If you are an HR leader in China now, or you hope to be one soon, the way in which you answer this question could change your life. If you are struggling to answer, do not worry. This is the first in a series of articles in which I will examine and explain the ins and outs of Strategic Talent Management (STM). As this is the first article, it may be a little heavy on theory. However, stick with me. The next few pages will be very informative and, over the next few issues of Network HR, we will look at some of the action steps you can take to become an STM leader.
STM is a relatively new aspect of HR. However, it may actually represent the future of our profession. It first became an important factor around 5 to 7 years ago when the talent war we now see raging intensely here in China first began to spark on a global level. STM, though, is not the future of HR just because high-quality employees are hard to find and even harder to keep hold of. Far from it, STM represents HR’s brave new world because, over the last decade, the growth of new technologies and global business changed the workplace so much that we need to redefine ‘talent’. Such changes are driving HR departments across the globe to leave behind old mindsets and to embrace STM as a way of engaging the challenges they will face in the future. For instance, some organisations are actually beginning to eliminate the very term ‘Human Resources’ from their vocabulary. HR was a term that came into use when the business environment was much less complicated and dynamic that it is today. Although it was well intended, it cast people as a commodity, much like any other raw material. With such a definition, it is no surprise that many of the practices developed beneath the ‘people-as-commodities’ banner focused simply on administering these ‘resources’ rather than engaging or inspiring them – administering is certainly not the same as adding value.
Dismantling and Repackaging
HR has changed over the past decade. Many organisations have now realised that using HR in solely an administrative capacity actually costs them money. Because of this, many organisations changed the way they approached HR. It was as though our whole field was dismantled and then re-packaged.
There is no doubt that HR is leaving behind its administrative identity – that is certainly a good thing. Now, most HR departments outsource much of their transactional work. Instead, they are finding relevance and value by contributing to their organisation’s business mission. I often hear HR leaders cry out, “We want a seat at the big table.” They want to be strategically important in their own right. However, the price of a seat at that table is high – HR departments across China and across the world must be able to prove that they can add business value. They must prove that their ambitions lie beyond simply improving administrational efficiency.
Sitting at the Big Table
So, what do businesses want from HR? CEOs across the world are keen for HR to tackle one major task – delivering a workforce that is capable of delivering their business plan and meeting their organisational goals. Sounds easy, doesn’t it? Unfortunately, alas, this is not as simple as it sounds. Delivering this dream workforce requires much more than bringing on-board a few potentially talented employees. Proving that you are efficient at recruiting new members for your workforce still doesn’t get you a seat at the big table. This remains much too close to HR’s old administrational identity. If done right, recruiting is highly important, but it is just one part of a much larger strategic responsibility facing HR. This new challenge should excite you as an HR leader. If you want a seat at your organisation’s big table, you must deliver on the same strategic level as the other business leaders who are already seated there do. For example, a CFO (Finance) delivers financial capability that allows an organisation to stay alive with sufficient capital to allow room to manoeuvre towards business goals. A CTO (Technology) delivers technical infrastructure that connects the knowledge, operations, products and services of an organisation to suppliers, employees and customers. And, a CMO (Marketing) delivers a customer segment that drives product development and sales. There are strategic capabilities throughout an organisation. However, they are all energised by one pervasive factor – talented people within the workforce. Who should take responsibility for that factor? The CEO? No, he/she has a big enough job of their own. Only HR can take ownership of delivering a workforce capable of delivering an organisation’s business plan. This changes the whole definition of how HR is measured. Instead of looking at the amount of time it takes to fill a vacant role, it is better to measure HR by outcomes linked to business capabilities such as strategic job coverage – the percentage of incumbents in strategic positions categorized as being ‘highly capable’ of executing their role.
What is Strategic Talent Management?
There are so many definitions of ‘talent management’ that it can be very confusing to understand exactly what STM is. Wharton professor Peter Cappelli once said, “One of the hard things about talent management is that so many different people use the term to mean so many different things. I've heard the phrase talent management used to describe literally everything that happens under the broad umbrella of human resources - hiring, performance appraisals, compensation practices, etc.” It is a mistake to use the label ‘Talent Management’ and paste it across the practices you have used for years. You certainly could not use the term ‘Strategic Talent Management’, slap it onto the same old HR techniques, and expect to be pushing for your seat at the table. When we use the term Strategic Talent Management, we mean something more precise, with much greater business value. Here’s my working definition: Strategic Talent Management is the management of a talent value chain that energises a business.
What is a business value chain?
A value chain is a series of causes and effects that together provide benefits for your organisation. Your company will have a value chain that transforms a raw material into a product or service. Your raw material can be anything – metal, chemicals, even knowledge. The value chain transforms these into the final product that your customers desire so much. The first link in your chain is the strategic objective of your business. What do you produce? Who are your customers? The next link is the business plan – where your organisation wants to go and the steps it will take to get there. From here, each link of the chain describes how your organisation’s plan will be implemented. The execution of every part of your plan, of every link in your chain, depends on the willing participation of your employees showing both talent and dedication. Your organisation must manage every part of this plan. Therefore, there must be a plan for managing the talented people involved. For STM to be effective in your organisation you need to establish a clear link between the following factors, forging a strong value chain.
The strategic intention of your company
The business planKey performance drivers
Strategic organisational capabilities
Strategic workforce capabilities
Strategic job families
Key positions within those job families
The talented people who occupy these positions and finally
The competencies of the talented people.
Each of these factors are links in your value chain. It is the human capital within your organisation that forges these links.
HR leaders who seize the business value of STM, and use it in the right way, can be true business partners with their customers - the leadership of the company. These are the HR leaders who will have an extremely bright future career. The era of HR as administrative and process expert is over. The era of contributing to business value has come. Next time around I will be dealing with a few more practical aspects of STM to help you add that value to HR and to your organisation.
In the last issue of Network HR, Allan Nee of Baode Law in Tianjin wrote a detailed and insightful article about the ways in which your organisation needs to adapt to China's new Labour Laws. Allan offered a myriad of fantastic advice. However, there was one factor he mentioned that really captured my attention - transparency.Read More
Benefits
The Power of Acknowledgement
he seeds of this article were sewn as I put together the last edition of Network HR. First, as I edited the Training & Development section, I read the following prophetic words from Jennifer Peterson, "If you want your customers to feel cared for, you must care for the employees that serve them." This started me musing about the way organisations across China treat employees.Read More
Training
Synchronicity for Success
A single droplet of sweat trickled down my neck as the glowing amber sun beat down on us. I glanced out of the corner of my eye and saw our competitors lined up alongside us. It was the moment we had been preparing for over the last 5 years. Our goal was crystal clear and I had visualised this very occasion countless times.Read More
Recuitment
War, what is it good for?
I believe I can bring the War for Talent to a peaceful end. I came to this realisation two
months ago after I was invited to present at the ‘Corporate Travel and Technology
World' conference in Shanghai. The topic, "Selecting Potential Leaders and Turning a Company from Good to Great", was
provided some months earlier, giving me time to source opinions from
around China. Read More
In the last issue of Network HR, Allan Nee of Baode Law in Tianjin wrote a detailed and insightful article about the ways in which your organisation needs to adapt to China's new Labour Laws. Allan offered a myriad of fantastic advice. However, there was one factor he mentioned that really captured my attention - transparency.Read More
he seeds of this article were sewn as I put together the last edition of Network HR. First, as I edited the Training & Development section, I read the following prophetic words from Jennifer Peterson, "If you want your customers to feel cared for, you must care for the employees that serve them." This started me musing about the way organisations across China treat employees.Read More
A single droplet of sweat trickled down my neck as the glowing amber sun beat down on us. I glanced out of the corner of my eye and saw our competitors lined up alongside us. It was the moment we had been preparing for over the last 5 years. Our goal was crystal clear and I had visualised this very occasion countless times.Read More
I believe I can bring the War for Talent to a peaceful end. I came to this realisation two
months ago after I was invited to present at the ‘Corporate Travel and Technology
World' conference in Shanghai. The topic, "Selecting Potential Leaders and Turning a Company from Good to Great", was
provided some months earlier, giving me time to source opinions from
around China. Read More
