The Leadership Capital Index: Realizing the Market Value of Leadership by Dave Ulrich

Author:Dave Ulrich
Language: eng
Format: mobi
Publisher: Berrett-Koehler Publishers
Published: 2015-10-18T14:00:00+00:00

CHAPTER 9

Talent Management Processes

Investors Want Organizations That Manage the Flow of People

We know it matters. Some go to war for it. Professional sports teams draft for it. Actors and musicians audition to show they have it. CEOs consider it the ultimate solution and try to manage it. Agents contract for it. Some are innately endowed with it; others strive diligently to earn it. All try to grow it. Talent.

Talent matters, but talent management processes matter more, because those processes are what ensure a continuous flow of future employees and the skills they possess, not just reliance on the current talent. McKinsey’s 2000 study, The War for Talent—now a classic—highlighted the importance of investing in an organization’s talent management processes for positive outcomes for multiple stakeholders.1 When organizations have an effective talent management process:

Employees are more productive.

Customers receive better service.

Strategies are fulfilled and the right cultural capabilities are established (as discussed in Chapter 8).

Community reputations are increasingly positive.

The cumulative effect of these talent outcomes is that investors who stay alert for them will be more effective over time. In our 2009 research on Asian talent and again in 2013, my colleagues and I found a strong and positive correlation between overall business performance and quality of talent management processes. This finding held true in Singapore, India, and China, and across all industries.

Talent management processes are hard to assess because of the multitude of programs and investments intended to attract, upgrade, and retain talent. Investors need to avoid the allure (and pitfall) of looking at one talent process (say, hiring or engaging or training or succession planning) and missing the importance of the overall talent management system. When my colleagues and I interviewed investors, they almost uniformly agreed that people matter and that talent management processes should affect their valuation of the firm. One thoughtful investor said he asks the following questions about talent management:

Figure 9.1. Framework for Organization’s Talent Management Processes

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