May 23, 2011

Meaning: Collectively, we spend precious little time on talent reviews, human capital audits and dialogue about people. Yet in an increasingly knowledge-based economy, we all know talent matters; it has a distinct, discernible value to an organization. An analysis of S&P 500 companies revealed that only $1 of every $6 of “market to book” value is from financial or physical assets. The remainder is from intangible assets – principally, an organization’s talent. That translates right into your role as a leader and what you do to grow and preserve your organization’s talent assets. The shorthand for your role says you need to have the “right people on the bus.” I think it is helpful to realize there is more than one “right” when it comes to decisions about people. This April, when I was on a panel with the head of talent for a Fortune 50 company, he noted that his company considers talent decisions in terms of five rights. That suddenly made the concept richer for me. Think about the right person with the right skills in the right job with the right timing for the right reason. We can change the dialogue about “the right people on the bus” by considering all 5 rights. 

Idea for Action: Spend time to do a real talent audit for your team or function. As a starter, ask yourself these questions about each individual player: Do I have the right person (think values and cultural fit); with the right skills (think kinds of skills and skill levels); in the right job (think match between the individual and the job); with the right timing (think today or tomorrow); and for the right reason (think whose needs you are meeting – yours, the individual’s or the organization’s). Use this audit to determine whether you really have the people and resources to meet your function’s goals. If not, you have changes to make.

Face the facts. If you discover that you have too many “C” players who lack a combination of several of these “rights,” you need to find a solution. Some are simply in the wrong job, some may not be a good cultural fit, some may not have or be able to learn the skills you need for the future, and some may be tolerated because they are well-liked. But every high-performing team needs more “A” players – those individuals you wish you could clone! Do you have any and what are you doing to keep them engaged? Are you helping the “B” players learn, grow and achieve their full potential?

Sometimes a visual says it all. I recall a client who used the common red-yellow-green talent chart to look at performance and potential. Red indicated low; yellow was solid; and green meant both high performance and high potential. The learning came when all business units were displayed side-by-side. The business unit with the strongest results had lots of green and no reds, while the business unit that was struggling had a chart filled primarily with yellows dotted here and there with a few reds. That color charting talent audit led this company to action.

Use the five rights to talk about all people decisions: promotions, lateral moves, hiring, constituting new teams, downsizing, and developmental moves. Block time on your calendar to focus on talent and talk with your peers about their teams and how they see some of your players. Keep the talent dialogue front and center, even as you deal with competitive challenges and customer issues. Remember that first statistic – almost 80% of business value can be tied to human assets. You can impact that value.

In the coming years, talent quality will increasingly separate the high-performing organizations from the also-rans. Be sure you have the right talent in place – and ensure it is consistently put to good use.

Best regards,
Sandra Davis, CEO