Make Your Company a Talent Factory

[June 2007 - Harvard Business Review - by Douglas A. Ready and Jay A. Conger] Stop losing out on lucrative business opportunities because you don’t have the talent to develop them. ... Despite the great sums of money companies dedicate to talent management systems, many still struggle to fill key positions--limiting their potential for growth in the process. Virtually all the human resource executives in the authors' 2005 survey of 40 companies around the world said that their pipeline of high-potential employees was insufficient to fill strategic management roles. The survey revealed two primary reasons for this. First, the formal procedures for identifying and developing next-generation leaders have fallen out of sync with what companies need to grow or expand into new markets. To save money, for example, some firms have eliminated positions that would expose high-potential employees to a broad range of problems, thus sacrificing future development opportunities that would far outweigh any initial savings from the job cuts. Second, HR executives often have trouble keeping top leaders' attention on talent issues, despite those leaders' vigorous assertions that obtaining and keeping the best people is a major priority. If passion for that objective doesn't start at the top and infuse the culture, say the authors, talent management can easily deteriorate into the management of bureaucratic routines. Yet there are companies that can face the future with confidence. These firms don't just manage talent, they build talent factories. The authors describe the experiences of two such corporations--consumer products icon Procter & Gamble and financial services giant HSBC Group--that figured out how to develop and retain key employees and fill positions quickly to meet evolving business needs. Though each company approached talent management from a different direction, they both maintained a twin focus on functionality (rigorous talent processes that support strategic and cultural objectives) and vitality (management's emotional commitment, which is reflected in daily actions). More