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This chapter is from the book

Talent Management System

The Talent Management System (TMS) is an effective tool for creating a symbiotic relationship between talent and the organization to dramatically accelerate performance improvements. The TMS is a distinct function within the organizational management system devoted exclusively to attracting, keeping, managing, and identifying talent. It is administered by the management team in cooperation with the human resource function.

TMS elevates talent to a visible, exalted position to which others aspire. The TMS should be implemented and communicated as a big deal because it promotes distinct tracks for talents and other employees. The introduction of a TMS system could create commotion, gossip about the insensitivity of management to people's feelings, complaints of discrimination, outright rebellion, and work stoppages. But if introduced carefully, TMS can also cause people to recognize special contributors in meaningful ways.

Special tracks are not new. Most corporations identify high-potential employees (hi-pos) and put them on a hi-po track with a higher pay scale. Engineering organizations identify gifted engineers and put them on a "dual ladder" track that can extend upward through several vice presidential levels. The same for gifted scientists. Why not the same for other talents?

The TMS should be a powerful magnet to talents, demonstrating that the corporation cares about talents and their joy-of-work needs. The TMS is structured into four elements.

  1. Attracting Talent describes how to become a strong magnet for talent. Here are seven ways organizations can attract talent.

    • Treat talent as customers.

    • Have a TMS.

    • Promise future reward and recognition with stock options, other ownership options, and performance-based pay packages.

    • Have a flexible work environment and positive culture.

    • Provide proper training and research facilities.

    • Practice visionary management and leadership.

    • Conduct performance reviews and succession planning.

    The single most important thing organizations can do to become more attractive to talent is to create a flexible work environment. To attract more talent, an organization needs to create an environment that attracts the most talented people to create the knowledge base needed in the organization. Rather than have narrow job functions—"This is the only thing I do and nothing else"—people should feel free to walk around. For example, even though they are working in the marketing organization, talented employees may go to product development and say, "Here is an idea." It may be wild, but the marketing people should still have the freedom to talk about it—and product development should consider the idea. For example, suppose you want to develop a car, and somebody in marketing comes up with a phenomenal car design and concept. There's nothing wrong with that. That's the kind of flexible work environment that attracts talent.

  2. Keeping Talent describes how to create and maintain daily working environments in which talents can productively pursue the joy of work and financial benefits from contributions. Organizations keep talented employees by doing the following.

    • Treat talents as customers.

    • Compensate talents as preferred suppliers.

    • Offer the right compensation, including proper reward and recognition.

    • Conduct meaningful performance appraisals.

    • Design jobs to appeal to talented people.

    • Assign the right talent to the right jobs.

    • Choose the right location to attract and retain the right talent.

    • Provide proper training, development, and succession planning.

    • Provide a proper research facility.

    • Balance age, race, gender, and color.

    • Create a challenging environment or excitement in jobs.

    • Communicate candidly without fear of reprisal.

    • Provide unassigned time to seed and cultivate ideas.

    • Create social bonds with talent through adventures, sports, games, contests, parties, and celebrations. For example, a former IBM manager used to take his 24 managers on a white-water rafting trip down the Colorado River each summer. He says, "When you're in white water together, and someone falls out of the raft, and you have to think how to get him back in, that creates deep bonding. At night, at a campsite that is far removed from cell phones and other distractions, the group can discuss different business strategies."

  3. Managing Talent describes how to treat talents as customers and create opportunities and freedoms for talents to stretch for their dream, for the things that make big differences for the company and for society. Managing talents may seem a hopeless endeavor. Talents seek freedom and support, not managing. Again, think of talents as customers. You can't manage customers. You can only provide them with the goods and services they want and need. Determine their customer requirements. Ask talents what they believe is the most important thing they can do for the company. If it is within the boundaries of the strategic direction of the company, ask them what they need from you and then provide those needs instantly. Act quickly. Delays in service indicate that you don't care—not a message you want to send to temperamental customers.

    Managing talent has to be learned. Managers must know how to get the best out of people and how to strategically place them in the right position where they are not dragged down by routine work. Managers must provide the setting in which their talents can produce maximum knowledge and maximum innovation and have maximum impact. When strategically managed, talents will generate maximum return. Many companies don't bother to grow their own talent or have talent farms or other ways to grow talent because they don't have anything like a TMS. They think managing talent is the human resource manager's job. Many managers mistake "people who kiss up to the manager" for talents—and they may promote the wrong people. Whom you know becomes much more important than what you know or what you do. This is a common mistake. Don't let politics get in the way of making good decisions. The manager may have a hard time making the proper decision. Often, the employees will know the talent better than the manager does. There are a couple of easy ways to solve this problem. The simplest way is for the manager to get an unbiased read from the employees on who is doing the best work. If the manager does it regularly enough, the employees will let down their guard, and the communication will be best. Absent that level of communication, the manager may need a more formal way of ascertaining who might be most talented. The manager might need an independent unit led by a chief talent officer (CTO) who manages the talent. In addition, the company could establish a "Keep Talent Happy Council" headed by a CTO to provide the guidance and training of the management team. If the organization is having a difficult time analyzing, finding, managing, or keeping its most talented people, something along these lines is a good idea.

    Treating talents as preferred suppliers by spectacularly compensating them for their spectacular contributions will also change the behaviors of the managers whom you wish to retain. The demand for talent places new demands on management. Managers who attract talent should be on the talent track. Those who repel talent should be somewhere else.

    More organizations should have CTOs and talent management councils whose job will be to manage talent effectively inside and outside the organization. CTOs must hire the best, use the best, and keep the best. They manage talent effectively by treating talents as customers, they compensate talents as preferred suppliers, they choose the right talent for right job, they allow talent to focus on creating and applying knowledge, they create an emotional bond by touching the mind and emotions, they embrace a trust culture, they build trust by talking and listening to each other freely, they present positive challenges to their talents to increase their performance level—where "positive challenges" does not mean criticism or humiliation but rather constructive coaching and encouragement, they provide a continuous learning environment, they focus on performance, they reward talent immediately, they build a culture where talents can turn their dreams into reality, and they create a boundaryless organization where information can flow freely.

  4. Identifying Talent describes three ways to identify visible and hidden talents: (a) notice and identify the obvious talents, (b) use a performance-based identification tool, and (c) use a test-based identification tool.

    Talent shortage is often the biggest obstacle to a company's growth. More companies need to grow their own talent, instead of just hiring talent. Hiring talent away from a competitor creates a war mentality. In fact, the personnel market is often called the "war for talent" because companies are hiring (stealing) talent from their competitors. Some people cast an unmistakable aura of talent. Others are hidden by impersonal company bureaucracies or overbearing bosses. External people may or may not carry a brand as talent. Internal or external, put the obvious talents on the talent track with significant and immediate compensation appropriate to the talent track. When uncertain, go prospecting. Prospecting for scarce, valuable resources is an honorable profession. If your apparent gold turns out to be "fool's gold," throw it back and try again.

    Year after year, I come across managers who do not know how to identify talented people. Over the years I have met many bright men and women, but management fails to use them effectively. They are frustrated talents and are therefore unproductive talents. If management does not use these talents properly, someone else will. Big benefits come from identifying talents within the company before hiring new employees.

    Identifying your own talents before hiring new talents is beneficial because existing talents already know the strengths and weakness of the organization, they are already familiar with the culture, they already know what corrective steps are needed to improve, they take less time in action or implementation of any strategy or idea, and identifying them eliminates recruitment costs. If you still need to hire talent, and you almost certainly will, visible internal talent will help attract outside talent. Talent attracts talent.

    Employees can change behaviors: Heads-down, obedient doers of what is asked can explode into dynamic leaders of big ideas that can make big differences to your corporation, if they are given freedom to explore and act; the encouragement to champion new ideas; support in championing ideas when the opposition gets tough; bosses who devote the time and energy to listen for understanding and even work on and add to talent's new ideas; or the experience of being rewarded with a "thank you" for out-of-the-box ideas rather than being chastised for wasting time on dreams—in other words, a whole new environment that fosters creativity, not just the daily grind of executing a project. Such environments have transformed wimps into tigers, really strong, agile talents. The challenge is to find the tigers hiding as wimps. It is certain that there are some such people within your organization. Find them and free them. That is what the TMS is all about.

    Conversely, all employees have to be accountable for what they do. If some people don't perform, get rid of them. If you want to move fast, you have to get rid of dead weight. You can't afford people who just go to work from 8 to 5, check e-mail, or surf the Net. This is the flip side of what the TMS is all about.

    Talents within the organization often stand out as different. Bosses, peers, and subordinates all recognize obvious talents. However, some talents are hidden by the system. Some talents are quiet, unassuming, and mild mannered. Such people are sometimes difficult to identify as talents. In these instances, other assessment tools can be used. The method of identifying talents is to pay attention, notice, explicitly identify them, and put them on the talent track.

Benefits of the TMS

New management systems that impact human resource practices often frighten management. Management fads don't always work, and getting a management system wrong can take down a company. Enormous benefits and minimal risk need to be shown.

The TMS can quickly transform an organization from an also-ran or a laggard to a world-class leader. The TMS is designed to minimize risk. It is a small overlay on whatever system is in place. The overlay resides primarily with line management, not human resources. Human resources picks up some new administrative responsibilities, such as introducing and maintaining a new system that promotes inequities between talents and others. This is not a new challenge. Hi-po and dual ladder tracks are the norm in manufacturing corporations. The suggested talent track is no different. Special tracks are very manageable when the portion of the population in them is small and clearly distinguished from the general population. By definition, the talent population will always be small because talent is defined by a high level of contribution compared with the level of contribution of the rest of the population. If the overall level of capability rises, the bar for talent status also rises.

The benefits winnow down to winning or losing. In long races, the best talent with the fastest vehicle wins. The vehicle is the corporation. Being fastest means changing faster than the toughest competitors. XYZ analysis, defined in my book, The Talent Era, indicates that 60 to 70% of contributions come from 5 to 10% of the employees, the talents. The TMS will create enormous excitement.

  1. Management behaviors will immediately change, at least for those you want to keep. The concept of treating talent like customers completely changes the paradigm about the roles of employees and managers. Envision writing a stage play about telling a manager that she is now the supplier of "joy of work" to temperamental customers called talents.

  2. The TMS will be a strong magnet for attracting and keeping talent.

  3. Nontalents will aspire to become talents. They will seek guidance about how they can improve to be worthy of becoming a candidate for moving to the talent track, hi-po track, or dual ladder track.

  4. Hidden talents will become visible. The silent ones will feel safe in coming forward.

  5. External talents will be knocking on your door to get in.

  6. If you are first or second in creating a significant talent pool among practitioners and managers, then your organization will develop a reputation of being the absolutely best place in the world to work. Then you can further increase your talent pool. Of course, the opportunity to leverage early successes to spiral up is accompanied by the opportunity to trail behind and spiral down.

  7. Talent can go anywhere, and most of them know it. Be the first to make a big splash about your new TMS oriented around treating talent like the customers that they are. Then advertise: "We know that you have more attractive opportunities than you can investigate. So do we. We need more talent. We are truly different. Our very livelihood depends on talent. We are different, we need you, we know we need you, and we will behave in ways that you want us to behave. And that's different."

  8. Be first. Catch the best talent.

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