MORE THAN half of senior leaders anticipate their companies’ performance will soon suffer because they don’t have the right talent in place, and while talent management is a significant priority for organisations, their efforts aren’t meeting the needs of the business.
A recent report has found that while senior leaders recognise its importance for the success and future of their companies and divisions, a disconnection occurs because they do not take a hands-on approach to what needs to be done.
“Leaders see the opportunity, they talk about it, they invest in it. But this is a job that requires their direct involvement, and most just aren’t skilled or experienced at doing it themselves,” said Matt Paese, vice-president of executive solutions for DDI, which wrote the report in cooperation with the Economist Intelligence Unit.
“It’s astounding given the fact that they recognise the business impact of having the right people, yet they’re outsourcing accountability for it.”
The report found that 85 per cent of CEOs said that talent management is as important as or more important than other business priorities. But only two in 10 leaders say they often spend time managing talent and one in 10 often review it with their boards.
“Many leaders don’t recognise that their involvement in talent management initiatives could turn the tide for the organisation,” Paese said. “It’s a missed opportunity for those leadership teams.”
CEOs and other senior leaders have an opportunity to set the tone for the entire organisation through their own involvement. Yum Brands CEO David Novak sees talent management as his responsibility.
He said he spends 100 per cent of his time on talent management. “Every opportunity [to meet with colleagues and employees] is a chance to coach, develop, share what you’ve learned with somebody else, get a perspective on somebody, assess their potential, assess their development needs,” Novak said.
“Any time I go into a meeting, I’m always looking at the people and thinking about what I can do to develop them, improve their skills, give them the coaching they need,” Novak said.
The report, which is based on a survey of 412 senior leaders in Europe, North America, Asia and Australia, also found that executives’ greatest obstacle to executing business strategies well was not having the right person in the right job.
For some organisations, this means not making the right promotion decisions, and for others, it’s not having enough talent ready to move into critical roles.
“This suggests that while organisations fully recognise the criticality of talent management, they are often not prepared to replace leaders who are not executing effectively,” Paese said.
Half of the leaders surveyed said their organisations are doing sub-par work in developing their leaders and more than half said they were fair or poor at identifying talent.
CFOs were most likely to link failure to poor leadership, with nearly 70 per cent fearing declining business performance because of a lack of good leaders.
“If you get the right people in the right roles, the strategy will take care of itself,” said Simon Mitchell, European marketing director at DDI.
He advised organisations to focus on three things: strategy, measurement and ownership. “Get clear and simple talent management strategies in place with clear and simple ways to measure progress,” he said.
“Then ensure it happens by making your managers and leaders accountable for talent management – starting with the CEO and the board – and linking performance to incentives and consequences,” Mitchell said. “Only then will sufficient focus be paid to identifying and developing future leaders. Organisations that do so will reap the rewards.”