0:01
We're talking about strategy execution and what's required for
organizations to drive performance.
And to do this we're using a 4A model of Alignment, Ability, Architecture,
and Agility.
In this particular segment, we're going to delve a little bit deeper into ability.
Do organizations have the talent necessary to implement their strategies, and
if not what do they do about it.
Questions to consider as we go through this,
include are people the most important asset?
Most annual reports begin with this claim.
People around are most important asset and the CEO wants you to know that.
But do the organization investments backed us up?
Our people actually managed is the most important asset?
And if not, why?
0:45
Why do firms face talent shortages?
We're going to see some evidence that says a lot of strategies are hamstrung
by the fact that there aren't talented people to implement them.
Why is this and what can you do about it?
And what does best practice look like in talent management,
leadership development as an input to strategy execution?
1:07
So at the end of this section what we want to do is be able
to do a couple of things.
First of all, identify the pitfalls firms
make the results on what we're going to call the talent syndrome.
I'm going to go through that.
And we also want you to be able to assess where
in an organization are those most critical talent pools, the strategic talent.
That makes the biggest difference for executing your strategy.
We're going to see that one size doesn't fit all and knowing where the strategic
assets are is the first step to being able to build that bench of talent.
The third point we want you to be able to focus on is evaluating the talent system.
What goes into that talent system and how can we determine the functionality of it
and the vitality, the energy that drives the organization forward?
So these are the things we want you to be able to do as we get through this segment.
1:59
So the talent syndrome.
This is a kind of an interesting thing in the medical community.
A syndrome, there's a pattern of symptoms that occur together over time.
And what we see in talent management is that there are three or four
key things that really hamstring organizations.
The first is that across a lot of different studies.
Executives will tell us that they're chronically short of talent.
2:29
They have good people in their organization but
not enough of those good people in the areas that are critical.
The second point is that because of the senior executive spending a preponderance
of their time reacting to people issues.
We saw in a previous segment that seventy-five percent of the time,
Executives are focused on execution, but
a big chunk of that is really reacting to shortages around people.
So rather than being pro active about
talent they're reacting to some of these things and putting out fires.
The third is, despite the fact that organizations are chronically short of
talents, many of them don't create a strategic investment and
it's not a top three priority of the firm.
So, think about this, we're short on talent, we're running around trying to put
out fires, but we haven't made it a strategic investment.
Why is that?
In fact, in many companies, investments and talent and
people are the first expense to be cut.
It's the largest and most controllable expense, and so
when companies get in trouble, it's oftentimes the thing they'll cut first,
and that's antithetical to what they want to be doing.
The fourth is the most troubling.
We don't have the talent that we need.
We aren't being proactive about it, it's not a strategic investment, and
what we find is that those same companies, about two thirds of them,
are unable to execute their growth strategies because of talent.
They have capital, they've got market opportunities, but
what they don't have are managers, leaders, and
talented people who are globally savvy and can execute against those strategies.
That's a syndrome that occurs across industries and across firms.
4:12
Now, not every company has that syndrome.
In fact, here's one that we want to talk about that isn't
susceptible to the talent syndrome.
In fact, they're awfully well known.
For their investment, and talent.
See if you can guess who this is?
This is one of the most admired companies in the world, by Fortune Magazine,
one of the most innovated companies, by Fast Company, one of the most respected
companies, by Barron's, and one of the most valuable brands, by Forbes.
This is a company that is very, very successful in the market place and
respected by all those stakeholders who look at it.
But digging a little bit deeper we see some of the elements about
leadership and talent.
It's a top company for leaders.
It's one of the best companies for not just having those great leaders but for
developing them over time.
It's one of the smartest companies in the world, and it's one of the ones that is
most demanded by potential employees that want to work for them.
It's a great place for working mothers and women.
And they got a perfect score in terms of the Corporate Equality Index,
100 out of 100.
And there's a connection between this investment in people,
the success they're having there, and
the success that they enjoy as one of the most successful companies on the planet.
Can you guess who it is?
5:32
Well, the company's General Electric.
I don't know if that's who you were thinking.
But this is an organization that's very well known for
it's investment in talent over time.
Now look at the strategy of GE.
It's what we call a conglomerate.
It has a wide array of businesses.
They make everything from light bulbs to jet engines.
And these businesses aren't even necessarily related to each other so
the portfolio is very broad.
Very widely spread,
they've got over 300,000 employees that are far flung around the world.
GE operates in over a 170 countries.
So think about that strategy.
Unrelated businesses.
Many, many employees all over the world, how did they execute against that?
Most companies could never achieve this.
And if you look deeply into how GE is able to execute that strategy,
a lot of it comes back to their investments in talent, and
the ability that creates with the organization.
So, when you look at their talent management system,
it really has two things that it's trying to do.
First of all, it needs to cultivate
a cohort of general managers who can run all these independent businesses.
They have to be capable, but they also have to be given the discretion,
the autonomy, to make decisions on their own.
So the general manager is key.
6:52
The other element that the talent system does,
is that it creates this cultural integration, what's common about GE,
and the culture binds this organization together.
Remember we, we said previously that in complex organizations,
entropy wants to have the organization fly apart.
Well, part of the talent system is to create those common
values that are the foundation for its culture, and
that holds GE together when a lot of other pressures are pushing it apart.
Down deeper into looking at the mechanics of the talent system
This is a company that has a long history of investing in leadership development.
In fact, they spend in excess of a billion dollars a year in developing leaders,
a billion dollars, and what's interesting is that, in good times and
in bad, that investment doesn't waver.
This is an organization that realizes that ability to execute
is rooted in its investment in talent.
Crotonville, their corporate university, is one of the first of its kind.
And they've been doing this kind of leadership development for many,
many years.
But it's a total system.
It's not one practice or another.
If you look at GE, it's how they hire, who they hire, how they develop people.
They rotate them through businesses.
Their approach to performance management, coaching, feedback.
The succession planning process called Session C
is really connected to career development and
decisions about who the next leaders in the organizations are going to be.
They ground this in their reward systems and their promotion systems and
even the pay systems.
So, the total system is based on
this unwavering investment in building the leadership bench.
They've been so successful that GE actually has a reputation as The Academy,
meaning they turn out more senior leaders than any other organization around,
so many.
That some of these leaders actually go to other companies.
GE does not have a shortage of talent.
It is actually one of the sources of talent that many other companies draw on,
so it's a really very interesting organization in terms
of driving strategy through investments and talent.
Michael LenoxSenior Associate Dean and Chief Strategy Officer
Jared HarrisSamuel L. Slover Research Chair in Business Administration
Scott SnellE. Thayer Bigelow Research Professor in Business Administration
