The question of talent is high on the list of managers' ulcer-inducing anxieties, and, more specifically, whether your people have the right stuff. Where are the star performers who might have the potential to lead? What does your future talent pipeline look like? What if today's highest-achieving employees were to leave, or to be killed in a freak PowerPoint presentation accident? In the war for talent, are your tanks rolling on to victory, or are you cowering in a small, underground spider-hole?
No question about it: you must nurture and retain your talent. But here things can get even trickier. You may have spent the last decade insisting 'our people are our biggest asset' - but that was never really the whole story, was it? Some of your people are your biggest asset, some don't do too bad a job, and some ... well, at least you are keeping them off the streets.
But as soon as you start flagging up a group of 'high potentials' or 'future leaders' or 'most likely to succeeds', aren't you going to hack off the remaining 90% of staff? Is that playing fair by your people? Who wants to be labelled a 'non-talent'? Senior managers and consultants are spending a lot of time thinking about these knotty talent issues at the moment. The challenge is to square the circle, to manage all your staff appropriately, so that talk of 'tortoises and hares' or 'flyers and plodders' is banished.
'Any organisation that really views people in that polar way is likely to be in a bit of trouble,' says Steve Newhall, managing director of development consultancy DDI. 'In the end, this comes down to how performance is being managed. The ideal is clearly to avoid having "tortoises" at all.'
Susanna Mitterer, MD at TMI, another development consultancy, agrees. 'You really need to get away from the either/or mindset and instead have a both/and approach. Corporate success also depends on the 65% or so core of the organisation, not just the top.'
True, and yet the idea that the best people may not be deployed in the jobs where they can make the biggest difference still gnaws away at managers. Succession planning is not a dark art, it's a basic business necessity. Sometimes it takes a crisis to bring that point home. When Matt Barrett took over as the new CEO at Barclays in mid-1999, he was the third chief executive the bank had seen within 12 months.
He decided that Barclays needed to look much more seriously at its succession planning, to ensure not only that ultimately he would be replaced by an internal candidate - as he was, by John Varley, in 2004 - but that the bank's most senior managers had talented people in place to succeed them when the time came.
A three-year programme of work on talent has built up a lot of momentum at the bank and is now bringing about movement in senior positions. Kathryn Wainwright, head of talent management and executive resourcing at Barclays, has been closely involved with the bank's new focus. 'We have rethought our approach on what we think talent is,' she explains. 'We have shifted from a competency-based model, which based expectations of future potential on past performance. We now have a much more substantial, ongoing dialogue with our people, not just a box-ticking exercise. We also have a better balance between the individual's aspirations and the future needs of the organisation.'
In the past, you got on at Barclays in much the same way as people have always got on in business - you networked, aligned yourself with success and trusted the organisation to have your best interests at heart. One day, surely, the tap on the shoulder would come.
'That was a tacit process,' says Wainwright. 'Of course, networking is still important, but we now spend a lot of time with our so-called emerging talent leaders, gauging what the organisation thinks of them and letting them know what their future prospects might be.'
By the end of April this year, Barclays' executive team, led by Varley, had held five half-day meetings to consider the bank's top 100 people. 'It is a top agenda item,' confirms Wainwright. 'How well do we know our senior leaders? Is that capability going to get us where we want to go? And if not, what do we need to do about it?'
The bank has taken a robust and open approach to the talent issue. HR and line managers have been closely involved, receiving training in talent assessment. Talent partners have been allocated to act as individual coaches and mentors to identified high-potential staff. 'We've tried hard to understand what talent looks like, and what it doesn't look like,' says Wainwright. 'And we've had to get people who weren't talent out of critical roles. There have been tough conversations with some people.'
But doesn't this set up the sort of them-and-us resentment that organisations have always worried about? 'Companies do find it difficult to have that sort of conversation,' she concedes. 'We try to be honest and objective. You often get individuals walking away feeling a great deal better about themselves when they see where they stand. They are treated with respect, and they understand why it might not be right for them to go forward.'
The talent debate is no place for squeamishness. 'We need A-class players in key roles. What are people going to learn from a B or C leader? Why would I go the extra mile for a C-class boss? Give me an A-class boss and I'll give you extra commitment and dedication. We need to cascade that ethos through the organisation.'
Openness is regarded as the talent manager's best weapon at the sales and marketing arm of pharma business AstraZeneca (AZ). Jennie Shaw, the company's talent consultant, says the essentially meritocratic culture of her business helps support this open attitude to talent and career advancement. 'We have a strong culture of performance and reward, and there is already a recognition that people are different and perform differently.'
Like Barclays, AZ has shifted its focus to the development side and away from excessive assessment of its people. 'We've spoken to other firms such as Shell and Centrica about this, and they agree that there is a danger of getting too refined in your assessment techniques and losing sight of development.'
AZ has introduced a learner-led system where future leaders can identify development opportunities that meet their training needs. But the firm tries to avoid a sheep-and-goats mentality by making development open to all. 'It's a seamless process,' says Shaw. 'Development is a component of every performance review - it's not a case of having one approach for leaders and another for everybody else. But top people do distinguish themselves by their superior performance.'
Shaw sees three potential pitfalls that could lower morale. 'If an elite few are perceived to be getting high-calibre development that is not open to others, you can create problems. We are aware that some of the most useful development - quality feedback and mentoring - is not always visible. The key is to make sure suitable development is open to all.'
The second pitfall is the openness of selection processes. Is this some sort of club to which few people have access? The third is secrecy about talent - how do I find out what is regarded as talent here? 'We increasingly try to make our decisions more transparent,' says Shaw. 'The data remains confidential, but we're more open about our reasons. We are also much more open about timescales, the career paths people are on and whether they have the potential to become a director.'
If you want to keep your talent happy, without alienating others, let the light in. 'People are bound to ask themselves who is taking these decisions and whether they feel comfortable with it,' says DDI's Newhall. 'If they see somebody who they know to be an idiot getting on, what does that say about the credibility of the process? It comes through again and again in employee attitude surveys: people don't like to think that poor performance is tolerated, and the more committed and engaged the respondent, the more disillusioned they get.'
Managers must allow for lots of different career paths and trajectories - for every high-flying manager, a firm always needs plenty of capable and experienced footsoldiers. For each superstar striker on the team, there has to be at least one journeyman left-back who doesn't mind sitting on the bench from time to time.
'Not everybody will want to be a leader,' adds Newhall, 'and you shouldn't force people down that track if they don't want to go there. Technical experts may make a vital and valuable contribution, and that needs to be visibly acknowledged. That doesn't mean they need to go down a "future leader" route.'
John Ingham at Penna Consulting thinks some of the language surrounding talent is unhelpful. 'It might make more sense to think in terms of employee segmentation,' he says. 'We've been segmenting customers for years, so why not staff? You can't treat everybody the same. Not everybody is the same.'
He advises having clear criteria as to what constitutes talent, and to have entry and exit mechanisms for any talent group. 'These groups should not get too big,' he says. 'You don't want people to think they can give up because they've been selected. The bar needs to be raised continuously, to drive performance.'
Last year, consultancy firm Towers Perrin (TP) published a substantial piece of research, Look Closer, which remains one of the best accounts of best practice in talent management. TP's Rebecca Fawcett argues that the concept of fair play in management has moved on a little. 'Exceptional people want to be treated exceptionally, but everyone wants to be treated fairly. What does fair mean nowadays? It used to mean being treated equally. But now in business it's about being treated according to your performance. That's why firms need to be open and courageous, communicating clearly what they are looking for.'
Rob Davies, MD of consultants Water for Fish, agrees. 'You should make it overt that a high-potential group exists, and what its criteria are,' he says. 'One client told us that they had always used a nod-and-a-wink approach to talent, and we said: "Do you think people don't realise that's how it works?" It's the unfairness that harms the business. Be straight with everybody; they will cope with it and respect both the process and the people who are selected.'
Penna's Ingham is unequivocal about talent management. 'By definition, you are talking about the people who will make the biggest difference to your organisation's success. This is the one you have to get right above all.'
FOUR PILLARS OF SUCCESSFUL TALENT MANAGEMENT
BE BOLD: Talent needs to stand out if it really matters
Talent programmes should be linked directly to business strategy and supported by the organisation's senior leaders.
BE BRAVE: Courage is the key differentiator
The best organisations communicate openly and use talent management processes to send strong messages about where they are going. They are open about who is and is not 'talent'.
BUILD IT IN: Talent management is a way of doing business
Talent management processes cut across businesses, geographies and reporting lines, removing many tensions that suppress talent.
TAILOR IT: This is about the individual
Talent is no longer defined by seniority, education or skills. The key characteristic is 'learning agility'. Information about career paths should be in the hands of individuals. Development plans should be individually tailored, designed to provide empirical learning and supported with one-to-one mentoring and coaching.
AGILE LEARNERS ...
- Demonstrate humility and are not afraid to admit they don't have the
- Are keen observers of themselves, others and situations.
- Have many ways of handling situations, and use conscious learning
- Are comparers: they search for parallels, look at history, read
- Make sense through rules of thumb - guiding principles and trends by
which to respond and view situations.
- Have a plan (explicit or implicit) and their own measures of success
SOURCE: Towers Perrin - adapted from The Leadership Machine (Lombardo
and Eichinger, 2002).