In my last article, the evolution of talent management: where it has come from and where it needs to go, I talked about several ways in which talent management is changing and evolving. One of the most critical aspects of this evolution is that talent management is becoming more integrated.
What does it mean for an organization to have integrated talent management? There are multiple ways to define integration, but in my point of view, an organization with truly integrated talent management has these three characteristics:
- Talent management is not the exclusive domain of HR but involves the CEO and leaders from across the organization.
- The CHRO has the business acumen to be a strategic partner and is held accountable for driving results
- Talent strategy is well aligned with business strategy, and talent management programs support strategic priorities and deliver business value.
1. Ensure that talent management is the shared responsibility of leaders across the organization
The most important aspect of integrated talent management is that it cannot be the exclusive domain of HR. Yes, HR should be involved in strategic decision-making, and yes, HR leaders should drive and facilitate many of the talent-related conversations with other business leaders. But for talent management to be successful, it needs to be treated as the shared responsibility of leaders across the organization.
Talent is critical to every single part of the organization – for more and more companies, their people are their biggest competitive differentiator – often the delta between success and failure. So it’s baffling that for so long, in so many organizations, talent management was treated as an HR-only responsibility. Most companies these days are getting the message that talent management is a critical issue that affects the entire organization, as evidenced by recent studies showing that talent is now the number one concern of CEOs.
It goes without saying that the CHRO should be accountable for leading the talent management charge: facilitating discussions with other leaders to define the talent strategy, executing talent management processes and programs, and reaching out to involve executives and managers from across the business in talent management activities as appropriate. But a CHRO doesn’t have formal authority over these executives and managers; the CHRO can only influence them. To really ensure active participation in talent management across the organization, the message needs to come loudly and clearly from the CEO. The CEO needs to communicate that successful talent management is everyone’s responsibility, and all departments will be held accountable for the success of their people. According to the McKinsey book The War for Talent, establishing a talent mindset across the organization is the single most important factor in winning the war for talent, and it absolutely must be driven by the CEO.
2. Ensure that the CHRO has the business acumen and accountability to be a strategic partner
One of the primary root causes of siloed, non-strategic talent management is that HR has not acted as a strategic partner with other business leaders. As described in the 2005 Fast Company article, Why We Hate HR, not only does HR not have a seat at the table, but “the table is locked inside a conference room to which they have no key.” Unfortunately, not a lot has changed in the last decade in terms of HR’s lack of C-level strategic participation. Why is HR so rarely included as a strategic business partner?
Well, to be blunt, many HR leaders have not acted very strategically. HR got a reputation for being focused on policy enforcement, administration and risk minimization, because that’s how many HR professionals behaved. Unfortunately, the “human” part of HR often got lost.
HR expertise alone does not make a great HR leader. HR leaders need to be able to think strategically, and they need to have a deep understanding of the business and its strategic priorities. They need to be able to speak the language of the other business leaders in the organization, and they need to be very good at exerting influence. They need to be analytic thinkers, problem solvers, and change leaders. Not surprisingly, some of the best HR leaders have held leadership roles in other parts of the business as well as in HR.
One notable example of a successful CHRO is Tim Huval, CHRO at Humana. Prior to Humana, Huval held a number of leadership roles at Bank of America, both in HR and in other parts of the organization. He was the first C-level hire made by the incoming CEO Bruce Broussard, and in the time he’s been there, Huval has been leading a major people and culture transformation as Humana shifts its business model from a traditional insurance company to a technology company that focuses on improving its members’ well-being. Throughout the transformation, employee turnover has remained low and employee engagement scores have remained high. According to a recent Forbes article ranking Huval #1 on its list of top CHROs, “Huval refuses to take credit for any of the many successes Humana has achieved over the last two years, quickly giving the credit to his colleagues and teammates. But those who know him will quickly point to the critical nature of his role in Humana’s transformation into the enterprise Broussard envisioned.”
Another key issue is that HR leaders have rarely been held accountable for delivering results. Because the business impact of HR programs can be difficult to measure, and because HR has indirect influence rather that direct responsibility for many aspects of talent management, they are rarely held accountable for delivering business value. In other words, many HR leaders have no skin in the game.
This needs to change. HR needs to be held accountable for driving results, and that can only happen if those results are measured (hence, another key attribute of the talent management evolution is that talent management needs to become more data-driven). And this doesn’t mean just process metrics (e.g. “over 80% of our employees have completed the training”), but more importantly, impact metrics and strategic insight (e.g. “over 80% of our employees have completed the training but quality defects have only decreased 1%; let's take another look at the root cause of those defects and see how we can beef up the training...”). Measuring business impact may not be easy, but it’s what matters. HR should be expected to quantitatively demonstrate the business impact that talent management has had on business results.
3. Ensure that talent strategy aligns with business strategy, and talent management programs support strategic priorities and deliver business value
Many organizations have traditionally taken a very transactional approach to talent management. In other words, talent management has often been focused primarily on processes and activities. For example, HR departments would focus on ensuring there is a process for recruiting, another process for performance management, for promotions, etc., and that all of these processes were working efficiently. Not that efficient and effective processes aren’t important, but they shouldn’t be a starting point. Talent management needs to start with understanding the business strategy, which then informs the talent strategy, which then translates into processes and activities to support the strategy.
Start by defining the strategic goals and priorities of the organization, and build the roadmap for how to get there. This will help determine numerous strategic talent decisions, such as:
- How will the size of our workforce need to change? How quickly?
- What skills will we need? Can existing employees be retrained? Do we need to hire new employees with these skills?
- What types of leaders do we need in the next 3, 5, 10+ years? Do we have enough high potential leadership candidates internally? Do we need to look outside for leadership candidates?
- How will strategic changes affect our employees? What do we need to do to optimize employee engagement as we implement changes?
- How is our culture helping us get there? Is it helping us more where it’s stronger/less where it’s weaker? How? Why? What can we do about that? Who's going to be best at helping us do it?
- What are the most important talent-related priorities? How should we prioritize effort and investment in talent management programs?
Once these strategic talent decisions are made, then it’s time to get tactical and work out what talent-related processes, programs and activities are needed to support the talent strategy. By starting with business strategy, it becomes much clearer what talent management actions are needed to support strategic priorities and deliver business value.
An example of integrated talent management
So…what does truly integrated talent management look like in practice? Great examples are still relatively hard to find, but there are a few, and General Electric (GE) is one of them. GE has been recognized as a talent management leader since the 1990s, going back to when Jack Welch put Bill Conaty into the CHRO role because of Conaty’s demonstrated performance across a number of organizational roles and his strong business acumen. Conaty was known as being an influential strategic advisor to Welch, which was even rarer among CHROs in those days.
Jack Welch saw talent as a top priority and was instrumental in driving a talent mindset across the organization. He made it unequivocally clear that talent management was the responsibility of every single leader in the organization, and they would be held accountable. He also saw developing talent as his main job: “I was a gardener providing water and other nourishment to our top 750 people. Of course, I had to pull out some weeds, too.”
Even though Welch and Conaty have both retired from GE, their legacy lives on, and GE continues to be recognized as a talent management leader. Talent management is seen as a key responsibility of all of GE’s leaders, and talent management programs are very closely aligned to business strategy. According to Jeff Immelt, GE’s current CEO, their talent management system is the most powerful tool they have to implement corporate strategy, through attracting, recruiting, developing and deploying the right people.
Here are a few examples of how GE is demonstrating integrated talent management across the organization:
- Jeff Immelt and most of GE’s leaders spend at least 30% of their time on people-related issues.
- Every manager at GE is responsible for the leadership development of his or her team, and they are expected to put a significant amount of effort into the leadership development processes.
- GE identified a strategic goal of increasing the focus on technological and innovation. In response, technology skills were added as a key development requirement as part of Session C, GE’s leadership review process.
- 21 Millennial employees were selected from across the organization for a special three-month assignment, to make recommendations to Jeff Immelt on how GE can better retain and inspire Millennials. GE implemented several of the recommendations made by the task force.
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