Getting ahead through                                        Six Practices                           Practice 6Supply Chai...
In practice, there is no universally accepted model or definition for talent management, but in                           ...
Step 2:                                                 Identify and attract talent                                       ...
The process of assessing performance and cascading KPIs is often hugely over complicated and                              ...
The value of training and enhanced understanding is no better demonstrated than in MIT’s                                  ...
Conclusions                                            McKinseys summarised their findings as follows:                    ...
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UEP Getting Ahead Through Six Practices, Practice 6 Talent Management


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UEP Getting Ahead Through Six Practices, Practice 6 Talent Management

  1. 1. Getting ahead through Six Practices Practice 6Supply Chain Consultancy Five key steps to aligning talent and performance Recently, McKinsey and Co., in conjunction They effectively integrate their people and with Georgia Tech College of Management, supply chains in a systematic way to create a published a report which indicated dynamic and robust performance management that six supply chain related practices system which: are fundamental to giving companies a  connects strategy to operational frontline competitive edge. According to the findings, staff; companies who excel in these six areas  focuses on the vital few levers and KPIs that are dominant in terms of service, cost and enable staff to see their role within the end- inventory. In this paper, Derek Thomason, to-end supply chain; Martin Green and Martin Haynes look at  ensures staff have the right knowledge, skills the sixth of these practices - the right talent, and ongoing education to operate at all accountable for performance. levels;  ensures succession planning is actively in The success of an organisation is almost place to develop the managers and leaders exclusively a product of the quality of the for tomorrow; people it employs. New technology and  empowers and holds staff accountable for innovative products may play their part, but performance. what truly differentiates the ordinary from the good, and the good from the great, is the way Talent management, however, is as much about in which organisations recruit, train, coach and a business ethos as it is a process. To be of real challenge their staff to continuously improve. value it needs to be an organisational priority, So what, you may ask. Isn’t that what most and like the most effective supply chains, it businesses try to do? In basic terms the answer needs to be managed end-to-end to yield the must be yes. But really successful organisations best possible outcomes. Moreover, it must be have a wider field of view. underpinned by a mindset and behaviours that recognise and actively encourage talent management as an integral part of the overall business strategy. 1 of 6
  2. 2. In practice, there is no universally accepted model or definition for talent management, but in principal it engages employees at all levels and involves the identification, nurture and ongoing development of individuals within an organisation. A five stage process to ensure an organisation has the right people, in the right place at the right time might be:  define talent requirements;  identify and attract talent (including internal / external recruitment);  define performance and role expectations;  develop and nurture leadership capabilities;  recognise, reward and retain. It is easy to talk about talent management in the abstract. As a concept few would argue its position as a business imperative and most will recognise the imbalance between the supply and demand for real talent. However, the great businesses make that all important transfer from good idea to practical, focused action. The potential of talent management is clear, but it is all about execution. To work for the benefit of all parties, it must support the organisation’s overall strategy and in turn exploit the insights and advantages achieved to inform future strategy development. An organisation needs to create a defined infrastructure to engage, reward and retain its talent. The decision to pursue such an approach must be viewed as a long term investment in people and be actively promoted and supported by the senior leadership team. Talented people will recognise when commitment levels waiver and will not wait long for the next opportunity. Step 1: Define talent requirements To ensure talent management adds real value to an organisation, it is important to establish the range of challenges to be addressed to meet the business objectives and at what level in the business the talent will be deployed. Define Identifying the competencies required of the talent pool starts with a clear understanding of the Requirements business strategy, processes and desired outcomes. Senior executives must be able to articulate Identify and both the ‘current’ and ‘future’ states in order to determine the requirements of the organisation. Attract They should also reflect the organisation’s overall philosophy and operating environment. Talent Many human resources functions are extremely experienced in building competency-based job Management profiles, informed by long established job descriptions and emerging trends in the employment Recognise, Define marketplace. These can be an excellent starting point, but there really are no hard and fast rules of Performance Reward and and Role what to include or exclude. Retain Expectations Develop & People invited to join talent management programmes should already exhibit both depth and Nurture breadth of capability, combined with an ability to learn and deliver very quickly. Leadership Capabilities Among the typical technical and behavioural competencies required for business management and performance, those within the talent pool also need to reflect the following: ‘They should reflect the  the need to manage specialist functions and / or generalists; organisations overall philosophy  requirement to create future executives and senior managers; and operating environment.’  the time-frame - i.e. how long you expect the talent to remain in the post before moving to another role in the organisation?  measurement - how good is the business at managing the consequences of poor performance?  capability and commitment to actively sponsor, mentor and coach the talent;  the prospect of finding a likely match(es) against your desired talent profile;  prioritisation of the various competencies and establishing minimum standards required. Defining talent requirements makes sure that the business is clear about the skills and expertise needed to deliver its strategic objectives.2 of 6
  3. 3. Step 2: Identify and attract talent Talent is not restricted to senior management or graduate recruits. Talent can be evident at all levels in the organisation and across a range of skills. The organisation needs to ensure it defines Define and identifies all these requirements. Requirements Given the profile and level of ambition normally assigned to talent management programmes, the Identify and Attract benchmark for qualification should be high. Individuals must already have demonstrated technical, Talent behavioural and commercial aptitude well above that of their peers and be equipped to cope with Management increasingly diverse and complex workloads. Define Recognise, Performance Reward and and Role Some take the view that talent can be developed in any individual with the right frameworks and Retain Expectations Develop & deliberate practice. Nurture Leadership Capabilities In practice competency assessment must be fully integrated within an organisation’s operational processes. Unipart has its own well established management system, a fundamental component of which is a competency based approach called ‘Gate to Great’. The methodology is not uniquely ‘Talent is not restricted to senior part of a narrowly focused talent management programme, but is a highly visible part of Unipart’s management or graduate recruits.’ staff development activity across the business. At every level, managers are required to deeply understand their business processes and identify the key skills and knowledge required to ensure high quality, cost efficient delivery of business targets. Each business area has a competency framework designed to ensure resilience within operations and measurable development of staff capability. It is the measurable and visible nature of this approach that drives staff engagement, accountability and retention. Every person in the business has the opportunity to demonstrate and develop their talents in the light of their specific role. To this extent, talent is self selecting and based on criteria related to their ability to demonstrate talent at their level in the business. Attracting talent to your organisation includes marketing and promoting your organisations’ vision, values, performance in the market place and how you engage and reward your people. Articles on your top performers and business successes will attract attention from other individuals looking for a new challenge. When you are looking to attract talent think about what motivates them and how your business meets those motivators. Will the talent get to play with the best/top performers and have challenges that will stretch their capabilities and are the rewards appealing? Step 3: Define performance and role expectations The use of competency based job roles and assessment is fairly common currency in most mature organisations, but those that extract genuine value from this approach do so because it is a Define Requirements dynamic and active part of business life. Engagement in the process extends from the frontline to the boardroom and is typically designed to be simple to use and absolutely aligned to the needs of Identify and the business. Attract Talent Competency and competence are simply about capability and accountability to deliver your Management business goals, irrespective of role, tenure, hierarchical status, or experience. It is about ensuring Define Recognise, Performance you have the right person, with the right skills, in the right place, at the right time. Reward and Retain and Role At a more operational level, talent management must also be supported by an effective Expectations Develop & management system that: Nurture Leadership  translates strategy into operational plans; Capabilities  is underpinned by a set of key performance targets, and;  includes a robust review framework which holds staff accountable for the delivery of business performance. ‘Recruit and assess talent against a multi-faceted and prioritised list of needs.’ In any business there is a requirement to both recruit and assess talent against a multi-faceted and prioritised list of needs. Most large organisations already have some form of competency framework in place and there is also a wealth of literature available online. However, in practice many frameworks fail to deliver the expected results as managers struggle to use and engage with the models. This is because they are frequently viewed as ‘add-ons’ to core business processes and are not fully integrated into daily management processes.3 of 6
  4. 4. The process of assessing performance and cascading KPIs is often hugely over complicated and frequently creates significant waste and ‘noise’ across an organisation. It takes managers away from the core responsibilities of engaging, leading and coaching their teams, to a place where they drown in e-mails, ad-hoc reports and spend hours in largely wasted meetings. The emergent themes are about decision making at the right level, supported by the appropriate targets and indictors of performance. Wherever possible, keep things simple. The same is true of KPIs or else this will ‘cloud’ talent who have been diverted by the need to meet complex and often conflicting KPIs, rather than allowing them to focus on value adding activities. ‘Simple’ does not set any maximum limit on the number of KPIs, nor does it imply a basic or naïve approach. The clue is in the title – KEY performance indicators. At some time in their careers most managers will have tried to juggle a complex array of indicators, many of which are beyond their gift, or which appear to hamper rather than enhance performance delivery. It often means the link between performance, reward, recognition and remuneration (which makes complete sense) is so convoluted, that managers hold up their arms in surrender, knowing they are trying to achieve the impossible. The benefit of defining roles and performance guarantees that the people are clear on their responsibilities and the performance expected to deliver the business’ strategic objectives. Step 4: Develop and nurture leadership capabilities Leadership and talent are inextricably linked and need to be developed within a culture that allows Define them to thrive. Requirements Whilst there is no best practice global template, developing a talent management strategy requires Identify and both investment and senior sponsorship and should typically consider, but not be limited to, the Attract following: Talent  provision of regular access to senior executives and high calibre mentors / coaches who will Management Define both support and challenge an individual’s development; Recognise, Performance  exposure to high profile projects and programmes of change; Reward and and Role Retain Expectations  clearly defined career development plans, charting how talent is expected to grow within the Develop & Nurture organisation; Leadership  development of networking opportunities both within and beyond the organisation; Capabilities  opportunities to work across different geographies or business units;  participation in new business development; ‘Talent needs to be developed  dedicated educational and training support; within a culture that allows them  dedicated reward and recognition packages. to thrive.’ Education and training is the foundation stone of talent management and development. It is not all about academic qualifications although they are of course a very significant advantage in today’s complex international economy. There are many global organisations created by individuals with what might be considered poor levels of academic achievement. But at the heart of that entrepreneurial spirit is an ability to really understand what their customers want, combined with the capacity to deliver an attractive product or service at the right time and price. That ability to learn and adapt quickly is what differentiates the good from the world class and is arguably at the core of truly successful talent management programmes. It is also a pre-requisite for the entire organisation.4 of 6
  5. 5. The value of training and enhanced understanding is no better demonstrated than in MIT’s (Massachusetts Institute of Technology) ‘beer game’. Conceived in the 1950s and evolved over the intervening period, it is perhaps the best illustration of why supply chains fail through lack of understanding, information and dialogue. Participants are divided into teams, taking on the roles of various parts of the supply chain - for example, local retailer, distributor or brewer. The game challenges the parties to respond to changing demands for a single brand of beer. The simple requirements of the game are of course managing the relationships between demand and supply, but the early rounds usually end in chaos with the various teams moving quickly from a beer drought to a beer flood. The underlying objectives seem obvious and the game provides a powerful reminder of the need for detailed understanding of the end-to-end process, the use and visibility of key performance indicators and appropriate communications between the stakeholder groups. We have already referenced Unipart’s ‘Gate to Great’ methodology, which places significant emphasis on the development of business skills and commercial acumen. That can take many forms including our ‘See at ten, do at eleven’ approach, where individuals move immediately from the classroom into a live working environment. The range and volume of training is very much driven by each organisation’s objectives, complexity and operating environment. By nurturing leadership and talent the business develops the required capabilities, employee retention increases and a more engaged work force is created that delivers real business benefits. Step 5: Recognise, reward and retain Talent management is about bringing benefits to both the employee and the business. This ethos Define of mutuality is a central aspect of the overall approach and must be underpinned by a clear set of Requirements performance measures against which targets can be set and results assessed. Identify and The task of senior executives is to create a framework that cascades business outcomes from the Attract boardroom to the frontline. This may appear obvious, however, the skill is in identifying who should Talent Management own what target, how it translates at each level of the hierarchy and how they are empowered Define and supported to ensure successful delivery. Recognise, Performance Reward and and Role Retain Expectations Whilst the same principles apply to talent management, it is likely that those potential ‘high Develop & Nurture flyers’ will be rewarded more highly and more quickly for delivery of exceptional performance. Leadership The targets will, of course, be far more challenging, so it is incumbent on the sponsor and senior Capabilities executives to set clear and measurable targets for achievement. As with the competencies, these may cover a broad spectrum of indicators, beyond the traditional revenue, cost and satisfaction ‘Talent management is about measures. Talent is typically groomed for leadership roles, so targets may include areas as diverse as bringing benefits to both the academic achievement, global process transformation and new business starts. employee and the business.’ The incentives, again, are likely to be higher within the talent management community. Financial remuneration and promotion are the obvious contenders, but in all likelihood there are many other equally important benefits associated with such programmes, for example:  significant access to senior leaders both within the organisation;  participation in key strategy planning and decision making meetings;  membership of key industry bodies;  free tertiary / specialist education and training;  external secondments / support of global charities. The list is very much at the behest of each organisation, but the objectives are clear: set challenging targets, ensure the talent is held accountable for delivery and reward sufficiently that both the individual and business achieve significant competitive advantage.5 of 6
  6. 6. Conclusions McKinseys summarised their findings as follows: ‘Leading companies make supply chain talent development and acquisition an organisational priority. Supply chain positions form part of the top management career track. Once the right people are on board, companies hold talent fully accountable for their contribution to supply chain performance.’ McKinseys emphasise the need to take a strategic view of acquiring and developing talent in the supply chain and the need to hold that talent accountable for performance against a range of targets. At Unipart, we would agree wholeheartedly with this approach, but would add that the management and development of talent needs to be built into the daily fabric of the business at all levels. Hence our approach of ‘Performance Through Engagement’ and ‘Gate to Great’ programmes, which offer every individual the opportunity to develop, regardless of their position in the business. The only caveat is that this has to be within a framework that ensures that their individual contribution is aligned to the strategic aims and direction of the business. We discussed this in the first of our papers on ‘Getting Ahead In Six Practices: Strategic Alignment’. In this way, it is possible to ensure that the talent programme benefits both the individual and the business. For more information contact: Unipart Expert Practices Unipart House, Garsington Road Cowley, Oxford OX4 2PG Tel: +44 (0) 1865 384690 or visit our website: of 6