Nine questions about talent management
Talent management is fundamentally based on understanding human nature, abilities, and potential. Often overlooked, the philosophy behind talent management plays a critical role in the implementation and effectiveness of these programs. The challenges of talent management start here.
Attraction and retention focus on placing the most talented and dedicated individuals in appropriate roles while maintaining a sufficient pool of candidates for senior decision-making positions over time.
What could be more straightforward?
The ongoing challenges of intractable skill shortages, uncertainties about leadership effectiveness and ‘bench strength’, and worries that hybrid work may undermine culture and connection suggest that current talent management approaches are not effectively delivering ‘talent’ at any level.
This observation places considerable weight on the talent management process. However, if the investment in talent management doesn't alleviate these organisational challenges, what purpose does it serve?
Where did talent management come from?
The term talent management was introduced in the late 1990s by McKinsey & Company in their book The War for Talent. The authors contended that a company’s success in the marketplace was increasingly linked to the performance of its top managers.
‘Star’ performers are seen to contribute disproportionately to organisational performance; therefore, they hold greater value in the talent marketplace. Consequently, the exit of a star performer can have significant consequences for organisational performance, intensifying the competition for talent.
For practitioners, differentiating between stars and non-stars became the primary objective of talent management. Jack Welch’s controversial ‘vitality curve’ distinguished A players from B and C players. The C players were sacked.
The widely utilised Nine Box Grid serves a similar purpose based on assessments of potential and performance. However, users of the Nine Box Grid encounter challenging philosophical and measurement dilemmas.
What do we mean by potential? How robust are our measures of performance? What’s the difference between a low performer with high potential and a high performer with low potential?
McKinsey did not ‘invent’ talent management, but the strength of the ideas they introduced took on a fad-like quality that continues to influence talent management programs.
Reflecting on the assumptions underpinning talent management is crucial, as they often go unnoticed. This reflection can help us break free from traditional talent management routines and explore new opportunities for growth and improvement. However, we must first understand the issues.
What’s your talent management philosophy?
Internally, many organisations run ‘talent programs’ that are often as troublesome for the ‘talent’ as for the leadership. The problems usually begin with the philosophy on which these programs are based.
Do leaders believe they are engaged in a ‘war for talent’ where attracting and retaining employees is crucial for competitiveness? In this view, talent can arise from anywhere and should be pursued at any cost.
Is the strategy focused on selecting high-potential individuals and nurturing their careers? Here, the investment is in the development of talent.
Is it a more inclusive perspective that recognises everyone's inherent skills? Management's role involves identifying strengths and aligning them with appropriate positions where individuals can flourish.
Does the talent system operate on the assumption that enhancing overall performance increases everyone’s potential, ensuring development opportunities are accessible to all? Management is responsible for investing in raising all the boats.
Talent management programs frequently combine various philosophies, which can create some confusion for those selected. There may also be a less clear understanding of the expected outcomes of investing in talent.
Talent management is fundamentally based on understanding human nature, abilities, and potential. Often overlooked, the philosophy behind talent management plays a critical role in the implementation and effectiveness of these programs. The challenges of talent management start here.
Is your talent management process adaptable?
Attracting, selecting, and retaining talent often have an industrial feel. People are hoovered up to be passed through filters and shunted until the talent is revealed. The process has more in common with strip mining than we might like to admit.
Many firms provide IT talent solutions that expand the talent pool while streamlining the selection process. But does speeding up the process improve the quality of the talent decision? Ultimately, it is a decision about capability, skill and fit.
This process highlights an intriguing division of perspectives.
The organisation views talent attraction, selection, and retention as an acquisition process that, depending on the talent philosophy, may bridge a skill gap or offer a competitive advantage. It is typically depicted as market-driven competition for the best.
However, applicants depend on information that provides a comprehensive and context-rich understanding of the organisation, the job, and how it aligns with their aspirations.
Aspirations and expectations regarding work and its role in life have fundamentally shifted post-pandemic. Potential applicants are rebalancing their criteria in ways that may not align with the organisation's expectations.
For example, Gen Z is reported to be consistently clear about the new criteria, which might be expressed in raw terms as:
This will not be my lifelong job.
I will compare your claims to others; I will hold you accountable.
I don’t trust your corporate spin; I will rely on my informal networks as a trusted source of information.
I will pursue my interests, not your predetermined career path.
I will prioritise my well-being over achieving your objectives.
The older generation hesitates at this approach. We quietly express our concerns about entitlement, self-interest, and ingratitude, conveniently overlooking our role in fostering a generation that is independent, confident, inquisitive, and willing to question tradition.
This generation embraces a boundaryless approach to work, a concept introduced at about the same time as talent management. Boundaryless careers were regarded as the means of maximising talent and enhancing organisational performance.
Gen Z is following the dream charted by previous generations as a path to greater productivity.
Do we have reliable data when picking winners?
In blunt terms, talent management is the art of selecting winners and, by extension, identifying losers.
The assumptions underlying talent selection imply that human capability can be reduced to routine and that the data guiding these decisions is reliable. Additionally, they assume that those tasked with selection can be relied upon to identify winners.
Punting on horse racing provides more reliable methods for choosing winners than talent management. When selecting the likely winner of the Melbourne Cup, punters have access to comprehensive, high-quality structured data, including past performance records, speed figures, track conditions, jockey statistics, handicap weights, and breeding history. Even better, this data is standardised and can be packaged for statistical analysis, making it easier to identify patterns and assess probabilities. Having AI at the punter’s disposal adds a layer of analytical capability not available when selecting human winners.
However, despite all this, the bookies continue to profit because the combination of the horse, jockey, race, track, and punter creates persistent uncertainty about the outcome. Punters, relying on internal logic, choose a horse based on the jockey’s livery, the horse’s appearance, or simply because it feels like the right choice.
In contrast, talent management decisions rely on self-generated resumes of experience, poorly conducted interviews, and subjective, biased, and incomplete performance assessments that often emphasise short-term performance. The likelihood of selecting a winner based on this information is low, leaving us to rely on our internal logic.
Decisions in talent management often reflect the subjectivity, bias, and inconsistency of the fallible humans involved in the process.
Do we know what we are selecting for?
Talent management frequently relies on limited lists of broad traits that define ‘talent’. Usually, these lists stem from the characteristics observed in other successful leaders. It is assumed that these traits remain constant over a person’s career, can be recognised by more experienced colleagues, and can be assessed separately.
The discussion about whether talent is natural or nurtured is key to this assumption of talent management philosophy.
If talent is innate, these qualities are apparent. Conversely, if talent is developed, these traits can be fostered with adequate time.
Summarising talent qualities in a list makes identifying talented individuals and categorising their common traits easier—we know what to look out for. Furthermore, once we recognise these traits, they can provide a framework for detecting talent within the organisation and supporting its development.
While this idea may seem appealing, it fails to recognise that talent comes in various forms and may not always emerge at the organisation’s convenience.
Leaders rely on their followers’ strengths and weaknesses as much as their talents, skills, and resources. How does our list of talents help us stay open to possibilities beyond individual talent? A list is designed to limit our choices and focus our selection efforts, not open up different possibilities.
Regardless of origin, a generic list of characteristics or competencies cannot effectively identify talent.
How well-prepared individuals navigate the obstacles to pursuing the organisation’s operational demands and strategic goals truly matters.
Choosing talent isn’t solely about what has been successful in the past or what is effective now; it’s about figuring out what will be needed in the future that is inherently uncertain.
Does the cream always rise to the top?
Those who have ‘it’ will inevitably rise to the top through the survival of the fittest process, won’t they?
In large organisations, career development is like a tournament. Talent is tested through multiple rounds, with ‘losers’ being eliminated, often never returning. The more talented individuals advance to the next stage and are perceived as having ‘it’.
In more competitive organisational environments, there is no need to invest in individual development; providing the conditions for competition is sufficient to identify talent.
The emphasis is on sifting rather than development. The ‘best’ person will prevail, and any investment in development can be used as an additional reward to motivate performance.
This approach is based on the understanding that the skills and ability to endure tournaments indicate talent.
It also assumes that those making selections can differentiate between genuinely talented candidates and those who simply excel at reading situations and conveying the 'right' impression during the tournament.
What about the ‘B’ team?
In most organisations, the ‘not-talented’ group is significantly larger than the ‘talented’ group. Indeed, many organisations would struggle without the ongoing efforts of the B-team, so what motivates this group to keep performing?
The exclusivity of talent management raises questions about whether to communicate who is talented or not.
Teams are the engines of organisational performance, and talent programs based on individuals can be potentially divisive. While those in the talent pool may feel valued, the larger group of ‘B’ players may withdraw their commitment.
When managing talent, leaders must simultaneously communicate exclusivity and inclusivity.
As a result, organisations may appear vague, secretive, and ambiguous about who is included in the talent pool, as the benefits of not openly discussing talent status outweigh the drawbacks.
Efforts to maintain secrecy often fail. The members of the ‘in-group’ are inevitably revealed. Typically, the B-team is left with little to no information about the selection criteria and the reasons for their exclusion.
Notably, the value of A-team membership may be questioned if there are impostors in the A-team. For the B-team, recognising their exclusion can gradually renegotiate their psychological contract with the organisation.
The rationale for talent management lies in the value that high-performing individuals bring to the organisation; however, the overall cost can be significant and is often concealed.
Should we invest in raising all the boats?
On the surface, this seems like a trivial question. Yet, when we broaden our definition of performance to include not only a talented individual but also a skilled team operating within a familiar environment, it begins to make more sense.
The context and teams are crucial in considering talent.
A hospital study revealed significant variances in success rates among cardiac surgeons performing identical procedures in different settings, highlighting the importance of context and teamwork.
Surgeons achieved better outcomes in facilities where they had completed more procedures. These performance discrepancies are linked to a surgeon’s familiarity with essential hospital resources, including specific staff members, team dynamics, and operational protocols.
Research on CEO performance in new organisations highlights the challenges of sustaining individual performance in a different environment. A recent US report shows that 2,000 CEOs exited their roles in the first 11 months of 2024.
Teams, stable work environments, and consistent practice are vital for performance.
Talent management philosophies drive job rotation, as the organisation and the individual seek to maximise the experiences that will reveal the talent worthy of climbing the greasy career pole.
The effort devoted to a person-centred approach to talent management may be more effectively invested in developing capable and talented teams while stabilising their work environments.
Are there opportunities for change?
The ‘war for talent’ concept is now deeply ingrained in many organisations, with talent management systems explicitly and implicitly reflecting this belief.
Senior leaders promoting person-centred talent programs have attained the highest levels of the organisation. They might overlook the challenges faced by their peers who did not reach the same heights and the possibilities of alternative strategies.
Consequently, the push for change is likely to be generational. For instance, Generation Z appears more receptive to diverse ideas and approaches.
The current approach lacks an honest assessment. Talent decisions that change career trajectories are often based on data unsuitable for those choices.
Shifting the focus from individual talent to team performance would transform the fundamental unit of value and measurement, thus redefining the entire talent management system.
