Reinventing Talent Management: How to Maximize Performance in the New Marketplace - Hardcover

Schiemann, William A.

Hardcover

ISBN 10: 0470452269 ISBN 13: 9780470452264

Publisher: Wiley, 2009

Synopsis

Praise for Reinventing Talent Management

"Bill Schiemann's book is a comprehensive presentation of the need to better understand, measure, and increase organizational people equity. It clearly transforms concepts that have historically been considered less tangible into actionable imperatives. Today more than ever, it's essential that leadership maximizes alignment, capabilities, and engagement within their organizations."
―Paul Schultz, President and COO, Jack in the Box Inc.

"Reinventing Talent Management has arrived just in time. Given the challenging times we face today, recruiting and retaining the very best people is now more important than ever. Bill has developed a unique innovative framework on how to do this, as well as provided a broad array of practical approaches to putting the theory into action."
―Keith Lawrence, Director, Human Resources, Procter & Gamble

"Reinventing Talent Management is an outstanding blend of research and practice. It reports compelling research on the value of investing in talent and offers specific recommendations on how to develop people equity through alignment, capabilities, and engagement. The book confirms what good people managers do and offers specific guidelines for those wanting to upgrade their people management skills."
―Dave Ulrich, Professor, Ross School of Business, University of Michigan, and Partner, The RBL Group

"Bill makes the case for reinventing talent management and tells us how to do it. The book is loaded with good examples and must-take actions that lead to a winning talent management strategy."
―Edward E. Lawler III, founder and Director, Center for Effective Organizations, Marshall School of Business, University of Southern California, and author of Talent: Making People Your Competitive Advantage

"Talent management certainly needs to be reinvented-this book does it! Read, learn, redo!"
―Dr. Richard Beatty, Professor of Human Resource Management, Rutgers University

"Reinventing Talent Management provides an accessible framework that offers pragmatic ways to better understand how investments in human capital and talent can be measured and linked to financial returns."
―Dr. John Boudreau, Professor and Research Director, Center for Effective Organizations, Marshall School of Business, University of Southern California

About this title

About the Author

William A. Schiemann is CEO of the Metrus Group, an organizational research and advisory firm that specializes in evidence-based decisions regarding organizational and functional strategy, as well as talent management. His clients range from large global firms such as Hewlett-Packard, Johnson & Johnson, McDonald's, Novartis, Takeda Pharmaceutical, and Wal-Mart, to local and regional private, public, and nonprofit organizations.

"Bill Schiemann's book is a comprehensive presentation of the need to better understand, measure, and increase organizational people equity. It clearly transforms concepts that have historically been considered less tangible into actionable imperatives. Today more than ever, it's essential that leadership maximizes alignment, capabilities, and engagement within their organizations."
―Paul Schultz, President and COO, Jack in the Box Inc.

"Reinventing Talent Management has arrived just in time. Given the challenging times we face today, recruiting and retaining the very best people is now more important than ever. Bill has developed a unique innovative framework on how to do this, as well as provided a broad array of practical approaches to putting the theory into action."
―Keith Lawrence, Director, Human Resources, Procter & Gamble

"Reinventing Talent Management is an outstanding blend of research and practice. It reports compelling research on the value of investing in talent and offers specific recommendations on how to develop people equity through alignment, capabilities, and engagement. The book confirms what good people managers do and offers specific guidelines for those wanting to upgrade their people management skills."
―Dave Ulrich, Professor, Ross School of Business, University of Michigan, and Partner, The RBL Group

"Bill makes the case for reinventing talent management and tells us how to do it. The book is loaded with good examples and must-take actions that lead to a winning talent management strategy."
―Edward E. Lawler III, founder and Director, Center for Effective Organizations, Marshall School of Business, University of Southern California, and author of Talent: Making People Your Competitive Advantage

"Talent management certainly needs to be reinvented-this book does it! Read, learn, redo!"
―Dr. Richard Beatty, Professor of Human Resource Management, Rutgers University

"Reinventing Talent Management provides an accessible framework that offers pragmatic ways to better understand how investments in human capital and talent can be measured and linked to financial returns."
―Dr. John Boudreau, Professor and Research Director, Center for Effective Organizations, Marshall School of Business, University of Southern California

From the Inside Flap

People―and the value they create―are the lifeblood of your organization.

Imagine having at your command a powerful new model for managing talent, one that creates measurable value, keeps people focused on agreed-upon goals, pinpoints capability needs, and enables you to manage talent so that everyone in your organization has the ability to continually contribute to your competitive success. At a time when the pressure to perform has never been greater, Reinventing Talent Management puts that model in your hands, discusses its use and impact on the key areas of talent management, and brings the discussion to life with an array of real-world examples. Anyone charged with driving performance up will profit from this book.

Today, a host of economic, cultural, technological, generational, and political forces are converging to change the way people and their organizations relate. It's time to pose tough questions and provide fresh solutions:

• What talent management factors influence one-third of your financial performance?
• Why are businesses losing an average of 20 percent of their customers to controllable talent factors?
• Why do some organizations have highly engaged employees in down economies, while some have employees who are disengaged even in good times?

The traditional methods of talent management are more likely to lead your organization to mediocrity than success. The healthiest businesses are those that have adopted new ways to manage talent and in the process build corporate cultures that unite people behind the singular goal of value creation.

Reinventing Talent Management presents a fresh and modern approach to talent management. By connecting value, strategy, and people, William Schiemann identifies three make-or-break factors that contribute to both organizational and individual success. These three factors―Alignment, Capabilities, and Engagement (ACE)―are keys to maximizing the value contribution of your people to your most critical organizational goals.

With Schiemann's breakthrough talent framework, you'll learn to identify, develop, and retain top talent, as well as create a workforce that is aligned with your organizational strategy, delivers superior products and services to customers, and is fully engaged in meeting your goals. With real-world examples, in-depth research, and powerful diagnostic tools, Reinventing Talent Management gives you resources to grow individual and organizational value in an increasingly competitive marketplace.

Excerpt. © Reprinted by permission. All rights reserved.

Reinventing Talent Management

How to Maximize Performance in the New MarketplaceBy William A. Schiemann Susan R. Meisinger

John Wiley & Sons

Copyright © 2009 John Wiley & Sons, Ltd
All right reserved.
ISBN: 978-0-470-45226-4

Chapter One

The Talent Challenge

"While some businesses skated by with mediocre talent management in the past, they will no longer be able to do so, given the fiercely competitive world ahead." -Susan Meisinger, retired CEO, Society for Human Resource Management

Think about any important goal in your life-getting an A in an important course, seeing your child graduate, completing a successful journey, getting that promotion, learning a new language, mastering a favorite hobby, even getting your golf handicap to levels that your friends envy. Why do some people seem to breeze through these life hurdles while others struggle? Is there some secret that they possess, or are they just lucky?

Early mentors in my life filled me with insights that at first mystified me, and later settled in at a more profound level. One lesson that I remember well was from a relative who frequently reminded me that "The harder he worked, the luckier he got." That was generally true, but he had so many setbacks that I began to question his advice. Why was it that he could never hit the mark despite all the hard work?

My father-in-law was famous for reminding a smug 20-something, "It's not only what you know, but who you know!" Wait a minute, I had more education than he did and I thought information was power! It sounded too political and unfair to a purist coming out of school, but I began to appreciate his wisdom when I struggled with getting my right answers accepted in my first major corporate experience. But even with his extensive network, he seemed to struggle to achieve some aspirations. Why was that?

And my graduate adviser was quick to tell me, "Work smart and not hard!" Wow, was I wasting that much time? What was he really telling me? Was he implying that I was not competent enough to earn my doctorate? I began to realize that I was spending too much time on interesting classes and research activities, but perhaps low- or no-value activities in pursuit of a key goal-my dissertation.

And finally, my parents saw the importance of creating value with advice such as "Make a difference!" It sounded like a noble thing, but little did I realize that it was the primary idea that would enable me to achieve success along the way.

Each of these admonitions (and I'm sure that you have many similar examples) intertwined throughout much of my life as I struggled to uncover the ingredients of success in college, in my academic career, in my life in a corporate behemoth that employed nearly one million employees, in a firm that I started over 20 years ago, and in my personal hobbies and aspirations. I began to realize that there were underlying factors that drive success.

But were these my own instincts? My own formula? As I examined the world informally, I began to recognize that these were not unique to me, but seemed to apply to others as well. In observing people who were successful and comparing them to those who were less so, I realized that you cannot control all of the factors in life that lead to success versus failure, but that there seemed to be some important ways in which you can stack the deck in your favor to increase the odds. As I began watching, studying, and later scientifically researching successes and failures across the globe-in sports, in business, in life-I came to realize that those who are successful increase their odds of succeeding by leveraging certain success factors, whether knowingly or unwittingly.

This book is about stacking the deck, and about growing value, both personally and in organizations as they realize the value contribution of people to organizational success. And it is not only about exploring what has guided others to success, but also about how those underlying success factors will become even more important in a world that is dramatically changing. In short, it is about making a difference!

Let's take a look at two situations. While the names have been changed for confidentiality, the stories are based on real firms. We will begin with a smaller organization because many of the underlying issues are multiplied across the many smaller units of larger global organizations, frequently becoming lost in its complexity.

Bob's Service Star

Imagine you own a small business like Bob, and you generate $500,000 a year in sales. For the past five years, you have cleared $50,000 annually. Not bad for a small business. After asking a few questions, and doing a few calculations, what if you were told that you might have earned $100,000, or double your existing profit. I'm sure that you would want to know what could make such a difference. And when you were told that much of that gain is in your people, you might step back and say, "Wait, I manage my people as tightly as anybody, and I don't see how that would be possible!" And what if you further heard that, based on your answers to a few of my questions, you have a good chance of being out of business in five years? You would almost assuredly laugh and say, "You don't know my business as well as I do." You are right that no one can know the intricacies of your business as well as you do, but armed with a few questions about your business, a look at recent research and best practices, and an understanding of emerging trends, even an outsider could have a good chance of being correct.

Recent research conducted by the Metrus Institute in partnership with the American Society of Quality tells us that:

Firms that receive high scores in managing their human capital are more than twice as likely to be in the top one-third of their industry in financial performance, compared to those who manage labor poorly. If the average small business is earning a 10 percent profit, recent research and best practice information suggests it could be earning as much as twice that. Firms in the top 25 percent on key people practices are losing far fewer of their top performers-8 percent on average compared to 18 percent in low people-practice businesses. For Bob's service business, which has 16 employees, with an employee replacement cost (finding, training, and getting them to peak productivity) of $12,000 per employee and a turnover rate of 50 percent, turnover costs are $96,000 per year. By adjusting some key people practices resulting in higher employee engagement, turnover costs could be cut in half-bringing $48,000 more to the bottom line! Quality provided to customers is substantially higher with highly engaged and capable people who are aligned with their customers. Companies in the top quarter of firms on those people factors have over twice the chance of being in the top third in quality among their competitors. As the competition gets tougher, top quality firms are retaining and growing their customers far better; low quality firms are seeing significantly reduced financial results or dropping out. Bob's Service Star is losing 20 percent of its customers each year-over half because they are looking for higher quality. Assuming that this 20 percent of the customers represent 20 percent of the revenue, then $100,000 of revenue must be replaced each year. By bringing the right talent, information, and resources to customers at the moment of truth in service delivery, that replacement number can be cut in half. In other words, the company earns $50,000 by having employees with the right service mentality. Typically, 15 to 30 percent of an employee's time is wasted in low- or no-value activities (for example, low priority e-mail, meetings without actions, socializing, phone calls, peripheral projects), because of misalignments of one type or another-employees don't understand your goals or policies, their values are not in concert with the organization's, or they get themselves involved in activities that are not as meaningful or productive. As my academic adviser suggested, they may be working hard, but not smart. Highly aligned businesses can often bring that unproductive time below 10 percent. This recapture of employees' time yields $40,000 of bottom line savings in found labor time to redeploy on additional customers, new products or services, or to scale back labor costs. Market trends will have an adverse impact on Bob's Service Star. First, if Bob's region follows national demographic projections, Bob will have to cope with a substantially different labor force, one with a different availability and mix of skills and interests. Howard Winkler of Southern Company has struggled with this issue in the Southeast, for example. He notes that there has been a great deal of commotion concerning the shortage of engineers, but in many locales around the world, basic skilled trades are not in great supply-plumbers, electricians, welders, machinists, and yes, even, auto mechanics.

During recessionary periods, there will be greater competition to secure customers, meaning that Bob will face competitors, (some new and often with lower costs), that will drive prices down. Second, some competitors, such as the dealerships that compete with Bob's, may well be outsourcing a portion of their backroom work (for example, diagnostics or advisory services) to India, Latin America, China, or other lower-labor-cost locations. This will not only create pricing pressures, but could also increase the standards for quality or speed to compete effectively.

During the next economic expansion, organizations like Bob's will likely face double jeopardy. First, misaligned or disengaged employees who stayed put during the recession may be eager to leave, leading to a further strain on the existing talent pool. Many organizations will go from talent feast to talent famine. Second, because of the global demographics and skills mix, the world will face a talent vacuum in many of the most desirable and critical skill areas. Organizations that are not well positioned are apt to be stripped of top talent without much warning.

This combination of trends has the potential to create the perfect storm-for Bob and for millions of other business leaders, small and large. The prediction that Bob and other firms might be out of business may not be wacky after all.

Large Corporations Face Perhaps Even Greater Challenges

We started with an example that resonates with many of you-a local small business of the sort that employs millions of workers across the globe. Large corporations, however, employ nearly half the population in many industrialized countries.

If the statistics presented here are applied to large corporations, the impact is dramatic. Imagine the success of a $3 billion firm that could be 5 to 15 percent more profitable and more sustainable in the future. That's a lot of money to the bottom line!

Let's take a look at GlobalCompute, a global technology giant. Martha Werthing had been a successful business executive who rose through the finance ranks, taking on key operational assignments, and finally assuming the leadership of a major Fortune 500 firm. She was a charismatic speaker who talked brashly about her competitors and was fearless of their might and reputation.

She fought hard to restructure the organization to acquire missing core competencies. Internally, she challenged her global leadership team to take on important competitive battles. She articulated a clear future strategy for the business and could bring even the most cynical managers to tears with her vision of bringing the competition to its knees.

But execution is often the Achilles heel of strategy, even when it is clear and compelling. Given the speed with which GlobalCompute's formidable competitors moved, the challenge was implementing precise market plans that depended on speed, innovation, new products and capabilities, and a highly effective internal team. While employees left her town meetings ready to take the hill, they soon bogged down on defining the hill, battling internal customers over who was right, jockeying for power, and struggling to find an identity. The company was simply not agile enough to beat the competition to the punch. While her vision was initially compelling, people quickly reverted to their historical patterns of behavior and functional silos. The misalignments were deeply embedded in the how not the what.

Moreover, the company's capabilities were falling short of market expectations. Products were late to market, inconsistent in quality, had features that did not meet market promises, and were delivered by a disconnected sales force. No one took action to address historical values and structures that were now only obstacles to the new business plans. Without a deeper base of understanding and trust that would help create the alignment needed to execute, her beginning-of-the-week words of wisdom were only faint echoes on Friday morning.

Employees knew and trusted their earlier world; they knew what to expect and how to operate in the old ways. Many were still very much committed to the old vision and values, believing that "this too shall pass." And even those who wanted to embrace the new vision didn't know how.

Not surprisingly, the new strategy went nowhere, and Martha Werthing was asked to resign. She left behind a highly talented, but siloed and demoralized culture. Rather than creating a more committed and engaged workforce, an atmosphere of cynicism, a distrust of leadership, and frustration torpedoed the goals and brought the house down.

Werthing was considered near the top of her competitive class, and yet she failed. She was astute at the 50,000-foot level, but couldn't align and mobilize people to execute the business strategy. She had a deep understanding of the business dynamics of her industry, but could not surmount the people challenges, which proved fatal to strategy execution. She failed when:

People-including her board and executive suite-were not aligned with her vision. The organization could not succeed as a house divided.

She miscalculated her ability to bring the right capabilities to the marketplace-great skills and technology alone were not enough. Talent needed to be calibrated to the vision, brand, technology, and resources in a way that customers valued. She struggled to hold the initial engagement of many of her people in the vision, which could not survive executive in-fighting, functional silos, poor follow-through on commitments, rapidly changing strategies, low communications transparency, and lack of input and involvement of employees.

Werthing's situation is not unique. She and many senior leaders like her fail to successfully address the make-or-break talent factors that determine the profitability and growth of today's organizations. Many of the old rules no longer apply. And the new rules must be applied differently in various organizations and cultures.

Reinventing Talent Management will demonstrate the need to adopt fresh thinking to managing talent in organizations of every size and type. Our conclusions are based on an examination of the new talent marketplace and the role it plays in shaping organizational growth and survival. The talent marketplace is the playing field for determining who gets what talent and how well it is being used within and outside of the organization. Externally, it is represented by global and local forces that influence an organization's ability to obtain and keep the talent it needs to be successful. Internally, it is the vibrant day-to-day dynamics that enable some organizations to have the right talent in the right place to achieve business goals better than the competition can. This often means talent that creates more satisfied customers, is more skilled, has stronger leaders, actively recruits new talent, is innovative, is loyal, and is more productive-in short, the talent has been optimized.

(Continues...)

Excerpted from Reinventing Talent Managementby William A. Schiemann Susan R. Meisinger Copyright © 2009 by John Wiley & Sons, Ltd. Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Edition details

• Publisher: Wiley
• Publication date: 2009
• Language: English
• ISBN 10: 0470452269
• ISBN 13: 9780470452264
• Binding: Hardcover
• Edition number: 1
• Number of pages: 288