Strategic Talent Management

The emergence of a new discipline
A view from the FTSE 100

Strategic Talent Management

The emergence of a new discipline
Executive summary
“If we don’t connect business and talent strategy, we will be nothing more than a typical HR unit, focusing on activities and not on impact and outcomes.” Activities or outcomes – what’s your focus? The cumulative impact of global demographic trends, combined with on-going economic uncertainty and aggravated by a critical skills shortage creates a powerful talent triple whammy facing business. In response, forwardlooking companies are bringing talent, particularly leadership talent, to the top of the agenda and are assigning responsibility for aligning business and talent imperatives to a senior talent executive. We are beginning to see the steady emergence of a new discipline of Strategic Talent Management, led by a Head of Talent or a similarly titled role. In order to increase our understanding of this relatively new role and its challenges, we approached the leading practitioners in FTSE 100 companies, in the latter half of 2011, to conduct research and in-depth interviews. The results are intended to serve as a guide for CEOs and Heads of Talent when evaluating their approach to senior talent management.
We found that the drive for structured talent management generally comes from a CEO who has recognised the importance of attracting and developing a superior pool of leadership talent that will enable the business to deliver on its strategy. A ‘flat world’ produces a number of tensions that Heads of Talent are expected to resolve. The drift of business from the West to East creates demand for a diverse set of leadership capabilities. Some senior executives readily understand that talent is a central enabler of strategy and that great talent management can be a source of sustainable advantage. A good number though, still regard talent development as a hygiene factor. Talent management in these companies can become an exercise in gap-filling and tactical recruiting. Our research convinces us that CEOs will continue to appoint a Head of Talent as a way of combatting this reactive mentality and creating awareness of the importance of talent to corporate success. It is for this reason that Heads of Talent tend to be viewed as distinct from the rest of HR, even when they report to the company’s top HR executive. But despite the advantages of being CEO appointees, many of the Heads of Talent we spoke to are struggling with paradoxes and ambiguity as they attempt to create alignment between business and talent strategy. They are often tasked with bringing consistency to talent management across decentralised business units, but they

2 Strategic Talent Management: The emergence of a new discipline

there is a need to share best practice to create the conditions for success. Purpose. achieving results through relationships and persuasion. Person. external talent challenges facing the company with tactical and internal challenges. The global economic crisis and the huge increase in unemployment have not made their role any easier. Profile. often with only influence to help them. Even with the high stakes attached to successful talent management and the right framework to help them succeed. many of them contradictory. They are balancing the strategic. but the future of most companies rests with the next generation.5 years have little or no power over hiring or promotion. there is still a marked shortage of people with the skills required to lead global companies. We discovered a complex set of factors. average length of time Head of Talent role has existed in the company 3 years 17% 157 90% 23 average length of time current Head of Talent has been in the role Heads of Talent that report to the CEO average size of top talent pool managed whole career spent in HR number of different job titles identified in our survey for the role 6 out of 10 average score in answer to: “How well do you think your organisation manages talent?” Heidrick & Struggles 3 . In the context of these challenges. we have developed a framework called the 7Ps which will be helpful in structuring the role of a Head of Talent: Pressures. Encouragingly. senior leaders and Heads of Talent on how to maximise the business impact of leadership talent. our research revealed an embryonic but emerging business discipline with little consistency around objectives or methodology. Overall. Process and Pools. winning Heads of Talent will still have to be diplomats rather than commanders. affecting performance and success. we found many Heads of Talent who had adopted this approach. Based on what we have observed and the insights that we have been able to glean. Power. Counter-intuitively. Heidrick & Struggles’ role as a leadership advisor to global organisations gives us a privileged perspective on these emerging trends and we undertook this study to start an on-going conversation with CEOs. The concerns of baby boomer and ‘generation X’ executives are important.

Top talent executives from 24 FTSE100 companies helped us in our research. It feels intuitively correct. Many of our CEO clients agree and have moved leadership talent to the top of their agenda. 1 see Appendix 1. The firms we surveyed use a wide range of titles for these leaders. and that an effective Head of Talent could have substantial impact on a firm’s competitiveness. At Heidrick & Struggles. our belief is that these Heads of Talent have an important role to play in improving corporate leadership. what they do. assigning responsibility to a senior executive. the context within which they operate and what constitutes success in their role. The report is divided into three parts: A summary of our findings. a review of the context within which these talent executives operate and finally a few tips for attaining success. ‘A note on titles’ 4 Strategic Talent Management: The emergence of a new discipline . if you have the right leadership talent in the right place with the right skills and behaviours. the agenda they address. In addition to the survey findings we have brought additional insights from Heidrick & Struggles’ leadership consulting experience. we identified a series of practices. but in this report we will refer to them as Head of Talent. as well as from research conducted at Harvard Business School. tools and competencies that can help create the conditions for success within this role and for the company as a whole. We wanted to test this theory by learning more about these senior talent executives: who they are. then the odds of successfully executing on your business strategy are high. We hope that it will be useful both to CEOs when they consider how to execute on their talent agenda and to the senior talent executives who are responsible for making the alignment of business and talent strategy a reality.1 Together with these executives.Introduction There is a growing body of evidence to support the idea that companies that align business and leadership talent imperatives have a greater chance of sustainable success.

we discovered great variety in the ways in which Heads of Talent operate and relate to line managers.Part 1 Principal findings – An embryonic but emerging discipline The Head of Talent is still a relatively new role. As we will explain in Part III. and some were the first Head of Talent their companies had ever hired. projects that involve high potential managers. There are few patterns that a CEO can rely on when appointing a first Head of Talent. conduct regular talent reviews and report on their progress. We found that on average the length of time a Head of Talent role had existed in the company was five years and that many of the current appointees had been in the role for about three years. trying to keep highpotentials engaged and providing front-line intelligence to senior line leaders (fig 1). and metrics. this means that Heads of Talent must take the initiative in structuring their own roles. A few companies have well-grooved talent management processes. and the like. Unlike more established functional roles (CFO. etc. Others spend more time on specific development initiatives: business school programmes. A good number of our interviewees indicated that they were still working out how they were expected to relate to their colleagues. systems. and companies use their executives in a wide variety of ways Most of the Heads of Talent we interviewed have been recently appointed. Chief Marketing Officer.) the Head of Talent is a newcomer and is rarely present on the executive team. figure 1 – How do you spend your time? Succession planning Training and development other Individual career management Recruitment Performance management Mobility management Compensation & Benefits 24% 22% 21% 10% 9% 7% 4% 3% Heidrick & Struggles 5 . As a result. Still others spend time ‘walking the floor’. Some are focused primarily on infrastructure for talent and leadership development – processes. but most are still exploring how they will select and develop high-potential managers. few models that a newly hired Head of Talent can easily adopt.

taken from our 2011 Board Study. Heidrick & Struggles.A wide variety of ‘Hot Topics’ that keep Heads of Talent awake at night Interviewees split their ‘Hot Topics’ into two categories – strategic and external talent challenges facing the company and tactical and internal issues. is reactive. blending global consistency with local delivery needs. we see that Heads of Talent are battling to create alignment between business and talent strategy: Hot topics Strategic Diversity Demographics • Aging population • Generational mix Globalisation & Emerging Markets • Global and ‘Glocal’ talent model • Relocation of business from West to East • Identifying. the time and effort devoted by the board to the development and 2 European Corporate Governance Report 2011 – Challenging board performance. data and tracking Change fatigue Succession and Leadership Pipeline Heads of Talent tended to confirm our experience that succession planning at all levels. but several of the ‘mega’ themes resonated with our experience and wider research on leadership talent. A few even fear that despite their best efforts “half the investment will walk out. In general. There are few surprises on either list. attracting and retaining leadership talent in emerging markets – “we say we are going into (emerging markets) but have no clue how to operate or source talent or how to expand our talent agenda in these new markets”. but particularly at the top. Many of the interviewees talked of developing a new ‘glocal’ talent model. but can also manage the balance between what can and needs to be done at the centre and what should be done locally. The drift of business from the West to East creates demand for a diverse set of leadership capabilities that can not only bridge the gap between established western management approaches and emerging eastern ones. Many Heads of Talent appear exasperated by the challenges of identifying. Generally.” Operational Workforce planning Business ambivalence • “Don’t get the talent management thing” • Resist forced distribution and performance management Career transitions • Sizing roles to smooth career moves • Internal rotations and transfers Quality of talent professionals Development plans and internal coaching Talent metrics.2 reflects the situation “A company’s leadership talent is its single most important asset and has become a critical governance topic for boards. 2011 6 Strategic Talent Management: The emergence of a new discipline . Some told us that they had learned a hard lesson that what attracts talent in emerging markets is different from what retains it and creates performance. The following quote. attracting & retaining talent in emerging markets Mobility • Willingness to move • Skills gaps across geographies Critical skills gaps • Global shortage of General Managers • Lack of commercial ‘savvy’ • From product to customer-centric competencies Succession • Internal/External pipeline Retention Globalisation and Emerging Markets A ‘flat world’ produces a number of tensions that Heads of Talent are expected to resolve.

in the majority of companies we looked at. but the intent is to focus on those who have the potential to grow into larger roles. Many respondents told us that their CEOs now wanted ‘an integrated and consistent approach’. hiring and redeployment depends on line managers. The average Head of Talent we interviewed had just over 150 people in their managed talent pool. our view is that this ratio should be reversed. In some cases. with most of them numbering under 250. but an executive or top talent pool that is a small proportion of the employee population. the existence of the list may be acknowledged. This may be to avoid internal discord. 70% of funds spent on leadership development go to formal training.” The statistics are quite worrying too – only 58% of boards we surveyed in EMEA had an effective CEO succession planning process and 46% had a vetted and viable candidate who could immediately step in as CEO if necessary. developing and retaining talent in their units. One reason for the popularity of the 9-box matrix. The people in these relatively small talent pools are the ‘group leaders’ or ‘high potentials’ or ‘critical list’: the name varies across companies. line managers became responsible for hiring. our interviewees did not expect the return of ‘big central HR’. it may also reflect a lack of confidence in the process on the part of talent managers. The Heads of Talent we interviewed typically ran very small teams. this number has not changed. ‘the list’ of high-potential leaders is derived from this matrix. but the list itself isn’t made public. There were few big budgets – in fact the majority of Heads of Talent didn’t know the proportion of the overall HR budget that they were allocated. Most Head of Talent roles manage a relatively small talent pool The typical Head of Talent does not look after all of the talent in the company. both inside and outside the company. We were therefore encouraged to hear many of our interviewees speak A common theme for the Head of Talent is the creation of consistency across decentralised units Many of our interviewees conveyed a history roughly like the following: As a result of decentralisation and corporate downsizing. Despite over a decade of mergers and substantial growth in the size of many companies. job-related development. Most had power that was indirect. a theme we return to later. we noted that few Heads of Talent had responsibility for creating and managing external talent pools. Interestingly. Heidrick & Struggles 7 . we think. They were expected to increase consistency across business units. We were surprised to learn that. On average. Our research also suggests that many companies could improve the way they allocate leadership development resources. with 70% allocated to experiential. The 9-box matrix that plots each manager on axes for performance and potential seems to be a favourite tool of the talent managers we interviewed. but it often led to inconsistencies. Our research and that of other firms (starting in the mid1990s) showed that these top pools averaged 150 leaders. more often driven by a desire for effective rather than simply more efficient senior talent processes. The CEOs could see that some divisional leaders did a great job in building their teams to the point that they could act as ‘net talent exporters’ to other parts of their organisations. Achieving more consistency across units thus became part of the mission for many of the Heads of Talent we interviewed. corporate talent managers have the ability to redeploy high-potential leaders from one unit to another.succession of its senior leaders is inadequate. But in most companies. to identify and deliver a more integrated corporate talent strategy. At the same time. the people ‘on the list’ aren’t told that they are on it. In the face of the critical skills shortage we explore later. But most of the power in the companies we looked at rests with the line leaders. many companies want to mitigate their leadership risk by aligning their talent agenda and pipeline practices to create ‘succession ready’ pools. regardless of the size of the company. is that it is relatively easy for talent managers to use and to explain to their CEOs and business colleagues. with talent managers playing an advisory role. In many companies. others experienced high turnover and had to look outside their units for succession. This had the advantage of making the line managers accountable.

One Head of Talent said: “We’re a very lean organisation so it’s easy to follow the people in my pool and get a good sense of whether they are happy or not. Others described how they got involved in relocation. Building on that approach. commercial acumen and internal awareness as top of their list. Each had come up with some system of metrics. Our interviewees spent 22% of their time managing training and development programmes. Other key competencies that were raised include: selfconfidence. I want to see around 10 internal appointments – rather than hiring externally – by Christmas. customer orientation. bringing together all people metrics in the company and trying to link talent health to business strategy. though several were just beginning to develop these and discuss them with line management. given the 70 / 20 / 10 rule of thumb. mobility.” Succession figured prominently in the metrics that several Heads of Talent employed. adaptability. That strikes us as about right. As one of our interviewees commented: “It’s difficult and often meaningless to try to calculate ROI on talent initiatives. special training programmes and career counselling. they focused on operational measures: completion of assessments. participation in leadership development programmes. Heads of Talent measure performance. and ratio of external hires. The majority of the Heads of Talent we interviewed did not try to relate their talent measures to the company’s financial output or share price performance.of project-based work. Instead. and the impact of that on the business. There was a considerable range in the elaborateness of talent metrics. One Head of Talent prepares an annual ‘People Balance Sheet’. such a scorecard could include: • head count (changes over time) • rate of talent change (external/internal moves divided by headcount. Our research suggests that a majority of our interviewees are strong in the relationship and associated influencing skills and have built deep and advisory-type relationships with their colleagues. We are thinking of setting similar targets for 2012. A Head of Talent explained: “I have a clear picture in regard to external hiring numbers at the top level. resilience.” Heads of Talent see ‘relationship building’ as being a key competency for their success We asked Heads of Talent to identify the three key competencies that underpin success in the role. The systems in other companies are more complicated. measured by year bands Several companies measure line managers on talent management activity.” Another commented: “The CEO can see the value of our work in our leadership presentations.” 8 Strategic Talent Management: The emergence of a new discipline . Some of the interviewees focused on technical skills and experience of HR processes and approaches but many identified relationship building. using primarily operational metrics We asked the Heads of Talent how they measured their own performance. attrition ratio at the top) • talent mix analysis (potential against performance) • proportion of new joiners to the entire employee group • tenure in position or company. But as we will discuss later. rather than to bring them in from outside. the resulting score figures in the manager’s bonus. you need to look at what you are doing relative to your industry and competition and see whether it’s making a difference. and now there’s a waiting list for our development programmes. number of talent reviews done by line managers. many have yet to fully develop and demonstrate the commercial acumen that would bring organisational buy-in and credibility. The CEO doesn’t need convincing. Rather. strategic thinking. It’s better to move people around. in which high-potentials are encouraged to work together on strategic issues.

Several Heads of Talent reminded us that they operate through line managers. but most thought that they could improve: “We need to be more joined up. was 6 out of 10. I expect it to go to an 8.5 or 4 out of 10. A few felt they were doing very well. But over the next two years. and the most common. The CEO doesn’t need convincing. The average overall rating. Another manager stressed implementation: “Right now I’d give us a 3. by area To be improved Compensation & Benefits Individual career management Mobility management Performance management Recruitment Succession planning Training and development Standard Good Excellent Heidrick & Struggles 9 .” said one. “The CEO can see the value of our work in our leadership presentations.Most Heads of Talent feel their companies could do a better job We asked Heads of Talent to rate their firms’ overall performance on talent management from 1 to 10. now it’s about how we take the ideas and make them happen.” Asked to evaluate a set of specific talent practices.” figure 2 – How Heads of Talent rate their company. and now there’s a waiting list for our development programmes. Our plans have huge potential. and that metrics should reflect this.” said one. Heads of Talent felt Mobility management and Training and development were areas where there was room for improvement (fig 2). rather than directly. referring to line management. “I don’t want to take credit for someone else’s work.

“My CEO sees the recession as a great opportunity to pick better people. High unemployment and the critical skills gap The global economic crisis and the huge increase in unemployment have led some to think that talent is readily (and cheaply) available. “The world seems to be running out of general managers that can run everything – P&L. even in these tough times. unless steps are taken to quickly and effectively integrate the new executive into the company culture. but experienced CFOs. Our work shows a steady trend toward recruiting to the top team from within and organic development of leaders. CEOs cannot be sure that the superstars they hire will perform well in their new environment. supply chain. on average. divisional general managers and CEOs remain challenging to secure. motivating and retaining them. with the vast majority reporting into the HRD (fig 3).3 A company hiring a star performer from outside should.Part 2 Contradictions. candidates with good jobs are cautious about changing firms. Increasingly. we were struck that Heads of Talent operate in an environment of contradictions and significant ambiguity. significantly. as companies migrate from product to customer centric approaches.” Our interviews and Heidrick & Struggles’ broader work confirm that high quality leadership talent is not easily found. A few of these contradictions really caught our eye: Even when they succeed in luring talented managers from other firms. Research by Boris Groysberg of the Harvard Business School suggests that ‘superstar’ talent is rarely as portable as we imagine. and for several years. talent – it appears people are specialising too soon. In difficult economic times. Heads of Talent are looking in vain for those with client relationship building skills. but many sectors still experience ‘seller’s markets’ for talent. So it appears that the ‘War for Talent’ is not over. Heidrick & Struggles and The Economist Intelligence Unit. we still see that many companies do not yet have these deep leadership resources to draw upon or prefer to ‘trade’ in the talent market to meet their needs. Chasing Stars (Princeton. The Global Talent Index Report: The Outlook to 2015 10 Strategic Talent Management: The emergence of a new discipline . 2010). marketing and brand behaviour. ambiguity and credibility As we reviewed our research data. It is true that there is currently a glut of job-seeking graduates. However. expect him or her to underperform. Talent management has become more than just acquiring new executives and is increasingly focused on developing. Contact with the CEO and other senior line 3 see Boris Groysberg. but there is a challenge to keep the talent management momentum up and ensure that we match the right people to the right opportunities.” We also heard that companies are finding it difficult to source talent with ‘commercial savvy’. the battle lines have just changed. capability around brand building. The situation is uneven across industries and roles. Heads of Talent told us that they are struggling to find executives with the right level of leadership experience and capability. Heads of Talent have significant work to do. Companies have to fight hard and pay well for talented managers. who as we identified earlier is looking to increase effectiveness and impact of senior talent on business results. Serving the CEO agenda and the lack of airtime The drive for improving talent management generally comes from the CEO. We found that relatively few Heads of Talent (around 17% of our sample) reported directly to the CEO.

energy and the ability to deal with setbacks. Interviewees told us that engagement was higher where they demonstrated ‘commercial savvy’ and spoke ‘business’ rather than ‘HR’ language. Moreover. but their names are often not known except at the very top. The Head of Talent must therefore take a lead without formal authority. But most of the power in the companies we looked at rests with the line leaders. “Executives in the ‘top talent pool’ are critical to the success of the company. HR or business role We also found ambiguity around the positioning of talent management. Heads of Talent explained their need for resilience. but rarely give them direct authority over hiring. 1998).” Others felt that positioning talent in the HR function only served to confuse internal clients: “If talent is everywhere and everyone has it – what’s the difference between Talent Management and HR?” Finally having often been asked by the CEO to bring transparency to senior talent management processes. sometimes even secret from those on the list. “The challenges we face are all internal. our respondents were surprised that the list of ‘Hi-Pos’ (high potentials) was a closely guarded secret. There’s a real ambivalence around talent here. the business is just not interested. with many suggesting that sitting within the HR function impacted credibility and acceptance by the business. we explore ways in which Heads of Talent can learn to navigate this ambiguous environment. see Ronald Heifetz. Our Heads of Talent confirmed this when we asked them what made a successful Head of Talent.” Heidrick & Struggles 11 .figure 3 – Who do you report to within your company (position title)? HR Director CEO more senior Talent Manager 17 4 3 executives also appeared ad hoc and relatively infrequent. as was the ability to build trust. Interpersonal skills were critical we learned. They were expected to increase consistency (as well as efficiency and effectiveness across business units) to identify and deliver a more integrated corporate talent strategy. they told us the winning talent manager operates through influence and suggestion rather than by exercising power. Responsibility without authority CEOs expect their Head of Talent to create consistency between line divisions. the business is just not interested. Those with direct reporting status or strong professional relationships with the CEO felt that visibility gave them an edge in dealing with some of the difficult senior talent issues they faced. There’s a real ambivalence around talent here. Leadership without Easy Answers (Harvard.” In the next section. “The challenges we face are all internal. deployment or retention. A number of interviewees talked of ‘being around’ when the CEO or the EXCO were in town or of briefing the CEO before the annual talent update to the board. promotion.4 4 for more on leadership without authority. tenacity.

And for the growth to come in these areas. the Head of Talent can catalyse a productive discussion about talent in the company. Winning Heads of Talent will be diplomats rather than commanders. So. You need growth to come in these particular areas. capabilities you have today – where you’re good and not so good. In an interview about her experiences. Beth Axelrod was the first Head of Talent appointed by WPP. Then. you’ll need a different cost structure because your margins are going to start to be squeezed. It is worth revisiting this value proposition periodically. Define your own value proposition As we noted earlier.) seem unable to address? Purpose Why has the company hired a Head of Talent? What are the problems that they are asking the manager to 5 “The challenge of hiring and retaining women: An interview with the head of HR at eBay”. September 2008. 12 Strategic Talent Management: The emergence of a new discipline . let’s talk about the implications for talent and for the organization. to ensure that the company and Head of Talent remain aligned on the value that this role is to deliver. Achieve alignment around seven key dimensions Alignment around the Head of Talent’s expected contribution is critical. there are very few blueprints that companies can rely on when they bring a Head of Talent into the organisation.Part 3 Creating the conditions for success Our interviews suggest that the most successful Head of Talent will take the lead both in defining ‘what success looks like’ for them and the company and in creating alignment between themselves and their colleagues about their role. we’ll have to fill out those capabilities. and they will work to link talent strategy with business strategy. she is now the global head of HR for eBay. Our interviews suggest that it is also important to seek consensus around the ways in which the Head of Talent will work with other executives in the company. McKinsey Quarterly. and about the value that the CEO and other executives expect their Head of Talent to contribute. she explained how such a conversation might begin: “You’re trying to drive ad sales from X to Y.” 5 By taking the lead in this way. etc. The following checklist – 7Ps – will be helpful in structuring the role of the Head of Talent. in the line. and what it will take to deliver that value. achieving results through relationships and persuasion. let’s talk about what Pressures How immediate are the company’s talent issues? Where are talent problems interfering with corporate performance? Where are the ‘pain points’ that existing leaders (in HR. The winning Head of Talent will therefore take the lead in proposing the value that he or she intends to add to the company. They will forge strong ties with their colleagues in line management. In addition. Let’s talk about where you have people and why you’ve got so many of them in high-cost locations.

and the willingness and ability of line managers to act as talent managers themselves. It is essential that everyone on the top team understands who falls into the Head of Talent’s portfolio. succession? The purpose of a Head of Talent will depend on many things: the company’s culture and its traditions. Person What skills should the Head of Talent possess? What experience should he or she have? For example. Most Heads of Talent had somewhat less frequent access to their CEOs. First. but communicate widely within their companies. Pools Finally. continuous dialogue with the business in terms of people asking what they need and what I and my team can deliver. which talent pools will the Head of Talent manage? Some companies divide their pools. Heidrick & Struggles 13 Power What decision making powers does the company want to invest in its Head of Talent? Will they have veto over senior hiring decisions? Over deployment of leaders in ‘high potential’ pools? Where will the Head of Talent have to operate through persuasion and where through direct decision making? Process Where will the Head of Talent get involved in top executive processes and forums? To clarify. has one talent manager for roughly the top 100 and another for the next 250. meeting their portfolio executives in person. The winning Heads of Talent seem to get two things right. well connected to colleagues With very few exceptions. This is a role where walking around and talking can be essential to success. one large industrial company for example. The CEO and Head of Talent also need to agree on the right external profile. a leading investment bank has regional talent leads (Europe. A CEO who wants such a broad internal profile for the Head of Talent will need to support the executive in gaining access to diaries. In many cases. successful Heads of Talent are diplomatic. Will the Head of Talent be involved before the deal is agreed? Or will he or she read about it in the newspapers and then be told to help integrate top talent in both . and often with a corporate executive team or executive committee. a key source of ‘ready now’ talent. managing their relationships like politicians. A formal report to the board or executive committee was often a motivator for meetings between the Head of Talent and CEO.solve? Are they primarily about recruitment. these meetings took place less than once a month. suppose that the company wants to take over a smaller competitor. Operate as a diplomat. alignment is what matters. companies? There is no ‘right’ answer here. In the appendix we offer a template for CEOs and Heads of Talent to use to review the current situation and future goals of their senior talent management strategy. retention. Asia. the capabilities already present in HR. One interviewee said: “I have profile with the business heads.” Many Heads of Talent meet regularly with line executives to conduct succession and development reviews. they get plenty of ‘air time’ with their colleagues – not necessarily the CEO. I knew it was important to have high impact early on. Second. Profile What internal and external profile should the talent manager maintain? Our interviewees emphasised the importance of ‘getting around the company’. One Head of Talent told us of “an open. Heads of Talent operate with little formal power. Some of the Heads of Talent we interviewed have relatively modest external profiles. But the CEO recently decided that the global Head of Talent needed to be deeply rooted in investment banking to facilitate easier communication with people at headquarters. They succeed or fail primarily through influence and persuasion. We saw several Heads of Talent use this type of checklist to define the current position of their role and impact and set a plan for the future. but certainly the executives who matter. Few of our interviewees had responsibility for external pools. it is often a good idea to pose some challenging scenarios: for instance. and North America) who don’t have wholesale banking experience. and what interaction he or she will have with them. key internal business events and even some client facing meetings.

We encourage Heads of Talent to look forward and outward. does this imply for these firms’ growth? How should talent risk impact an oil firm’s forward investment programme? It is easy for the Head of Talent. drivers of behavioural and cultural change from within. the CEO will also be so concerned. Profile.” We don’t find this result surprising. the Head of Talent needs to take the lead here. for example. It will also keep the CEO’s door open.” said one of the managers we interviewed.” But the majority reported breaks in the chain linking business strategy and talent strategy. All were aware that. ones that CEOs know how to work and how to lead. faces a severe shortage of senior engineering leadership. focusing on activities and not on impact and outcomes. “I need to make talent meaningful to my colleagues. What is the best way to forge a strong connection with company strategy? A good starting point: work backward from the company strategy to the talent requirements it implies. Our hope is that it will help create greater clarity around the strategic importance of this key business role and function.” one Head of Talent told us. line managers often don’t know how to take the first steps in aligning it with their business strategies. Our 7Ps (Pressure. The oil and gas industry. Many global firms are seeing their areas of strongest growth shifting from North America and Western Europe to Asia. We think that this is good advice for every Head of Talent. To help improve the focus and impact of these efforts we propose a simple and practical checklist style diagnostic (appendix 3). “we will be nothing more than a typical HR unit. For a relatively new area like talent management. Person. as well. n . The concerns of baby boomer and ‘generation X’ executives are important. These leaders have different views about work. looking at talent or leadership risk facing the company. feeling that ‘not talking like HR’ gave them more credibility with line managers. “If we don’t connect business and talent strategy. the Heads of Talent we met are taking the lead in communicating their value and mission to the business and using their influencing and diplomatic skills to seed change amongst the top population of their companies. communication and collaboration.and to build good relationships quickly. “Business strategy feeds talent strategy which in turn feeds succession. because of demographic shifts and a decline in enrolment in petroleum engineering courses in the past. working hard to create credibility and traction in the organisation and with critical business leaders. to develop an inward focus. retention or reward. they were not the decision makers around hiring. HR – struggle to connect their planning with the flow and direction of the business.” Many of our interviewees were quick to distinguish their roles from HR. IT. Focusing on these issues will help Heads of Talent keep their work directly relevant to the most pressing issues of the company. and Pools) is intended to help CEOs and Heads of Talent to map out the gap between their long term aims and current reality. Africa and Latin America. According to one. However. aligning business and talent imperatives. A few interviewees felt that they were running tightly ‘joined up’ systems. As we suggested above. What implications does such a shift have for executive talent? What does this imply for senior executive mobility? For leadership development in the company? Another approach we have found helpful is to work forward. A smart Head of Talent will get to know them and look carefully at their needs. but the future of most companies rests with succeeding generations. concerned with the executives they are responsible for. The board of any company will be concerned both with implementation of its strategy and with risk to future performance – and therefore. In company after company. Connectivity – linking business and talent strategy Our interviewees recognised the difficulty. Process. scope and real business impact of leadership talent professionals and functions. Our research suggests that this discipline is in an embryonic state. marketing. functional leaders – finance. The task is easier for the older functions. the Middle East. What risks 14 Strategic Talent Management: The emergence of a new discipline Conclusion A new strategic talent discipline is emerging but there remains confusion about the nature. still developing. Purpose. in most cases. They see their role as longterm in nature. but told us that a strong Head of Talent will find ways to connect talent and business strategy. and they saw this as a problem. Power.

com Caroline Vanovermeire Principal cvanovermeire@heidrick.com Dave Tullett Director Centre for Leadership Innovation dtullett@heidrick. contact us at leadershipsolutions@heidrick. we leveraged Heidrick and Struggles’ network of senior talent executives to conduct more ad hoc and informal discussions around the themes we uncovered.com Victor Prozesky Partner vprozesky@heidrick. We would like to thank all of the Heads of Talent for the time they have spent participating in the research. either face to face or via telephone. The talent management professionals we spoke with represent a strong cross section of leading players and industry sector listed on the London Stock Exchange. Additionally. If you would like to contribute to the dialogue. with 20 of those respondents. To add further depth to these findings we conducted detailed interviews.com Sarah de Corday-Long Associate Principal sdecordaylong@heidrick. all of them senior talent management professionals within FTSE 100 companies.com Heidrick & Struggles 15 .About the survey A total of 24 people participated in our on-line survey.com Annabel Parsons Partner aparsons@heidrick. The interviews and study were developed and produced by London based Heidrick & Struggles leadership consultants.com Rebecca Curran Associate Principal rcurran@heidrick.

Director of Group Resourcing and Development Director of Group Talent Development Director of Organisational Capabilities Director. Talent Management 16 Strategic Talent Management: The emergence of a new discipline . The executives we interviewed have the following titles.Appendix 1 A note on titles We chose ‘Head of Talent’ to refer to the top talent management executive in a company. Leadership development and Change Global Learning & Development Director Global Practice Leader Talent Management Global Talent Director Group Head of Talent Group Head of Talent. Resource Development and Resourcing Group Head of Talent Management Group HR Director (2) Head of Leadership Development Head of Leadership. Talent and Learning Head of Resourcing and Development Head of Talent & Development Head of Talent Management Leadership Development Director Senior Talent Manager SVP Global Talent and EMEA Human Resources VP. Group HR and EHS General Manager Human Resources and Legal Global Director of Organisational Development and Leadership Global Head of Talent.

Appendix 2 Responses to our survey What is the gender of the Head of Talent? (n=24) 33% 67% Male Female How many years of professional experience do you have? (n=20) 0% 0% 32% 68% 0–5 years 5–10 years 10–20 years 20+ years Was your previous role within? (n=20) 85% 15% HR other function How long have you been with the Company? (n=24) 63% 26% 11% 0–5 years 5–10 years 10–20 years Were you recruited externally or internally for this position? (n=20) 50% 50% Externally Internally How long have you been in this position? (n=24) 33% 46% 21% 0–2 years 2–5 years 5+ years What responsibilities do you encompass regarding the Top Population? (Select all that apply) (n=24) 25% 71% Compensation & Benefits Individual career management (promotions and rotations) 42% 58% 66% 91% 83% Mobility management Performance management (target setting. Development plans) When did the Head of Talent (or closest equivalent) position first exist in your company? (n=24) 25% 25% 50% 0–2 years 2–5 years 5+ years How many people do you have in your Top Population / Talent Pool? (n=24) 153 average Top Population Who do you report to within your company (position title)? (n=24) 17% 71% 12% CEO HRD more senior Talent Manager What is your level of study? (n=20) 40% 40% 10% 10% Degree Masters MBA n/a Heidrick & Struggles 17 . on boarding) Succession Planning (people reviews. etc) Training & Development (Corporate University. assessments) Recruitment (head-hunters.

How would you rate your company’s performance on talent management? (n=24) Compensation & Benefits 13% 29% 50% 8% To be improved Standard Good Excellent How many people report to you? (excluding personal assistant) (n=24) 8 average What was your career path prior to becoming Head of Talent? (n=24) 90% 10% HR other Individual career management 21% 33% 33% 13% To be improved Standard Good Excellent How do you spend your time? (n=24) 3% 10% 4% 7% 9% 24% 22% 21% Compensation & Benefits Individual career management Mobility management Performance management Recruitment Succession planning Training & Development other Mobility management 42% 33% 25% 0% To be improved Standard Good Excellent Performance management 17% 17% 66% 0% To be improved Standard Good Excellent In which industry does your company operate? (n=24) 29% 34% 29% 8% Consumer Industrial Financial Services Pharma Recruitment 13% 33% 46% 8% To be improved Standard Good Excellent % may exceed 100 due to roundings Succession planning 13% 25% 50% 13% To be improved Standard Good Excellent Training & Development 33% 21% 25% 21% To be improved Standard Good Excellent 18 Strategic Talent Management: The emergence of a new discipline .

Appendix 3 Heidrick & Struggles’ Talent Management Diagnostic 7Ps Pressure What are the talent issues that are impacting performance? How are / should these be addressed? What do I need to ensure future success? What have I got today? What will I do to close the gap and keep it closed? Purpose What is the main focus of Head of Talent effort? Is it aligned with the key talent issues and the strategy? Person What skills and experience are critical to the role? Do these exist? Profile What is the internal and external impact of the role/ function? What “brand” promises exist? Power What are the decision rights held by Head of Talent? Process Where is Head of Talent involved in top executive processes and forums? Pools What is the size and definition of the talent pools? Is Head of Talent responsible for internal and external pools? Heidrick & Struggles 19 .

For almost 60 years. we have been building deep relationships with the world’s most talented individuals on behalf of the world’s most successful companies. www. Inc. Reproduction without permission is prohibited. and retention of talent we help our clients – from the most established market giants to the newest market disruptors – build winning leadership teams. development. 201201JNTSEC73 . Through the strategic acquisition. All rights reserved.Heidrick & Struggles is the leadership advisory firm providing senior-level executive search and leadership consulting services.heidrick. Trademarks and logos are copyrights of their respective owners.com Copyright ©2012 Heidrick & Struggles International.

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