It’s been almost a quarter century since McKinsey coined the phrase “war for talent,” which also birthed the field of talent management in organizations. Since then, HR has made great strides in defining and improving how talent is managed and developed, yet substantial gaps remain.
My colleagues and I at the Center for Effective Organizations (CEO) have been doing a lot of research and consulting in the talent space in recent years, and have identified the following key challenges facing our business and HR leadership
- What does talent really mean, and who gets to decide: humans or machines?
- Is talent embodied in the people or the work?
- How does talent contribute to organizational success?
- How can we develop our talent for critical roles in a VUCA world?
- What is the role of leaders in a world with fluid talent?
- How can HR help build robust organizational capability on the foundation of talent?
We have created a new virtual workshop Fluid Talent and Technology: The Secret Sauce to Building Organizational Capability which addresses these issues and launches on November 7. In this article I review a number of the key challenges facing organizations on these fronts, including some of the actionable insights that are starting to emerge from our partnerships with researchers and practitioners around the world.
What does talent really mean and who gets to decide?
Sharna Wiblen has done a masterful job in recent years calling attention to two related questions: what does “talent” really mean, and how do definitions of talent get embedded in our technology systems in ways that are very non-strategic.
Starting with the second question first, vendors of all HRIS and workforce management technology solutions build definitions of talent into their systems as foundation elements. Their systems include pre-defined criteria and processes for codifying what talent is, ranking algorithms, and the promise of consistency and control in measuring and managing talent.
When first designing their systems, the vendors will work with a handful of marquee clients, at best, to ensure that their approach works for at least a few companies. They finalize the design choices with that very small group of clients, and then sell a pre-set system to all subsequent customers. Customization of course is available to adapt their system to better fit what makes your organization unique. Yet the pressure to contain costs and justify the upfront costs of purchasing such large and complex systems means that customization happens late and usually only partially addresses the mismatch with your human capital system. So the technology tail ends up wagging the talent dog.
The vendors of course incorporate feedback from their user base with subsequent updates. Yet their objective always is common definitions and processes that can be scaled across the maximum number of users. And that orientation is often at odds with your organization’s needs for bespoke and tailored ways of measuring and managing the unique ways you deploy your talent. The bottom line is that technology solutions are never the panacea their champions lead us to believe they will be. They are a necessary tool for monitoring people processes and making sure the transactional parts of HR are conducted efficiently. But their efficiency in defining and measuring HR process often puts them directly at odds with what’s usually needed to improve the quality of talent decisions.
As Sharna’s research has shown, an even more fundamental problem is this: if you have three people in a room, you are liable to get at least three, if not five or more, definitions of what talent actually is. The good news is that you can reach consensus, and her research has provided a clear path for doing so. Yet this means that we should be starting with that reconciliation process first, and then work back to the technology systems design choices, rather than the cart-before-the-horse approach which is much more common today.
Is talent embodied in the people or the work?
John Boudreau and Ravin Jesuthasan, CFA, FRSA‘s three recent books have thoroughly addressed the challenge with traditional ways of thinking about talent as manifested in jobs. Traditionally, we defined work based on jobs. But with gig work proliferating both outside and inside organizations, the idea of leading “the work,” rather than leading individuals who work in jobs, is becoming more and more central to the notion of talent and what it means.
Our current state in many ways is the logical conclusion to a series of changes in the labor market that have taken place gradually over multiple decades. The erosion of traditional careers and “regular” full-time jobs first gave way to part-time work, followed by temporary work. Yet even with those changes, the orientation of the employment relationship was still focused on hiring a person to fill a specific job, even if that job assignment only was short-term.
At the same time, more and more jobs have been outsourced. The rationale is one part pull, one part push. The pull is the growth in the vendor ecosystem, with increasing options available for outsourcing key tasks and business processes. The push is the desire to get headcount off the books, which can make revenue and profit per person look artificially high – and attractive to investors – because outsourced “employees” aren’t included in those calculations. The end result is that many managers have had to deal for quite some time with managing both regular employees and other people working for the organization who are not directly employed by it. Gig work is a new hybrid manifestation of this, a combination of outsourcing and temp work, with jobs broken down into tasks rather than remaining bundled together to be done by one person only over an extended period of time.
John and Ravin have very recently introduced the idea of “melting” jobs through gig work, breaking them down into their component parts and reconstructing them based on whoever can do the tasks, whether internally or externally, via a gig marketplace. This bears close resemblance to an argument that Alexis Fink and I made a few years ago about more strategic ways to approach workforce planning, which included using job and task redesign to remove bottlenecks to performance. John and Ravin provide a rigorous framework for thinking through what it means to break down jobs into tasks and reconstitute them into new bundles to be performed by gig workers.
How does talent contribute to organizational success?
A key issue when it comes to talent is the relationship between what people contribute as individuals and the ultimate objective, which is organizational performance. This is directly related to Sharna Wiblen’s research on what talent means (see the first section above), and raises it a level, to how talent’s impacts are aggregated and built upon within the organization.
Beyond the question of defining and measuring talent – Sharna’s focus – there’s the equally important question of how talent contributes to organizational performance. Answering that question requires that we look at how people come together to perform interdependent work in cohesive (small) teams; in larger groups that aren’t as cohesive as a “real” team; and in teams of teams – where end-to-end business processes are carried out.
My earlier article, Talent is an Organizational Capability, addresses that exact issue, and points out the need for measuring and managing work at multiple organizational levels: job/role, team/group, business unit/business process, and enterprise. My current research and consulting with organizations is deeply exploring all those dimensions. The research is showing that a more holistic approach is needed, which encompasses both the different levels at which the work is organized and is managed, as well as the three key pillars of (a) work design, (b) staffing and talent management, and (c) goal setting, accountability and rewards.
How can we develop our talent for critical roles in a VUCA world?
While it is easier than ever to break jobs apart into tasks and distribute them to whoever can perform them, at the end of the day there are still large numbers of people who work solely for one organization: yours. This means the classic challenges of talent development haven’t gone away. Yet they need to be adapted for the current times where we operate with greater uncertainty and volatility in the business.
The research on developing talent for new opportunities is clear: the bigger the change from what the person currently is doing, the harder it is to predict success in new roles. This means the traditional talent management 9 box tool that maps out performance versus potential is founded on shaky ground: we may think we know someone’s potential, but the only way to know for sure is to have them step into the role and do it. And it often turns out those predictions are wrong. The classic solution is through realistic job previews: give the person an opportunity to experience what it means to do the work before getting the promotion. Yet that is rarely practical in most situations.
Expert research-practitioners like Maura Stevenson, Ph.D. know these challenges from years of experience, and have charted a path that identifies the competencies most likely to be aligned with true potential. Rather than focus on the ability to complete specific tasks in the current role, Maura and her peers look for competencies such as learning agility, critical thinking, tenacity, interpersonal effectiveness, reinforcing accountability, and handling conflict directly and compassionately. These markers and others can help individuals navigate uncertain waters in their roles, and for the organization more broadly, as it operates in a VUCA environment – especially during trying times like we all have experienced during the recent years of Covid-19.
What is the role of leaders in a world with fluid talent?
Jonathan Donner and John Boudreau in their current work are addressing the specific issue of leadership in a fluid talent world. They are finding that what leaders need to focus on depends in part on where they sit.
For higher-level leadership roles, key things to emphasize include:
- Setting the boundaries and targets for the new work operating system
- Establishing the guardrails for how work is conducted in the absence of “jobs” and “reporting relationships”
- Leveraging purpose for alignment
For frontline manager roles, key emphases include moving:
- From digital savvy to technological fluency
- From process execution to project guidance
- From hierarchical authority to empowerment and alignment
- From technical to humanistic work automation
- From episodic to continual focus on diversity, equity and inclusion
We are excited to see the partnership between Jonathan and John producing these new insights, and sharing them with us in real time during the virtual workshop and beyond.
How can HR help build robust organizational capability on the foundation of talent?
The final piece of the puzzle is HR’s role in enabling a future of talent that can operate equally effectively in melted jobs and traditional roles, in a highly uncertain economic environment.
Dave Millner, John Boudreau and I, separately and together, have been examining this issue, and have combined our perspectives for insights into implications for HR, including:
- Challenges with the traditional definition of the HR business partner role, with implications for a new HR operating model (this work is being co-led by Max Blumberg)
- How leadership in both the business and HR need to approach thinking about what talent means and how to make better talent decisions (this work is being co-led by Pete Ramstad)
- What does effective HR capability look like in this new world
- Intersections and synergies between the HRBP and OD roles and contributions in a post-pandemic world, including this article I previously wrote, and subsequent work with Alexis Fink and Maura Stevenson
There are two immediate upcoming opportunities to join us to engage in these topics. The first is this Friday, for a webinar that Dave Millner and I will be leading. For more information, you can sign up for the webinar here. The second is the virtual workshop which starts on November 7.
Regardless whether you can join us for these events, we look forward to sharing the insights from our action research with the community in the coming months and years through our writing, presentations, and direct engagements with your organizations.
