What Exactly Is Talent?

Organisations thrive or perish based on one thing - talent. It is the creativity, motivation and engagement of talented people that keeps an organisation on the path to success. Forget tech nological advancements, increased capital or improved markets; the only sustainable competitive advantage for organizations today is a talented workforce. Therefore, if your organisation's life and death is determined by its talented employees, there is one question you must be able to answer. What exactly is talent?

So, to ensure you have a solid understanding of ‘talent', let me get straight down to business. Talent consists of three essential components, none of which can be missing if we are to manage our talent for real business impact. These three talent components are known as C/E/T. C = General behavioural Competencies - the observable and measurable way that people behave in the workplace (not what they do, but how they do it). E = Experience - the accumulation of work context and practice. T =Technical/Professional Knowledge - occupation-specific knowledge needed to do the job.

1. Competencies

The first way talent management seeks to understand people is in terms of competencies - workplace behaviours that produce superior results. Competencies are important because they tell us ‘how'. For example, "How does an individual work and behave in within an organisation?" Are they energetic, intellectually powerful, resultsoriented, persistent, analytical, persuasive and cooperative? Can they form the relationships they will need to succeed within their role? Are they leaders? Are they a good fit with their boss? Are there any behavioural defects that could cause an individual's career to go off track? Is the person ethical?

Humans have an almost limitless capacity to possess and develop all kinds of competencies. However, to make the most of our talent, we need to know whether the key people in our organisation possess ‘mission critical' competencies. These are competencies that allow them to produce fantastic results and bring value to your company. It is also vital that we look at these competencies in even greater detail and identify ‘differentiators' - competencies that are uncommon, and, that set superior performers apart.

Let's use sales employees as an example here. Everyone in the sales department should have the drive to persuade potential customers. Therefore, persuasiveness is a normal competency for a sales person. However, if the majority of sales people have the ability to persuade a customer, it is not a differentiator. Truly ‘talented' sales people are those that have something extra. To make the most of our talent, we need to identify these specific competencies that differentiate the superior performers from the average.

"To make the most of our talent we need to identify these specific competencies that differentiate the superior performers from the average."

2. Experience

The second crucial element of talent is experience, as defined by practice and context. Or, to put it more simply, what the employee has done and in which situations they have done it. We can see the importance by comparing the experience required and accrued by a Director of Operations in a USD 10 million single product company, compared to his or her counterpart in a USD 1 billion multi-product global organisation. Whilst the director from the smaller company will certainly develop vital experience in their role, the director at the bigger organisation will develop a far more diverse bank of experience. Or, if we use sales as an example again, think about the differences between a salesperson that has experience dealing with middle-managers and one who has experience cutting deals with senior VPs.

3. Technical Professional Knowledge

To do their jobs well, employees also need our third talent factor - an occupation-specific knowledge base. For instance, you need to ask if your CFO has the knowledge that can keep your organization financially alive. Or, if your marketing employees have the right kind of know-how to identify the next crucial new customer segment.

Technical knowledge can be broken down into numerous categories and sub-categories. For example, we can further specify the general category of "Financial Knowledge" as "knowledge needed to make financial forecasts." That sub-category can also be further specified as "the knowledge needed to make financial forecasts for new product lines" (as opposed to forecasts for existing products). Or, to take it one step further, "the knowledge needed to make forecasts for new product lines in emerging, low-wage countries in East Asia."

Inventory and Analysis

These 3 talent components (C/E/T) are the foundations on which all business initiatives are accomplished. Keeping an inventory of human talent helps organisations make the important connection between talent and a specific business need. By using C/E/T as a basis for decision making, we can make analytical data driven decisions, rather than decisions driven by ‘gut feelings' or intuition. Therefore, defining talent in terms of C/E/T provides an organization with a highly accurate and useful way to create (i) a success profile for any given position, and (ii) a talent profile for any given person.

We can think of our talent profiles as lists of Competencies, Experiences, and Technical knowledge, as the above graphic illustrates. The person being profiled possesses 7 Competencies, 5 Experiences, and 6 Technical Knowledge factors. As everyone is unique, another person may have 22 Competencies, 19 Experiences, and 3 Technical knowledge factors. This all sounds relatively straightforward so far, doesn't it? However, to ensure that our analysis is as effective as possible, we need to weight each C/E/T factor by the degree of difficulty. For example, some of the most difficult factors take years of professional and personal growth to develop, such as senior leadership competencies. Similarly, some experience and knowledge factors are much more difficult to acquire than others. For instance, a Ph.D. is much more difficult to acquire than an undergraduate degree.

Once you have identified the C/E/T components required for the key people who will occupy major positions within your organisation, you must analyse your talent factor by factor, to determine who is a good fit. A ‘good fit' will show strong similarities between the C/E/T of the employee and the C/E/T required for the position. For example, by analysing experience and competencies we could define one specific individual as being "decisive". If the position you are considering them for is defined as a "decision making role", then you may well have a good fit.

Expanding C/E/T

Applying C/E/T to individual roles and individual employees is great. However, we can go further. To expand our perspective from individuals to our organisation as a whole needs a systematic method to help execute talent planning along three dimensions:

• Managing C/E/T for talent value at the organizational level.

• Managing the time horizon (talent requirements change over time).

• Managing the leadership pipeline.

1. Managing C/E/T for Talent Value at the Organisational Level

As we already discussed, to make the most of our talent, we must first analyse and optimise C/E/T components for each key position. However, we must also take a wider perspective and look at these on an organisational level to ensure an appropriate inventory of talent, so that the organisation as a whole can achieve its business objectives.

2. Managing Time Horizons

When defining and managing our talent, time horizons need to be anticipated and controlled. There is a difference between the talent needed for today and the talent needed for tomorrow. There are several key processes that help the talent manager to prepare for the changes to come:

• Planning the future workforce based on C/E/T - for strategic job families and key positions

• Identifying alternative talent that can step in if key people leave today

• Succession management - defining who can do the job tomorrow

• Talent bench-strength analysis - defining talent surplus and shortages, rebalancing as needed

• Training and Development investments based on forecasted C/E/T requirements

• Retention risk analysis - what scarce skills can the organization least afford to lose

3. Managing the Leadership Pipeline

Organisations must take special account of how they prepare and deploy their leaders. There is an old saying, "Good leaders need good experience - good experience comes from having bad experiences."

However, making a mistake in leadership planning is the costliest talent error an organisation can make.

The definition of leadership talent varies at different levels in the organisation, as do the challenges leaders must confront. The Charan/Drotter model of the Leadership Pipeline identifies several levels at which a leader needs to operate as their role changes and their span of control increases. Each of these levels creates specific challenges that in turn require certain competencies for success. Strategic talent management anticipates the competencies for each level and makes plans to ensure the organisation has the right supply of leaders at each level.

To succeed on a strategic level, an organisation must develop its capability to manage its talent. Without a clear, focused and comprehensive definition of talent - the C/E/T - it cannot succeed. An organisation that cannot define and manage its talent risks losing the only sustainable competitive advantage it has.