Strategic HR Review

Managing talent for competitive advantage: Taking a systemic approach to talent management
Chris Ashton Lynne Morton

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Chris Ashton Lynne Morton, (2005),"Managing talent for competitive advantage: Taking a systemic approach to talent management",
Strategic HR Review, Vol. 4 Iss 5 pp. 28 - 31
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Chris Ashton, CRF Publishing

and Lynne Morton, Performance Improvement Solutions

Managing
talent for
competitive
advantage
Taking a systemic approach to talent
management
Getting the right people in pivotal roles at the right
time should be nothing new to HR professionals, but
done effectively, talent management can create longterm organizational success. Here, Lynne Morton and
Chris Ashton show how to align talent management
strategies to business goals, integrate all related
processes and systems and create a talent mindset
in your organization.
28

ALENT MANAGEMENT (TM) IS more

than a new language for old HR work, or just
the next hot new thing for HR practitioners
and managers to get involved in. For many
organizations, it has become a strategic imperative.
McKinsey research1 reveals that 75 percent of
corporate officers were concerned about talent shortages
and Deloitte reports that retaining the best talent is a
top priority for 87 percent of surveyed HR directors.2
This need for talent and, therefore, its expert
management is also driven by macro trends including:
New cycles of business growth, often requiring
different kinds of talent.
Changing workforce demographics with reducing
labor pools and, therefore, a talent squeeze.
More complex economic conditions which require
segregated talent and TM.
The emergence of new enterprises which suck talent
from larger organizations.
A global focus on leadership which is now
permeating many levels of organizations.
The strategic importance of talent management
On the basis of substantive research undertaken for our
forthcoming report (see sidebox, right), we argue that
good TM is of strategic importance and can
differentiate an organization when it becomes a core
competence and when its talent significantly improves
strategy execution and operational excellence.
For example, imagine your company has the right
talent in pivotal roles at the right time. What difference
will these people make to revenues, innovation and
organization effectiveness compared with having to
operate without them? What is the cost of the lost
opportunities and the downtime and replacement costs
of losing critical talent? What are the consequences of
having to make do with the wrong kind of leaders and
managers in the top two executive layers or of not
having successors groomed and ready to replace them?
Yet generally, organizations still struggle with TM.
According to research, three-quarters of business leaders
have invested dedicated resources in TM but most
say they havent yet felt the impact of doing so.3 Why
not? Through our research, we tried to provide reasons
by asking these questions:
Why are you doing TM? Is it for the individual, the
organization or both?
What do you mean by talent and talent
management?
What are your propositions for attracting and
retaining talent?
How do you manage and use the talent your
organization needs?
How are internal roles and resources deployed
appropriately to support TM?
How is TM integrated across HR processes and with
business planning and strategy execution processes?
Volume 4 Issue 5 July/August 2005

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These are the difficult aspects of talent management

which take much thinking and planning to resolve. Its a
long journey to success as First Data Corporation has
experienced. The following case study illustrates how TM
is embedded into the strategic fabric of the organization.

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Case study 1: First Data Corporation

US-based First Data Corporation (FDC) is a world
leader in electronic commerce and payment services. Its
success is built on three core strategic goals:
Sustained revenue growth.
Business expansion.
Organizational excellence in flawlessly executing
millions of transactions a week.
Talent management at FDC its focus, leadership,
acquisition, retention, evaluation and tools has
evolved over five years, and continues to be a work in
progress. The evolving talent plan aligns with goals,
business strategy and their organizational implications.
The talent office annually reviews analytics and
recalibrates talent to align with growth and other
organizational needs. The current growth objective is
15 percent. Ours is a numbers business, which tends
to reflect a short-term view, says Annmarie Neal,
senior VP, organization development. Yet, we also have
to build a leadership bench and talent pools, not
around the execution capabilities were known for, but
on a customer-solutions focus and strategic foresight.
Investments in talent arent short-term they need at
least three-year horizons to see returns.
The key issue for FDC is to accurately identify high
potentials with different capabilities such as strategic
thinking, partnership building, results orientation,
innovation and talent leadership and then build
succession depth. In effect, they are building talent
balanced with buying it, guided by the notion of critical
positions that is, those positions that positively impact
on the strategic goals or their execution.
We are now applying our processes for identifying,
assessing and growing future leaders to our more
junior, untested populations who we expect to be our
next VPs. Technology, as Neal explains, has allowed
them to do more in depth and breadth with the
same headcount. TM initiatives at FDC include:
Talent profiling of individuals.
Conducting calibrations of business performance and
key results behaviors.
Assessing and forecasting succession depth.
Implementing organizational assessment summaries
to give status reports for leadership talent.
Using just-in-time, action-learning programs and
talent-sharing assignments.
Developing talent at risk tools based on potential
derailers and defection triggers.
Introducing a talent scorecard with five perspectives,
each of which has critical indicators hiring,
Volume 4 Issue 5 July/August 2005

KE
! 10 TALENT MANAGEMENT PRIORITIES FOR HR
This article is based on the forthcoming report, Differentiating Talent
Management, by CRF Publishing. Based on interviews in case
organisations with HR/OD practitioners, talent managers and talented
individuals, it concludes with these 10 priority issues. They will guide your
choice of appropriate approaches and practices that could make a
difference to your talent management efforts:
1. Rethinking/establishing the talent focus talent definitions,
values/principles, business context and talent market trends.
2. Positioning talent management strategic or tactical, decisions, actions
and how talent processes are designed/delivered.
3. Integrating talent and business the TM system and alignment with the
strategic management process and annual/quarterly operating plans.
4. Leading the talent focus the quality of leadership focus, direction and
defined talent roles.
5. Examining culture and talent mindset common language, consistent
messages and cultural attributes and negative influences.
6. Assessing capability and accountability defining talent capabilities,
accountabilities for talent, quality/frequency of talent conversations and
talent measures/evaluation.
7. Process design and implementation people/technology issues, success
rates from talent processes and process shortcomings/failures.
8. Assessing talent performance improved talent development, realising
potential, talent deployment and talent performance.
9. The talent agenda to keep this agenda fresh and responsive through
continued support, consistent interpretation, regularity of discussions, etc.
10. Reviewing talent management to establish how well you compare
with other organisations or business units/functions internally in talent
focus, delivery and shortcomings.
For details of the 234-page report, contact CRFP on info@crfpublishing.com or visit www.crfpublishing.com

performance, retention, transportability and

succession pipeline.
Taking stock of FDCs TM efforts to date, Neal
acknowledges success but suggests there are significant
issues for the organization to resolve:
1. Accountability for talent rather than expectations,
to ensure leaders actually hire/develop talent for
the future.
2. Evaluating the effectiveness of what the talent office
and OD team do in TM, with support from HR.
3. Strengthening the FDC value proposition for wider

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Lynne Morton

Chris Ashton

is author of
Differentiating Talent
Management and
principal of the US-based consultancy, Performance
Improvement Solutions. She is also author of two
talent reports for the Conference Board:
Integrated and Integrative Talent
Management, 2004, and Talent
Management Value Imperatives, 2005.

is a director of CRF
Publishing, London
and has many years'
experience as a researcher, analyst and
business journalist. He has authored over
20 management reports internationally in
the HR and strategic performance areas.

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appeal to potential talent outside the organization.

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Defining TM
As we see it, TM is a strategic and holistic approach to
both HR and business planning or a new route to
organizational effectiveness. This improves the
performance and the potential of people the talent
who can make a measurable difference to the
organization now and in future. And it aspires to yield
enhanced performance among all levels in the
workforce, thus allowing everyone to reach his/her
potential, no matter what that might be.
Though this interpretation of talent is inclusive, it
strikes a strategic balance between performance and
potential. Performance historically, the primary focus
of measurement and management concerns both the
past and the present, whereas potential represents the
future. Our position assumes that potential exists, it can
be identified and it can be developed.
Here are specific ways that two case organizations in
the report define talent:
Executive management team leaders, directors/VPs
and A-player managers in all functions plus Bplayers as potentials.
Future business leaders with more strategic
capabilities than just operational excellence skills
plus specialist talent able to execute business
integration projects on time and to budget.
Clearly, there isnt a single consistent or concise
definition. Current or historic cultural attributes may
play a part in defining talent, as will more egalitarian
business models. Many organizations acknowledge that
talent, if aligned with business strategy or the
operational parameters of strategy execution will
change in definition as strategic priorities change. For
example, in start-up businesses, the talent emphasis will
be different to the innovative or creative talent needed
to bring new products to market. Any definition needs
to be fluid as business drivers change, so will the
definitions of talent.
What TM involves
Talent management is the integration of different
initiatives, or constructs, into a coherent framework of
activity. There are certain crucial components and a
useful model for defining TM is to think of it in these
key words:
Ethos embedding values and behavior, known as a
talent mindset, to support the view that everyone
has potential worth developing.
Focus knowing which jobs make a difference and
making sure that the right people hold those jobs at
the right time.
Positioning starting at the top of the organization
and cascading throughout the management levels to
make this a management, not HR, initiative.

30

Structure creating tools, processes and techniques

with defined accountability to ensure that the work
gets done.
System facilitating a long-term and holistic
approach to generate change.
Case study 2: Reuters
Reuters is a global information company, providing
critical information for professionals in the financial
services, media and corporate markets. It has
approximately 14,500 staff and revenues of UK2.9
billion.
Having undergone a tremendous amount of change
in recent years, its strategy is now focused on:
Fix It the Fast Forward business transformation,
now two-thirds complete.
Strengthen It expansion into related business areas
and improvements in service resilience.
Grow It efforts to capitalize on structural changes
in global markets.
Reuters has been on the TM journey for about four
years, with a new focus on leadership and people to
counter the economic upheavals the business
experienced in 2001. As a result, the organization
underwent widespread and multi-faceted people changes:
downsizing in some areas, outsourcing in others, and
recruiting in key growth areas. Even during this period,
retention of critical talent was recognized as extremely
important, and may be seen as Reuters first step in TM.
Talent management provided a way to focus and
simplify its tools and resources, while also sharpening
its focus on key talent. As a result, it has started to
embed a talent mindset in the organizational culture,
with a renewed emphasis on employee engagement.
The approach includes:
a 9-box performance/potential grid (based on the
GE model);
an OPR Organizational and People Review
process that includes individual assessment and
calibration, as well as strategic analysis of the people
requirements to achieve business strategy; and
a senior-level mandated process that touches about
3,500 people, with recommended use at subsequent
managerial levels.
The approach is a facilitated one, the premise being
that managers own the talent and are responsible for
developing it. HR facilitators encourage business unit
leaders to take ownership of TM work by conducting a
Talent Review Workshop. The process for the
workshop, along with tools and guidelines to run it,
has been rolled out globally and is now being used in
98 different countries. Although the reach of these
efforts to date has been broad, its business impact
hasnt been as evident. Reuters is on target with some
of the HR analytics, such as retention, which are
Volume 4 Issue 5 July/August 2005

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tracked in their balanced scorecards, but they cant yet

trace the impact of TM efforts clearly. For example,
although their ISR engagement studies show that
employee engagement has gone up, its difficult to trace
that back to the TM work.
Nonetheless, the difference in the organization is
palpable. The senior team has developed an open and
flexible mindset to share talent one level below them,
since they now view that talent as a corporate asset.
They work together to share and develop this group,
which is a great challenge for an organization with such
global reach. One of their forthcoming initiatives is a
Talent Sharing Forum. Now being piloted, this is
designed to create cross-group profiles and to
encourage sharing and swapping of talent. Other talent
management challenges include:
ensuring managers have quality conversations with
talent, at many levels;
getting more alignment between high performers and
whats expected of them;
supporting the work with technology; and
adding further levels and greater integration of TM
initiatives.
Integrating TM through a system
Its worth emphasizing that integration is critical. Our
research shows that without integrating TM activities,
the effort invested will tend to be dissipated with patchy
results. Integration is knowing how all the pieces of TM
fit together within a TM system. This will not operate
in isolation from strategy, business planning and the
organizations approach to people management.
In this sense, the work of talent management cuts
across what has been traditional HR silos. If integrated,
it functions in a more facilitative, OD-like nature. It
will also reach higher up the organization than other
HR initiatives, often attracting the attention of boards
and senior teams. Similarly, TM reaches down the
organization, to include new recruits along with
tenured professionals. Lastly, talent planning must be
done in parallel with business planning, creating a rich
integration of people and strategy.
One way of achieving such system integration and
alignment is the CRF Talent Management System (see
Figure 1, above right). This systemic view of talent has
five elements:
1. Need the business need derived from the business
model and competitive issues.
2. Data collection the fundamental data and
intelligence critical for good talent decisions.
3. Planning people/talent planning guided by data
analysis.
4. Activities the conversion of plans into integrated
sets of activities.
5. Results costs, measures and effectiveness criteria
to judge the value and impacts of TM.

Volume 4 Issue 5 July/August 2005

Figure 1. The CRF Talent Management System

Using this system can help TM become a strategic

differentiator rather than a standard set of HR
processes if the right conditions, context, timescales
and offerings exist in the first place. System integration
and alignment ensures that TM efforts are rational and
fit for purpose.
Since the arrival of the current era of talent is
widely acknowledged, its not surprising that renewed
significance is being placed on the management of that
talent. And as talent continues to be viewed as a
strategic differentiator, its management will take more
of a strategic role. How fascinating it will be to take the
pulse of talent management in the business community
in another five years. We believe that while the
management of talent will most likely become
embedded in the fiber of cultures by then, the HR
executives who led those initiatives will have achieved
much more prominence.

, CONTACT
Chris Ashton
E-mail: chris@crfpublishing.com

Lynne Morton
E-mail: lmorton@pisols.com

References
1. Global Survey of Business Executives: McKinsey & co, New York, 2004
2. Aligned at the Top: Deloitte & Touche/Human Resources Magazine, London, 2002
3. Top Talent Retention Survey: Astralis Group, St Albans and Lancaster University Management
School, 2004

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