significant) consequence, is the opportunity cost of not having the right people to do the exploratory, experimental and innovative work that will unlock future success. The new ideas that are not conceived or developed, the opportunities that are not spotted early enough, or that are put aside because we don’t have the right people to work on them, remain invisible. Organisations may never ‘feel the pain’ of this deficit, but they resign themselves to being followers - reacting to the change that others create - rather than being leaders.

2. Impaired Performance

You know you’re here when you realise you’ve been forced to make compromise talent decisions

When an organisation suffers prolonged talent gaps, its leaders are forced to make compromise decisions when filling vacancies and resourcing new work. This means choosing the best available person for the role, rather than the best person for the role. Compromise talent decisions may at times be unavoidable, but they are always problematic because they put both the individual and the performance of the business at risk.

I recently worked with the leadership team of a global automotive distributor. The business had strong cash reserves (thanks to 10 years of obsessive cost management after the 2008 recession), and a strategy to grow through acquisition. They had an opportunity to make several large acquisitions in South America and Asia, which would have significantly increased their market share in those regions. But at least one of those deals was put in jeopardy because they didn’t have the capacity to manage the acquisition process or the leaders to oversee the integration work once the deal was done. This acute shortage of capability was down to ten years of under-investment in talent across the business. It was too late to start developing people for these critical roles – the skills required take years to build - so they became reliant on external hires to lead this important work. New entrants who were not imbued in the culture of the business and who didn’t have strong relationships with colleagues in head office on whom they would be dependent for technical, political and moral support when they took up their roles in region.

The leadership team in question were forced to choose an external hire, when an internal candidate would have been a far less risky choice, because for too many years their predecessors were so preoccupied with cutting costs and locking in the people who were delivering short term performance, they unwittingly put the long term success of the business at risk.

3. Impaired Efficiency

When you realise that your talent processes have become habitual.

In the absence of a clear strategy, talent processes inevitably become habitual: costly and resource-hungry processes are repeated each year without questioning their continued validity. The most common examples of this are development programmes that outlive their usefulness, and the annual round of succession planning that in too many organisations, is little more than a process of putting names in boxes. The plan bears no relation to what actually plays out when roles become vacant. People are listed year after year and then bypassed by an external hire or an unplanned internal transfer when the role becomes vacant.

As a business leader confided recently, “It’s an insurance policy, it’s not a plan. We do it for the benefit of the Board and the Regulator. It meets a process need but it doesn’t really make a difference to the business”.

What’s even worse than the hours wasted on pulling together a meaningless plan, are the false expectations that are set for the people who are listed as successors, but who have no real confidence that they will get a shot at the role.

Against this backdrop, it’s easy to see why business leaders continue to cite talent management among their top concerns. For many, this is a consequence of adopting reassuringly popular talent strategies (intentionally or otherwise). Choosing talent management strategies based on continuity and “best practice” - rather than a clear picture of future talent demand - and therefore no evidence or insight to suggest that they are the strategies that will create value in the future.

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Questions To Consider

When you look at your own business – do you find yourselves overly reliant on a small number of talented people, or forced to make compromise decisions when it’s time to resource important work? This might be the result of decisions that your business failed to take in previous years, such as failing to spot raw talent deep in the organisation or shying away from investing early in the capabilities expected to drive performance in the future.

• Have your talent processes become habitual?

• Do they help mitigate against the three impairments described here, or do they focus mainly on short term actions?

If any of these factors sound familiar to you, the next article in our ‘Rethinking Talent Strategy’ series will look at how we can disrupt traditional talent management approaches and stop settling for habitual practices that fall short.

Click here to find out more about how On3 can help you rethink your talent management strategy.