Four Crucial Shifts for Talent Management to Drive a Transformation

By Aaron Sorensen 

Business Transformation requires agility, business acumen, and complex problem-solving.  So if your talent management team has grown complacent over time, that’s a massive problem.

The volatility of today’s business environment is unprecedented. New technologies like automation, artificial intelligence, and digitization are changing business models at a historic rate. Layer in the pandemic, hybrid work, unpredictable demand, and dynamically changing expectations of the workforce and we have a serious navigational challenge for executives looking to drive a business transformation.  

Transformation has become a widely popular— and overused—term. It often starts with a company shifting how it engages with customers by introducing new technologies or capabilities that create a differentiated or more valued experience for customers.

The best companies execute transformation initiatives and equip their organizations to sustain improvements over time because they truly recognize the strategic importance of the people who will create the next app, product, or service line. These forward-thinking companies believe that transforming is inherently about unlocking the ideas and skills of their talent through new ways of working and have talent systems that enable them to acquire, develop, deploy, and engage people around the transformation agenda.

Such organizations have cultures and agile talent management systems that reinforce a growth mindset and strip away drag that many of our well-intentioned management processes create. They are constantly renewing themselves around new pathways to growth, speeding ability to bring products and solutions to market. Success is largely dependent on how well an organization can identify and enact growth opportunities and unleash its talent in a way that will create value for customers. The odds of success are primarily about how a business manages talent and shapes its organization around the capabilities that will allow it to win.

The Opportunity for Talent Management

Over the past two decades, as talent management has evolved to an established function, much of the focus has been on programs that enable businesses to acquire, develop, engage, and retain talent more effectively than competitors. During this period, CHROs and VPs of talent have spent many calories “proving” the ROI to skeptics. It’s been a long but successful journey, and based on recent research, it seems that most large businesses ($2.5 billion or more) buy into this value proposition, with 9 out of 10 having a formal talent function.

Talent programs will most certainly continue to evolve and mature over time, but they’re now generally accepted practice in most organizations. There also continues to be far less opportunity (and budget) to innovate in these areas as line executives grow impatient with the fad du jour and more evidence accumulates that sound fundamentals and great execution combine to create the best outcomes.

As a result, the more traditional talent programs, such as succession planning, are requiring far less active management. That’s because line HR partners and executives are taking on more of a leading role in program delivery, with talent professionals in the copilot seat course correcting along the way.

This creates an exciting opportunity for the function to shift focus and resources from managing programs toward driving the transformation agenda by leveraging the function’s skills and capabilities in a much different way. As the company transforms, so must the talent function to stay relevant in an era where agility is becoming the norm.

Successful transformations require getting the strategy-organization-talent equation right and being agile enough to continuously adapt as situations change. This means being able to paint a detailed picture of the “as-is” and “to-be” workforce, describing how it aligns with the future organization design, and advising business leaders on what actions and investments are needed to ensure talent gaps don’t create an execution risk.

After the strategy is set, inevitably “the work” crosses into the talent and organization domains, and this is where things get tricky. Who should be driving this work, and how should talent management teams be involved? Execution requires a mix of skills related to talent planning, assessment, analytics, development, training, organization development, and change management—all areas where the talent function has deep expertise and experience.

Talent teams need to be agile and ready to engage around the most challenging, complex problems related to people when executing a transformation. Based on experiences working with talent management teams that have been integral to executing a transformation, this requires four crucial shifts in thinking and capabilities for talent management.

MINDSET SHIFT #1

FROM: DOGMATISM ABOUT BEST PRACTICES TO: DESIGNING AROUND BUSINESS AND CUSTOMER NEEDS  

As the boxer Mike Tyson once told a reporter about his opponents’ fight plans: “Everyone has a plan until they get punched in the mouth.”

The same is true for transformation initiatives. Despite the best planning, this work is often a messy undertaking, with many pivots along the journey as challenges emerge and strategies evolve. As a result, talent data and tools become less relevant for predicting future success.

With this context in mind, there’s nothing that will get you uninvited from the party quicker than being too rigid and dogmatic about following best practices to the letter. Does that mean we should throw out the scientific rigor of the trade for the sake of speed? Absolutely not! But perfection is most certainly the enemy of good when it comes to transformations.

Success is often based more on art than science. Strategies are less than clear, roles don’t exist or are being formed, and most of the tools and data accumulated on the current workforce don’t translate well to future scenarios or predict success in a new environment. Heavy talent interventions must be more surgical and minimally invasive. In many respects, intuition and deep business acumen are the most crucial skills, but it’s important to not stray too far from the data and our understanding about what does and doesn’t work based on science.

MINDSET SHIFT #2

FROM: CALENDAR-DRIVEN PROGRAMS TO: DELIVERY OF AGILE CAPABILITIES THAT HELP SOLVE TALENT RELATED BUSINESS PROBLEMS  

To be clear, designing and delivering talent management programs and processes like talent reviews, succession planning, performance management, and leadership development must continue to be a core capability.

Let’s not abandon these programs after working so hard to establish them. Many progressive talent management teams have evolved these programs to be more agile versus episodic, but in the main, they will largely be event-driven. When done right, these programs deliver enormous value and are now part of the normal operating cadence for most organizations.

The point here is that talent processes have gone too far in aligning themselves with strategic and operational planning milestones that churn along annual cycles. Too many rely on a programmatic approach to advising senior leaders and have neglected a huge opportunity to leverage existing capabilities to address talent- related business problems.

The finance function, by way of comparison, seems to be further ahead in how it supports transformation initiatives. Just like the talent function, finance has many calendar-driven processes and has formed teams around the programmatic aspects of the function, like end-of-month close, budgeting, taxes, and internal reporting.

However, the financial planning and analysis team, which often has a matrix reporting relationship to the CFO, includes highly skilled individuals with capabilities that help the business gather data, analyze it, and evaluate the entirety of a business’s financial activities. This team also maps out the financial future along the transformation journey. Talent should take a cue from finance and consider how the function builds and deploys capabilities in a similar manner.

MINDSET SHIFT #3

FROM: A TALENT TOOL MINDSET TO: A BUSINESS SOLUTIONS MINDSET  

As the talent function has matured, particularly over the past decade, there’s been a strong trend toward “productization” of tools, analytics, and decision guidance related to people. The upsides of this movement are obvious: in many respects, productization will evolve the talent function as technologies continue to advance and talent leaders look to optimize burdensome processes with a more intuitive user experience.

The movement has been mostly led by software firms, tech startups, and survey providers, who all saw an opportunity in the space to create standardized and repeatable offerings delivered through slick technology or access to benchmarks.

While there will undoubtedly continue to be a place for talent-related products for the foreseeable future, these tools are effective and profitable to the firms that sell them because they’re designed to address a narrow set of needs that many companies share.

Customizing around a company’s unique needs drags down profit for these firms. Few transformation journeys are the same, and the types of data, analyses, profiles, and decisions tend to be bespoke to the types of change, culture, and business model. That’s why these products tend to be less helpful than a homegrown survey, Excel model, or tailored leadership model.

If a function over-relies on the products that have helped it create scale, what happens when it’s handed a complex and unstructured business problem that those products can’t solve? The professionals who succeed in influencing talent decisions during a transformation are those who use their deep tool kits creatively by bundling tools and methods that work for the business to get the job done.  

MINDSET SHIFT #4

FROM: AN OBSERVER OF CHANGE TO: A DRIVER OF CHANGE THROUGH NEW LEADERSHIP CONCEPTS  

While 43 percent of companies indicated in a recent study that change management is a capability that resides in the talent management function, the same respondents said they rarely utilize this skill. This statistic becomes concerning when you consider what managing change truly requires: aligning and equipping leaders, managers, and staffers to sustain change. It’s clear from the abundance of research that leadership is what separates companies that can pull off a transformation from those that can’t.

Because transformations are more about the people in the company than a strategy or technology initiative, there’s clearly a huge opportunity for talent professionals to help drive change. Leadership is a particularly important area where the talent function can substantially contribute. However, this will require the function to also transform the way it approaches the topic.

Delivering sustainable change requires leaders to develop new ways of thinking, working, and behaving to transform the way teams work. This means that the talent function must venture beyond things like talent reviews, 9-box grids, position depth charts, and coaching programs. Success requires operating in a more agile manner to ensure the business identifies and positions the best individuals to lead the transformation, and that they have the right skills to be effective as visible champions of change.

But because behavior is difficult to change—especially for a senior leader whose behavior is often deeply ingrained through years of reinforcement—creating sustainable change begins with a mindset shift that is a deeply personal journey.

Here, too, is an opportunity for the talent function to stop managing programs from a distance and get closer to the action by working directly with leaders to help them make this challenging journey.

Many organizations have successfully equipped their leaders to lead change by re-envisioning their coaching programs around concepts borrowed from the agile movement. Rather than centering the coaching process around stakeholder feedback and competencies, these programs have found success by helping leaders apply a growth mindset to new contribution models for themselves and their teams.

The talent function must advocate for things like simulations, leadership labs, and other non-threatening environments that allow leaders to practice, fail, and learn new behaviors.

Ready for Action?

These shifts don’t come easy, especially since they’ll need to happen while existing talent programs are being delivered and strategies are being implemented. But many progressive organizations have pulled off the balancing act. The best way to get going is to start building bridges between talent teams and transformation groups, or those driving key change initiatives. Ensure a shared understanding of the transformation plan, program management office, and governance structure to identify where perspectives about the workforce will be most impactful. Understand what budgets and resources have been allocated toward workforce management and be ready to discuss what value each team can bring to the table.

If you don’t have a transformation office or a clearly-defined steering committee, but your business is going through change, ask your senior leaders about their plans to ensure the workforce is ready and capable to execute the change, and how they plan to minimize execution risk. 

You should also recognize that not everyone will be able to make this journey, since it does require an uncommonly high level of adaptability in thinking and engaging with stakeholders.

For most talent professionals and their teams, the transformation imperative presents an opportunity to deliver insights about the workforce and people in a different, but very rewarding and meaningful way that builds from existing skill sets.

Embedding talent management can absolutely improve the transformation odds of success but taking advantage of this opportunity requires innovative and agile partnerships and different modes of engagement that help your organization build capabilities to continuously find and execute new pathways to growth. Let the shifting begin.

Article reprinted with permission from The Talent Strategy Group, LLC.