Talent Management Why Best Fit Beats Best Practice

How to apply “best fit”

solutions for your business

Why best practice in talent management is failing

Talent management as widely practiced is in danger of becoming part of the problem rather than the solution to sustained organisational success. Best practice as a standardised prescription is now holding back the diversity of innovative processes that different firms can draw on to face their distinctive business challenges.

2

Why we should be nervous about firms that win best practice talent management awards

This response triggered an angry debate on the blogosphere with

the question: “If the HR Director had no influence over these bad

decisions, what was the point of the HR Director?”

Paul Kearns argues that the Bank’s “strategic ambition to become

the ‘most admired bank’ was not matched by an ability to get the

best value from its human capital. If that isn’t the job of an HR

Director then I don’t know what is.” Kearns points out that the

Bank’s problems were “caused by its culture; the attitudes and

behaviours that prevailed at the time. Behaviours influenced by the

HR policies and practices in an organisation.”

Neil Morrison at FlipchartFairytales suggests that “it is an

exaggeration to say that the HR department can be blamed for the

Bank’s collapse…an HR Director who did not want to implement an

HR strategy that facilitated casino banking would have been out of

a job.”

This is right. But we cannot have it both ways. It seems odd to

receive awards and prizes for strategically well aligned talent

management and then, in the wake of a business melt-down, to say

“nowt to do with us gov”¹ and describe the activity as not much

more than a support function.

What exactly is going on in the world of best practice talent

management?

In the early 2000s, the UK Bank was a global player, fifth largest in

the world by market capitalisation. And it was winning awards left,

right and centre. Its HR Director regularly appeared in the Power

Player listings of HR rankings. According to 2008’s HR’s Most

Influential, the HR Director’s “ability to align HR with the business

strategy is almost unrivalled.”

The Human Resources function won prizes for its effectiveness in

human capital and talent management. Hay Group interviewed

“senior executives from 150 global organisations to identify the

secrets of effective business performance.” It highlighted the Bank

as having “the right approach to talent management and is reaping

the business benefits.”

In 2009 the Bank reported the biggest loss in UK corporate history.

About to go bust, it had to be bailed out by the UK tax payer to the

tune of £45 billion.

In the post mortem that followed this business fiasco, and the

regulatory review of the bank’s corporate governance, risk

management and executive team, the question emerged: what was

the role of talent management? As Professor Graeme Martin asks:

“was Human Resources the unindicted co-conspirator in the demise

of financial services?”

In recent interviews the then HR Director has argued that the finger

of blame cannot be pointed at Human Resources. “I cannot see what

HR could have done…HR is a support function.”

http://flipchartfairytales.wordpress.com/2010/01/04/nowt-to-do-with-us-guv-says-

rbs-hr-director/

1.

© AM Azure Consulting Ltd 2012

http://flipchartfairytales.wordpress.com/2010/01/04/nowt-to-do-with-us-guv-says-rbs-hr-director/



















3

the world of talent management has been seduced by the

best practices of the business success industry, when recent

analysis of the “great firms” highlights fundamental

misgivings about the findings

the attempt to map out a standard formula of best practice in

talent management has been based on a flawed programme

of research, more often driven by the product applications

and consultancy services of talent management vendors

than from any meaningful evidence base

talent management in search of “best practice” will continue

to struggle to make a business impact. At best it will be an

organisational irrelevance, and, at worst, damaging to

organisational competitiveness

talent management as “best fit” arises from the wise choice

of a game plan that reflects the context of strategic

capability, organisational design, corporate culture and the

dynamics of talent supply and demand

the best practice of the neat jigsaw puzzle of “strategic

alignment” only exists in consultancy conference

presentations. The reality is a messy game of talent

management Snakes and Ladders. But it is an approach that

is more likely to improve organisational effectiveness

In a nut shell


An unthinking focus on best practice can undermine the strategic positioning of a company. Best practice is about standardisation. It doesn’t provide any basis for competitive advantage.

Paul Hunter

4

The script from the talent management industry is now a familiar

one.

The talent management challenge we are told is increasing.

Despite the economic down turn of the last few years,

organisations still face a “perfect storm” of shortages for specific

skills, demographic changes, and the challenges of globalisation.

Research reminds us that we continue to struggle with talent

management. For a variety of reasons, organisations still find it

difficult to design and implement the responses to meet this

challenge.

But we do “know” that talent management practice is

associated with superior levels of corporate performance.

If we are to face the talent management challenge we need to

identify the best practices associated with these high performing

organisations, and implement them within our firms to maintain our

competitiveness.

This article argues instead that:

we may have been looking in the wrong places for best

practice

there is no best practice; there is only best fit based on the

distinctives of our organisation's past, present and future

the continued attempt to implement the standard recipe of best

practice, far from improving business competitiveness, will be

irrelevant, or in some instances, damaging to our

organisations

we need to adopt a different mind set to talent management,

one that identifies the distinctive challenges facing our

organisation to formulate a targeted talent management game

plan

The story line for talent management


5

The menu of talent management best practice

Talent management includes a spectrum of

activities, underpinned by different

assumptions and mind sets about the link

between individual and organisational

performance.

However it is fair to say that most best-

practice prescriptions have focused on the

individual, their performance and potential,

as key to business success.

Star spotting to find the bright and beautiful Since we know that: “most performance outcomes are attributable to a small group of elite performers”,

we should focus our talent management efforts on this group. Here we recruit and incentivise the most

experienced and capable people in the market place, the leaders with the “right stuff” who can take on

“mission impossible” for our strategic future.

Focus on the strategically critical roles This is the identification of, not the A players, but the A positions, those roles that represent the key

battle ground of competitive success. And to do whatever it takes to get the superior performers in these

roles. This is a highly targeted talent management strategy to place bets on a few key roles and where

excellent performance will make most business impact.

Build a pool or wave of talent This is the talent management strategy that sets out to build a breadth and depth of capability from

within. Here the aim is to provide the next generation of leadership able to reinforce our values and

culture to maintain continuity. This enterprise is less about classic replacement charting, and more

about creating groupings of individuals able to progress to different clusterings of organisational activity.

Engage the many This is talent management as the recognition that organisational success is about the mobilisation of

coordinated effort at all levels and across many different functions. Here the enterprise is less about

directing resources to the corporate elite and fast track high potentials, and more about building a

culture and working environment that is vibrant and fosters talent in collaboration for greater productivity

and innovation.

Coordinate talent on a project basis This is the “Hollywood model” of talent management in which we coordinate the optimal mix of skill sets

and expertise around big projects. Here we draw on a series of networks to bring together individuals

and teams with the specific experience and talents relevant to the scale and type of the project. We are

less concerned with “owning” talent and more focused on how to orchestrate the performance of

individuals and work groups across a range of collaborative structures.

Outsource talent This is the lean version of talent management in which an organisation assesses the best way to

configure its different activities - strategic, operational and support - and structures itself around a small

corporate hub, accessing talent on an “as and when” basis, through an array of partnerships and

outsourcing arrangements.

Talent management is a craft, not a science. It is very context-dependent, and so is the decision when to favour one approach over another.

Paul Sparrow


6

If the research clamour of the talent management industry is to be

believed, the growing gap between current practice and the

challenge facing organisations indicates that the business sky is

about to crash down on our talent management heads.

Faced with such a threat, the argument runs, we need to look to

the principles and practices of those firms who have navigated

successfully the talent management challenge, identify the

lessons and apply them to our firms.

The typical solution is any permutation of:

a rethink of the employee brand for the attraction and

retention of the talent we need

an exercise in employee engagement to improve motivation

a competency framework to profile skill requirements

better assessment methodology for selection

development centres to spot the high potentials at an earlier

stage in their career

programmes of business education supported by executive

coaching to accelerate professional and leadership

development

improved talent technology for data management and

organisational intelligence

better definitions of potential to support nine box plotting

within talent reviews

and more

Is the sky about to fall on our talent management heads?

LO

HI

The sky is falling on our heads

Competing for the future

around a wise strategy and smart tactics

Life goes on

Outrunning the needs of the

business

Talent Management Practice

Ta

len

t M

an

ag

em

en

t C

ha

lle

ng

e


7

The talent management industry preaches the solution of best

principles and practice. Of course there is an acknowledgement

that “each organisation is different”. But this important reality is

dismissed quickly to list out the prescribed approach, one that is

remarkably similar across very different organisations.

Best principles - along the lines of build commitment from the

CEO and senior management, or clarify accountabilities for line

management ownership - often represent little more than vague

platitudes.

And best practices seem based on a logic of: “this is what

successful companies do. These things must make them

successful. Therefore we must apply their specific talent

management activities if we want to be and stay successful.”

The problem is that the best practices of the successful firms may

be anything but. They may be very common, but they may have

little to do with successful performance.

To understand the issues it is useful to look at the experiences

and impact of the business success industry, that grouping of

publications and consultants who claim to have discovered the

formula for sustained organisational performance.

A question mark about best practice


I believe too much management wisdom is not wise at all, but instead flawed knowledge based on a misunderstanding or misapplication of “best practices” that often constitutes poor, incomplete or outright obsolete thinking.

Mike Myatt

8

The odds are against the long term survival and success of our

organisation. In “Profit from the Core” only 13% of 1854

companies were able to grow consistently over a 10 year period.

In the “Creative Destruction” analysis a mere 160 of 1,008

companies survived from 1962 to 1998. And Jim Collins in “Good

to Great” examined 1,435 companies over 30 years; only 9% had

managed to out-perform the market over a 10 year period.

Faced with these odds, we are in a tough competitive game. And

we look for ways to increase the likelihood of staying in the game;

even better, to find ways of improving the chances of winning the

game.

The solution: to learn from the practices of successful firms. The

research model is now well established:

start with a group of companies

look at the most successful

examine what they do to identify the patterns associated

with their success

translate these patterns into a general framework with the

promise that this formula will help us achieve the results of

the successful firms

The challenge of organisational survival and success


9

At best, the success industry integrates robust research with

business case studies to stimulate debate about promising

practices that will help our organisations improve. This is learning

from success to access new insights and experiences to help us

rethink what we do and how we might do things better.

However, over the last few years, a number of management

scientists, economists and statisticians have begun to explore the

claim that the business success industry has discovered “the

immutable laws of organised human performance”, or in Jim

Collins’ words to have uncovered “timeless fundamentals that

enable organizations to endure and thrive”

and identified three fundamental problems:

1. The success problem

What in fact seemed to have been remarkable, exceptional and

great companies turn out in fact to be in the main a sample of lucky

false positives. Identifying patterns from the largely lucky is no

guide to highlighting the dynamics of sustained success.

2. The cause - effect problem

We have relied on a research methodology in which the

consequences of success have shaped our attributions of the

causes of success. The success industry hasn’t so much identified

the causal factors of success, as been impressed by “just so”

stories that were used to explain the consequences of success.

3. The prediction problem

This is the bottom line for the success industry. Did our

understanding of currently successful firms help improve our

effectiveness in predicting who would succeed in future? The

answer is no. Drawing on samples of the largely lucky who

provided spurious explanations of their success, the track record of

the success industry in predicting future success has been dismal.

The failure of the success business


10

Rebecca Henderson at Harvard Business School asks all the

students in the class room to stand up.

“I then ask each of them to toss a coin: if the toss comes up “tails”

they are to sit down, but if it comes up “heads” they are to remain

standing. Since there are around 70 students in the class, after six

or seven rounds there is only one student left standing.

With the appropriate theatrics, I approach the student and ask:

“How did you do that? Seven heads in a row! Can I interview you

in Fortune?”

The key point is that in any system there will be variation, some of

this variation arising from luck, and other from skill. One student

out of 70 hitting a one off run of seven heads is luck. The student

who keeps tossing seven heads, time after time, possesses an

important skill, and we need to understand the reasons.

The argument here isn’t that the companies included in the

success literature were lucky. But until we sort out the role of luck,

we don’t know if we’re looking at genuinely successful companies

or merely lucky ones.

Drawing on a sample of over 22,000 companies between 1966

and 2008, Michael Raynor in his ambitious Persistence Project

has attempted exactly that: to separate out the lucky false

positives from the genuinely remarkable high performing firms.

Raynor tested if the “success studies” had been studying

unambiguously successful firms . Here he looked at the companies

profiled by eleven credible or popular success studies. Only 30 out

of 228 different firms held out as exemplars of successful

companies are in fact genuinely remarkable firms.

We have been looking in the wrong places for our

understanding of the dynamics of organisational success.

Problem 1: we haven’t looked at genuinely successful companies


11

Phil Rosenzewig argues that the data used by the success

industry rather than being an explanation of the organisations’

success are in fact a consequence of the organisations’ success.

In “The Halo Effect”, Rosenzweig points to an array of

psychological studies that indicate if you arbitrarily tell a person

they have excelled or failed at some task, those told they have

succeeded generate different explanations of the outcome than

those told they had failed. This is the “halo effect” in which our

overall evaluations of success or failure influence the way we

think about the reasons for that success or failure.

Knowing that a company is currently highly successful we are

more likely to report any manner of positive attributes about the

organisation (its employee engagement, its leadership, its

systems, talent management practices, etc). Conversely if an

organisation is struggling, rather than discerning the specifics of

what is or isn’t working, we generalise to identify the negatives.

This problem Rosenzweig argues, is reinforced by the questions

used by the success industry. “One of Jim Collins' interview

questions, for example, asks managers:

"Can you think of one particularly powerful example that

exemplifies the essence of the shift from good to great at your

company?”

Faced with this kind of leading question, which currently

successful firm is going to respond with anything other than

positive examples?

We base our judgments uniquely on financial results. If a company is making good profits the press will talk of a powerful, dynamic CEO and a strong corporate culture. If the same company is doing badly, the same CEO will be described as arrogant and out of touch. The firm’s corporate culture will be described as poor.

Phil Rosenzweig

Problem 2: we get cause and consequence confused


The success industry has been examining the stories

organisations tell themselves to explain their current success

rather than pinpoint the real causes of their performance.

12

The overwhelming message of the success industry has been:

Great companies do these things. If you do these things,

you too will be great.

If the success industry is on to something to unlock the dynamics

of organisational performance, then the least we should expect is

that the “great firms” (or least a meaningful proportion of them)

themselves will continue to display signs of greatness.

We shouldn’t anticipate that every firm profiled in the success

genre is a dead cert for future success given the changing and

competitive nature of the business game. But we should expect a

reasonable level of predictive power if the success research has

identified “timeless, universal answers that can be applied by an

organisation”.

.

The track record of the “successful” companies

Of the 43 companies studied in “In Search for Excellence”, less

than one third could be described as excellent and nearly one half

had serious performance declines, within only five years of their

original “excellence.

For the firms profiled in “Built to Last, only 5 companies had

improved profitability, and 11 had declined within five years of the

original research.

Bruce Niendorf and Kristine Stock analysed the 11 companies of

“Good to Great”. Only 1 had out-performed the stock market, and

the overall portfolio of companies had under-performed the market.

1 had gone bust, another needed a massive government bail out.

In Collins’ 2010 analysis of another set of 7 “remarkable” firms in

“Great By Choice”, less than three years later it is unclear that the

“great” are in fact all that great compared to the comparator

organisations Collins selected. After all it has been Apple that has

out-performed the “great by choice” Microsoft.

Applying Nassim Taleb’s “skin in the game” test, an investor

placing their bets on the success firms would have done worse

than if they had followed a standard tracker fund¹.

Problem 3: a poor track record of prediction

1. Taleb, being a contrarian thinker, would no doubt short the stock of any

organisation profiled in the success literature.


13

Given the earnest humourlessness of much of the success

industry, the irony of this enterprise has largely gone unnoticed. In

embarking on a business to identify the dynamics of success it

failed as a business. Jim Collins cites Burlanmanson’s Law:

“The greatest danger is not failure, but being successful

without realising why.”

A wise insight. Another danger is assuming that we are looking at

success in the first place.

Is the success game then pretty much over? Not quite.

There are bright spots. The “Persistence Project” of Michael

Raynor - a much more systematic and comprehensive analysis -

identifies key patterns. Accessing a larger data set over a longer

time frame, with tougher criteria to minimise the low positives of

the lucky successful, Raynor evaluates the “Triple Crown

Winners”, those firms that delivered superior growth, league-

leading profitability and shareholder returns at the same time. His

summary of the factors:

.

Raynor goes on to make the point that the evidence base suggests

that sustained and remarkable organisational performance has to

jump all three hurdles.

“strengths in any one area do not compensate for

weaknesses in others.”

Of course these are storylines in the narrative of success. Raynor

reminds us that the “the dynamic nature of the challenges and

opportunities faced by different companies at different times makes

it challenging to have a formula-based approach to growth.” These

are guiding principles rather than the prescription of the specific “do

this-get that” practices typically sold by the success industry.

Has the business success industry failed?

1. clarity of vision. This avoids the distractions of exciting

diversification that can derail long-term success. But

neither is it an obsession with the “one thing”. It seems to

be an overarching purpose that maintains a “compelling

vision that is shared widely across levels and functions”

that helps organisations strategically reposition

themselves.

2. disciplined resource allocation. This is partly a robust

assessment of the merits of each new opportunity. It is also

a rigour to “compartmentalise resources” to invest in both

today and tomorrow’s business.

3. excellence in execution across all functions. This is a

relentless attention to the detailed disciplines of

implementation.


14

The talent management industry, that constellation of business

schools and management colleges, and consultancies, from the

established big firms to the smaller niche players, has mirrored

the experiences of the business success industry.

The approach works in the same way:

identify successful firms

look at their talent management practices

summarise the findings into a framework and new

theory

sell this bundle of best practices as the solution to

improved organisational performance

What about the implications for best practice in talent management?

Alignment and integration are the keys to the success and effectiveness of global talent management and are proven to correlate strongly with superior business performance, both financial and non-financial.

Managing Today’s Global Workforce, Ernst &

Young 2010


15

A typical research programme looks like this¹:

Grab a group of 300 firms in 2002. Make an evaluation of the

maturity and innovativeness of their talent management

practices. (Here it’s never made explicit what criteria were

applied to determine how mature and innovative these

practices are.) Access measures of the organisations’ current

financial performance, typically total returns to shareholders, or

return on assets. Then run the numbers to look at the

correlation between talent management practice and corporate

performance.

Then generate a nice chart. Or for those who don’t get the pattern,

summarise in a few handy percentages or headline quotes, along

the lines of:

“high performing firms are four times more likely to

demonstrate best practice in talent management than low

performing firms.”

But the issue is not the correlation between today’s financial

performance and current talent management practice. The issue

is the extent to which best practice in talent management predicts

future organisational outcomes. Here we need to look at firms who

applied best practice talent management in, say, 2002 to identify if

they were more productive, profitable and competitive in the

market place in 2012 than their less proactive contemporaries.

What’s going wrong in the “best practice talent management industry”?


Our desk top review examined the most frequently cited research programmes,

including those from the Aberdeen Group, Accenture, Bersin Associates, Booz &

Co, Ernst & Young, Hackett Group, Hay Group, Hewitt Associates, IBM Institute

for Business Value/Human Capital Institute, Jeitosa, McBassi & Co, McKinsey,

and Right Management.

1.

16

How to set up a new talent management consultancy: sell the “deli” theory

We know the problems of the business success industry:

inadequate sampling that mistakes the lucky positives from the

genuinely remarkable

the halo effect in which the consequences of current success

become post hoc explanatory narratives

the dismal failure to predict future success, even over a

relatively short time scale

The “best practice in talent management” enterprise has largely been

a rerun of this exercise.

This is likely to lead to the “deli theory” of organisational success. We

conduct painstaking and methodical research to find that high

performing firms are eight times more likely than low performing firms

to have introduced a high quality deli into their company restaurants.

Quickly we make the link between the presence of a deli, employee

engagement and corporate performance. We announce this research

finding to the talent management community and organise

conferences and workshops to share examples of how firms have

implemented “deli” best practice. We then set up a talent

management consultancy based on advisory services in the

introduction of a deli, with the promise that this will transform your

business.

This, like the business success industry, is based on faulty reasoning.

The presence of a deli may be as much a consequence of success

for current high performing firms than a cause of their future

performance.


17

At first sight, this talent management prescription looked like

reasonable advice. And it was a solution that was implemented

energetically by talent management practitioners. “It’s hard to

argue with the idea that the company with the best talent wins.”

Bruce Tulgan in Winning Talent Wars declares: “talent is the

show. Organisations need to learn how to employ people

whenever, wherever, and however they are willing. Instead of

staffing the jobs, staff the work.”

It’s now over 10 years since McKinsey conducted their research.

It’s worth asking how these firms displaying talent management

excellence are performing now.

In our analysis of the 27 exemplar companies profiled in the 2001

The War for Talent research we adopted a pragmatic approach,

using Fortune 500 rankings in 2012 (due to changes in ownership,

etc. it was difficult to locate performance data for the full data set).

Around half of the grouping is now down on 2000 status, another

quarter are about the same, and a quarter is up.

This is hardly a positive endorsement of best practice talent

management as shaping future organisational success.

An example of best practice talent management smoke and mirrors

Over ten years ago, The War For Talent provided a new road

map for the emerging talent management profession. Applying

the methodology of the success business, the McKinsey research

team identified the talent management activities of high

performing firms to locate the specific practices that underpinned

their success. “Companies scoring in the top quintile of talent-

management practices outperform their industry's mean return to

shareholders by a remarkable 22 percentage points.”

And a package of recommendations were outlined to apply the

talent management excellence of the successful firms:

develop a talent mind set: build an obsession with people

to drive business performance

create an employee value proposition: review current

employment practices to create an environment in which

talent can flourish

rebuild your recruitment strategy: be proactive in the

search for talent at every level

accelerate the development of talent: look for imaginative

way to test and stretch emerging talent

differentiate and affirm your people: encourage honesty

in rewarding superior performance and tackling

performance problems


18

The more immediate problem for The War For Talent was the

spectacular downfall of Enron, the exemplar of its talent

management formula. Not only had Enron implemented the

principles of best practice talent management, it had made them

fundamental to the way it ran the business.

Malcolm Gladwell asks: “what if Enron failed not in spite of its

talent mind-set, but because of it?”

Jeffrey Pfeffer¹ identifies the problems of “The War For Talent”:

an emphasis on individual performance to reward the stars

diminishes teamwork, “creating destructive internal

competition, and retarding learning”

the glorification of the talents of those outside the company

which dismisses the skills and abilities of insiders

“a self-fulfilling prophecy where those labelled as less able

become less able because they are asked to do less, given

fewer resources, training, and mentoring”

a focus on personal brilliance that pays less attention to the

context of the systemic, cultural, and business processes that

in fact are critical to collective performance

an elitist, arrogant attitude that lacks the humility to learn and

get better

Things get worse

Developing a talent mind set, the sensible belief that people

make a difference became an obsession that individual

contribution is the driver of business success. For Enron,

whatever the “smartest guys in the room” touched would turn to

business gold.

Creating an employee value proposition should be the review

of current employment practices to build an environment in which

talent can flourish. For Enron it created a “them and us” culture

in which the “super stars” flourished and others were

ignored.

Rebuilding the recruitment strategy is proactivity in the search

for talent at every level. For Enron it was a resourcing plan to buy

in the “best, bright and beautiful” at inflated salaries that

undermined continuity of culture and purpose.

Accelerating the development of talent is finding imaginative

ways to test and stretch emerging talent. In Enron it resulted in

the over-promotion of inexperienced individuals who got out

of their depth and simply weren’t up to the challenge.

Differentiate and affirm your people could have led to greater

honesty in rewarding superior performance and tackling

performance problems. Instead for Enron it created a “rank-and-

yank” performance management strategy played out in talent

reviews that became known as the “pit of vipers”, fuelling

suspicion, self-seeking behaviour, a breakdown of trust and

ultimately corruption.

https://gsbapps.stanford.edu/researchpapers/library/rp1687.pdf 1.


https://gsbapps.stanford.edu/researchpapers/library/rp1687.pdf

19

The McKinsey “The War For Talent “study was fundamentally

flawed, despite the enthusiasm with which the talent management

industry adopted its findings and prescription to achieve superior

levels of organisational performance. And its core methodology

continues to be repeated throughout the talent management

industry.

At best, the package of best practice has been irrelevant in the

prediction of business success. At worst it has been a deeply

damaging experience for specific firms, particularly those who

adopted that aggressive best practice of “rank and yank”.

This is not to argue that talent management can’t be a critical

component of an organisation’s business performance. It is clear

that it can be¹. Neither are we suggesting that particular talent

management practices are wrong. There is no shortage of specific

processes that have had a significant business impact, although the

evidence base is stronger for some than others.

But it is to suggest that a reliance on the standard bundle of “do-

this-get-that” is a flawed talent management strategy.

Rethinking best practice


Does Human Capital Matter? A Meta-Analysis of the Relationship Between Human

Capital and Firm Performance, Crook, et al, Journal of Applied Psychology, 2011

1.

stopping the stupid stuff before we pursue excellence

starting with 3 guiding principles

addressing the trade offs of 4 key fundamentals

monitoring the radar screen of promising practice

an executive debate about the past, present and future

establishing an actionable game plan

To move from best practice to best fit, we suggest the following:

20

We stop the stupid stuff before we pursue excellence

Although there might not be a standard package of best practices,

there may be a set of “worst practices”, i.e. activities with little

evidence of their effectiveness, or worse, the clear indication of a

potential to make things worse. There are the talent management

antics that Dave Ulrich describes as organisational “frou frou”; well

marketed wheezes that have gained corporate traction, and are

either irrelevant or damaging to our organisations’ competitive

health.

This is that variation of maneouvres that includes:

In his analysis of the successes and failures of the hi tech industry

over a 25 year period, Rick Chapman went off “In Search of

Stupidity” as an alternative to Tom Peters’ “In Search of Excellence”.

If there is any rhyme or reason to the dynamics that differentiate

winners from losers it is this:

“the avoidance of stupid mistakes.”

Most of the business disasters could have been avoided with a

“modicum of common sense and situational awareness.” This isn’t

just the wisdom of 20/20 hindsight, Chapman’s in-depth review

reveals the details of stunningly bad decisions made by some very

“smart people”.


The race goes not to the strong, nor swift, nor more intelligent but to the less stupid.

Rick Chapman

the utilisation of a “one-size-fits-all” test for assessment

black box systems for person-job matching that claim 85%

predictive accuracy (it never quite means what we think it does)

pseudo scientific programmes for personal development with

claims of “revolutionary life transformation”

new age style team development processes that are personally

intrusive and demeaning to participants

secret sessions for talent reviews that “talk plots” but result in no

action

the purchase of a fully integrated talent technology solution

(which will be out of date after a two year programme of

implementation)

reward systems that incentivise short-term financial performance

with no downside for the consequences of incompetence

Forecasting organisational success is difficult. Predicting corporate

failure and decline is much easier if we have introduced and

implemented the “stupid stuff” of the obsessional “one thing” talent

management gurus.

21

We start with 3 guiding principles

Clarity of vision. This is the informed and coherent insight into the

precise role of talent management within our organisation’s model

of business success and how it plans to compete for the future.

This is to see the big picture of the talent management options and

analyse the pros and cons of different resourcing and development

strategies. For some organisations this may be a relatively modest

enterprise to focus on improvements in a handful of current

processes. For others it may a fundamental overhaul of the

organisation's structure, policies and systems.

Disciplined resource allocation. This is the scrutiny of

organisational activity to assess what is helping and hindering

overall efforts . This highlights what is currently in place and

working well, what is in place but needs to stop, and what needs to

be introduced. It is also the tough exercise in prioritisation to agree

where resources need to be directed and deployed for maximum

advantage. Should we, for example, target our efforts on a few key

individuals in critical roles, or is talent management a much wider

enterprise for our business?

Excellence in execution. This is the relentless attention to the

detail of implementation, and the delivery of practical user friendly

tools for individuals and managers to utilise. If, for example, talent

reviews are an important component within the talent management

game plan, this is the “nuts and bolts” of systems for the

positioning, preparation, facilitation and follow up of crystal clear

processes within defined accountabilities.

A good starting point is to apply the three guiding principles Michael

Raynor identified in his analysis of those firms that sustained

genuinely high performance over time.


22

We address the trade offs of 4 key fundamentals

Guiding principles are useful, but only take us so far in mapping out

a talent management game plan that is right for our organisation.

Here we now move into a messier world than the standard

prescription of best practice talent management suggests.

To develop a specific “best fit” map and a pragmatic action plan for

our organisation we need to address the issues of:

strategic capability

organisational design

corporate culture

the talent market place

4 FUNDAMENTALS

Strategic Capability: the battle grounds on which we will

compete as an organisation in future. These are the capabilities in

which we need to excel to out-perform the competition, and a

clear view of how similar or different they will be to current

capability.

Organisational design: this is the ingenuity with which we

coordinate activity to optimise our effectiveness, and the decisions

we make to trade off the pros and cons of centralisation vs.

decentralisation or the integration of business activity vs.

differentiation This is partly about establishing a structural blue

print to map the roles and relationships that will guide the

implementation of our strategy. It is also about how we access

and leverage talent from a series of partner firms.

Corporate culture: this is identifying the “personality” of the

organisation, its operating ethos and working ethos which sets the

tone for how we do things. Here talent management becomes a

debate about how attractive or not we are to the kinds of people

we want to recruit, develop, progress and retain. This is also a

willingness to recognise when our culture is part of the talent

management problem.

The talent market place: this is an insight into the dynamics of

supply and demand in the market place in which we operate,

alongside a robust debate about our structure and culture, and the

experience and skills we would like vis-a-vis those we are willing

and able to either buy in from outside or develop from within.


The choice of talent management strategy massively affects organisational performance.

Pamela Bethke-Langenegger

23

Strategic capability:

what are the business battle-grounds on which we

will compete? This is an assessment of the strategic

space that maintains most distance from our

competitors but keeps us close to our target

customers. For some organisations, this is very

focused, for example, technical innovation within a

niche but profitable market. For others success will

be gained or lost by the robustness of business

processes for cost differentiation.

Organisational design:

how should we coordinate our activities around the

capabilities we need? Which choices need to be

made about our organisational structure? What is

fundamental to our organisation and what is

peripheral and can be outsourced? What is the

relationship between the corporate core and its

different business activities, and with other

stakeholder partners? How inter-dependent are the

different business units; largely stand alone activities

or highly inter-connected?

4 fundamentals for best fit

The talent market place:

what are dynamics of supply and demand in the

markets and geographies in which we operate?

Where and how can we access the expertise and

skill sets we need? How much are we prepared to

pay for these? What is the optimal balance of buy in

or develop from within?

Corporate culture:

what is the legacy of our organisational past and the

philosophy within which it has operated? Which

values have shaped the way we interact and behave?

Is this a culture that will evolve easily to meet the

demands of the future? Or do we need to rethink the

ethos of our culture to shift to a different working

style?

Strategic

Capability

Organisational

Design

The Talent

Market Place

Corporate

Culture

BEST

FIT


24

4 fundamentals for best fit and 6 big questions


Is strategy structure, or is structure strategy?

Is our organisational structure well aligned within clear strategic priorities vs.

do we have sufficient flexibility with the current structure to encourage new

thinking about the future?

Is our culture a strength, or a weakness in talent management?

Does our culture provide a distinctive working environment to differentiate

us from our competitors vs. do we need to rethink our talent requirement to

bring in those individuals who will catalyse a fundamental change in how we

operate?

Are we clear about the strategic bus, or looking for the right people to

get on the bus?

Can we achieve our business aspirations deploying the talent we can

access - internally and externally vs. do we need to raise our strategic game

through a rethink of our talent requirement?

Does our structure drive our culture, or is culture the dynamic of

future success?

Does our organisational structure reinforce the kind of culture we want to

build vs. is our culture so strong that we can be much looser and more

flexible in how we organise and coordinate work activity?

Does strategy shape the working environment, or does culture eat

strategy’s lunch?

Does our operating environment support the implementation of our strategic

goals and priorities vs. is our culture sufficiently responsive and flexible to

generate the ideas that will help rethink our business options?

Do we configure talent around structure or allow talent to define

structure?

Does our template of organisational design of roles and reporting

relationships make it easy to access the talent we need for the future vs. do

we need to shift to a different organisational design to attract and retain the

kinds of individuals the business requires?

This is talent management, not as the import of the tactics of best

practice, but as a strategic debate to address the fundamental

dilemmas of organisational success. Here we ask the tough

questions about the options we face in deciding the scope and focus

of how we will compete in future, how we should organise ourselves

given the choices of structural design, and the kind of culture that will

be key to our business - all against the backdrop of the realities of

supply and demand in the talent market place.

For those interested in this approach, email

[email protected] for an extensive check-list

mailto:[email protected]

25

When we get the trade offs wrong: an example of wrong headed thinking

Trade-offs are difficult. Because there is no obvious solution, they

require us to weigh up the pros and cons of our options given our

available resources, and the need to make decisions before our

competitors might out-smart us.

It takes several rounds of hard thinking and debate to get to the point

where we are clear about the best way to balance the strategic ideal

with informed choices about our organisational design, and the kind

of culture we want to build. Only then can we finalise our talent

management game plan.

For some there are short cuts. For Tom Peters, the formula is

simple:

“excellent companies create corporate cultures in which

success flourishes.”

This is an overwhelming game plan of culture out-trumps strategy.

Get the culture right and strategy will look after itself.

Rick Chapman summarises the position of one firm, Lanier, that

Peters extolled as excellent, an organisation that “lives, sleeps, eats,

and breathes customers”. Lanier represents the kind of winning

culture that “loves customers, loves its employees, and loves the

company’s products”.

“The only problem with all of this was that Lanier wasn’t an

excellent company; it was a dead company, a shot-through-

the-head dinosaur whose sluggish nervous system hadn’t yet

gotten round to telling the rest of its body to lie down and

die.”

Culture of course is a key dynamic of future organisational

success.

But if we put our eggs only in this basket, without a recognition of

the difficult dilemmas to address in thinking about strategy,

structure and the talent market place, we shouldn’t be too

surprised if our organisation falls by the way side.

26

Monitoring the radar screen of promising practice

Having analysed the “white papers” and research reports of

scores of best practice talent management publications, there is

an overwhelming sense of how similar it all is. Best practice talent

management is a remarkably standardised bundle of activity.

There may be a good reason. It could be there is an established

formula that works. Any sensible talent management game plan

therefore is about the speed of adopting and implementing this

standard set of practices. We are sceptical; the evidence base

does not indicate that a strategy of best practice delivers superior

levels of organisational performance.

Our view is that we have ended up with this familiar package of

“best practice” because of the “me too” nature of the talent

management industry. We have believed the sales pitches of the

conventional vendors based on a routine but flawed research

methodology, attended the same conferences and seminars to

discuss the conclusions of this research, and shared the same

assumptions about what good talent management looks like. It’s a

low risk approach, but not one that has driven significant

innovation.

Despite the suggestion from the industry that we’re “going to talent

hell in a handcart”, we disagree. (Or if we are, it is because we

continue to accept the standard solution.) One of our objections to

the best practice talent management enterprise has been the way

its prescription has stifled genuine creativity about the different

strategies and tactics that enhance individual, team and overall

corporate performance.

This is talent management as a constant scanning of:

unusual organisations achieving remarkable outcomes

rather than copy the approach of the “usual suspects” of

best practice. This is to look at organisations in very

different sectors and industries to locate imaginative ideas

about the working practices they have introduced that may

be driving superior levels of organisational performance.

emerging activity¹ that indicates ingenuity in exploring

ways to optimise business performance through the

willingness to abandon conventional thinking and take risks

and experiment with new processes.

interesting ideas that are bubbling their way through from

original research, informed peer debate to imaginative

pilots. The trick is to spot their relevance and application for

our business before our rivals.

See for example, http://www.managementexchange.com/m-prize/entries/node/12597 1.

http://www.managementexchange.com/m-prize/entries/node/12597



27

The talent management professionals we work with know the

reality. Talent management hinges on a series of iterative

conversations at executive levels to review the organisation and:

the past, in particular the culture that has evolved over the

years, and whether it is helping or hindering. It also involves

a review of the legacy of our talent, and a willingness to

make objective decisions about individuals who are able to

progress to take on new challenges rather than those still

fighting old business battles.

the present, and the structure that is in place and how well

this template of organisational design will coordinate and

direct future time and effort. This is also the willingness to

face the facts in the review of the breadth and depth of our

current professional and executive talent to pinpoint

immediate performance problems and retention risks.

the future, and the extent of our strategic ambitions and

how different these are to current business priorities. This

can be a keen sighted view of how best to reposition the

organisation for the long-term and a rethink of the talent

requirement. Or a reckless plan which fails in

implementation, constrained by a lack of experience and

skill in those critical roles that represent the battle ground

with our competitors.

These conversations, conducted with a combination of rigour and

creativity, will assess the kinds of trade offs that need to be made

in finding the balance between the ideal and the do-able.

An executive debate about the past, present and future


Defining the objective, scope, and advantage requires trade-offs.

David Collis & Michael Rukstad

28

Establishing an actionable game plan

Working through the issues produces a talent management

game plan that reflects the trade offs we think will optimise the

current and future performance of people. Here we have to think

strategically about those actions that might make an immediate

impact vs. those that will build organisational versatility for the

longer-term.

This is talent management not as a high level schemata of a

best practice framework, but the nuts and bolts of hard thinking

and intensive stakeholder debate to provide:

A clear consensus of what talent management means for our

organisation

This is clarity about the scope and focus of talent management. It is

also an understanding of how we want to position talent management

within our organisation, and the principles that will underpin our

proposed approach.

A map to get us from here to there

This is an insight into what is in currently in place and can be built on

to make progress, what we will need to abandon as no longer relevant

to our future, and what we will need to design and introduce. Our map

should also incorporate a statement of future success, and the metrics

that will indicate progress and evaluate impact.

A plan that outlines specific priorities for the activities we see as

critical to our approach to talent management

This plan, to be credible, reflects the level of investment (time and

resource) that needs to be made based on the gap between our

current organisational readiness and our level of ambition. It also

clarifies the sequence of activity to outline a sensible running order of

activity based on the importance and urgency of the issues balanced

with the “art of the possible”.

A set of accountabilities within our organisational calendar to

connect the loop of business planning and performance and talent

management, and that annual ritual of the succession plan for

corporate governance. At one level, this is an overarching process

map to outline the timing of the inputs and outputs of activity. At

another level it pinpoints the commitments of “who does what and

when” within an infrastructure of information flows and decision

making.

Best practices are only best when they’re applied in a given context; what works for one company may not work in another.

Guenter Stahl

29

Best fit as getting real about organisational realities


Wise talent management professionals mistrust the kind of

solutions that are:

The “big thing of strategic alignment”, those expensive

consultancy programmes which require extensive diagnosis to

produce a neat framework that connects the pieces of the jigsaw.

They know this is talent management as fantasy, impressive in

Boardroom presentations but extraordinarily difficult to implement

in the real world. And once put in place, invariably out-of-date, and

no longer fit for purpose.

It is easy to imagine an organisational scenario of change when

the pursuit of strategic alignment might be the worst thing we

could do. Our carefully designed and inter-connected talent

management jigsaw might look good. It might also make an

organisation more, not less vulnerable, to the snakes and ladders

of business turbulence¹.

The “one thing” of tactical intervention. This is the talent

management “hammer” in search of the “nails” of organisational

problems. There is no “one thing” solution that will work for all

organisations, however successful it has been in another firm. And

the introduction of that one thing - implemented without an

understanding of context - may be positively disruptive and

damaging.

If the big global consultancies have the full tool kit of “strategic

alignment”, the niche consultancy players have a hammer. But it is

a hammer that can be used in any number of organisational

scenarios.

Both perspectives operate within the mind set of “best practice”

talent management, the assumption that there is an established

way of doing things.

Getting to a talent management “best fit” game plan might require

the tough work of debate and decision making around hard

choices. But if it’s an easy talent management solution, the

chances are we haven’t found an approach that will drive

sustained performance for the distinctives of our organisation and

how it plans to compete for the future.

The survival and success of our organisations hinges on a

combination of skill and luck. Luck may or may not smile on our

business, but skill in the strategies and tactics we deploy in talent

management will optimise the chances that we endure and thrive.

Good advice comes with a rationale so you can tell when it becomes bad advice

Raymond Chen In “Anti Fragile”, Nassim Taleb makes the point that these systems simply provide

the illusion of resilience whilst in fact making them more fragile.

1.

30 © AM Azure Consulting Ltd 2012

AM Azure

Established in 1994, we combine evidence based practice and

pragmatic innovation. We:

summarise complexity to provide evidence based solutions

that are pragmatic and build and maintain momentum for our

clients. We don’t over complicate what in fact is often quite

“simple”. But we know what is genuinely difficult.

help trouble-shoot the messy organisational problems to see

the key issues, identify options and put in place actionable

plans that make progress.

cut to the chase to focus on the distinctive challenges of our

clients. We don’t embark on over-engineered diagnostic

methodologies that result in a generic solution we had in the

“back of our pockets” all along. But we do enjoy the innovation

that results from our clients with great ideas and want help in

translating them into practical applications.

draw on an extensive research base, library of resource and

range of tool kits, and up-to-date thinking to help design and

implement practical solutions quickly.

stay well clear of any talent management project that takes

more than six months to implement. We don’t enjoy the

boredom of long-winded project management meetings. And

neither do our clients who want to make things happen and

see results.

If you are interested in our approach to talent management,

and the processes we apply for “best fit”, call us on:

44 (0) 1608 654007

or email [email protected]