What makes talent tick?

by 07 Jun 2007

The many bottom line benefits of employing talented people are well-known, but how well do companies really recognise talent? Craig Donaldson speaks with some leaders in the field about what makes talent tick and how to best nurture it

Talent. Everyone’s after it. As margins of competitive advantage narrow across an increasing number of areas in business, it is becoming increasingly obvious that the most sustainable and last bastion of competitive advantage companies can gain is through their people.

McKinsey & Company’s groundbreaking 1997 study, The War for Talent, found that talented workers are 50 to 100 per cent more productive than average employees, and even a modest improvement in workforce capabilities can double a company’s market capitalisation.

But how many companies really understand what makes talent tick? Some good hiring managers can rely on their gut feel when a potentially talented worker sits themselves down in the interview chair. But for the most part, formal systems and processes still struggle to really nail talent identification in the hiring process. However, there are a number of companies around the world that have got a better handle on the process.

What makes talent tick?

There is no one simple answer to what makes talent tick. But, there are a number of common traits that talented ‘diamonds in the rough’ exhibit.

General Electric’s Australia & New Zealand vice-president of HR, Jim Nolan, says one consistent thing he sees in talented people is that they like to be challenged. “They like to be given something that isn’t just going to be an easy slam dunk. They are going to go into it and hopefully change things for the better, but they don’t necessarily know how to do when they go into it. And within those challenges, they like to be empowered and responsible for getting on with the job,” he explains.

Similarly, Virgin Mobile’s HR director, Angela Foskett, says talented people like variety in their challenges. “They have a work hard, play hard ethic, and an ability to challenge and question the norm. So scope and breadth in a role is important to them. We don’t work in silos and people have a lot of exposure to different areas – our employees really like that fact,” she says.

“At the same time, talented people also like being empowered to make decisions. They like to be able make decisions without a lot of hand-holding.”

Matthew Guthridge, an associate principal with McKinsey & Company, says talent can be recognised by several personal attributes. As leading organisations are increasingly knowledge-intensive, he says top talent must firstly have the ability to acquire and apply knowledge in the course of their work. Talent also demonstrates an ability to manage complexity by collaborating across organisational boundaries and clarifying roles and accountabilities. “Third, talent focuses on driving both business performance in the short-term and invests in healthy practices to promote performance over the long-run,” he says.

Attitude is a key indicator of talent, according to Guthridge. Academic research consistently demonstrates that personality is one of the best predictors of organisational behaviour, which supports important goals such as customer service and sales.

Guthridge also notes that individuals with strong emotional intelligence (EQ) as well as IQ skills have a real advantage relative to their peers. “Emotional intelligence helps people to build mutually beneficial relationships both within the workplace and with key external stakeholders, and enables them to successfully navigate their way through an organisation’s political landscape,” he says.

Helping talent hit its stride

Recognising talent is one thing. Another thing is actually nurturing and developing talent in a way that provides maximum benefit for both talent and the organisation.

Siobhan Lyndon, HR manager for Google Australia & New Zealand, says it is important to maintain an open environment where both good and bad ideas are freely discussed and are actively encouraged. “We believe this open and trusting environment, combined with our team approach to decision-making, allows new employees to feel comfortable to experiment, learn and contribute quickly,” she says. Ideas and debate are actively encouraged, she adds, and employees also work in small teams, promoting spontaneity, creativity and speed.

Google takes the unique step of providing its software engineers with ‘20 per cent time’, which means that 20 per cent of their time at work can be used on their own projects. “They use this time to create new technologies and products that can have an extensive positive impact on people around the globe. Some of Google’s best products have come out of 20 per cent time,” Lyndon says.

This sense of give and take is important, according to Nolan, and talented people need to feel supported in their work environment. If talent is given stretch goals, for example, then unnecessary hierarchy and bureaucracy need to be removed.

“You have to provide a climate that will trust and support them, and then take a risk on them. And then when you actually take a risk on them and maybe throw them into that bigger role that traditionally they may not have had the experience to do, you see the intellect, the values and the desire to give it a go,” he says.

Within GE, talent identification and development processes are encapsulated in what it calls the “talent acceleration process”. This consists of executive assessments, in which talent individuals participate in a verbal 360-degree feedback as well as an in-depth face-to-face assessment with two HR professionals. “So we will interview people and look at who they’ve worked with throughout their career, what their motivations have been and why they’ve made certain decisions, so we can really understand what their strengths and areas for development are. We can then give them some pragmatic and practical career advice about things they can do to develop, strengths they could continue to build on, and where they can take that in their career within GE,” Nolan says.

At the same time, Nolan says managers need to provide coaching and support when necessary. “One of the key things is teaching leaders to be able to provide this. We’re not going to get to everybody in HR, and we can’t be a talent scout in every corner of our organisation. But being clear about what talent looks like and helping leaders identify talent is key for us.”

Guthridge says internal identification of talent is one of the major obstacles to overcome, because managers are often very reluctant to lose their top people, and so may not identify them as top talent. “HR must therefore put in place the right processes and incentives to encourage line managers to do the right thing for their people and the broader organisation,” he says.

HR also needs to assume more responsibility for building social capital rather than just human capital, he adds. Social capital is created when talent is well-networked and it facilitates the sharing and retention of knowledge within the organisation. “Supporting the formation of professional (for example, best practice sharing) and personal networks (sporting clubs and wine clubs, for example) will strengthen an organisation’s social capital.”

Delivering the goods

Successfully identifying and recruiting talent requires a more refined process than traditional recruitment methods. Not every recruiter has the instinct to be able to pick potential talent, and getting more people involved in the process can assist in identifying talent.

At Virgin Mobile, Foskett says a candidate can meet up to 11 people during the interview process. “We do have a formal interview, but we take a consultative approach to the whole process. It is never one person making the decision,” she says.

“We have got a 60 per cent cultural fit as a recruitment philosophy. In the interview process we ask key questions such as, ‘What does Virgin mean to you?’ and ‘What are the expectations of the culture once you get here?’ We want an understanding that they are not going to experience culture shock when they come on board and that their expectations are aligned to the brand.”

Culture is always on the agenda at Virgin Mobile, Foskett says, and it is important to deliver on promises made during the interview and hiring process. “We don’t pay at the highest end of the market because we do recognise that we have many other offerings, such as a fantastic culture, good work lifestyle, flexible working arrangements and the like. So it’s important that we deliver on those. The cultural ambassadors within the business are always thinking about the next thing we can do to maintain the environment that we have got.”

HR is usually tasked with assessing cultural fit at Virgin Mobile, Foskett says. “We will put the foot down when it comes to cultural fit and that will be a reason why someone is not employed, even if their skills fit the role.”

Nolan says delivering on employee expectations is also important. “We’ve got to be very clear up-front on what we’re going to deliver for talent and what we’re not going to deliver. If you oversell yourself as an organisation at the recruitment stage and then don’t deliver, talented individuals can find that frustrating. If things aren’t transparent and talented people feel they’re being hoodwinked, they’re going to see through it pretty quickly.”

HR can play an important role in this process. At Google, for example, HR plays an important role in ensuring the work environment is supportive and conducive to creativity, Lyndon says. “HR also plays a vital role in taking the stress out of the daily working lives of Googlers. We are also at the forefront of identifying talented recruits.”

Bottom line impact

Quantifying the bottom line impact of talent is beyond the capability of most organisations. Aside from landmark studies, such as McKinsey’s, nearly every manager knows the intrinsic value of a talented employee.

Guthridge says the impact of talent varies by industry and the type of role. Top talent in knowledge-intensive industries and complex roles deliver two to three times the performance of an average performer in these roles, he says. In simpler roles and/or asset-based industries, the potential for differential performance is less, so top talent may deliver only a fraction more than their peers. “Knowing this, organisations should focus their talent management investments in the right roles in order to get the best returns,” Guthridge says.

Foskett says the benefits of having talented employee are “absolutely huge”. Virgin Mobile saves considerable time and costs when it comes to recruitment and retention as a result of a very successful referral process. “Our recruitment agency costs are fairly minimal, and by keeping good people the savings from a retention perspective are huge.”

In GE, one of the key measurables is turnover, Nolan says. “If we don’t deliver on agreed expectations, then we’re going to lose talented people. So the bottom line is turnover. If you’re haemorrhaging talent, people are going to leave at any level of the organisation to follow them too,” he says.

“But if you can retain and motivate talented people, time after time, it’s one or two of those individuals who are going to take your organisation to the next level. They’re going to come out with something that will really have an impact on your organisation, rather than just doing a great or a good job. They’re going to be the ones who are fundamentally going to shift your organisation to the next level”

Developing talent at GE

General Electric is well-known for its ability to develop talent. Jim Nolan, General Electric’s vice-president of HR, Australia & New Zealand, says talented people possess five inner drivers: passion, strong EQ and IQ, imagination, vision, and the ability to engage others.

Talented people are also hungry for feedback, he says. “With a talented individual, they will sit, listen and understand. They’ll understand the impact of their behaviour on the people around them, and go away and make a fundamental change in the way they behave. That’s where you see the maturity as they progress through their career. They live through certain experiences; they live through the challenges that you throw at them, and really grow through those opportunities. They don’t just see it as a box ticking exercise for their CV. They actually see every opportunity as an opportunity for personal growth and stretching behaviours,” he says.