TALENT PLANNING

5 Key Steps in Strategic Talent Planning Recruiting rarely is based on any sort of strategic plan. For most organizations, recruiting is a tactical operation a series of things that take place that result in qualified people getting hired. It is mostly reactive, and few recruiters have the time or charter to look forward more than a few weeks. To ensure that your organization has a chance at hiring the best people and to successfully operate in a global, competitive environment, organizations you will need a strategic plan coupled to appropriate resources and tactics. Heres a quick overview of the five essential first steps needed to put this plan together and to begin making it operational: The five key steps in strategic talent planning Step 1: Talent Plan Workforce or talent planning is the first and hardest step. It means deeply understanding the organizations business goals and the competitive environment the organization functions in. It is a combination of understanding and predicating demand, while at the same time being educated and aware of the talent supply situation from all the sources that are available. This step needs to be far more than simply listing the jobs projected in the annual budgeting process and factoring in turnover. It is an evolving process, as opposed to an annual event, and is the most dynamic and critical stage of any strategic process. Step 2: Image and Brand It is not true that if you build a great strategy or a great organization, people will necessarily flock to your doors. Getting people aware of your organization is a tough job. It requires having a consistent communication process as well as a plan to raise general awareness through advertisements, promotions, or by getting listed as a best place to work. You have to be able to answer questions like, What makes your company different or unique? or Why would I want to come work for you? Not only should you have answers to these questions, but you should also make sure your advertising, web presence (which is essential), and overall corporate advertising support this image. This has to be an organization-wide effort. It takes time and an accumulation of messages to be effective. One or two advertisements or a handful of posters wont do it. Step 3: Sourcing Methods Develop a multi-faceted sourcing strategy. Embrace active candidates who are responding to your brand and image-building messages, but maintain the capacity and skills to tap passive candidates. Decide based on past experience what works best for you in locating candidates, and then build those sourcing channels to the max. Make sure you are using referrals from current employees, your network of professionals, web-based search, your own web site and also develop methods to keep in touch with potential candidates that you have no current position for but might have at some later time. Step 4: Screening and Assessing Candidates Are you going to invest heavily in educating managers in behavioral interviewing? Are the recruiters going to be the main screeners, or will you use testing and other tools? What role will the Internet play, if any? Are you going to look into using web-based tests? How much will you rely on candidates screening themselves out or in? What role does the hiring

managers play in screening and assessing, and what are the differences between what you do and they do? This is an area where there can be great improvement with reasonable effort, but where things are still done mostly the way they have always been done. A focus on automating screening to some degree reduces the volume of candidates and actually raises candidate satisfaction. Step 5: Market and Communicate! Candidates want to be in the know about their status and prospects. They seek out feedback and information. Your organizations website is an invaluable tool, but you will also need to develop systems to communicate with candidates personally and to send out newsletters and emails. Probably all the people you need at one time or another sent a resume or expressed interest. They were most likely told that there were no current openings. Wouldnt it be wonderful if you could actually stay in touch with those people and let them know when there is an open position? Thats what CRM (candidate relationship management) systems can do. Unfortunately, they are not yet generally available or optimized for recruiting. But ask your ATS vendor what they doing about this and urge them to provide you the tools you need to effectively keep qualified candidates interested in you. Make sure that whatever systems you choose fit your strategy and make economic sense A few other things to keep in mind:

Make sure all managers and recruiters have a simple system for deciding on a candidate. As you know, speed is the real differentiator today, and the recruiter/manager who moves the most quickly will usually get the candidate. Eliminate unnecessary approvals, and make sure your selection criteria are clear to avoid slowing down the process. If you are a decentralized firm, work out a system for who owns what. If you all agree together then the areas of dispute will be limited. The rule I use is that the central or corporate function should set standards and establish corporate-wide systems. Local offices should participate in that process and have great autonomy on the day-to-day stuff. They can supplement broad image and branding activities with local advertising within the bounds of an agreement you all make with one another.

These initial steps and processes are what enable the back-end activities of scheduling, interviewing, making offers, and on-boarding. Building Cross-Functional Capability: What It Really Takes Building cross-functional capability is a lot harder than drawing lines on an organization chart. It requires upgrading leadership and team-member skills. It also demands that organizational culture become more interactive and less bureaucratic. At the same time, by relying too much on cross-functional teams, organizationsand especially R&D labsrisk diluting deep functional knowledge and expertise, ending up with too many superficial generalists. Given these dangers and difficulties, why should managers bother about building cross-functional capability? The answer is that many projects and problems require knowledge integration. There is strong evidence that cross-functional teams save time and money in developing new products.

Furthermore, customers are increasingly asking for solutions to their problems. This requires crossfunctional teams not only to package products, but also to develop new applications. This kind of partnering has also stimulated ideas that energize the R&D process. Together with Charles Heckscher of Rutgers University, I have been observing successes and failures in cross functional teamwork. We find there are common elements essential for building this capability. These have to do with competencies in organization, leadership and team members. What Organizations Need Organizations should have:

Competent and lean functional knowledge groups. Experts need a home where they share specialized knowledge with others in their own field. Technical disciplines still have some qualities of a craft guild. The difference between traditional guilds and the present day is that with the breakneck pace of innovation, the young often know more than the master craftsmen. This is especially the case with information technology, perhaps less so in biochemistry, for example. By lean groups, I mean that competencies are aligned with strategic goals. Everyone in the group should either add value or demonstrate innovative potential. Breakthroughs still come from functional experts who are not trying to satisfy customer needs, but to create new needs. (When downsizing a functional knowledge group, be prepared for entrepreneurial experts to flood senior management with memos and proposals that propose breakthroughs.)

Processes for forming, managing, assessing and dissolving teams. For cross-functional teaming to become an organizational capability rather than a serendipitous event, processes need to be established: What is the team's mandate? Which functions are required? When should they be brought in? What are the guidelines for bringing new members up to speed and sending people back to their functional organizations when they are no longer needed. Without processes and guidelines, teams develop a life of their own and costs mushroom. Measurements of performance. Individual contributions to teams should be evaluated, with supportive incentives. Include measurements by customers who in the case of R&D may be production or marketing organizations. Those who contribute by teaching and facilitating knowledge creation should also be rewarded. Incentives should balance team success and individual contribution. A pragmatic learning culture. Cross-functional teams require cultural operating principles that are understood and practiced by everyone. There should be a process for developing and communicating these principles. Pragmatism in this sense means defining values in terms of practice. These "soft" cultural principles are in fact harder to develop than the "hard" factors of roles and measurements. They include open dialogue where conflicting views are tested and experimentation is encouraged. In a learning culture, people not only reflect on the relation of practice to results but also question their theories when the results don't meet expectations. Failures are used as opportunities for learning better ways of doing things.

Interactive strategic hierarchy. Although good cross-functional teams should be a heterarchies where subject matter leadership shifts according to who has the appropriate knowledge, organizations need a strategic hierarchy. This includes the strategic level, that determines market positioning, the operational and functional knowledge leadership level, and the "doing" level of technical staff. This hierarchy should be interactive and transparent, and information should flow up and down freely.

What Leaders Need Strategists should not only communicate a vision to the whole organization, but also engage operational leaders in a dialogue about implementation. The doers in labs and on the front line should also be able to engage in the dialogue and give feedback to operational and functional knowledge leadership. They should also be heard at the strategic level. (I have described this more fully in "Knowledge Workers Need New Structures"). A learning culture must have leadership that models and maintains it. I cannot overemphasize the importance of leadership to determine strategic direction, knit together different kinds of expertise, and provide the competence required for cross functional teams.

Strategic leadership designs and communicates a 3-5 year vision for the organization and the assumptions underlying it. At this level, business opportunities are identified in terms of value propositions. Who are our customers? What value do we offer them? How will we create this value? How should we be seen by the market? What kinds of teams are required? What skills do we need? What are the investment priorities? Operational leadership then takes over to find the skills needed, organize teams and facilitate their activities. Operational leaders must push the process forward, communicate and overcommunicate, follow up and make sure that everyone is heard, conflict brought out and resolved. Teams do not succeed without operational leaders, but the leader must also know when to step aside and let functional experts on the doing level lead. Functional knowledge leadership selects and develops people, according to the kinds of skills needed for the business. These leaders make sure that experts keep up with their technical fields and with advances made in other companies.

What Team Members Need Finally, cross-functional capability depends on team members. They should have the following:

Understanding of the vision, what the organization is trying to accomplish over the next 3 to 5 years. This understanding directs their priorities and focusses thinking. Without it, teammembers may champion ideas and initiatives that are a waste of energy. A solid grounding in their own disciplines. Team members must communicate those innovations or market developments that change the assumptions underlying value propositions. Respect for what each function contributes. Teammembers need to stretch themselves to learn how and why other disciplines think the way they do. It also helps to invest time in getting to know each other's background and interests. Clear mandates to make decisions. Unless team members are empowered by their functional knowledge boss to represent the group's position on issues, time will be wasted in seeking approval, respect for each other will erode, and the team will eventually bog down. Team skills include brainstorming, listening, asking clarifying questions, seeking consensus. The team should be trained to practice these skills. The proper character. Team effectiveness depends on individual character as well as skills, leadership and organizational capability. When team members want to help each other succeed, there is less need for leaders to facilitate open dialogue or resolve conflict. When team members

are thinking only about their own interests, leadership must become heavy-handed. To create good teams, people with the right character should be hired and promoted. These requirements describe why cross-functional capability demands so much attention to the human side. But there are no shortcuts and the rewards for this investment are not only in productivity gains, but also the ability to implement a demanding vision. Cross-Functional Capability Organizations Should Have: Leadership Needs: Team Have:

Membership Should

Competent and lean functional knowledge groups Process for forming, assessing and dissolving teams Measurements of performance with supportive incentives Learning culture: interactivity, openness, creative conflict, reflection on practice Interactive strategic hierarchy

Strategic Leadership o Describing 3-5 year vision o Identifying opportunities - value propositions o Determing the skills needed Operational leadership o Finding the skills needed o Facilitating o Pushing and followingup Functional Knowledge Leadership o Recruiting talent o Developing people o Keeping up with innovation

Understanding of the vision, what the organization is trying to accomplish over the next 3 to 5 years--the value propositions Solid grounding--good in own discipline Respect for what each function contributes and for each other Clear mandates-empowered to act Team skills Character values--helping others succeed

TALENT DEVELOPMENT BUDGET A Talent development budget (TDB) that accounts for the costs of attracting, holding, replacing, training, and developing Talent. A value-driven cost structure that measures the quality of work performed against the quantity of work Performed. It is recommend of having a contingency plan for key Talents. Special budgets for special people may send shock waves through an organization. Most organizations have been struggling to reduce inequities due to past discriminatory practices. Now if you propose a budget to deliberately increase inequities between classes of people, this new notion will encounter resistance. The sooner you face such resistance head-on by creating a highly visible TDB, the sooner you can get past this barrier. Every organization should have a TDB. Without one, senior managers might complain: "I can't afford to send this person to this conference" or "I can't hire these people because I don't have any money."They face that challenge because they have a production budget and a cash budget, but not a TDB.For growth, the talent development budget is more important than any other budget. All organizations, regardless of size, should prepare a TDB for the long term as well as for the

short term. The long-term TDB may be prepared for more than one year to allow sufficient time to plan major expenditures for acquiring Talents, keeping Talents, and training Talents. This budget may help to determine the goals of the organization. By preparing a TDB, organizations improve effectiveness and avoid poor allocation of resources. After an organization sets its goals, it can estimate how much to spend on acquiring, holding, and developing the Talents to meet the goals. A shortage of key Talent will lead to severe problems. If management spends more money in one low-priority area of business, the whole business suffers. Often Internet startup companies spend lots of money in advertising, which puts a company into a deep financial hole. Similarly, organizations cannot bear excessive costs on Talents. A TDB is not the same as a training and development budget. A training and development budget A training and development budget is not allocated for attracting and holding Talent or replacing Talent. For example, if your CEO quits and goes to a competitor, and you have no budget to replace that CEO, you suddenly must incur a significant, unbudgeted expense. If you don't have the budget, you don't know what to do when you suddenly lose a key person. And yet it is foolish not to anticipate losing key Talent Occasionally. For example, when a Fortune 10 company announced its new CEO after one of its most successful CEOs retired, three other people in consideration quit immediately. They assumed that in the next ten to twenty years they might not have a chance to become the CEO of the same organization. So, they accepted positions in three different organizations. The company might have anticipated this, but if it did not have replacement costs budgeted at that time, it would have had to use unbudgeted funds, which is always awkward at that level. Even if it promoted internal executives to fill those positions, it would still incur a heavy replacement cost. Flawless hiring of key executives is one of the critical factors for success. To achieve flawless hiring, you must dedicate sufficient time to select the right people, hire them, and bring them into the organization. You have to invest a lot of money. You can't just put an advertisement in Fortune or the Wall Street Journal and be done. The CEO needs to be involved in interviewing candidates and talking with their references. Most senior managers don't do that because it costs money. Senior managers should have access to money in the TDB to recruit Talents or replace Talents who leave. The cost of attracting and holding Talent and the cost of replacing Talent are two critical costs beyond training and development. Typically companies place training and development costs within human resources; but they should spend more money to attract, hold, and develop Talent. High-potential Talent should receive the lion's share of the Talent development budget. Suppose seven of us work at a manager level in seven different divisions. Of the seven, maybe two of us are identified by the company as very talented people. So, rather than allow each of us $5,000 each for training and development, the organization should spend more money on the most talented of the seven. Give them growth opportunities. Make a special case for top performers who are the future of the company. Of those seven people, if the five other people leave, the organization may not suffer as much as if the two more talented were to leave. The Talent development budget can be sufficiently flexible to allow different spending levels for different people. The resulting disparities may cause the human resources manager some

difficulty because of the apparent inequities. But that is the nature of attracting and keeping Talent. Talents are free agents. After a company sets its goals and knows its capability, its management can prepare a TDB and plan to fund its key resources to meet the goals. For example, if a company plans to implement a Six Sigma initiative, its management may set goals to train three thousand employees in two years, spend $2 million on training and developing key Talent, and save $20 million on the projects. After the company sets such performance goals, management then allocates budget money to be spent in that way. Corporations now prepare production budgets, sales budgets, cash budgets, and capital budgets. It is very easy for managers to prepare those budgets because they can easily determine the value of hard assets such as machinery, buildings, land, and other physical resources. But they cannot.

Contingency Planning Developing a Good 'Plan B'

Fires, floods, tornadoes these are the things we often connect with contingency planning. But what if your main supplier suddenly goes bankrupt? Or, what if your entire sales force gets sick with food poisoning at your annual sales conference? Or, your payroll clerk simply calls in sick on payroll day? These things can all cause confusion and disorder if you haven't prepared for them properly. Contingency planning is a key part of this preparation. As you see, contingency planning is not just about major disasters. On a smaller scale, it's about preparing for events such as the loss of data, people, customers, and suppliers, and other disruptive unknowns. That's why it's important to make contingency planning a normal part of your everyday business operations. Risk Assessment The need for contingency planning emerges from a thorough analysis of the risks that your organization faces. It's also useful in thinking about new and ongoing projects: what happens when 'Plan A' doesn't go as expected? Sometimes Plan A simply means 'business as usual.' Other times, with more sophisticated risk management plans, Plan A is your first response to deal with an identified risk and when Plan A doesn't work, you use your contingency plan. Use these principles in your risk assessment process: Address all business-critical operations No matter where your contingency planning starts, a good plan identifies critical business functions, and it outlines a way to minimize losses. Identify risks The first part of an effective risk analysis is to identify the various risks that your business may face. What has the potential to significantly disrupt or harm your project or business operations? The end result of a risk analysis is usually a huge list of potential threats. If you try to produce a contingency plan for each, you may be overwhelmed. This is why you must prioritize. Prioritizing risks One of the greatest challenges of contingency planning is making sure you don't plan too much. You need a careful balance between overpreparation for something that may never happen, and adequate preparation so that you can respond quickly and effectively to a crisis situation when necessary. Risk Impact/Probability Charts help you find this balance. With these, you analyze the impact of each risk, and you assign a likelihood of it occurring. Then it's easier to determine which risks require the expense and effort of risk mitigation. Business processes that are essential to long-term survival like maintaining cash flow, staff support, and market share are typically at the top of the list. Note that contingency planning isn't the only action that emerges as a result of risk analysis you can manage risk by using existing assets more effectively or by investing in new resources or services that

help you manage it (such as insurance). Also, if a risk is particularly unlikely to materialize, you may decide to do nothing about it, and manage around it if the situation arises. Contingency Planning Challenges You should be aware of a few common obstacles as you begin your contingency planning process: People are often poorly motivated to develop a strong Plan B because they have too much of an emotional investment in the Plan A they want to deliver. Stress that Plan B should be properly thought through. Theres usually a low probability of a crisis occurring, so people often dont feel a sense of urgency to create a contingency plan, meaning that it gets stuck at the bottom of their To Do Lists. Unfortunately, this may mean that contingency planning ends up as a task that never gets done. Organizational politics can interfere with prioritizing risk, because many people may want to be seen as an essential part of recovery efforts. If you include all key business managers in the risk assessment and prioritization process, this may help you reach agreement. Developing the Plan Remember these guidelines when it's time to prepare your contingency plan: Your main goal is to maintain business operations Look closely at what you need to do to deliver a minimum level of service and functionality. Define time periods What must be done during the first hour of the plan being implemented? The first day? The first week? If you break down the plan, you're less likely to leave out important details. Identify the trigger What specifically will cause you to implement the contingency plan? Decide which actions you'll take, and when. Determine who is in charge at each stage and what type of reporting process they must follow. Keep the plan simple You don't know who will read and implement the plan when it's needed, so use clear and plain language. Consider related resource restrictions Will your organization be able to function the same way if you have to implement Plan B, or will Plan B necessarily reduce capabilities? Identify everyone's needs Have people throughout the company identify what they must have, at a minimum, to continue operations. Define 'success' What will you need to do to return to 'business as usual'? Include contingency plans in standard operating procedures Make sure you provide initial training on the plan, and keep everyone up-to-date on changes. Manage your risks Look for opportunities to reduce risk, wherever possible. This may help you reduce, or even eliminate, the need for full contingency plans in certain areas. Identify operational inefficiencies Provide a standard to document your planning process, and find opportunities for performance improvement. Maintaining the Plan After you prepare the contingency plan, you need to do several things to keep it practical and relevant don't just create a document and file it away. As your business changes, you'll need to review and update these plans accordingly. Here are some key steps in the contingency plan maintenance process: Communicate the plan to everyone in the organization. Inform people of their roles and responsibilities related to the plan. Provide necessary training for people to fulfill these roles and responsibilities. Conduct disaster drills where practical.

Assess the results of training and drills, and make any necessary changes. Review the plan on a regular basis, especially if there are relevant technological, operational, and personnel changes. Distribute revised plans throughout the company, and make sure the old plan is discarded. Audit the plan periodically: Reassess the risks to the business. Analyze efforts to control risk by comparing actual performance to the performance level described in the contingency plan. Recommend and make changes, if necessary. Key Points Contingency planning is ignored in many companies. Day-to-day operations are demanding, and the probability of a significant business disruption is small, so it's hard to make time to prepare a good plan. However, if you're proactive in the short term, you'll help ensure a quicker and more effective recovery from an operational setback in the long term, and you may save your organization from failure in the event that risks materialize. A contingency planning process also helps you gain significant insight into the risks your organization faces. This enables you to develop an effective planning strategy that will immediately add value to the business. Contingency planning requires an investment of time and resources, but if you fail to do it or if you do it poorly the costs could be significant if a disaster happens. Talent Reservoir The model presented here is called Talent Reservoir. Its goal is to build of high-talent people capable of supporting an organization's current and future business requirements consistent, with the three objectives outlined earlier Talent Reservoir Talent Reservoir has 3 major components are: 1. Designing and building a Talent Reservoir solution. 2. Capturing the Talent Reservoir solution in a software package. 3. Implementing an integrated Talent Reservoir process. Talent reservoir Talent reservoir is a talent management process that takes into account some other aspects of the assessment process to identify competencies required by the organization. It identifies key areas of risk management and organizational deficiencies. Talent reservoir integrates all components of talent management: selection (both internal and external), competency and performance evaluation, coaching and staff development, and succession planning. When used in the selection process, Talent reservoir utilizes competencies in an organization as defined by stakeholders within the company and compares

those competencies with candidates skills and behavior. The candidate selection has according to talent reservoir three different aspects, the typical script, the hidden script and then the talent reservoir script. The typical script consists of a rsum, job description and other credentials. The hidden script contains the human factors that often are not taken into account when searching for talent. The talent reservoir script contains additional features like competency assessment, organizational fit and alignment to organizational values. When the process is used for selection, either internally or externally, the following steps must be followed: 1. Select the competencies needed for success in this job. These represent skills, attitudes; and behaviours and every organization choose their own organizational competencies based on their mission statements and core values. Typical competencies might be team participation, respect for others, communication, integrity, innovation, caring and compassion, financial responsibility, safety, professionalism, planning, follow-through, technical skills, and results orientation. 2. Define measurement scales. Rating scales to introduce a series of examples of successful behaviours relevant to each job in the organization. 3. Develop a structured interview outline by using the competencies and measurement scales. By using these, the recruiter develops a list of questions directly related to the job. Talent Reservoir is appreciated for ensuring a workforce with the behaviours and skills linked to organizational and customer demands