Leverage Your Company’s Pivotal Talent to Maximize the Impact on Results
When the countdown to the new fiscal year begins, companies take a hard look at next year’s spend and carefully allocate resources to people development.
They identify gaps in the talent pipeline and carefully consider possibilities, and before you know it, they have focused their attention and investment on the high-potential (HiPo) talent.
Sound familiar? Absolutely!
Sound good? Not necessarily — and here’s why.
Investment in talent is essential, and many companies believe resources invested in high-potential employees will deliver the best possible return by readying future leaders. However, that assumption is potentially flawed as it doesn’t define the impact required of the talent investment or link it to the company’s strategy.
High-potential talent has become a catch-all expression that’s most typically associated with broad personality characteristics such as drive, self-awareness, and the ability to learn and be agile. Although these traits are important, they don’t necessarily relate to an employee’s ability to truly impact the performance of the business.
Investing in high-potential talent without carefully identifying and assessing employees who drive growth is akin to a CEO telling analysts the company’s two percent operating-margin improvement is due to an investment in and a deep commitment to high-grade pixie dust!
As an alternative, companies should consider the pivotal talent concept first put forward by authors and HR experts Peter M. Ramstad and Dr. John W. Boudreau. They believe companies should embrace a systematic, analytical framework in their decision making and devote their resources to the employees pivotal to the company’s success.
To put it in perspective, the employees who can best drive specific results are essentially human levers with the power to produce significant outcomes with relatively minor behavioural shifts.
That’s exactly why companies should consider a different approach:
- First, zero in on company strategies and key goals.
- Then and only then identify the pivotal talent pools and individuals who would most impact the strategic objectives. This should form the basis of the talent-planning process and investment in development.
We recently worked with a manufacturer whose leaders knew they had to look for different ways to maximize the top line in an increasingly competitive, finite market. Strategically, they had to grow their service business (which was higher margin and longer term) rather than simply sell more of a product that was likely to be purchased only once in a limited market.
Instead of recommending the blanket HiPo development route, RHR International collaborated with the manufacturer to fully understand its strategy and then determine which talent pools had the most impact on selling service contracts. It turns out the service engineers, who visited the sites regularly and had formed close relationships with the users, were most likely to influence sales. Of all the manufacturer’s employees, the service engineers had the most consistent—and relevant—contact with customers.
As a result, development resources were allocated to the service engineers, who were encouraged to spend more—not less—time with their long-term, repeat customers to further entrench the relationships. They were introduced to the service-selling concept and learned how to talk to the customer about what the customer does every day and about how a well-maintained product delivers quantifiable business benefits.
Because management fully supported them, and they finally had the time and communication skills, they were able to ask the questions that truly mattered to the manufacturer’s and the product users’ service and maintenance departments: “How do you use the product? What issues have you had with it? What could it do better? Do you have a busy and a slow season? Should we adjust our visits accordingly?”
This manufacturer successfully embedded the pivotal talent concept across its day-to-day operations to deliver measurable top- and bottom-line results.
The best practices that worked so well for this manufacturer make sense for all goal-oriented companies that want to demonstrate measurable ROI for their talent-development budget.
- Understand your company’s strategy, ask questions about the human levers who will most impact performance, and focus on the talent pools that will achieve those results. This approach and perspective are outside the comfort zone of some HR leaders, but in today’s competitive business environment, they can give you and your company an edge.
- Shift the focus to the pivotal talent who will have the most impact on your company’s performance. Asking a simple question such as, “Who is the company’s pivotal talent?” may produce some interesting results. Be prepared for generic answers such as, “our managing directors and HiPos,” as this shows that leaders haven’t linked their view of talent to the organization’s goals and strategies.
- Recognize the limitations of the high-potential label. Investment in long-term development is necessary, but the HiPo label raises the question, “High potential for what?” Consider using more precise language, such as “talent ready to scale their leadership” or “talent pivotal to the growth of service contracts.” Also, remember that labelling someone a HiPo invariably means creating more PoPos (pissed off and passed overs), which does both your company and its employees a massive disservice.
- Validate the talent independently of manager recommendations. That’s because managers are often inherently biased and tend to select employees much like themselves. They also focus more on their direct reports’ current performance than their ability to help the company reach strategic success.
- Define and measure the impact of talent interventions on organisational performance. In my experience, HR departments rarely use impact measures to define their success and focus instead on the number of people in their succession pools or satisfaction ratings for development programmes.
- Systematically collect and leverage data that demonstrates the impact of your company’s talent investments. It’s surprising how little impact data is collected, because it can inform HR’s decision making and justify its strategies. It is also surprising how much of the HR data about talent rests in unwieldy spreadsheets or individual reports.
All talent deserves the right to be developed, and it should form part of the employee value proposition. But not all talent is pivotal, and companies and HR departments would benefit from investing more time targeting this group and showing clearer links between their talent interventions and the strategic performance of the business.
To find out how RHR International’s Executive Bench® services can help your organization plan for critical leadership transitions, contact Jessica Foster.