“People are our greatest asset”….
For almost every organization this is true. It’s also a fact recognized by almost every CEO, and certainly, they use the phrase often enough. The reality is that most companies still treat people largely as a cost rather than an asset. With payroll making up to 70 percent of an organization’s overhead that may be understandable but potentially it’s short-sighted. In today’s knowledge economy, for an organization to flourish, it must make the most of its people.
In recent years, the importance of talent to business has been strongly backed by CEOs across a wide range of surveys. In particular, the 2013 Conference Board CEO Challenge Report shows CEOs focused on the importance of people where human capital was ranked highest of the CEO’s ten top global challenges, ahead of government regulation (#6) and global political, economic risk (#5).
In outlining how they plan to meet these key challenges the CEOs show a focus on the procedural and tactical rather than the strategic. Of the ten actions they plan to meet their top two global challenges (#1Human Capital and #2 Operational Excellence), only one can really be considered strategic – “better alignment between strategy, objectives and organizational capabilities”. Where does it sit on the list of ten? Tenth…
And yet strategic alignment is crucial.
Tactical responses CEOs mention – growing talent, providing more training and raising engagement – are all essential, but their effectiveness is determined by whether the organization is using talent properly in the first place.
To ensure employees are fulfilled, an organization must have in place processes to ensure it plays to their strengths, works on their weaknesses and considers both against organizational need. The new way of building people’s abilities in line with organizational needs is business-led. It is agile enough to make a difference to the daily working lives of managers as well as providing data for strategic impact.
It’s something I call Talent Optimization.
My take is that previous attempts to understanding the workforce have often floundered because of the sheer size of the problem. The holy grail of connecting corporate strategic business goals, to periodic individual performance reviews, to compensation and reward has been elusive if not downright impossible. Why? Firstly, it’s because cascading goals from strategic top level imperatives, down to how do individuals perform day to day, is a foggy path, and reward practices are often driven by averages and parity. Secondly, the skills and competencies that define what is “good or great” by position are usually missing. As an employee if I don’t know what my mission is, how can I master the role I am playing, much less strive to aspire to a new role in the future? It’s not easy for a firm to master the complex content behind; competencies, policies, social collaboration, classroom, individual learning and effectively weave these into advanced HR practices.
When organizations do concentrate on providing this kind of complex content they are well on their way to Optimizing their Talent. Organizations spend millions on data warehouses, and analytics for the 10 or 15% of management layer, but ignore the content that employees and most managers need to make effective decisions, and then take action. Aligning strategic objectives and organizational capabilities with well thought out content is investing in an Employee Business Intelligence Platform.
Talent Optimization focuses on making it easy for employees and managers to know what their roles are, the goals, how to get answers, take action and, specifically, what’s in it for them.
This is the first in a series of blog entries where I’ll be exploring the philosophy behind Talent Optimization and practical ways in how it can be implemented to give organizations and their employees a real competitive edge.
People are an organization’s greatest asset but without systematic support, their potential will never be fulfilled.
Tarik Taman,
General Manager HCM