Talent Management: More Important than Ever

In times of retrenchment, when organizations have fewer employees, aligning people and positions is one of the most powerful levers available to leaders. Talent management is a strategic lever that allows leaders to increase the productivity, execution abilities, and change resilience of their organizations.

The Conference Board is out with its annual assessment of the top ten challenges facing CEO’s, which it delayed slightly this year in order to gauge the impact of the financial crisis. The report, CEO Challenge 2008, shows a shift in CEO focus with talent management dropping from the top 10 list — edged out by an emphasis on execution, productivity and change management. While an emphasis on the short term viability of companies is expected, the shift away from talent management as a key concern raises questions about just what we may mean when we use the term "talent management."

It would not be a surprise to discover that CEO's equate talent management with succession planning exercises. If succession management has been little more than fulfilling a deliverable to the compensation committee of the board, then it’s little wonder that this activity has moved, not just to the back burner, but off the stove entirely! Talent management is the strategic selection, development, and deployment of people in your organization. In an environment where so many leaders are focused on the near term, strategic investments in building the leadership capability in organizations may get deferred in some cases because of a perception that the participants can’t be spared from their daily responsibilities to invest time in building their capabilities. In the absence of developing leaders, intelligently deploying leaders becomes even more crucial.

Talent management requires understanding who are the key producers, influencers and developers in your organization, which roles are pivotal, and how you are arraying your key talent against the greatest opportunities. In times of retrenchment, when organizations have fewer employees, aligning people and positions is one of the most powerful levers available to leaders. Talent management is a strategic lever that allows leaders to increase the productivity, execution abilities, and change resilience of their organizations. Furthermore, uncertain times can result in unplanned exits from the company. What’s Plan B when a key player walks? Talent management focuses on both developing leaders and having contingency options ready for replacing people in roles.

The downgrading of talent management on the CEO Top 10 Challenges list is symptomatic of how leaders can lose their strategic focus in difficult times. Talent management is more critical now than in easier times. The decisions carry even more weight. None other than Larry Bossidy estimates that he invested 40% of his time on people issues. If the author of the popular book Execution: The Discipline of Getting Things Done values talent management so highly, it certainly deserves to remain at the center of the CEO agenda.

Three things you can do right now:

- Don't give up developing employees. But make employee training do double duty - that is, skip training for training's sake. Embed learning into the actual work to ensure you're getting maximum return for your dollars.

- Hire development companies that can do more than just training. Do they offer executive coaching? Organizational consulting? Can they develop your talent in several areas &mdas; for example, leaders and teams? Think comprehensively.

- Pay attention to morale and engagement. Studies show that employees become more engaged when they are given the opportunity to develop. When you offer training and development, you create a double positive: more highly engaged as well as more skilled employees.