Strategy driven talent management a leadership imperative pdf

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CHAPTER 22

CRITICAL RESEARCH ISSUES IN TALENT MANAGEMENT Rob Silzer

In general, research on talent management in organizations has been limited (see Gubman, 1998; Lawler, 2008; Lewis & Heckman, 2006), although much has been written about specifi c talent man- agement components such as recruiting, selection, and perfor- mance management. Doing rigorous research in organizations is challenging because of the complexity of fi eld research and the limited ability to hold some variables constant while others are studied. The fi eld also lacks agreement on the appropriate type and level of outcome measures to use.

Many of the previous chapters make suggestions for future research in specifi c areas of talent management. This chapter discusses the talent management areas that would benefi t from further research investigation (see Table 22.1 ).

Key Strategic Links At the beginning of this book, we identifi ed the key strategic links in how talent management can be ingrained in a business organi- zation. While business managers have generally developed strong links among the business environment, the business strategy, and business results, this process in the past has often bypassed human resource (HR) and talent management systems. Business executives

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C o p y r i g h t 2 0 1 0 . P f e i f f e r .

A l l r i g h t s r e s e r v e d . M a y n o t b e r e p r o d u c e d i n a n y f o r m w i t h o u t p e r m i s s i o n f r o m t h e p u b l i s h e r , e x c e p t f a i r u s e s p e r m i t t e d u n d e r U . S . o r a p p l i c a b l e c o p y r i g h t l a w .

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768 Strategy-Driven Talent Management

and human resource professionals are increasingly likely to see tal- ent management as a core business process that has a major role to play in linking business strategy to business results. However, the links between these business elements are not yet well developed, and many of them are relatively weak (see Figure 22.1 ).

A critical area for research is investigating these links and identifying the factors that strengthen or weaken the links. We probably have better insight into the link between a talent strat- egy and talent programs and processes than for the other links in Figure 22.1 . In this area, some HR and talent professionals are experienced and knowledgeable. But linking these at the front and back end with business practices is a relatively new fi eld. For example, which changes in talent can directly result in strategic gains for the company?

Key research questions are:

What is the most effective talent strategy for achieving a particu- lar business strategy? What key factors are most important to con- sider when choosing a talent strategy (such as talent availability, business conditions, business strategy time frame, or others)?

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Table 22.1. Talent Management Areas That Need Further Research

Strategic issues Key strategic links

Organizational talent strategy and talent models

Talent as a driver of business strategy

Programs and processes Talent model for individuals

Talent programs and practices

Talent pools and differential investment

Talent decisions

Outcomes and cultural issues Talent measures and outcomes

Organizational acceptance

Talent expertise Talent management talent

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Critical Research Issues in Talent Management 769

How can we design the most effi cient and effective talent programs and processes that have the greatest likelihood of achieving a talent strategy? How do we measure the impact of those talent programs and practices on achieving the talent strategy, and if they are inef- fective, what diagnostic process should we use to identify and fi x the underlying problem? How can we clearly understand the link between the suc- cess of talent programs and processes and the achievement of business results, achievement of the business strategy, and organizational success? What processes and conditions con- tribute to a stronger or weaker impact? What other variables (such as product development and technology) also contrib- ute to these outcomes, and how can we identify the indepen- dent contribution of talent?

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Figure 22.1. Strength of Key Strategic Talent Management Links

Business Strategy

Business Environment

Talent Strategy

Strategy-Driven Talent Management

Processes

Strong

Weak

Moderate

Weak

Business Results

Measurement of Progress

Weak

Strong

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770 Strategy-Driven Talent Management

Organizational Talent Strategy and Talent Models There has been some discussion in the HR profession regarding talent strategies, but frequently this gets reduced to focusing on specifi c talent programs and processes rather than choosing a broad approach to talent. There needs to be a greater understand- ing of which broad talent strategies are most effective for specifi c business conditions and strategies. For example, Leslie W. Joyce (see Chapter 3 ) presents a buy, build, borrow, or bind model of talent strategies and discusses the benefi ts of each. How can we measure the effectiveness of each strategy, and when should an organization switch talent strategies? Can we identify a talent ROI (return on investment) for each strategy (given specifi c objec- tives and business conditions)? What impact do limited fi nancial resources or limited talent resources in a geographic location have on talent strategy choice? Many organizations have a broad cultural bias for selection or development approaches. What busi- ness conditions favor one approach over the other? What are the benefi ts and drawbacks of having a strong preference for one over the other, and how can we achieve the right balance?

Implementing and measuring the impact of various talent strategies are also areas of interest. How do we operationalize specifi c talent strategies in the most effi cient and effective way? Some companies have talent strategies or talent brands that are well known. Do these talent brand strategies actually provide some competitive advantage by attracting the desired talent, or do they just provide marketing publicity? Most of the evidence here is self - report survey data. How do we more objectively mea- sure the outcomes of a broad talent strategy and determine if the strategy is successful? If the organization is not achieving its busi- ness goals, how do we know whether to change the talent strategy or just the specifi c programs?

In thinking about broad talent management models (see Chapter 1 by Rob Silzer and Ben E. Dowell and Chapter 2 by Marcia J. Avedon and Gillian Scholes), can we confi rm various stages in the development of an effective talent management sys- tem? What evidence is there for the effectiveness of different tal- ent management models? What aspects of these models actually provide the most sustainable competitive advantage?

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Critical Research Issues in Talent Management 771

Key research questions are:

What talent strategies are most effective, under what condi- tions, and for which business objectives and strategies? How can a talent strategy easily be converted into specifi c programs and processes that are effective and effi cient? Is there a single general model of talent management across companies, or does it vary for different companies and busi- ness conditions?

Talent as a Driver of Business Strategy Many organizations now see their internal talent as a competitive advantage that is critically important for delivering on existing business strategies. However, only a few see their internal tal- ent as a major infl uence on driving or determining future busi- ness strategies. How can organizations evaluate current talent and build new business strategies around them? For example, Capital One Financial leveraged its existing internal fungible tal- ent to pursue new businesses beyond the credit card industry. Human Resources is now being encouraged to step up to these opportunities and take a leadership role in shaping, rather than just responding to, business strategies. In this regard, Human Resources should be contributing to the company ’ s strategic direction as much as fi nance and product development by lever- aging current talent to identify new strategic directions.

Key research questions are:

How can we identify the strategic opportunities that existing internal talent provides for the organization? What are the talent characteristics and business conditions that can be combined to create new strategic opportunities? What role can human resources take to exert infl uence on future business strategies?

Talent Model for Individuals There has been a lot of emphasis on developing and imple- menting talent programs and processes, but there needs to be a greater understanding of the role of individual differences in

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772 Strategy-Driven Talent Management

program effectiveness. For example, what types of individuals (based on personality, ability, and motivational differences) ben- efi t most from specifi c development interventions and learning opportunities? What are the person versus treatment versus situ- ation interactions? Why do some individuals respond better in certain situations and not in others? How can we better match an individual to an effective learning experience? What are the core components and limits of talent fungibility (the ability to perform a variety of functions)? Can we outline a talent model for individuals based on individual differences that identify key matches to the work situations and talent programs? How can an individual ’ s talent best be sustained or leveraged? What compe- tencies or individual differences are foundational elements for other more complex skills and abilities?

Key research questions are:

Can we develop a model of individual talent based on what we know about individual differences? How do individual differences infl uence the effectiveness of talent programs and processes (for example, does age affect learning ability in a development experience)? What are the core components of fungibility in an individual, and can we develop and nurture those characteristics in people?

Talent Programs and Practices Designing and implementing talent systems, programs, and prac- tices in an organization raises questions about:

How to choose programs How to link them to the underlying strategies How to design programs to refl ect the situation and business conditions How to implement and manage a program so it remains con- sistent with the original objectives How to integrate various talent programs and processes

First, we need research that identifi es which programs and practices are most effective for specifi c purposes and conditions.

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Critical Research Issues in Talent Management 773

For example, when is starting a campus recruiting program or an apprentice program a good talent choice? How is the choice driven by the underlying business strategy? How simple or com- prehensive does the talent approach need to be? When would a straightforward recruiting program be suffi cient over an approach that includes recruiting, development, compensation, and retention components? When is it better to invest in a selec- tion strategy over a development strategy?

Programs and processes may need to refl ect the organizational culture, the business climate, and often the local geographic cul- ture. How can they be designed to refl ect these without losing program effectiveness? Which program aspects can vary, and which are essential to include? What is the necessary and suffi - cient level of design complexity to be effective?

Implementation issues are often ignored after the program developers have moved on to another project. How can programs and processes be implemented to best meet the original objectives? What periodic talent program reviews or updating are needed to make sure the program continues to meet those objectives over time? How can the program be designed to minimize the adminis- trative resources that are needed but still maximize the outcomes?

Talent management integration is often cited as something that is important to achieve. What are the core characteristics of integration across talent programs and processes? Can we mea- sure the degree of integration? Can we demonstrate that greater integration actually leads to more effective outcomes? How do we go about integrating existing programs, and what efforts bring the greatest payoff?

Often talent strategies discuss specifi c programs and outcomes but often seem to skip over discussing the specifi c characteristics of the talent involved. For example, a talent strategy might be to buy talent from the outside at above-market compensation rates, but how does this differentially apply to different talent groups? Some groups or individuals are likely to be more responsive to compensation inducements than others (for example, customer service representatives versus medical researchers). What are the key talent differences that make them more or less responsive to different programs and processes? How does a program need to adapt to the specifi c talent group?

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774 Strategy-Driven Talent Management

Key research questions are:

How can we make the best choices on which talent programs and processes to use to achieve specifi c business and talent strategies? How can programs be adapted to refl ect local norms, situ- ational factors, and business conditions without losing effectiveness? How can programs be managed over time to remain consis- tent with the original program objectives? How important is it to integrate talent programs and prac- tices, and how can that be effi ciently done? How much do individual or group talent differences affect the effectiveness of a program?

Talent Pools and Differential Investment Currently there is great interest in the use of talent pools, such as high - potential talent, to identify and develop strategic talent. But we have little research on the effectiveness of talent pools and how they are identifi ed and nurtured.

How do we know which talent groups in an organization are critical to achieving strategic objectives? Can we demonstrate that certain characteristics, such as hard - to - replace talent, actually matter? Perhaps “ rare and hard to imitate ” talent (Barney, 2001) is only a competitive advantage for a certain period of time before a competitor leapfrogs over that advantage to reframe the com- petition and capture a different type of talent. How long is spe- cialized talent sustainable as a competitive advantage?

High - potential talent pools (see Chapter 5 by Rob Silzer and Allan H. Church) are so popular that in some organizations they seem to be an unquestioned talent program with little underly- ing thought and few clear objectives. What are the key character- istics of someone who is high potential? Can these characteristics be developed to increase a person ’ s likelihood that he is seen as a high potential? How can we measure the outcomes and ben- efi ts of this program beyond just comparing promotional rates (a confounded variable)? How early in an individual ’ s career can you identify her as a high - potential individual?

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Critical Research Issues in Talent Management 775

How can we evaluate the usefulness of differential invest- ment in talent? We should defi ne and be able to measure the tal- ent return on investment for a specifi c investment in talent. How should we make decisions on where to invest? What impact does differential investment have on the talent who get the resources and the other employees who don ’ t? What is the impact on orga- nizational outcomes?

The composition of talent pools also needs further study. Typically organizations annually look for the best high - potential candidates for a specifi c talent pool but give little thought to what mix of talent or what number of individuals is needed. What combination of talent (potential level, performance mix, career stage) should be identifi ed to have a sustainable talent pool over time?

What organizational resources should be included in the dif- ferential investment in talent? Are some investments (for example, compensation level, development experiences, or career advance- ment) more effective with certain individuals or at different career stages or in certain geographies? How much investment is suf- fi cient? When does a particular investment provide diminishing returns? What is the appropriate level of talent investment to max- imize returns?

Key research questions are:

How do we accurately identify the critical, strategic talent pools? What are the core characteristics of being high potential, and how early can they be identifi ed in individuals? Can these characteristics be developed? Can we measure the talent return on investment of differen- tial investments in talent pools? What level and what type of investment is the most effi cient and effective? What is the ideal mix of talent in a talent pool in order to have sustainable talent?

Talent Decisions In the past, decisions regarding talent typically have been based on personal observations and experience. Often the most senior per- son in the room made the fi nal call about an individual. However,

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776 Strategy-Driven Talent Management

we know that this type of decision making often has great potential for errors (Dawes, 1988; Hastie & Dawes, 2001; Tichy & Bennis, 2007). How can we build a decision - making process regarding tal- ent that is data based and effective? Do we need to construct a talent decision - making science, as Boudreau and Ramstad (2007) have suggested, or can we improve the talent decisions by intro- ducing objective decision - making techniques (Dawes, 1988; Hastie & Dawes, 2001) into the process? How can we improve the qual- ity of each decision and also improve the overall decision - making process in the organization? What are the most important deci- sion - making characteristics to include (such as making decisions based on objective data, getting others involved in the decisions, or focusing on the avoidance of typical decision errors)?

Key research questions are:

How can we improve the quality and effectiveness of talent decisions? Can well - known decision - making techniques signifi cantly improve these decisions? How important is it to fi rst improve the quality and rigor of the talent data? How easily can managers and leaders learn and adopt these techniques? What outcome measures can we use to provide feedback to deci- sion makers on the quality and effectiveness of their decisions?

Talent Measures and Outcomes Most organizations now stick to basic talent metrics, such as turn- over and time to fi ll a position, if they measure talent outcomes at all. These measures are very broad and may not be directly relevant to the specifi c talent programs and processes. There is emerging interest in developing more useful and precise talent metrics (see Chapter 12 by John C. Scott, Steven G. Rogelberg, and Brent W. Mattson). But what are the right outcome mea- sures for talent management systems, programs, and practices? How do we measure achievement of program objectives, talent strategies, and business strategies?

Most current measures are either subjective or based on very general information. Can we develop more rigorous, relevant,

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Critical Research Issues in Talent Management 777

and objective measures that also parcel out the infl uence of other related factors such as business and economic conditions? What are those other infl uential factors? How can we accommo- date the dynamic nature of many talent programs and processes and still get a sound outcome measure?

The organizational level of the measure is also important. What are the complexities and limitations of measuring talent manage- ment effectiveness against broad organizational performance? What is the best organizational level to establish these metrics: organization-wide, business unit, department, work group, or spe- cifi c talent group? Are some organizational performance criterion measures, such as profi t margin, inappropriate to use because of the complex set of variables that can have an impact on them?

How rigorous do the measures need to be? What measure- ment standards, such as reliability and validity, should we insist on following in developing these measures? What type of data and data analysis capabilities are needed to provide high - quality, objective talent data? At what point does a focus on data analysis interfere with sound judgment?

How important is it to have a solid underlying model of talent management to guide the interpretation of the outcome results? How can outcome measures be most useful in guiding future tal- ent decisions?

Key research questions are:

What are the most useful and precise talent measures? Can we develop outcome measures that are objective and rig- orous but still useful? At what levels in the organization should we measure talent outcomes and over what period of time? Should we rely on objective data - based outcome results or should they be interpreted using an underlying model of organizational talent as a guide?

Organizational Acceptance Several chapters have noted the need for a cultural mindset for talent (see Chapter 1 by Rob Silzer and Ben E. Dowell ) or a tal- ent stewardship (see Chapter 2 by Marcia J. Avedon and Gillian Scholes) in order to have a highly effective talent management

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778 Strategy-Driven Talent Management

system. Also mentioned is the importance of installing talent management as a core business practice (see Chapters 1 and 2 as well as Chapter 9 by Ben E. Dowell). These assume an organization- wide acceptance of talent management.

This raises some important issues. What are the organizational readiness factors for gaining this broad acceptance? Are some organizations more ready than others? How critical is CEO sup- port for establishing talent management as both a cultural mind- set and a core business practice? Is CEO support necessary and suffi cient? How do you introduce, communicate, and embed these organizational values? How do you maintain them over time? Do they require constant support and communication? What are the early signs that organizational acceptance is declin- ing? Once accepted, what actions does an organization need to take to maintain acceptance? What is the impact of changing the allocation of resources to talent management?

Key research questions are:

What are the key characteristics of a cultural mindset in practice? How can an organization introduce this concept, and are some organizations more ready than others than others to accept it? What factors, such as CEO support, are needed to embed a talent mindset in an organization? How can talent management get accepted as a core business practice? Is CEO endorsement and active support enough? How do you measure the impact of having a talent mindset in the organization?

Talent Management Talent Over the years, HR professionals working in the area of talent have moved from being specialists in specifi c talent areas, such as staffi ng or training and development, to broader roles in manage- ment development and leadership development. More recently they have broadened their roles even further by working in orga- nizational development or as an HR consultant to a business unit. Now some of them are being asked to step up to an even broader role as a talent director (or maybe in the future to chief talent

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Critical Research Issues in Talent Management 779

offi cer) for a business unit. This requires knowledge (and prefera- bly experience) in the full range of talent programs and processes but also an understanding of talent and business strategies and busi- ness in general. They will need to be partners with the senior business executive much as a chief fi nancial offi cer is today.

These broader roles require talent professionals to have both a broader and a deeper background, which raises several ques- tions that HR will need to address. How can an HR professional gain this breadth and depth? What individual characteristics (skills, abilities, motivations) are needed to operate effectively as a chief talent offi cer? Will they need to gain line management experience to fully understand the connection between business strategy, talent management, and business performance?

Key research questions are:

How can we fully describe this broader and deeper talent management role? What skills, abilities, and motivations are needed to be effec- tive in this critical role? How early in their careers can we identify individuals with potential for these roles? Should organizations develop a program for high - potential talent offi cers similar to ones found in fi nance, to build this critical talent pool?

Conclusion A large number of questions regarding the effectiveness of tal- ent management still need to be addressed. The most important priority may be to study how talent management efforts can be more directly linked to business strategies and outcomes. It is challenging to do nonsurvey - based research on talent manage- ment in organizations. But we need to fi nd new ways to study these complex issues.

Readers are encouraged to review Chapter 12 on manag- ing and measuring the talent management function for a bet- ter understanding of talent management metrics. In addition, relevant research issues have also been identifi ed in most of the other chapters.

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780 Strategy-Driven Talent Management

References Barney, J. B. (2001). Is the resource – based “ view ” a useful perspective

for strategic management research? Yes. Academy of Management Review, 26 (1), 41 – 56.

Boudreau, J. W., & Ramstad, P. M. (2007). Beyond HR: The new science of human capital . Boston: Harvard Business School.

Dawes, R. M. (1988). Rational choice in an uncertain world . Orlando, FL: Harcourt.

Gubman, E. L. (1998). The talent solution: Aligning strategy and people to achieve extraordinary results . New York: McGraw - Hill.

Hastie, R., & Dawes, R. M. (2001). Rational choice in an uncertain world: The psychology of judgement and decision making . Thousand Oaks, CA: Sage.

Lawler III, E. E. (2008). Talent: Making people your competitive advantage . San Francisco: Jossey - Bass.

Lewis, R. E., & Heckman, R. J. (2006). Talent management: A critical review. Human Resource Management Review, 16 , 139 – 154.

Tichy, N. M., & Bennis, W. G. (2007). Judgment: How winning leaders make great calls . New York: Penguin.

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