Heidrick Strategic Talent Management2012[1]


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Heidrick Strategic Talent Management2012[1]

  1. 1. Strategic Talent ManagementThe emergenceof a new disciplineA view fromthe FTSE 100
  2. 2. Strategic Talent ManagementThe emergence of a new disciplineExecutive summary of 2011, to conduct research and in-depth interviews. The results are intended to“If we don’t connect business and talent serve as a guide for CEOs and Heads ofstrategy, we will be nothing more than a Talent when evaluating their approach totypical HR unit, focusing on activities and senior talent management.not on impact and outcomes.” We found that the drive for structured talent management generally comes from a CEO who has recognised theActivities or outcomes – what’s your importance of attracting and developing a superior pool of leadership talent that will enable the business to deliverfocus? The cumulative impact of global on its strategy. A ‘flat world’ produces a number of tensionsdemographic trends, combined with that Heads of Talent are expected to resolve. The drifton-going economic uncertainty and of business from the West to East creates demand for a diverse set of leadership capabilities.aggravated by a critical skills shortage Some senior executives readily understand that talentcreates a powerful talent triple whammy is a central enabler of strategy and that great talentfacing business. In response, forward- management can be a source of sustainable advantage. A good number though, still regard talent development aslooking companies are bringing talent, a hygiene factor. Talent management in these companiesparticularly leadership talent, to the can become an exercise in gap-filling and tactical recruiting.top of the agenda and are assigning Our research convinces us that CEOs will continueresponsibility for aligning business and to appoint a Head of Talent as a way of combattingtalent imperatives to a senior talent this reactive mentality and creating awareness of theexecutive. We are beginning to see the importance of talent to corporate success. It is for this reason that Heads of Talent tend to be viewed as distinctsteady emergence of a new discipline of from the rest of HR, even when they report to theStrategic Talent Management, led by a company’s top HR executive.Head of Talent or a similarly titled role. In But despite the advantages of being CEO appointees, many of the Heads of Talent we spoke to are strugglingorder to increase our understanding of with paradoxes and ambiguity as they attempt to createthis relatively new role and its challenges, alignment between business and talent strategy. They are often tasked with bringing consistency to talentwe approached the leading practitioners management across decentralised business units, but theyin FTSE 100 companies, in the latter half2 Strategic Talent Management: The emergence of a new discipline
  3. 3. 5 years average length of time Head of Talent role has existed in the company 3 yearshave little or no power over hiring or promotion. They arebalancing the strategic, external talent challenges facingthe company with tactical and internal challenges, oftenwith only influence to help them.The global economic crisis and the huge increase in average length of time currentunemployment have not made their role any easier. Head of Talent has been in the role 17%Counter-intuitively, there is still a marked shortage ofpeople with the skills required to lead global companies.The concerns of baby boomer and ‘generation X’executives are important, but the future of mostcompanies rests with the next generation. Heads of Talent that report to the CEO 157In the context of these challenges, there is a need to sharebest practice to create the conditions for success. Basedon what we have observed and the insights that we havebeen able to glean, we have developed a framework calledthe 7Ps which will be helpful in structuring the role of a average size of top talent pool managed 90%Head of Talent: Pressures, Purpose, Person, Profile, Power,Process and Pools.Overall, our research revealed an embryonic but emergingbusiness discipline with little consistency aroundobjectives or methodology. We discovered a complex whole career spent in HR 23set of factors, many of them contradictory, affectingperformance and success. Even with the high stakesattached to successful talent management and the rightframework to help them succeed, winning Heads of Talentwill still have to be diplomats rather than commanders, number of different job titlesachieving results through relationships and persuasion.Encouragingly, we found many Heads of Talent who had identified in our survey for the role 6 out of 10adopted this approach.Heidrick & Struggles’ role as a leadership advisor to globalorganisations gives us a privileged perspective on theseemerging trends and we undertook this study to start average score in answer to:an on-going conversation with CEOs, senior leaders andHeads of Talent on how to maximise the business impact “How well do you think yourof leadership talent. organisation manages talent?” Heidrick & Struggles 3
  4. 4. IntroductionThere is a growing body of evidence to Together with these executives, we identified a series of practices, tools and competencies that can help create thesupport the idea that companies that conditions for success within this role and for the companyalign business and leadership talent as a whole. In addition to the survey findings we have brought additional insights from Heidrick & Struggles’imperatives have a greater chance of leadership consulting experience, as well as from researchsustainable success. It feels intuitively conducted at Harvard Business School.correct; if you have the right leadership The report is divided into three parts: A summary of our findings; a review of the context within which these talenttalent in the right place with the right executives operate and finally a few tips for attainingskills and behaviours, then the odds of success. We hope that it will be useful both to CEOs whensuccessfully executing on your business they consider how to execute on their talent agenda and to the senior talent executives who are responsiblestrategy are high. Many of our CEO clients for making the alignment of business and talentagree and have moved leadership talent strategy a reality.to the top of their agenda, assigningresponsibility to a senior executive.At Heidrick & Struggles, our belief is that these Headsof Talent have an important role to play in improvingcorporate leadership, and that an effective Head of Talentcould have substantial impact on a firm’s competitiveness.We wanted to test this theory by learning more aboutthese senior talent executives: who they are, what they do,the agenda they address, the context within which theyoperate and what constitutes success in their role. Toptalent executives from 24 FTSE100 companies helped usin our research. The firms we surveyed use a wide rangeof titles for these leaders, but in this report we will refer tothem as Head of Talent.11  see Appendix 1, ‘A note on titles’4 Strategic Talent Management: The emergence of a new discipline
  5. 5. Part 1Principal findings– An embryonic butemerging disciplineThe Head of Talent is still how they will select and develop high-potential managers, conduct regular talent reviews and report on theira relatively new role, and progress.companies use their executives in As a result, we discovered great variety in the ways ina wide variety of ways which Heads of Talent operate and relate to line managers. Some are focused primarily on infrastructure for talentMost of the Heads of Talent we interviewed have been and leadership development – processes, systems, andrecently appointed, and some were the first Head of Talent metrics. Others spend more time on specific developmenttheir companies had ever hired. Unlike more established initiatives: business school programmes, projects thatfunctional roles (CFO, Chief Marketing Officer, etc.) the involve high potential managers, and the like. Still othersHead of Talent is a newcomer and is rarely present on the spend time ‘walking the floor’, trying to keep high-executive team. We found that on average the length of potentials engaged and providing front-line intelligencetime a Head of Talent role had existed in the company was to senior line leaders (fig 1).five years and that many of the current appointees hadbeen in the role for about three years. There are few patterns that a CEO can rely on when appointing a first Head of Talent, few models that a newlyA good number of our interviewees indicated that they hired Head of Talent can easily adopt. As we will explainwere still working out how they were expected to relate in Part III, this means that Heads of Talent must take theto their colleagues. A few companies have well-grooved initiative in structuring their own roles.talent management processes, but most are still exploringfigure 1 – How do you spend your time? Succession planning 24% Training and development 22% other 21% Individual career management 10% Recruitment 9% Performance management 7% Mobility management 4% Compensation & Benefits 3% Heidrick & Struggles 5
  6. 6. A wide variety of ‘Hot Topics’ Hot topicsthat keep Heads of Talentawake at night StrategicInterviewees split their ‘Hot Topics’ into two categories Diversity– strategic and external talent challenges facing the Demographicscompany and tactical and internal issues. There are few • Aging populationsurprises on either list, but several of the ‘mega’ themes • Generational mixresonated with our experience and wider research on Globalisation & Emerging Marketsleadership talent. Generally, we see that Heads of Talent • Global and ‘Glocal’ talent modelare battling to create alignment between business and • Relocation of business from West to Easttalent strategy: • Identifying, attracting & retaining talent in emerging marketsGlobalisation and Emerging Markets MobilityA ‘flat world’ produces a number of tensions that Heads • Willingness to moveof Talent are expected to resolve. The drift of business • Skills gaps across geographiesfrom the West to East creates demand for a diverse set of Critical skills gapsleadership capabilities that can not only bridge the gap • Global shortage of General Managersbetween established western management approaches • Lack of commercial ‘savvy’and emerging eastern ones, but can also manage the • From product to customer-centricbalance between what can and needs to be done at the competenciescentre and what should be done locally. Many of the Successioninterviewees talked of developing a new ‘glocal’ talent • Internal/External pipelinemodel, blending global consistency with local delivery Retentionneeds. Many Heads of Talent appear exasperated bythe challenges of identifying, attracting and retaining Operationalleadership talent in emerging markets – “we say we are Workforce planninggoing into (emerging markets) but have no clue how Business ambivalenceto operate or source talent or how to expand our talent • “Don’t get the talent management thing”agenda in these new markets”. Some told us that they had • Resist forced distribution and performancelearned a hard lesson that what attracts talent in emerging managementmarkets is different from what retains it and creates Career transitionsperformance. A few even fear that despite their best • Sizing roles to smooth career movesefforts “half the investment will walk out.” • Internal rotations and transfers Quality of talent professionalsSuccession and Leadership Pipeline Development plans and internal coachingHeads of Talent tended to confirm our experience that Talent metrics, data and trackingsuccession planning at all levels, but particularly at the top, Change fatigueis reactive. The following quote, taken from our 2011 BoardStudy,2 reflects the situation “A company’s leadershiptalent is its single most important asset and has becomea critical governance topic for boards. In general, the timeand effort devoted by the board to the development and2  European Corporate Governance Report 2011 – Challengingboard performance, Heidrick & Struggles, 20116 Strategic Talent Management: The emergence of a new discipline
  7. 7. succession of its senior leaders is inadequate.” The statistics Most Head of Talent roles manageare quite worrying too – only 58% of boards we surveyedin EMEA had an effective CEO succession planning process a relatively small talent pooland 46% had a vetted and viable candidate who could The typical Head of Talent does not look after all of theimmediately step in as CEO if necessary. In the face of the talent in the company, but an executive or top talent poolcritical skills shortage we explore later, many companies that is a small proportion of the employee population.want to mitigate their leadership risk by aligning their Our research and that of other firms (starting in the mid-talent agenda and pipeline practices to create ‘succession 1990s) showed that these top pools averaged 150 leaders,ready’ pools, both inside and outside the company. regardless of the size of the company, with most of themInterestingly, we noted that few Heads of Talent had numbering under 250. Despite over a decade of mergersresponsibility for creating and managing external talent and substantial growth in the size of many companies,pools. this number has not changed. The average Head of Talent we interviewed had just over 150 people in their managedA common theme for the talent pool.Head of Talent is the creation The people in these relatively small talent pools are the ‘group leaders’ or ‘high potentials’ or ‘critical list’: the nameof consistency across varies across companies, but the intent is to focus on thosedecentralised units who have the potential to grow into larger roles.Many of our interviewees conveyed a history roughly like The 9-box matrix that plots each manager on axes forthe following: As a result of decentralisation and corporate performance and potential seems to be a favourite tool ofdownsizing, line managers became responsible for hiring, the talent managers we interviewed. In many companies,developing and retaining talent in their units. This had the ‘the list’ of high-potential leaders is derived from thisadvantage of making the line managers accountable, but matrix. One reason for the popularity of the 9-box matrix,it often led to inconsistencies. Many respondents told us we think, is that it is relatively easy for talent managers tothat their CEOs now wanted ‘an integrated and consistent use and to explain to their CEOs and business colleagues.approach’, more often driven by a desire for effective We were surprised to learn that, in the majority ofrather than simply more efficient senior talent processes. companies we looked at, the people ‘on the list’ aren’tThe CEOs could see that some divisional leaders did a told that they are on it; the existence of the list may begreat job in building their teams to the point that they acknowledged, but the list itself isn’t made public. Thiscould act as ‘net talent exporters’ to other parts of their may be to avoid internal discord; it may also reflect aorganisations; others experienced high turnover and had lack of confidence in the process on the part of talentto look outside their units for succession. Achieving more managers.consistency across units thus became part of the mission In some cases, corporate talent managers have the abilityfor many of the Heads of Talent we interviewed. to redeploy high-potential leaders from one unit toAt the same time, our interviewees did not expect another. But in most companies, hiring and redeploymentthe return of ‘big central HR’. The Heads of Talent we depends on line managers, with talent managers playinginterviewed typically ran very small teams. Most had an advisory role.power that was indirect. There were few big budgets Our research also suggests that many companies could– in fact the majority of Heads of Talent didn’t know improve the way they allocate leadership developmentthe proportion of the overall HR budget that they were resources. On average, 70% of funds spent on leadershipallocated. They were expected to increase consistency development go to formal training; our view is thatacross business units, to identify and deliver a more this ratio should be reversed, with 70% allocated tointegrated corporate talent strategy. But most of the experiential, job-related development. We were thereforepower in the companies we looked at rests with the line encouraged to hear many of our interviewees speakleaders, a theme we return to later. Heidrick & Struggles 7
  8. 8. of project-based work, in which high-potentials are The systems in other companies are more complicated.encouraged to work together on strategic issues. Others One Head of Talent prepares an annual ‘People Balancedescribed how they got involved in relocation, mobility, Sheet’, bringing together all people metrics in thespecial training programmes and career counselling. company and trying to link talent health to businessOur interviewees spent 22% of their time managing strategy. Building on that approach, such a scorecardtraining and development programmes. That strikes us could include:as about right, given the 70 / 20 / 10 rule of thumb. • head count (changes over time) • rate of talent change (external/internal movesHeads of Talent see ‘relationship divided by headcount, attrition ratio at the top)building’ as being a key • talent mix analysis (potential against performance)competency for their success • proportion of new joiners to the entireWe asked Heads of Talent to identify the three key employee groupcompetencies that underpin success in the role. Some • tenure in position or company,of the interviewees focused on technical skills and measured by year bandsexperience of HR processes and approaches but manyidentified relationship building, commercial acumen Several companies measure line managers on talentand internal awareness as top of their list. Our research management activity; the resulting score figures in thesuggests that a majority of our interviewees are strong manager’s bonus.in the relationship and associated influencing skills and The majority of the Heads of Talent we interviewed didhave built deep and advisory-type relationships with their not try to relate their talent measures to the company’scolleagues. But as we will discuss later, many have yet to financial output or share price performance. Rather,fully develop and demonstrate the commercial acumen they focused on operational measures: completion ofthat would bring organisational buy-in and credibility. assessments, number of talent reviews done by lineOther key competencies that were raised include: self- managers, participation in leadership developmentconfidence, resilience, strategic thinking, adaptability, programmes, and ratio of external hires. As one ofcustomer orientation. our interviewees commented: “It’s difficult and often meaningless to try to calculate ROI on talent initiatives.Heads of Talent measure Instead, you need to look at what you are doing relativeperformance, using primarily to your industry and competition and see whether it’s making a difference.”operational metrics Succession figured prominently in the metrics that severalWe asked the Heads of Talent how they measured their Heads of Talent employed. A Head of Talent explained: “Iown performance. Each had come up with some system have a clear picture in regard to external hiring numbersof metrics, though several were just beginning to develop at the top level, and the impact of that on the business. Ithese and discuss them with line management. There want to see around 10 internal appointments – rather thanwas a considerable range in the elaborateness of talent hiring externally – by Christmas. It’s better to move peoplemetrics. One Head of Talent said: “We’re a very lean around, rather than to bring them in from outside. We areorganisation so it’s easy to follow the people in my pool thinking of setting similar targets for 2012.”and get a good sense of whether they are happy or not.”Another commented: “The CEO can see the value of ourwork in our leadership presentations, and now there’s awaiting list for our development programmes. The CEOdoesn’t need convincing.”8 Strategic Talent Management: The emergence of a new discipline
  9. 9. Most Heads of Talent feel theircompanies could do a better jobWe asked Heads of Talent to rate their firms’ overallperformance on talent management from 1 to 10. Theaverage overall rating, and the most common, was 6 out of10. A few felt they were doing very well, but most thoughtthat they could improve: “We need to be more joined up,”said one, referring to line management. Another managerstressed implementation: “Right now I’d give us a 3.5 or 4 “The CEO can see theout of 10. But over the next two years, I expect it to go toan 8. Our plans have huge potential; now it’s about how value of our work in ourwe take the ideas and make them happen.” leadership presentations,Asked to evaluate a set of specific talent practices, Headsof Talent felt Mobility management and Training and and now there’s a waitingdevelopment were areas where there was room forimprovement (fig 2). list for our developmentSeveral Heads of Talent reminded us that they operate programmes. The CEOthrough line managers, rather than directly, and thatmetrics should reflect this. “I don’t want to take credit for doesn’t need convincing.”someone else’s work,” said one.figure 2 – How Heads of Talent rate their company, by area To be improved Standard Good Excellent Compensation & Benefits Individual career management Mobility management Performance management Recruitment Succession planning Training and development Heidrick & Struggles 9
  10. 10. Part 2Contradictions, ambiguityand credibilityAs we reviewed our research data, we Even when they succeed in luring talented managers from other firms, CEOs cannot be sure that the superstars theywere struck that Heads of Talent operate hire will perform well in their new environment. Researchin an environment of contradictions and by Boris Groysberg of the Harvard Business School suggests that ‘superstar’ talent is rarely as portable as wesignificant ambiguity. A few of these imagine.3 A company hiring a star performer from outsidecontradictions really caught our eye: should, on average, expect him or her to underperform, significantly, and for several years, unless steps are takenHigh unemployment to quickly and effectively integrate the new executive into the company culture.and the critical skills gap So it appears that the ‘War for Talent’ is not over; theThe global economic crisis and the huge increase in battle lines have just changed. Talent management hasunemployment have led some to think that talent is become more than just acquiring new executives andreadily (and cheaply) available. “My CEO sees the recession is increasingly focused on developing, motivating andas a great opportunity to pick better people, but there is retaining them. Our work shows a steady trend towarda challenge to keep the talent management momentum recruiting to the top team from within and organicup and ensure that we match the right people to the right development of leaders. However, we still see thatopportunities.” Our interviews and Heidrick & Struggles’ many companies do not yet have these deep leadershipbroader work confirm that high quality leadership talent resources to draw upon or prefer to ‘trade’ in the talentis not easily found. It is true that there is currently a glut of market to meet their needs.job-seeking graduates, but experienced CFOs, divisional Heads of Talent have significant work to do, even in thesegeneral managers and CEOs remain challenging to secure. tough times.In difficult economic times, candidates with good jobs arecautious about changing firms. Companies have to fighthard and pay well for talented managers. The situation is Serving the CEO agendauneven across industries and roles, but many sectors still and the lack of airtimeexperience ‘seller’s markets’ for talent. The drive for improving talent management generallyHeads of Talent told us that they are struggling to find comes from the CEO, who as we identified earlier isexecutives with the right level of leadership experience looking to increase effectiveness and impact of seniorand capability. “The world seems to be running out talent on business results. We found that relatively fewof general managers that can run everything – P&L, Heads of Talent (around 17% of our sample) reportedsupply chain, talent – it appears people are specialising directly to the CEO, with the vast majority reporting intotoo soon.” We also heard that companies are finding it the HRD (fig 3). Contact with the CEO and other senior linedifficult to source talent with ‘commercial savvy’, capabilityaround brand building, marketing and brand behaviour. 3  see Boris Groysberg, Chasing Stars (Princeton, 2010); Heidrick &Increasingly, as companies migrate from product to Struggles and The Economist Intelligence Unit, The Global Talentcustomer centric approaches, Heads of Talent are looking Index Report: The Outlook to 2015in vain for those with client relationship building skills.10 Strategic Talent Management: The emergence of a new discipline
  11. 11. figure 3 – Who do you report to within your company (position title)? HR Director 17 CEO 4 more senior Talent Manager 3executives also appeared ad hoc and relatively infrequent. HR or business roleA number of interviewees talked of ‘being around’ whenthe CEO or the EXCO were in town or of briefing the CEO We also found ambiguity around the positioning of talentbefore the annual talent update to the board. Those with management, with many suggesting that sitting withindirect reporting status or strong professional relationships the HR function impacted credibility and acceptance bywith the CEO felt that visibility gave them an edge in the business. Interviewees told us that engagement wasdealing with some of the difficult senior talent issues they higher where they demonstrated ‘commercial savvy’ andfaced. spoke ‘business’ rather than ‘HR’ language. “The challenges we face are all internal. There’s a real ambivalence around talent here, the business is just not interested.” OthersResponsibility without authority felt that positioning talent in the HR function only servedCEOs expect their Head of Talent to create consistency to confuse internal clients: “If talent is everywhere andbetween line divisions, but rarely give them direct everyone has it – what’s the difference between Talentauthority over hiring, promotion, deployment or retention. Management and HR?”They were expected to increase consistency (as well Finally having often been asked by the CEO to bringas efficiency and effectiveness across business units) transparency to senior talent management processes, ourto identify and deliver a more integrated corporate respondents were surprised that the list of ‘Hi-Pos’ (hightalent strategy. But most of the power in the companies potentials) was a closely guarded secret, sometimes evenwe looked at rests with the line leaders. Our Heads of secret from those on the list. “Executives in the ‘top talentTalent confirmed this when we asked them what made pool’ are critical to the success of the company, but theira successful Head of Talent. Moreover, they told us the names are often not known except at the very top.”winning talent manager operates through influence andsuggestion rather than by exercising power. Interpersonal In the next section, we explore ways in which Heads ofskills were critical we learned, as was the ability to build Talent can learn to navigate this ambiguous environment.trust. Heads of Talent explained their need for resilience,tenacity, energy and the ability to deal with setbacks. TheHead of Talent must therefore take a lead without formalauthority.44  for more on leadership without authority, see Ronald Heifetz,Leadership without Easy Answers (Harvard, 1998).“The challenges we face are all internal. There’s a real ambivalencearound talent here, the business is just not interested.” Heidrick & Struggles 11
  12. 12. Part 3Creating theconditions for successOur interviews suggest that the most capabilities you have today – where you’re good and not so good. So, we’ll have to fill out thosesuccessful Head of Talent will take the capabilities. In addition, you’ll need a differentlead both in defining ‘what success cost structure because your margins are going to start to be squeezed. Let’s talk about wherelooks like’ for them and the company you have people and why you’ve got so many ofand in creating alignment between them in high-cost locations.” 5themselves and their colleagues about By taking the lead in this way, the Head of Talent can catalyse a productive discussion about talent in thetheir role. Winning Heads of Talent will company, and about the value that the CEO and otherbe diplomats rather than commanders, executives expect their Head of Talent to contribute. Itachieving results through relationships is worth revisiting this value proposition periodically, to ensure that the company and Head of Talent remainand persuasion. They will forge strong ties aligned on the value that this role is to deliver.with their colleagues in line management,and they will work to link talent strategy Achieve alignmentwith business strategy. around seven key dimensions Alignment around the Head of Talent’s expectedDefine your own contribution is critical. Our interviews suggest that it is also important to seek consensus around the ways in whichvalue proposition the Head of Talent will work with other executives in theAs we noted earlier, there are very few blueprints that company.companies can rely on when they bring a Head of Talent The following checklist – 7Ps – will be helpful in structuringinto the organisation. The winning Head of Talent will the role of the Head of Talent.therefore take the lead in proposing the value that he orshe intends to add to the company, and what it will take to Pressures deliver that value. How immediate are the company’s talent issues?Beth Axelrod was the first Head of Talent appointed by Where are talent problems interfering with corporateWPP; she is now the global head of HR for eBay. In an performance? Where are the ‘pain points’ that existinginterview about her experiences, she explained how such leaders (in HR, in the line, etc.) seem unable to address?a conversation might begin: Purpose “You’re trying to drive ad sales from X to Y. You need growth to come in these particular areas. Why has the company hired a Head of Talent? What And for the growth to come in these areas, let’s are the problems that they are asking the manager to talk about the implications for talent and for the organization. Then, let’s talk about what 5  “The challenge of hiring and retaining women: An interview with the head of HR at eBay”, McKinsey Quarterly, September 2008.12 Strategic Talent Management: The emergence of a new discipline
  13. 13. solve? Are they primarily about recruitment, retention, companies? There is no ‘right’ answer here; alignment issuccession? The purpose of a Head of Talent will depend what matters.on many things: the company’s culture and its traditions,the capabilities already present in HR, and the willingness Poolsand ability of line managers to act as talent managers Finally, which talent pools will the Head of Talent manage?themselves. Some companies divide their pools; one large industrial company for example, has one talent manager for roughlyPerson the top 100 and another for the next 250. It is essentialWhat skills should the Head of Talent possess? What that everyone on the top team understands who falls intoexperience should he or she have? For example, a leading the Head of Talent’s portfolio, and what interaction heinvestment bank has regional talent leads (Europe, Asia, or she will have with them. Few of our interviewees hadand North America) who don’t have wholesale banking responsibility for external pools, a key source of ‘readyexperience. But the CEO recently decided that the global now’ talent.Head of Talent needed to be deeply rooted in investment We saw several Heads of Talent use this type of checklistbanking to facilitate easier communication with people to define the current position of their role and impactat headquarters. and set a plan for the future. In the appendix we offer a template for CEOs and Heads of Talent to use to reviewProfile the current situation and future goals of their senior talentWhat internal and external profile should the talent management strategy.manager maintain? Our interviewees emphasised theimportance of ‘getting around the company’, meetingtheir portfolio executives in person. A CEO who wants Operate as a diplomat, wellsuch a broad internal profile for the Head of Talent will connected to colleaguesneed to support the executive in gaining access to diaries, With very few exceptions, Heads of Talent operate withkey internal business events and even some client facing little formal power. They succeed or fail primarily throughmeetings. influence and persuasion. The winning Heads of TalentThe CEO and Head of Talent also need to agree on the seem to get two things right.right external profile. Some of the Heads of Talent we First, they get plenty of ‘air time’ with their colleagues –interviewed have relatively modest external profiles, but not necessarily the CEO, but certainly the executives whocommunicate widely within their companies. matter. One Head of Talent told us of “an open, continuous dialogue with the business in terms of people asking whatPower they need and what I and my team can deliver.” ManyWhat decision making powers does the company want Heads of Talent meet regularly with line executives toto invest in its Head of Talent? Will they have veto over conduct succession and development reviews. This is asenior hiring decisions? Over deployment of leaders in role where walking around and talking can be essential to‘high potential’ pools? Where will the Head of Talent have success.to operate through persuasion and where through direct Most Heads of Talent had somewhat less frequent accessdecision making? to their CEOs. In many cases, these meetings took place less than once a month, and often with a corporateProcess executive team or executive committee. A formal report toWhere will the Head of Talent get involved in top executive the board or executive committee was often a motivatorprocesses and forums? To clarify, it is often a good idea to for meetings between the Head of Talent and CEO.pose some challenging scenarios: for instance, supposethat the company wants to take over a smaller competitor. Second, successful Heads of Talent are diplomatic,Will the Head of Talent be involved before the deal is managing their relationships like politicians. Oneagreed? Or will he or she read about it in the newspapers interviewee said: “I have profile with the business heads.and then be told to help integrate top talent in both I knew it was important to have high impact early on, Heidrick & Struggles 13
  14. 14. and to build good relationships quickly.” Many of our does this imply for these firms’ growth? How should talentinterviewees were quick to distinguish their roles from risk impact an oil firm’s forward investment programme?HR, feeling that ‘not talking like HR’ gave them more It is easy for the Head of Talent, concerned with thecredibility with line managers. All were aware that, in most executives they are responsible for, to develop an inwardcases, they were not the decision makers around hiring, focus. We encourage Heads of Talent to look forwardretention or reward. and outward, as well. The concerns of baby boomer and ‘generation X’ executives are important, but the future ofConnectivity – linking business most companies rests with succeeding generations. Theseand talent strategy leaders have different views about work, communication and collaboration. A smart Head of Talent will get to knowOur interviewees recognised the difficulty, but told us that them and look carefully at their needs.a strong Head of Talent will find ways to connect talentand business strategy. A few interviewees felt that they The board of any company will be concerned both withwere running tightly ‘joined up’ systems. According to one, implementation of its strategy and with risk to future“Business strategy feeds talent strategy which in turn feeds performance – and therefore, the CEO will also be sosuccession.” But the majority reported breaks in the chain concerned. Focusing on these issues will help Headslinking business strategy and talent strategy, and they saw of Talent keep their work directly relevant to the mostthis as a problem. pressing issues of the company. It will also keep the CEO’s door open.“If we don’t connect business and talent strategy,” said oneof the managers we interviewed, “we will be nothing morethan a typical HR unit, focusing on activities and not onimpact and outcomes.” ConclusionWe don’t find this result surprising. In company after A new strategic talent discipline is emerging but therecompany, functional leaders – finance, IT, marketing, HR remains confusion about the nature, scope and real– struggle to connect their planning with the flow and business impact of leadership talent professionals anddirection of the business. The task is easier for the older functions. Our research suggests that this discipline isfunctions; ones that CEOs know how to work and how to in an embryonic state, still developing, working hard tolead. For a relatively new area like talent management, line create credibility and traction in the organisation and withmanagers often don’t know how to take the first steps in critical business leaders. However, the Heads of Talentaligning it with their business strategies. As we suggested we met are taking the lead in communicating their valueabove, the Head of Talent needs to take the lead here. and mission to the business and using their influencing and diplomatic skills to seed change amongst the topWhat is the best way to forge a strong connection with population of their companies. They see their role as long-company strategy? A good starting point: work backward term in nature, aligning business and talent imperatives,from the company strategy to the talent requirements drivers of behavioural and cultural change from within.it implies. Many global firms are seeing their areas of To help improve the focus and impact of these efforts westrongest growth shifting from North America and propose a simple and practical checklist style diagnosticWestern Europe to Asia, the Middle East, Africa and Latin (appendix 3). Our 7Ps (Pressure, Purpose, Person, Profile,America. What implications does such a shift have for Power, Process, and Pools) is intended to help CEOs andexecutive talent? What does this imply for senior executive Heads of Talent to map out the gap between their longmobility? For leadership development in the company? term aims and current reality. Our hope is that it will helpAnother approach we have found helpful is to work create greater clarity around the strategic importance offorward, looking at talent or leadership risk facing the this key business role and function. “I need to makecompany. The oil and gas industry, for example, faces a talent meaningful to my colleagues,” one Head of Talentsevere shortage of senior engineering leadership, because told us. We think that this is good advice for everyof demographic shifts and a decline in enrolment in Head of Talent. npetroleum engineering courses in the past. What risks14 Strategic Talent Management: The emergence of a new discipline
  15. 15. About the surveyA total of 24 people participated in our If you would like to contributeon-line survey, all of them senior talent to the dialogue, contact us atmanagement professionals within FTSE leadershipsolutions@heidrick.com100 companies. To add further depth tothese findings we conducted detailedinterviews, either face to face or via Annabel Parsonstelephone, with 20 of those respondents. PartnerAdditionally, we leveraged Heidrick aparsons@heidrick.comand Struggles’ network of senior talent Victor Prozeskyexecutives to conduct more ad hoc and Partnerinformal discussions around the themes vprozesky@heidrick.comwe uncovered. The talent managementprofessionals we spoke with represent a Caroline Vanovermeirestrong cross section of leading players and Principalindustry sector listed on the London Stock cvanovermeire@heidrick.comExchange. Dave TullettThe interviews and study were developed Director Centre for Leadership Innovationand produced by London based Heidrick dtullett@heidrick.com& Struggles leadership consultants. Rebecca CurranWe would like to thank all of the Heads Associate Principalof Talent for the time they have spent rcurran@heidrick.comparticipating in the research. Sarah de Corday-Long Associate Principal sdecordaylong@heidrick.com Heidrick & Struggles 15
  16. 16. Appendix 1A note on titles We chose ‘Head of Talent’ Director of Group Resourcing and Developmentto refer to the top talent Director of Group Talent Developmentmanagement executive in Director of Organisational Capabilitiesa company. The executives Director, Group HR and EHSwe interviewed have the General Manager Human Resources and Legalfollowing titles. Global Director of Organisational Development and Leadership Global Head of Talent, Leadership development and Change Global Learning & Development Director Global Practice Leader Talent Management Global Talent Director Group Head of Talent Group Head of Talent, Resource Development and Resourcing Group Head of Talent Management Group HR Director (2) Head of Leadership Development Head of Leadership, Talent and Learning Head of Resourcing and Development Head of Talent & Development Head of Talent Management Leadership Development Director Senior Talent Manager SVP Global Talent and EMEA Human Resources VP, Talent Management  16 Strategic Talent Management: The emergence of a new discipline
  17. 17. Appendix 2Responses to How many years of professional experience do you have? (n=20)our survey 0% 0–5 years 0% 5–10 yearsWhat is the gender of the 32% 10–20 yearsHead of Talent? (n=24) 68% 20+ years33% Male67% Female Was your previous role within? (n=20) 85% HRHow long have you been with 15% other functionthe Company? (n=24)63% 0–5 years Were you recruited externally or26% 5–10 years internally for this position? (n=20)11% 10–20 years 50% Externally 50% InternallyHow long have you been inthis position? (n=24) What responsibilities do you encompass33% 0–2 years regarding the Top Population?46% 2–5 years (Select all that apply) (n=24)21% 5+ years 25% Compensation & Benefits 71% Individual career management (promotionsWhen did the Head of Talent and rotations)(or closest equivalent) position first 42% Mobility managementexist in your company? (n=24) 58% Performance management (target setting,25% 0–2 years assessments)25% 2–5 years 66% Recruitment (head-hunters, on boarding)50% 5+ years 91% Succession Planning (people reviews, etc) 83% Training & Development (Corporate University, Development plans)How many people do you have inyour Top Population / Talent Pool? (n=24)153 average Top Population Who do you report to within your company (position title)? (n=24) 17% CEOWhat is your level of study? (n=20) 71% HRD40% Degree 12% more senior Talent Manager40% Masters10% MBA10% n/a Heidrick & Struggles 17
  18. 18. How would you rate your company’s How many people report to you?performance on talent management? (n=24) (excluding personal assistant) (n=24)Compensation & Benefits 8 average13% To be improved29% Standard What was your career path50% Good prior to becoming Head of Talent? (n=24)8% Excellent 90% HRIndividual career management 10% other21% To be improved33% Standard How do you spend your time? (n=24)33% Good 3% Compensation & Benefits13% Excellent 10% Individual career managementMobility management 4% Mobility management42% To be improved 7% Performance management33% Standard 9% Recruitment25% Good 24% Succession planning0% Excellent 22% Training & DevelopmentPerformance management 21% other17% To be improved17% Standard In which industry does your66% Good company operate? (n=24)0% Excellent 29% ConsumerRecruitment 34% Industrial13% To be improved 29% Financial Services33% Standard 8% Pharma46% Good8% Excellent % may exceed 100 due to roundingsSuccession planning13% To be improved25% Standard50% Good13% ExcellentTraining & Development33% To be improved21% Standard25% Good21% Excellent18 Strategic Talent Management: The emergence of a new discipline
  19. 19. Appendix 3Heidrick & Struggles’ Talent Management Diagnostic What do I need to ensure What have I got today? What will I do to close the7Ps future success? gap and keep it closed?PressureWhat are the talentissues that are impactingperformance? How are /should these be addressed?PurposeWhat is the main focus ofHead of Talent effort? Is italigned with the key talentissues and the strategy?PersonWhat skills and experienceare critical to the role? Dothese exist?ProfileWhat is the internal andexternal impact of the role/function? What “brand”promises exist?PowerWhat are the decision rightsheld by Head of Talent?ProcessWhere is Head of Talentinvolved in top executiveprocesses and forums?PoolsWhat is the size anddefinition of the talentpools? Is Head of Talentresponsible for internal andexternal pools? Heidrick & Struggles 19
  20. 20. Heidrick & Struggles is the leadership advisory firmproviding senior-level executive search and leadershipconsulting services. For almost 60 years, we have beenbuilding deep relationships with the world’s mosttalented individuals on behalf of the world’s mostsuccessful companies. Through the strategic acquisition,development, and retention of talent we help our clients– from the most established market giants to the newestmarket disruptors – build winning leadership teams.www.heidrick.comCopyright ©2012 Heidrick & Struggles International, Inc.All rights reserved. Reproduction without permission is prohibited.Trademarks and logos are copyrights of their respective owners.201201JNTSEC73