10

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Making Talentship Work

How the HR Evolution Becomes a Practical Reality

In the previous nine chapters, we made the case that talent decisions are vital to organizational effectiveness and strategic success. We also highlighted key elements of talentship and the HC BRidge decision framework that supports it. We believe that the evolution of a truly strategic decision-based approach to talent and organization is imminent and that we will soon see leaders accomplish the long-touted goal of making talent decisions, not just HR, more strategic. Talentship and HC BRidge describe the frameworks for revealing the connections, but our work with organizations repeatedly shows that the process of connecting talent and organization decisions to business and strategy is typically too unsystematic to support lasting change.

Talentship and HC BRidge have potentially significant implications for HR leaders. Beyond just encouraging them to be at the table, it equips them to be proactive members of the leadership team with a unique perspective, supported by rigorous and reliable logic. Earlier we showed that a decision science requires shared mental models and management systems integration. HR and business leaders need to go beyond just identifying the logical talent and organization connections to strategies and the unique opportunities they reveal. Discovering the right answer isn’t the same as motivating the organization to change based on that answer. Change agent has shown up in virtually every HR leadership competency model for years, yet research shows there is still a stubborn gap between the reality and the aspiration. We believe that change agent competencies are important, but talentship means creating change within a decision science. Talentship means change happens best when leaders inside and outside the HR function are skilled at asking the right questions, facilitating the vital conversations, and building the mind-set of their colleagues to see the strategic implications of talent and organization decisions more logically and insightfully.

In this concluding chapter, we describe what decision-science-based change looks like and how leading organizations are using that process to make talentship a tangible part of their approach to strategy and decisions. Of course, a complete description of the change process is beyond the scope of a single chapter. Here we will focus on what experience reveals to be the most significant elements of change. We offer guidelines to make talentship a systematic part of an organization’s strategic planning, budgeting, performance management, and succession planning. Armed with both the decision logic and the tools for change, the essential evolution can get under way.

Engage Leaders Where They Are

We facilitate both strategy and leadership development discussions with line executives, and it’s common for these senior leaders to say something like “As I think about the process we use to select and launch projects, I realize we do all this analysis of the customer requirements and build sophisticated financial models. Yet as soon as the project is awarded, we scramble like crazy to find the people, which causes us to miss our projections.” Even when talent needs are based on deep and logical insights, organizational change often depends most on how well those insights are integrated into the existing decision processes.

Leaders need to consider talent implications at every stage of the decision cycle and have the discipline to define and refine the strategy until it is sufficiently clear to determine the talent implications. It’s not enough to follow the more typical approach that fits talent decisions into the strategy after it is formed and when it is only deep enough to determine that it will meet the financial requirements. Throughout this book we have shown many examples of strategies that are simply not in-depth enough to clearly identify the strategic pivot-points around which talent and organization decisions must align. It would not be enough for Disneyland merely to know it had to be “The Happiest Place on Earth” or for Boeing to know that it needed to deliver a large-capacity airliner on time. The change process almost always requires both improving the strategy as well as connecting it to talent and organization decisions. This means that any lasting change must engage leaders who formulate and analyze strategy, and those leaders are often outside the HR organization. In fact, the very observation that HR leaders may require a deeper definition of strategy than other fields is a change process in itself—one that both HR leaders and line leaders need to be willing to address.

Talentship Cannot Be Just Another HR Program

Here’s what we know will not work—creating a new HR program-based strategic talent analysis, launched and driven by HR, and added on to or run independently from the existing decision and planning processes. Very few line managers are looking for a new HR program to help them improve their strategic processes. Even fewer have the time to invest in new processes that are not directly relevant and connected to the work they are already doing. Inevitably, it will feel more like control or another HR hoop to jump through rather than help—no matter how well-intentioned the initiative or how valid the strategic talent and organization insights.

Equally unlikely to succeed are processes to identify strategic talent requirements that are completed by HR professionals or consultants and do not engage key business leaders to consider the business issues and the talent implications together. Business leaders may be grateful to HR for doing the work for them, but the analysis is often too superficial and static to lead to optimal decisions. Most leaders have experienced HR planning processes that produce a report that took a lot of work but isn’t used much.

Leaders Know That People Are Important, So What Is Next?

Ten years ago a significant barrier to talentship was that leaders did not see people issues as important ones. That is rare today. Our experience has shown that most line leaders welcome the type of rich and robust insights that can result from deeper analysis of their strategy’s talent implications. In fact, they often see such issues as even more important than decisions about money, technology, and so on. At the same time, they are often frustrated that their analysis frameworks, their strategy processes, and/or their HR leaders fail to meet the need. The issue is not a lack of motivation or willingness to get better at talent and organization decisions but rather the lack of a logical and specific process to actually make it happen. The logical frameworks in this book can serve as the platform to go beyond simply recognizing that talent matters. That recognition is a great motivator, but it’s not the same as a plan of action. Organization leaders can go further by ensuring that the questions we’ve provided become an accepted and consistent part of their strategic and business planning. Next, we describe some ways to make that a reality and the vital and exciting new role that HR leaders can play.

Connect Talentship to Organizational Change Efforts

Much has been made about the need for organizations to be more agile, flexible, and ready for change. The ability to change may be more valuable than the ability to defend the status quo.¹ The need to change rapidly and continuously often leads organizational leaders to presume that the kind of deep strategy analysis we have described is obsolete or irrelevant. They ask, “Why analyze talent and organization pivot-points within a deep strategy framework when the competitive environment and the strategies are always changing?” We illustrated some of the challenges with dynamic strategy issues when we described the competitive dynamics between Boeing and Airbus.

In fact, talentship is not only applicable; it is even more valuable in fast-changing environments. Major organizational change initiatives may provide a place to pilot the implementation of talentship concepts. In fast-changing environments, it is not enough simply to change. Organizations that survive and thrive learn to consistently change in directions that are strategically valuable, and they do so faster than their competitors. As a result, a common language for understanding the impact of talent and organization decisions becomes even more valuable. It is the only way organizations can anticipate and understand when changing strategic circumstances requires changes in talent and its organization. Suboptimal investment in talent and organization is as wasteful in fast-changing environments as in stable ones. In fact, resources are more scarce when change is rapid, so suboptimal investment may be even more harmful.

Other fields have learned the importance of going slow to go fast. It is foolish for an IT department to dive into a project and begin the programming as quickly as possible. Rather, the goal should be to accomplish the mission as quickly as possible, which very well might mean spending additional effort on the front end to fully understand the system requirements and priorities. The IT team may adapt and change along the way, but they also know that without a good systems analysis, the risk of missing the budget or the deadline (likely, both!) is far greater.

In a similar way, a decision science approach like talentship can play a vital role in defining, communicating, and improving change readiness and results. The logical analysis that underpins talentship provides the language, discipline, and frameworks to communicate the change. Often organizational change falters because those deeply entrenched in the organization simply don’t understand how their actions and interactions affect strategic imperatives. Even well-meaning and motivated organization members will stumble without such an understanding.

Thus, a key opportunity to initiate and enhance the evolution toward talentship is to connect frameworks like HC BRidge to the organization’s specific change priorities and to use them to reveal deep insights about the pivot-points for successful strategic change. As a starting point, try making a list of the top change priorities for your own organization. Then, use the talentship principles to consider what talent pools or organization structures would be most pivotal to really making that change happen, and test whether the list of talent programs is really as unique and logically specific as it could be. We often find that such an exercise quickly reveals ways to shape the talent agenda and doesn’t require a deep strategy analysis because it focuses on the change priorities that have already been identified.

Integrate Talentship with Other HR Change Efforts

The HR function is changing on many different dimensions today. The types of change may include a new information system infrastructure, outsourcing, mergers and acquisitions, restructuring and downsizing, and globalization. It seems that the change agenda for the HR function itself is accelerating and increasing in scope.

It is a common reaction for some HR leaders to say, “I would be interested in talentship, but right now it seems that I have to work on the control and service delivery aspects of HR. I will consider talentship when we are ready for it.” Our experience is that this is indeed sometimes the case—the HR function is simply not mature or sophisticated enough in its basic control and service requirements to consider extending its paradigm to include talentship. Doing so is the equivalent of introducing capital planning into an organization that does not have a general ledger or do basic budgeting well. There is certainly a minimum foundation of compliance and programs that must be in place before the HR function introduces talentship.

Yet, our experience suggests that organizations more typically err by waiting too long to introduce talentship. In HR functions where there is frustration with the service delivery elements, a talentship-based approach to the mission and organization of the HR function itself is actually the key to solving the perceived issues with service delivery and quality. For example, the barriers and friction between the corporate-office and business-unit HR professionals are more easily solved through a perspective that sees HR as a value chain to support decisions rather than in endless discussions over centralizing and decentralizing services without any foundational framework for those discussions. So while there does need to be some basic level of HR to implement talentship, these capabilities exist in most organizations; they just haven’t been tapped yet.

Finally, we find talentship to be a useful framework for other significant and necessary HR changes. We worked with one organization that had recently announced a major merger. Rather than using the traditional approach of integrating HR functions by reviewing and allocating services across the two heritage organizations, in a new approach, leaders used the talentship concept as a way to join together as a unified organization. Another organization was preparing to outsource. In this second case, talentship frameworks not only helped inform the outsourcing itself, it provided a framework for designing the strategic work for the HR organization that remained after outsourcing. This included roles as diverse as business-unit HR, COE, and HR operations. Finally, another organization had historically managed HR in a highly decentralized way across three divisions. For cost and service consistency reasons, its leaders decided that certain elements of HR needed to be shared and that a more centralized approach was appropriate. The talentship framework and tools helped guide the reorganization and more clearly define the roles that would be retained in the business units and those that would be consolidated.

Those change efforts—merger integration, outsourcing, and restructuring—would have occurred with or without talentship. Each of them, however, benefited by leveraging the talentship concepts and used the change process to accomplish the original goal and to create incremental value by having a more decision-focused and sophisticated HR function.

In your own organization, consider the most prominent changes that your HR organization faces (outsourcing, restructuring, strategic mission, etc.), and use the talentship principles to identify how to make those changes in a way that enhances decisions about organization and talent where they are most important, rather than only considering the efficiency or effectiveness of the HR function. We find that when framed in terms of strategic talent decisions, organizations often uncover insights about the true value in large-scale HR organization change and a more logical and compelling case for the change is required.

Integrate Talentship with Existing Management Systems and Processes

Timing is everything. The discussions created by considering the anchor points of efficiency, effectiveness, and impact all have their place. If they are too aggressively pursued at the wrong point in the organization’s existing planning, budgeting, and performance processes, they will not be effective.

For example, it seems obvious that the right time to consider the talent and organization implications of the strategy is when strategic issues are first being discussed. Yet, in many organizations, the initial strategy discussion focuses on resources such as technology, advertising, or money, while the people issues are treated as a separate process, often occurring after, and in reaction to, the earlier strategy analysis.

One reason this happens is the failure to distinguish effectiveness and efficiency from impact. Impact connects most to strategy discussions, while effectiveness and efficiency are often better addressed in planning the HR function. It is the impact discussion that is appropriate at the point where business strategy is being created and this is where the talent implications should be drawn out to help clarify and refine the strategy.

The implications for HR (largely in effectiveness and efficiency) can be addressed later. If line leaders make a deep and logical connection between success and talent implications during the strategy process, they will be much better prepared to hear HR’s recommendations regarding its programs and practices, as well as the investments necessary for the HR function. In fact, we encourage HR leaders to carefully distinguish the appropriate leaders for these different discussions. Line leaders should lead strategy discussions, with HR helping ensure that the talent implications are clear (impact). At the same time, HR should lead the discussion about how to create the necessary unique talent pool strategies to compete in the talent market and the programs and practices that should be implemented to create that unique market position. This professional expertise should not be delegated to non-HR leaders. Lacking a good basis for these distinctions, organizations can rely too heavily on non-HR leaders to define the HR policies and practices so that they receive the systems they want. As we have seen, however, there is great value in having strong professional HR expertise involved in the design of HR systems, processes, and the HR organization, while the more appropriate role for non-HR leaders is to work in close partnership with HR leaders, through the existing planning processes, to better identify the talent-strategy connections.

We find that four prominent areas provide opportunities to integrate impact analysis and talentship more broadly into existing planning processes:

• Strategic planning

• Succession planning

• Operational planning and budgeting

• Performance management and goal setting

Our experience suggests that in each process there are significant opportunities to inject the logic, language, and frameworks of talentship. Yet the appropriate elements of talentship and the significant contribution of the talentship logic vary with each process. So it is very important to consider carefully how to engage with each of the four processes.

Strategic Planning

Strategic-planning processes vary widely between organizations. Some organizations strongly coordinate their strategy processes across business units while others leave the processes to the business units’ discretion. Still others do very little strategic planning internally, choosing to rely on external consulting firms. Organizations also vary widely on the role of HR leadership within the strategy process, although increasingly it is common to have HR leaders participate directly, which we believe should be the norm.

Many organizations have processes that they call “strategic planning” but that are actually more operational and financial, focused on building financial projections and justifying requests for resources (typically capital, discretionary spending, and headcount). Unfortunately, strategic plans that merely allocate financial resources or focus only on improving operations are often not sufficient to identify the kind of game-changing talent and organization pivot-points we have described here. So the first challenge in building a stronger connection between strategy and talent is for HR leaders to understand the strengths and weaknesses of the organizational strategic-planning processes as they consider the path toward talentship.

To make this assessment, consider where the strategies that currently guide the firm were created. Who drove the process? Who participated? What strategy, marketing, and finance frameworks guided the processes? What review process occurred?

To find the most vital strategic issues (versus the operational issues that are called “strategy”), look for situations where the following information is discussed and analyzed:

• External trends within the industry

• Relative market position versus competitors

• Market segments and value propositions

• Strengths and weaknesses versus competitors

• Product line strategy

When issues like these are discussed, the pivot-point lenses we discussed in chapter 4 are a natural fit. When addressing market positions, market segments, and/or value propositions relative to competitors, it is a natural extension to be more explicit about differentiators. For example, if the strategy discussion evolves toward the organization’s distinctions compared to competitors, a useful question is this: “For those areas where we have strong differentiators, is it more important to get customers to place greater value on our advantages, or is the critical issue protecting the advantage from competitive attack?” As we have already seen, solving these issues provides direct line of sight to typically overlooked talent and organization implications.

Succession Planning

Like strategic planning, succession planning is a process focused on long-term organizational implications. HR often takes the lead in designing the systems, frameworks, and tools that support the process. As a result, succession planning can be an excellent system to introduce many talentship concepts. Because HR plays such a significant role in succession planning, our experience shows it is a formidable opportunity to encourage a deeper consideration of pivotal talent and organization issues. A key is to extend the goal of succession planning beyond having a slate of ready leaders (simple replacement planning). Rather, the purpose should be to have an in-depth and strategic discussion about the strengths, weaknesses, and optimal development plans for key talent resources. We find that few organizational leaders will dispute this assertion, so it opens the door to approach succession planning in this more strategic way. For example, we recommend that a succession-planning process should include at least five key elements:

• Talent requirements (demand)

• Talent resources (supply)

• Individual development and deployment planning

• Addressing the implications of the talent resources on the business plan

• Reviewing and refining the talent pool strategy

We won’t discuss the tools and frameworks for each of these elements here, but you can see how the HC BRidge anchor points can impact these elements of an effective succession plan. Many succession-planning processes reflect an implicit assumption that the leadership competencies and behaviors that served in the past and serve today are the ones that will be needed tomorrow. They imply that “what got us here will get us there.” This is why succession-planning processes tend to reflect the profiles of successful current and past leaders. Future leaders often appear quite similar in background, experience, and competencies to existing leaders. Most organizations know this may be a problem, but few have a systematic way to connect this awareness back to tangible succession-planning changes that better reflect future leadership needs.

In contrast, succession planning based on talentship ultimately strives to identify what’s pivotal for the future strategy and what changes in future leadership will be most pivotal and aligned with those strategy pivotpoints. Talentship offers an alternative to merely cataloging the traits of today’s successful leaders by providing a logic that answers the question “What will our future leaders need to do that will make the biggest difference in our strategic success?” A great question to ask is “Given our strategy, how will our leaders need to be different than our competitors’?”

For example, in the Boeing/Airbus example, the analysis we provided might suggest that future Boeing leaders will increasingly be pivotal for their effect on accurate market predictions and for facilitating alliances with suppliers and other partners who possess vital intellectual capital. This could easily be different from the current profile of many aerospace leaders, whose careers may have reflected an era with less volatile markets and less strategic reliance on partnerships.

We find that the career paths in many organizations have been honed to produce leaders who were adept at an earlier model, one that emphasized success through a set of skills and competencies that made previous leaders successful but that may be far different from what is required for future success. A talentship-based succession process would go beyond asking whether there is a sufficient supply of successors in the traditional career paths and instead encourage attention to focus on the changing nature of the successors, as well as their availability. Succession-planning discussions rarely fail to pose the question “Are we preparing the leaders we need for the future?” Unfortunately, the typical answer is “Certainly, because we have deep bench strength in all our leadership pipeline positions.” By now it is clear that this is an effectiveness answer to an impact question. The critical issue often is not the depth of the traditional bench as much as anticipating the need to change the nature of leadership succession to reflect changing competitive opportunities and strategy pivotpoints, and to recognize the needed changes before the competition.

Because succession planning is recognized as a vital strategic, long-term process driven by HR leaders, those leaders often have more freedom to shape the process toward talentship discussions. Non-HR leaders are more comfortable when HR leaders raise these issues in the context of succession planning and leadership development.

Operational Planning and Budgeting

Strategic- and succession-planning processes vary widely from one firm to another, but budgeting processes typically are far more mature and consistent. Budgeting processes typically focus on one-year planning cycles. They are usually a significant tool for management control of key resources and performance management for key leaders and many others. Organizations check their performance against budget more often than they check results against strategic-planning projections or succession-planning goals.

This all means that the budgeting process will typically be well developed and that it will actively engage key organizational leaders, even in companies where strategy processes and succession planning may be more rudimentary or not as engaging to organizational leaders. In fact, where the strategic-planning processes are weak and the strategic competencies of the line leaders are low, we have found that the budgeting process is often the most effective place to begin engaging the strategy’s talent implications. The operational budgeting and planning process is often an excellent initial opportunity to build a deeper understanding of talent and organization implications. Connecting talentship to the budgeting process is often the most viable alternative in such situations.

Of course, budgeting processes seldom engage the long-term questions of strategy and leadership preparedness, so the engagement process must be different.

Pivot-point logic and analysis can be powerful tools to expand the sophistication of the analysis within the budgeting cycle. For example, a common budgeting subprocess with immediate talent and organization implications is headcount planning. “How many people will be required?” is a question virtually always considered during budgeting. This can be the jumping-off point for a deeper discussion that integrates impact and effectiveness. Natural follow-on questions are:

• What talent issues (open positions, turnover, positive performance, etc.) had the largest impact on the budget in the year we just completed?

• What do you think are the most important new hires in this year’s plan? What makes hiring them so pivotal?

• Where do we need to hire people who are significantly different from those we hired in the past?

• In what jobs would turnover be a significant problem in this year’s plan? Why is it so important?

The key is to reframe the task beyond merely completing the budget (often a daunting process in itself!) and to use the context of the budgeting process to motivate a deeper exploration of the strategy-talent connection. More deeply considering the logic behind the resource allocations and the implications of budget assumption variances for future strategic positioning can improve the level of talent discussions, even without using all the strategy lenses described earlier. We often find that such discussions gently demonstrate to business leaders the need to establish a strategy process, because those leaders realize that they are allocating resources without a common understanding of the long-term plan and its implications.

So asking talentship questions can help leaders use the budgeting process to question or clarify key strategy assumptions. More directly, we often find that budget issues themselves often reveal talent pivot-points, when those issues are analyzed using impact questions. Examples include:

• Which business process constraints most affect the budget? (This question helps find the talent and organization alignments that will most relieve that constraint.)

• What are the biggest differences between the new budget and our current level of performance? (The answer here points to areas where large changes are required, which is a good place to find talent and organization pivot-points associated with the change.)

Performance Management and Goal Setting

The performance management and goal-setting process is another place to uncover talent and organization issues in an existing process. Performance management and goal-setting processes in particular have a powerful effect on capacity, culture, interactions, and actions. Virtually every organization invests significant time and effort in creating line of sight, or a very clear and deeply understood connection between the company’s strategic goals and how they are translated into work group and individual performance expectations. Performance management systems strive to ensure that the sum of the subunit and individual goals add up to the firmwide goals and that there are systems in place to monitor and reward performance where it matters most.

HR leaders have significant influence in the logic and structure of performance management conversations, so we often see that this is an excellent, and often untapped, opportunity to use that influence to better focus on the strategic questions that support goal setting and performance management. For example, a useful question is “Are our performance management processes and systems focused and aligned on the strategic pivot-points?” Performance measures are often financial, which aligns them with the financial aspects of strategy. A talentship perspective encourages performance goals and measures that align with the strategy and where actions and interactions are most pivotal to success.

Dig Below the Financial Numbers. We find this often means digging below typical financial objectives. Such objectives often cascade down from high-level financial reporting goals and sometimes represent little more than allocating cost, revenue, and profit goals across business units. It is difficult for individuals at the operations level to connect what they do to such broad financial goals.

For example, in one customer service organization that involves driving trucks on routes, route drivers were held accountable for cost per mile. That’s a perfectly legitimate financial goal, but the route drivers controlled neither the largest cost (truck maintenance) nor the number of miles they drove (which was determined by the logistics and dispatching system). We see this pattern surprisingly often in performance goals for frontline employees. By gently inviting business and operational leaders to consider how performance goals connect to the actions and interactions that most affect the strategic differentiators, processes, and resources—and what alternative goals might be more closely related to the human capacity of frontline employees—HR leaders can elevate the conversation on the performance management process. They will begin to uncover pivot-points such as the customer interactions of Disney sweepers and Starbucks baristas that we discussed earlier.

Make Good Strategies Even More Executable. Not only does the performance management process offer opportunities to elevate conversations when the strategy is not well developed; it can also be useful in organizations with well-developed strategies as a way to clarify the connections between the strategy and the talent and organization issues. When the strategy is deep and logical enough to connect to talent and organization, the performance management process provides a natural opportunity to examine whether goals and performance measures emphasize the strategy, talent, and organization pivot-points. Performance management measures can be used as natural diagnostics to see whether there is shared understanding about what aspects of talent, organization, and behavior are important.

An interesting way to turn the logic around is to start with the policies and practices and use them as a perspective on strategic intent. We encourage HR leaders to ask, “What do our performance measures and rewards imply are the important and pivotal interactions and actions, processes, resources, and differentiators? Do we all agree with those implications?” Leaders often recognize the need to revise the performance measures, which presents an opportunity to use talentship logic to direct that discussion toward the strategic context and then to use the lenses and pivotpoint processes discussed earlier to enhance performance alignment and improve execution.

Another important area to consider in defining the performance management goals is to focus on the what and the how of performance management. It is not just about which goals must be accomplished but which methods are appropriate. These are increasingly critical aspects of performance management systems and relate to the interactions and actions element of the HC BRidge framework.

Finally, a powerful purpose of performance management is to provide employees with a clearer line of sight between their actions and the organization’s mission. Yet, as the effectiveness chapters showed, traditional performance measures are often derived from generic job descriptions, broad financial measures, and goals that may or may not reflect a shared understanding of the strategy pivot-points. We often encounter organizations where performance management goals are set very carefully and diligently but are based on factors that are important or frequent, not pivotal. Recall how effectiveness improves line of sight through greater attention to the pivotal elements of performance and human capacity.

Indeed, the game-changing performance elements are often those that fall outside traditional job descriptions, as our Disney sweepers and Boeing engineer examples showed. Performance management focuses naturally on questions of which goals are vital and whether employees have true line of sight to their most significant contributions, so the performance management process provides a powerful opportunity to use impact logic to enhance the connections between talent, organization, and strategy.

As we noted earlier, too often engagement is measured only with respect to very high-level or generic objectives. When performance measures are developed through a deep and logical talent decision science, both performance and engagement can reflect the kind of unique and strategically vital elements that truly drive strategic success.

Integrate Talentship with Existing Mental Models

The HC BRidge framework provides a common logic and language that enables HR and business leaders to streamline and refine their strategic conversations about talent and organization decisions. We built the HC BRidge framework on efficiency, effectiveness, and impact because these three anchor points have much in common and naturally connect to most existing business frameworks in finance, accounting, marketing, operations, and information management.

Each business, and even each operational function, has its own set of mental models that are used to guide discussions, establish measures, and make decisions. Some of these are common across most organizations, such as operating profits, return-on-net assets, and economic value added. Others are unique and specific to a particular industry or even a particular organization. Examples include route scheduling for airlines or underwriting for insurance companies.

These frameworks define the mental models that leaders learn and use for financial assets; typically, they are fully integrated into core processes such as strategic planning, budgeting, and performance management. So they are a natural starting point for conversations about what talent and organization decisions most affect the elements of these mental models. The talent and organization implications of business and strategy are directly related to the strategic and business context, and that business context is usually described with a particular language.

Additional frameworks that span all businesses are shown in table 10-1. Because these frameworks (both generic and specific) guide so many thinking processes, they form the organization’s mental models. They structure the vast amounts of data, and they are the first-level filter through which most information is processed.

Tools to create talent insights are more powerful when they are engineered into the language and logic that already exist within the organization. Today’s efforts to hold leaders accountable for HR measures and scorecards, and to present a new HR planning process designed to make HR more strategic, often require that leaders learn a new language. Not only is this often difficult to sell; it misses a powerful opportunity to engage leaders where they already have tremendous energy and expertise. As we explained earlier, it is surprisingly powerful—and often easier—to frame the logic connecting strategy to talent and organization decisions so that it is compatible with the leaders’ current mental models. Virtually all business models are in some way grounded in economic or financial logic. In fact, virtually all such models have elements that map to efficiency, effectiveness, and impact.

TABLE 10-1

Frameworks that span all businesses

Functional area	Management processes	Common frameworks
Finance	•   Operational budgeting •   Financial reporting •   Capital budgeting	•   EVA, ROIC •   Revenue and expense reporting •   IRR, incremental EVA
Marketing	•   Customer segmentation •   Product line management	•   Customer attribute models •   Product life cycle models
Strategy	•   Long-range strategic planning	•   Competitive environment (such as “five forces” from Michael Porter) •   Competitive positioning
Product development and engineering	•   Product development	•   Product development processes •   Product development review cycles
Operations	•   Inventory management •   Production planning •   Quality improvement	•   Process mapping standards •   Economic order quantity •   Material requirements planning •   Six Sigma
Note: EVA (economic value added), ROIC (return on investment capital), IRR (internal rate of return).

Framing Talent Logic like Business Logic at Allstate

We find that HR leaders make great progress in elevating leaders’ talent savvy by first uncovering the logic that is expressed in the business and then framing the talent logic to correlate with it. For example, when we work with organizations where engineering logic dominates, we use concepts such as failure rates (turnover), redundancy (overstaffing), and constraints. In organizations where a marketing logic dominates, we use concepts such as brand image (employment value proposition), customer segmentation (talent segments), and customer response functions (pivotal talent contributions). We find situations within the organization where the economic principles that drive talentship are used to manage a different resource and extend those principles to apply to the talent and organization resource.

For example, at Allstate, Joan Crockett, senior vice president of HR, helped line leaders understand a new approach to measuring staffing decisions by making an analogy between staffing decisions and the underwriting processes for new insurance policies.² Underwriting includes gathering information about the performance and risk factors of the insured organization or individual, relating those factors statistically to the probability of default or significant claims, and then determining the appropriate policy features to maximize the return-risk trade-off. Applying this to staffing, she described how staffing is talent’s underwriting. It involves gathering information about the known performance and risk factors of applicants, relating that information statistically to applicants’ performance after they are hired, and then determining the appropriate selection decision rules to maximize the return-risk trade-off in hiring.

Success Is When the Language of Business Becomes a Talent Language

In the most advanced organizations that we know, the business logic and the talent logic have become fundamentally intertwined. For example, in one software applications organization, the conversation about talent and organization evolved to the point where business leaders began to seamlessly connect their natural process logic with talent pivot-points.³ Rather than being satisfied with talent goals, such as hiring more software developers and testers, they began to ask questions such as “We know that our business model requires that our search engine must be the first to search e-mail and blogs on both the hard disk and the Web. What kinds of designers and testers do we need to make that happen fast? Do we offer a unique proposition in the labor market to get and keep them? Are we deploying the best ones we have to this task?”

This was not the result of a mandate from HR or the CEO requiring that business leaders become accountable for HR and talent measures. Instead, it was a natural result of HR leaders posing insightful questions about the business model, questions that were informed by a logical framework for talent and organization implications. Over time, business leaders began to see such insight’s value and how they could incorporate the questions into their existing mental models.

Sustainable Change Is the Goal, Not a Single Program or Event

There is a recurring theme within the techniques we’ve described here. The objective is not the adoption of a particular program, nor the successful completion of a strategy event. The process we have described here takes time, and it occurs through multiple learning cycles. Perhaps the best phrase to describe effective change management using talentship has come from several organizations we’ve worked with. As their HR and business leaders more deeply understand and use the techniques, they have told us, “Your approach is like a stealth bomber because we don’t introduce it with a lot of flash and attention. We just start asking better questions, digging for the right pivotal information in the existing processes, and encouraging our leaders to think differently within the models they already use. In fact, the best outcome is when our business leaders begin to think of talentship logic as their idea!”

Change processes that are seen to emanate too much from the HR department are unfortunately often resisted and not respected. Talentship and HC BRidge represent new thinking in a world where everyone is already overtaxed. Virtually no organization believes it cannot benefit from a deeper and more strategic approach to talent and organization decisions. The problem is that the processes to make this happen often impose such significant additional demands that they are crushed under their own weight. Stealthy and incremental changes are often much more effective.

To create this change, there does need to be a specific and concentrated effort on the skills and capabilities of leaders in all parts of the HR function. We find that the key is to systematically develop HR collectively in the new language and concepts. This is challenging because many HR professionals operate fairly independently within the HR function. They define their value through their relationship with their line leaders, and they often hesitate to give up that independence and align around a common professional decision model. Yet, as we have seen, such alignment around a logical framework has been the hallmark of the evolution of decision sciences like marketing and finance, and is vital to success in talentship.

We designed the HC BRidge framework and the talentship decision science to be naturally compatible with the underlying logic of existing financial and business models. The concepts of pivot-points, constraints, resources, differentiators, efficiency, effectiveness, and impact all have counterparts in existing models, at all levels of the organization. They apply as well to a single business process as they do to high-level questions about global organizational design. That allows leaders at all levels to apply these ideas to the issues at hand and to have tangible successes at a basic level that can build to more complex or novel decisions.

A final key to successful implementation is managing the learning and change process in cycles. The goal is not to make perfect talent decisions, just as the goal of finance and marketing is not to make perfect decisions about money and customers. Rather, talentship strives to systematically improve talent decisions over time. Treating learning and change as an integrated process, and taking a multicycle approach that starts with small effects and builds on them, produces significant cumulative change and improvement in talent and organization decisions, well beyond what can be achieved with flashier and more dramatic approaches that require large immediate changes to existing organizational systems.

HR and the Line Learn and Use Talentship Differently

Our work has shown that a vital success factor in implementing talentship is to recognize that HR leaders and non-HR leaders begin the learning journey at very different points. HR leaders are often more familiar with the effect of talent and organization decisions on business performance because they see those effects daily. They often hold positions that demand that they be effective advocates for employees, so they more readily accept and search for logical connections. At the same time, HR leaders are often far less familiar with strategy and operational management processes and less adept at finding the strategic and operational pivot-points within them. This is where non-HR leaders often shine. Line managers are typically very familiar with strategy and operations and thus their development opportunity is to translate these insights into talent implications.

HR leaders understandably are more willing to invest time and resources in their talentship development, and we strongly recommend starting with HR in any type of talentship transformation. Evidence shows that HR leaders recognize that deeper strategy analysis skills are vital to their strategic role and impact on the business. Talentship provides a direct connection to what they often perceive as a critical business need. In contrast, the same evidence suggests that line managers may overestimate their skills in strategic talent and organization analysis and that they typically don’t make a strong connection between their capabilities and the strategic role of their HR leaders.⁴

One approach that has proved highly effective for line managers is action learning, rather than classroom training. Effective organizations use talentship concepts in the deployment of a new strategy or change initiative. The newness of the initiative often conveys legitimacy for trying something a bit different. Business leaders, often guided by HR colleagues, find the pivot-points and focus the organization’s energy on the critical elements required to execute the new strategy or change. In this way they not only develop new skills; they achieve important business objectives at the same time. Although action learning takes time, it is a powerful way to provide the real-world practice that’s so important for success, and the investment in learning is directly linked to important business outcomes.

A common starting point is to develop HR professionals, who then apply the new skills and concepts to existing opportunities in strategic planning, operational planning and budgeting, succession planning, and performance management. Talent and organization decision models should be customized to fit the company’s existing decision models. That way, the most effective conversations about talent and organization alignment occur so naturally that organizational leaders begin to think of them as their own idea. Finally, the best learning often comes through experience, so the most effective approach is a patient one that recognizes that learning will occur in steps.

Conclusion

Talentship does little good if it is merely a new set of analytical tools that are never used or if it is a one-shot analysis that gets brief attention but then is soon forgotten. Like finance and marketing, it must become an integral element of the mental models that HR and business leaders use to advance the organization’s competitive success.

We began this book with the example of Corning seeing talent opportunities that others overlooked because Corning used a logical and systematic approach to talent strategy that others lacked. Throughout this book we’ve described the elements of that logic and techniques for making this approach a reality in any organization.

Organizations that make a commitment to improving the quality of decisions that depend on or impact talent by using the concepts described in this book will find the effort challenging at times but worthwhile in the long run. The payoff will be to illuminate the uncharted strategies quicker than your competition, and to thrive, rather than perish, through the essential evolution.