Heidrick Strategic Talent Management2012[1]
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Transcript of Heidrick Strategic Talent Management2012[1]
Strategic Talent Management
The emergence of a new discipline
A view from the FTSE 100
Executive summary
“If we don’t connect business and talent
strategy, we will be nothing more than a
typical HR unit, focusing on activities and
not on impact and outcomes.”
Activities or outcomes – what’s your
focus? The cumulative impact of global
demographic trends, combined with
on-going economic uncertainty and
aggravated by a critical skills shortage
creates a powerful talent triple whammy
facing business. In response, forward-
looking companies are bringing talent,
particularly leadership talent, to the
top of the agenda and are assigning
responsibility for aligning business and
talent imperatives to a senior talent
executive. We are beginning to see the
steady emergence of a new discipline of
Strategic Talent Management, led by a
Head of Talent or a similarly titled role. In
order to increase our understanding of
this relatively new role and its challenges,
we approached the leading practitioners
in FTSE 100 companies, in the latter half
of 2011, to conduct research and in-depth
interviews. The results are intended to
serve as a guide for CEOs and Heads of
Talent when evaluating their approach to
senior talent management.
We found that the drive for structured talent management
generally comes from a CEO who has recognised the
importance of attracting and developing a superior pool
of leadership talent that will enable the business to deliver
on its strategy. A ‘flat world’ produces a number of tensions
that Heads of Talent are expected to resolve. The drift
of business from the West to East creates demand for a
diverse set of leadership capabilities.
Some senior executives readily understand that talent
is a central enabler of strategy and that great talent
management can be a source of sustainable advantage.
A good number though, still regard talent development as
a hygiene factor. Talent management in these companies
can become an exercise in gap-filling and tactical
recruiting.
Our research convinces us that CEOs will continue
to appoint a Head of Talent as a way of combatting
this reactive mentality and creating awareness of the
importance of talent to corporate success. It is for this
reason that Heads of Talent tend to be viewed as distinct
from the rest of HR, even when they report to the
company’s top HR executive.
But despite the advantages of being CEO appointees,
many of the Heads of Talent we spoke to are struggling
with paradoxes and ambiguity as they attempt to create
alignment between business and talent strategy. They
are often tasked with bringing consistency to talent
management across decentralised business units, but they
Strategic Talent Management The emergence of a new discipline
2 Strategic Talent Management: The emergence of a new discipline
have little or no power over hiring or promotion. They are
balancing the strategic, external talent challenges facing
the company with tactical and internal challenges, often
with only influence to help them.
The global economic crisis and the huge increase in
unemployment have not made their role any easier.
Counter-intuitively, there is still a marked shortage of
people with the skills required to lead global companies.
The concerns of baby boomer and ‘generation X’
executives are important, but the future of most
companies rests with the next generation.
In the context of these challenges, there is a need to share
best practice to create the conditions for success. Based
on what we have observed and the insights that we have
been able to glean, we have developed a framework called
the 7Ps which will be helpful in structuring the role of a
Head of Talent: Pressures, Purpose, Person, Profile, Power,
Process and Pools.
Overall, our research revealed an embryonic but emerging
business discipline with little consistency around
objectives or methodology. We discovered a complex
set of factors, many of them contradictory, affecting
performance and success. Even with the high stakes
attached to successful talent management and the right
framework to help them succeed, winning Heads of Talent
will still have to be diplomats rather than commanders,
achieving results through relationships and persuasion.
Encouragingly, we found many Heads of Talent who had
adopted this approach.
Heidrick & Struggles’ role as a leadership advisor to global
organisations gives us a privileged perspective on these
emerging trends and we undertook this study to start
an on-going conversation with CEOs, senior leaders and
Heads of Talent on how to maximise the business impact
of leadership talent.
5 yearsaverage length of time Head of Talent
role has existed in the company
3 yearsaverage length of time current
Head of Talent has been in the role
17% Heads of Talent that report to the CEO
157average size of top talent pool managed
90%whole career spent in HR
23number of different job titles
identified in our survey for the role
6 out of 10average score in answer to:
“How well do you think your
organisation manages talent?”
Heidrick & Struggles 3
There is a growing body of evidence to
support the idea that companies that
align business and leadership talent
imperatives have a greater chance of
sustainable success. It feels intuitively
correct; if you have the right leadership
talent in the right place with the right
skills and behaviours, then the odds of
successfully executing on your business
strategy are high. Many of our CEO clients
agree and have moved leadership talent
to the top of their agenda, assigning
responsibility to a senior executive.
At Heidrick & Struggles, our belief is that these Heads
of Talent have an important role to play in improving
corporate leadership, and that an effective Head of Talent
could have substantial impact on a firm’s competitiveness.
We wanted to test this theory by learning more about
these senior talent executives: who they are, what they do,
the agenda they address, the context within which they
operate and what constitutes success in their role. Top
talent executives from 24 FTSE100 companies helped us
in our research. The firms we surveyed use a wide range
of titles for these leaders, but in this report we will refer to
them as Head of Talent.1
1 see Appendix 1, ‘A note on titles’
Together with these executives, we identified a series of
practices, tools and competencies that can help create the
conditions for success within this role and for the company
as a whole. In addition to the survey findings we have
brought additional insights from Heidrick & Struggles’
leadership consulting experience, as well as from research
conducted at Harvard Business School.
The report is divided into three parts: A summary of our
findings; a review of the context within which these talent
executives operate and finally a few tips for attaining
success. We hope that it will be useful both to CEOs when
they consider how to execute on their talent agenda and
to the senior talent executives who are responsible
for making the alignment of business and talent
strategy a reality.
Introduction
4 Strategic Talent Management: The emergence of a new discipline
The Head of Talent is still a relatively new role, and companies use their executives in a wide variety of waysMost of the Heads of Talent we interviewed have been
recently appointed, and some were the first Head of Talent
their companies had ever hired. Unlike more established
functional roles (CFO, Chief Marketing Officer, etc.) the
Head of Talent is a newcomer and is rarely present on the
executive team. We found that on average the length of
time a Head of Talent role had existed in the company was
five years and that many of the current appointees had
been in the role for about three years.
A good number of our interviewees indicated that they
were still working out how they were expected to relate
to their colleagues. A few companies have well-grooved
talent management processes, but most are still exploring
Part 1 Principal findings – An embryonic but emerging discipline
how they will select and develop high-potential managers,
conduct regular talent reviews and report on their
progress.
As a result, we discovered great variety in the ways in
which Heads of Talent operate and relate to line managers.
Some are focused primarily on infrastructure for talent
and leadership development – processes, systems, and
metrics. Others spend more time on specific development
initiatives: business school programmes, projects that
involve high potential managers, and the like. Still others
spend time ‘walking the floor’, trying to keep high-
potentials engaged and providing front-line intelligence
to senior line leaders (fig 1).
There are few patterns that a CEO can rely on when
appointing a first Head of Talent, few models that a newly
hired Head of Talent can easily adopt. As we will explain
in Part III, this means that Heads of Talent must take the
initiative in structuring their own roles.
24%22%
21%10%
9%7%
4%3%
Succession planning
Training and development
other
Individual career management
Recruitment
Performance management
Mobility management
Compensation & Benefits
figure 1 – How do you spend your time?
Heidrick & Struggles 5
A wide variety of ‘Hot Topics’ that keep Heads of Talent awake at nightInterviewees split their ‘Hot Topics’ into two categories
– strategic and external talent challenges facing the
company and tactical and internal issues. There are few
surprises on either list, but several of the ‘mega’ themes
resonated with our experience and wider research on
leadership talent. Generally, we see that Heads of Talent
are battling to create alignment between business and
talent strategy:
Globalisation and Emerging Markets
A ‘flat world’ produces a number of tensions that Heads
of Talent are expected to resolve. The drift of business
from the West to East creates demand for a diverse set of
leadership capabilities that can not only bridge the gap
between established western management approaches
and emerging eastern ones, but can also manage the
balance between what can and needs to be done at the
centre and what should be done locally. Many of the
interviewees talked of developing a new ‘glocal’ talent
model, blending global consistency with local delivery
needs. Many Heads of Talent appear exasperated by
the challenges of identifying, attracting and retaining
leadership talent in emerging markets – “we say we are
going into (emerging markets) but have no clue how
to operate or source talent or how to expand our talent
agenda in these new markets”. Some told us that they had
learned a hard lesson that what attracts talent in emerging
markets is different from what retains it and creates
performance. A few even fear that despite their best
efforts “half the investment will walk out.”
Succession and Leadership Pipeline
Heads of Talent tended to confirm our experience that
succession planning at all levels, but particularly at the top,
is reactive. The following quote, taken from our 2011 Board
Study,2 reflects the situation “A company’s leadership
talent is its single most important asset and has become
a critical governance topic for boards. In general, the time
and effort devoted by the board to the development and
2 European Corporate Governance Report 2011 – Challenging board performance, Heidrick & Struggles, 2011
Hot topics
StrategicDiversity
Demographics
• Agingpopulation
• Generationalmix
Globalisation & Emerging Markets
• Globaland‘Glocal’talentmodel
• RelocationofbusinessfromWesttoEast
• Identifying,attracting&retainingtalentin
emerging markets
Mobility
• Willingnesstomove
• Skillsgapsacrossgeographies
Critical skills gaps
• GlobalshortageofGeneralManagers
• Lackofcommercial‘savvy’
• Fromproducttocustomer-centric
competencies
Succession
• Internal/Externalpipeline
Retention
OperationalWorkforce planning
Business ambivalence
• “Don’tgetthetalentmanagementthing”
• Resistforceddistributionandperformance
management
Career transitions
• Sizingrolestosmoothcareermoves
• Internalrotationsandtransfers
Quality of talent professionals
Development plans and internal coaching
Talent metrics, data and tracking
Change fatigue
6 Strategic Talent Management: The emergence of a new discipline
succession of its senior leaders is inadequate.” The statistics
are quite worrying too – only 58% of boards we surveyed
in EMEA had an effective CEO succession planning process
and 46% had a vetted and viable candidate who could
immediately step in as CEO if necessary. In the face of the
critical skills shortage we explore later, many companies
want to mitigate their leadership risk by aligning their
talent agenda and pipeline practices to create ‘succession
ready’ pools, both inside and outside the company.
Interestingly, we noted that few Heads of Talent had
responsibility for creating and managing external talent
pools.
A common theme for the Head of Talent is the creation of consistency across decentralised units
Many of our interviewees conveyed a history roughly like
the following: As a result of decentralisation and corporate
downsizing,linemanagersbecameresponsibleforhiring,
developing and retaining talent in their units. This had the
advantage of making the line managers accountable, but
it often led to inconsistencies. Many respondents told us
that their CEOs now wanted ‘an integrated and consistent
approach’, more often driven by a desire for effective
rather than simply more efficient senior talent processes.
The CEOs could see that some divisional leaders did a
great job in building their teams to the point that they
could act as ‘net talent exporters’ to other parts of their
organisations; others experienced high turnover and had
to look outside their units for succession. Achieving more
consistency across units thus became part of the mission
for many of the Heads of Talent we interviewed.
At the same time, our interviewees did not expect
the return of ‘big central HR’. The Heads of Talent we
interviewed typically ran very small teams. Most had
power that was indirect. There were few big budgets
– in fact the majority of Heads of Talent didn’t know
the proportion of the overall HR budget that they were
allocated. They were expected to increase consistency
across business units, to identify and deliver a more
integrated corporate talent strategy. But most of the
power in the companies we looked at rests with the line
leaders, a theme we return to later.
Most Head of Talent roles manage a relatively small talent poolThe typical Head of Talent does not look after all of the
talent in the company, but an executive or top talent pool
that is a small proportion of the employee population.
Our research and that of other firms (starting in the mid-
1990s) showed that these top pools averaged 150 leaders,
regardlessofthesizeofthecompany,withmostofthem
numbering under 250. Despite over a decade of mergers
andsubstantialgrowthinthesizeofmanycompanies,
this number has not changed. The average Head of Talent
we interviewed had just over 150 people in their managed
talent pool.
The people in these relatively small talent pools are the
‘group leaders’ or ‘high potentials’ or ‘critical list’: the name
varies across companies, but the intent is to focus on those
who have the potential to grow into larger roles.
The 9-box matrix that plots each manager on axes for
performance and potential seems to be a favourite tool of
the talent managers we interviewed. In many companies,
‘the list’ of high-potential leaders is derived from this
matrix. One reason for the popularity of the 9-box matrix,
we think, is that it is relatively easy for talent managers to
use and to explain to their CEOs and business colleagues.
We were surprised to learn that, in the majority of
companies we looked at, the people ‘on the list’ aren’t
told that they are on it; the existence of the list may be
acknowledged, but the list itself isn’t made public. This
may be to avoid internal discord; it may also reflect a
lack of confidence in the process on the part of talent
managers.
In some cases, corporate talent managers have the ability
to redeploy high-potential leaders from one unit to
another. But in most companies, hiring and redeployment
depends on line managers, with talent managers playing
an advisory role.
Our research also suggests that many companies could
improve the way they allocate leadership development
resources. On average, 70% of funds spent on leadership
development go to formal training; our view is that
this ratio should be reversed, with 70% allocated to
experiential, job-related development. We were therefore
encouraged to hear many of our interviewees speak
Heidrick & Struggles 7
of project-based work, in which high-potentials are
encouraged to work together on strategic issues. Others
described how they got involved in relocation, mobility,
special training programmes and career counselling.
Our interviewees spent 22% of their time managing
training and development programmes. That strikes us
asaboutright,giventhe70/20/10ruleofthumb.
Heads of Talent see ‘relationship building’ as being a key competency for their successWe asked Heads of Talent to identify the three key
competencies that underpin success in the role. Some
of the interviewees focused on technical skills and
experience of HR processes and approaches but many
identified relationship building, commercial acumen
and internal awareness as top of their list. Our research
suggests that a majority of our interviewees are strong
in the relationship and associated influencing skills and
have built deep and advisory-type relationships with their
colleagues. But as we will discuss later, many have yet to
fully develop and demonstrate the commercial acumen
that would bring organisational buy-in and credibility.
Other key competencies that were raised include: self-
confidence, resilience, strategic thinking, adaptability,
customer orientation.
Heads of Talent measure performance, using primarily operational metricsWe asked the Heads of Talent how they measured their
own performance. Each had come up with some system
of metrics, though several were just beginning to develop
these and discuss them with line management. There
was a considerable range in the elaborateness of talent
metrics. One Head of Talent said: “We’re a very lean
organisation so it’s easy to follow the people in my pool
and get a good sense of whether they are happy or not.”
Another commented: “The CEO can see the value of our
work in our leadership presentations, and now there’s a
waiting list for our development programmes. The CEO
doesn’t need convincing.”
The systems in other companies are more complicated.
One Head of Talent prepares an annual ‘People Balance
Sheet’, bringing together all people metrics in the
company and trying to link talent health to business
strategy. Building on that approach, such a scorecard
could include:
• headcount(changesovertime)
• rateoftalentchange(external/internalmoves
divided by headcount, attrition ratio at the top)
• talentmixanalysis(potentialagainstperformance)
• proportionofnewjoinerstotheentire
employee group
• tenureinpositionorcompany,
measured by year bands
Several companies measure line managers on talent
management activity; the resulting score figures in the
manager’s bonus.
The majority of the Heads of Talent we interviewed did
not try to relate their talent measures to the company’s
financial output or share price performance. Rather,
they focused on operational measures: completion of
assessments, number of talent reviews done by line
managers, participation in leadership development
programmes, and ratio of external hires. As one of
our interviewees commented: “It’s difficult and often
meaningless to try to calculate ROI on talent initiatives.
Instead, you need to look at what you are doing relative
to your industry and competition and see whether it’s
making a difference.”
Succession figured prominently in the metrics that several
Heads of Talent employed. A Head of Talent explained: “I
have a clear picture in regard to external hiring numbers
at the top level, and the impact of that on the business. I
want to see around 10 internal appointments – rather than
hiring externally – by Christmas. It’s better to move people
around, rather than to bring them in from outside. We are
thinking of setting similar targets for 2012.”
8 Strategic Talent Management: The emergence of a new discipline
Most Heads of Talent feel their companies could do a better jobWe asked Heads of Talent to rate their firms’ overall
performance on talent management from 1 to 10. The
average overall rating, and the most common, was 6 out of
10. A few felt they were doing very well, but most thought
that they could improve: “We need to be more joined up,”
said one, referring to line management. Another manager
stressed implementation: “Right now I’d give us a 3.5 or 4
out of 10. But over the next two years, I expect it to go to
an 8. Our plans have huge potential; now it’s about how
we take the ideas and make them happen.”
Asked to evaluate a set of specific talent practices, Heads
of Talent felt Mobility management and Training and
development were areas where there was room for
improvement (fig 2).
Several Heads of Talent reminded us that they operate
through line managers, rather than directly, and that
metrics should reflect this. “I don’t want to take credit for
someone else’s work,” said one.
figure 2 – How Heads of Talent rate their company, by area
“The CEO can see the
value of our work in our
leadership presentations,
and now there’s a waiting
list for our development
programmes. The CEO
doesn’t need convincing.”
Compensation & Benefits
Individual career management
Mobility management
Performance management
Recruitment
Succession planning
Training and development
To be improved Standard Good Excellent
Heidrick & Struggles 9
As we reviewed our research data, we
were struck that Heads of Talent operate
in an environment of contradictions and
significant ambiguity. A few of these
contradictions really caught our eye:
High unemployment and the critical skills gapThe global economic crisis and the huge increase in
unemployment have led some to think that talent is
readily (and cheaply) available. “My CEO sees the recession
as a great opportunity to pick better people, but there is
a challenge to keep the talent management momentum
up and ensure that we match the right people to the right
opportunities.” Our interviews and Heidrick & Struggles’
broader work confirm that high quality leadership talent
is not easily found. It is true that there is currently a glut of
job-seeking graduates, but experienced CFOs, divisional
general managers and CEOs remain challenging to secure.
In difficult economic times, candidates with good jobs are
cautious about changing firms. Companies have to fight
hard and pay well for talented managers. The situation is
uneven across industries and roles, but many sectors still
experience ‘seller’s markets’ for talent.
Heads of Talent told us that they are struggling to find
executives with the right level of leadership experience
and capability. “The world seems to be running out
ofgeneralmanagersthatcanruneverything–P&L,
supply chain, talent – it appears people are specialising
too soon.” We also heard that companies are finding it
difficult to source talent with ‘commercial savvy’, capability
around brand building, marketing and brand behaviour.
Increasingly, as companies migrate from product to
customer centric approaches, Heads of Talent are looking
in vain for those with client relationship building skills.
Even when they succeed in luring talented managers from
other firms, CEOs cannot be sure that the superstars they
hire will perform well in their new environment. Research
by Boris Groysberg of the Harvard Business School
suggests that ‘superstar’ talent is rarely as portable as we
imagine.3 A company hiring a star performer from outside
should, on average, expect him or her to underperform,
significantly, and for several years, unless steps are taken
to quickly and effectively integrate the new executive into
the company culture.
So it appears that the ‘War for Talent’ is not over; the
battle lines have just changed. Talent management has
become more than just acquiring new executives and
is increasingly focused on developing, motivating and
retaining them. Our work shows a steady trend toward
recruiting to the top team from within and organic
development of leaders. However, we still see that
many companies do not yet have these deep leadership
resources to draw upon or prefer to ‘trade’ in the talent
market to meet their needs.
Heads of Talent have significant work to do, even in these
tough times.
Serving the CEO agenda and the lack of airtimeThe drive for improving talent management generally
comes from the CEO, who as we identified earlier is
looking to increase effectiveness and impact of senior
talent on business results. We found that relatively few
Heads of Talent (around 17% of our sample) reported
directly to the CEO, with the vast majority reporting into
the HRD (fig 3). Contact with the CEO and other senior line
3 see Boris Groysberg, Chasing Stars (Princeton, 2010); Heidrick & Struggles and The Economist Intelligence Unit, The Global Talent Index Report: The Outlook to 2015
Part 2 Contradictions, ambiguity and credibility
10 Strategic Talent Management: The emergence of a new discipline
executives also appeared ad hoc and relatively infrequent.
A number of interviewees talked of ‘being around’ when
the CEO or the EXCO were in town or of briefing the CEO
before the annual talent update to the board. Those with
direct reporting status or strong professional relationships
with the CEO felt that visibility gave them an edge in
dealing with some of the difficult senior talent issues they
faced.
Responsibility without authorityCEOs expect their Head of Talent to create consistency
between line divisions, but rarely give them direct
authority over hiring, promotion, deployment or retention.
They were expected to increase consistency (as well
as efficiency and effectiveness across business units)
to identify and deliver a more integrated corporate
talent strategy. But most of the power in the companies
we looked at rests with the line leaders. Our Heads of
Talent confirmed this when we asked them what made
a successful Head of Talent. Moreover, they told us the
winning talent manager operates through influence and
suggestion rather than by exercising power. Interpersonal
skills were critical we learned, as was the ability to build
trust. Heads of Talent explained their need for resilience,
tenacity, energy and the ability to deal with setbacks. The
Head of Talent must therefore take a lead without formal
authority.4
4 formoreonleadershipwithoutauthority,seeRonaldHeifetz,Leadership without Easy Answers (Harvard, 1998).
HR or business roleWe also found ambiguity around the positioning of talent
management, with many suggesting that sitting within
the HR function impacted credibility and acceptance by
the business. Interviewees told us that engagement was
higher where they demonstrated ‘commercial savvy’ and
spoke ‘business’ rather than ‘HR’ language. “The challenges
we face are all internal. There’s a real ambivalence around
talent here, the business is just not interested.” Others
felt that positioning talent in the HR function only served
to confuse internal clients: “If talent is everywhere and
everyone has it – what’s the difference between Talent
Management and HR?”
Finally having often been asked by the CEO to bring
transparency to senior talent management processes, our
respondents were surprised that the list of ‘Hi-Pos’ (high
potentials) was a closely guarded secret, sometimes even
secret from those on the list. “Executives in the ‘top talent
pool’ are critical to the success of the company, but their
names are often not known except at the very top.”
In the next section, we explore ways in which Heads of
Talent can learn to navigate this ambiguous environment.
174
3
HR Director
CEO
more senior Talent Manager
figure 3 – Who do you report to within your company (position title)?
“The challenges we face are all internal. There’s a real ambivalence
around talent here, the business is just not interested.”
Heidrick & Struggles 11
Our interviews suggest that the most
successful Head of Talent will take the
lead both in defining ‘what success
looks like’ for them and the company
and in creating alignment between
themselves and their colleagues about
their role. Winning Heads of Talent will
be diplomats rather than commanders,
achieving results through relationships
and persuasion. They will forge strong ties
with their colleagues in line management,
and they will work to link talent strategy
with business strategy.
Define your own value propositionAs we noted earlier, there are very few blueprints that
companies can rely on when they bring a Head of Talent
into the organisation. The winning Head of Talent will
therefore take the lead in proposing the value that he or
she intends to add to the company, and what it will take to
deliver that value.
Beth Axelrod was the first Head of Talent appointed by
WPP; she is now the global head of HR for eBay. In an
interview about her experiences, she explained how such
a conversation might begin:
“You’re trying to drive ad sales from X to Y. You
need growth to come in these particular areas.
And for the growth to come in these areas, let’s
talk about the implications for talent and for
the organization. Then, let’s talk about what
capabilities you have today – where you’re good
and not so good. So, we’ll have to fill out those
capabilities. In addition, you’ll need a different
cost structure because your margins are going
to start to be squeezed. Let’s talk about where
you have people and why you’ve got so many of
them in high-cost locations.” 5
By taking the lead in this way, the Head of Talent can
catalyse a productive discussion about talent in the
company, and about the value that the CEO and other
executives expect their Head of Talent to contribute. It
is worth revisiting this value proposition periodically,
to ensure that the company and Head of Talent remain
aligned on the value that this role is to deliver.
Achieve alignment around seven key dimensionsAlignment around the Head of Talent’s expected
contribution is critical. Our interviews suggest that it is also
important to seek consensus around the ways in which
the Head of Talent will work with other executives in the
company.
The following checklist – 7Ps – will be helpful in structuring
the role of the Head of Talent.
Pressures
How immediate are the company’s talent issues?
Where are talent problems interfering with corporate
performance? Where are the ‘pain points’ that existing
leaders (in HR, in the line, etc.) seem unable to address?
Purpose
Why has the company hired a Head of Talent? What
are the problems that they are asking the manager to
5 “The challenge of hiring and retaining women: An interview with the head of HR at eBay”, McKinsey Quarterly, September 2008.
Part 3 Creating the conditions for success
12 Strategic Talent Management: The emergence of a new discipline
solve? Are they primarily about recruitment, retention,
succession? The purpose of a Head of Talent will depend
on many things: the company’s culture and its traditions,
the capabilities already present in HR, and the willingness
and ability of line managers to act as talent managers
themselves.
Person
What skills should the Head of Talent possess? What
experience should he or she have? For example, a leading
investment bank has regional talent leads (Europe, Asia,
and North America) who don’t have wholesale banking
experience. But the CEO recently decided that the global
Head of Talent needed to be deeply rooted in investment
banking to facilitate easier communication with people
at headquarters.
Profile
What internal and external profile should the talent
manager maintain? Our interviewees emphasised the
importance of ‘getting around the company’, meeting
their portfolio executives in person. A CEO who wants
such a broad internal profile for the Head of Talent will
need to support the executive in gaining access to diaries,
key internal business events and even some client facing
meetings.
The CEO and Head of Talent also need to agree on the
right external profile. Some of the Heads of Talent we
interviewed have relatively modest external profiles, but
communicate widely within their companies.
Power
What decision making powers does the company want
to invest in its Head of Talent? Will they have veto over
senior hiring decisions? Over deployment of leaders in
‘high potential’ pools? Where will the Head of Talent have
to operate through persuasion and where through direct
decision making?
Process
Where will the Head of Talent get involved in top executive
processes and forums? To clarify, it is often a good idea to
pose some challenging scenarios: for instance, suppose
that the company wants to take over a smaller competitor.
Will the Head of Talent be involved before the deal is
agreed? Or will he or she read about it in the newspapers
and then be told to help integrate top talent in both
companies? There is no ‘right’ answer here; alignment is
what matters.
Pools
Finally, which talent pools will the Head of Talent manage?
Some companies divide their pools; one large industrial
company for example, has one talent manager for roughly
the top 100 and another for the next 250. It is essential
that everyone on the top team understands who falls into
the Head of Talent’s portfolio, and what interaction he
or she will have with them. Few of our interviewees had
responsibility for external pools, a key source of ‘ready
now’ talent.
We saw several Heads of Talent use this type of checklist
to define the current position of their role and impact
and set a plan for the future. In the appendix we offer a
template for CEOs and Heads of Talent to use to review
the current situation and future goals of their senior talent
management strategy.
Operate as a diplomat, well connected to colleaguesWith very few exceptions, Heads of Talent operate with
little formal power. They succeed or fail primarily through
influence and persuasion. The winning Heads of Talent
seem to get two things right.
First, they get plenty of ‘air time’ with their colleagues –
not necessarily the CEO, but certainly the executives who
matter. One Head of Talent told us of “an open, continuous
dialogue with the business in terms of people asking what
they need and what I and my team can deliver.” Many
Heads of Talent meet regularly with line executives to
conduct succession and development reviews. This is a
role where walking around and talking can be essential to
success.
Most Heads of Talent had somewhat less frequent access
to their CEOs. In many cases, these meetings took place
less than once a month, and often with a corporate
executive team or executive committee. A formal report to
the board or executive committee was often a motivator
for meetings between the Head of Talent and CEO.
Second, successful Heads of Talent are diplomatic,
managing their relationships like politicians. One
interviewee said: “I have profile with the business heads.
I knew it was important to have high impact early on,
Heidrick & Struggles 13
and to build good relationships quickly.” Many of our
interviewees were quick to distinguish their roles from
HR, feeling that ‘not talking like HR’ gave them more
credibility with line managers. All were aware that, in most
cases, they were not the decision makers around hiring,
retention or reward.
Connectivity – linking business and talent strategyOur interviewees recognised the difficulty, but told us that
a strong Head of Talent will find ways to connect talent
and business strategy. A few interviewees felt that they
were running tightly ‘joined up’ systems. According to one,
“Business strategy feeds talent strategy which in turn feeds
succession.” But the majority reported breaks in the chain
linking business strategy and talent strategy, and they saw
this as a problem.
“If we don’t connect business and talent strategy,” said one
of the managers we interviewed, “we will be nothing more
than a typical HR unit, focusing on activities and not on
impact and outcomes.”
We don’t find this result surprising. In company after
company, functional leaders – finance, IT, marketing, HR
– struggle to connect their planning with the flow and
direction of the business. The task is easier for the older
functions; ones that CEOs know how to work and how to
lead. For a relatively new area like talent management, line
managers often don’t know how to take the first steps in
aligning it with their business strategies. As we suggested
above, the Head of Talent needs to take the lead here.
What is the best way to forge a strong connection with
company strategy? A good starting point: work backward
from the company strategy to the talent requirements
it implies. Many global firms are seeing their areas of
strongest growth shifting from North America and
WesternEuropetoAsia,theMiddleEast,AfricaandLatin
America. What implications does such a shift have for
executive talent? What does this imply for senior executive
mobility? For leadership development in the company?
Another approach we have found helpful is to work
forward, looking at talent or leadership risk facing the
company. The oil and gas industry, for example, faces a
severe shortage of senior engineering leadership, because
of demographic shifts and a decline in enrolment in
petroleum engineering courses in the past. What risks
does this imply for these firms’ growth? How should talent
risk impact an oil firm’s forward investment programme?
It is easy for the Head of Talent, concerned with the
executives they are responsible for, to develop an inward
focus. We encourage Heads of Talent to look forward
and outward, as well. The concerns of baby boomer and
‘generation X’ executives are important, but the future of
most companies rests with succeeding generations. These
leaders have different views about work, communication
and collaboration. A smart Head of Talent will get to know
them and look carefully at their needs.
The board of any company will be concerned both with
implementation of its strategy and with risk to future
performance – and therefore, the CEO will also be so
concerned. Focusing on these issues will help Heads
of Talent keep their work directly relevant to the most
pressing issues of the company. It will also keep the
CEO’s door open.
ConclusionA new strategic talent discipline is emerging but there
remains confusion about the nature, scope and real
business impact of leadership talent professionals and
functions. Our research suggests that this discipline is
in an embryonic state, still developing, working hard to
create credibility and traction in the organisation and with
critical business leaders. However, the Heads of Talent
we met are taking the lead in communicating their value
and mission to the business and using their influencing
and diplomatic skills to seed change amongst the top
population of their companies. They see their role as long-
term in nature, aligning business and talent imperatives,
drivers of behavioural and cultural change from within.
To help improve the focus and impact of these efforts we
propose a simple and practical checklist style diagnostic
(appendix 3). Our 7Ps (Pressure, Purpose, Person, Profile,
Power, Process, and Pools) is intended to help CEOs and
Heads of Talent to map out the gap between their long
term aims and current reality. Our hope is that it will help
create greater clarity around the strategic importance of
this key business role and function. “I need to make
talent meaningful to my colleagues,” one Head of Talent
told us. We think that this is good advice for every
Head of Talent. n
14 Strategic Talent Management: The emergence of a new discipline
A total of 24 people participated in our
on-line survey, all of them senior talent
management professionals within FTSE
100 companies. To add further depth to
these findings we conducted detailed
interviews, either face to face or via
telephone, with 20 of those respondents.
Additionally, we leveraged Heidrick
and Struggles’ network of senior talent
executives to conduct more ad hoc and
informal discussions around the themes
we uncovered. The talent management
professionals we spoke with represent a
strong cross section of leading players and
industry sector listed on the London Stock
Exchange.
The interviews and study were developed
and produced by London based Heidrick
& Struggles leadership consultants.
We would like to thank all of the Heads
of Talent for the time they have spent
participating in the research.
If you would like to contribute
to the dialogue, contact us at
Annabel Parsons
Partner
Victor Prozesky
Partner
Caroline Vanovermeire
Principal
Dave Tullett
Director Centre for Leadership Innovation
Rebecca Curran
Associate Principal
Sarah de Corday-Long
Associate Principal
About the survey
Heidrick & Struggles 15
Appendix 1 A note on titles
We chose ‘Head of Talent’
to refer to the top talent
management executive in
a company. The executives
we interviewed have the
following titles.
Director of Group Resourcing and Development
Director of Group Talent Development
Director of Organisational Capabilities
Director, Group HR and EHS
GeneralManagerHumanResourcesandLegal
GlobalDirectorofOrganisationalDevelopmentandLeadership
GlobalHeadofTalent,LeadershipdevelopmentandChange
GlobalLearning&DevelopmentDirector
GlobalPracticeLeaderTalentManagement
Global Talent Director
Group Head of Talent
Group Head of Talent, Resource Development and Resourcing
Group Head of Talent Management
Group HR Director (2)
HeadofLeadershipDevelopment
HeadofLeadership,TalentandLearning
Head of Resourcing and Development
Head of Talent & Development
Head of Talent Management
LeadershipDevelopmentDirector
Senior Talent Manager
SVP Global Talent and EMEA Human Resources
VP, Talent Management
16 Strategic Talent Management: The emergence of a new discipline
Appendix 2 Responses to our survey What is the gender of the Head of Talent? (n=24)
33% Male
67% Female
How long have you been with the Company? (n=24)
63% 0–5 years
26% 5–10 years
11% 10–20 years
How long have you been in this position? (n=24)
33% 0–2 years
46% 2–5 years
21% 5+ years
When did the Head of Talent (or closest equivalent) position first exist in your company? (n=24)
25% 0–2 years
25% 2–5 years
50% 5+ years
How many people do you have in your Top Population / Talent Pool? (n=24)
153 average Top Population
What is your level of study? (n=20)
40% Degree
40% Masters
10% MBA
10% n/a
How many years of professional experience do you have? (n=20)
0% 0–5 years
0% 5–10 years
32% 10–20 years
68% 20+ years
Was your previous role within? (n=20)
85% HR
15% other function
Were you recruited externally or internally for this position? (n=20)
50% Externally
50% Internally
What responsibilities do you encompass regarding the Top Population? (Select all that apply) (n=24)
25% Compensation & Benefits
71% Individual career management (promotions
and rotations)
42% Mobility management
58% Performance management (target setting,
assessments)
66% Recruitment (head-hunters, on boarding)
91% Succession Planning (people reviews, etc)
83% Training & Development (Corporate University,
Development plans)
Who do you report to within your company (position title)? (n=24)
17% CEO
71% HRD
12% more senior Talent Manager
Heidrick & Struggles 17
How many people report to you? (excluding personal assistant) (n=24)
8 average
What was your career path prior to becoming Head of Talent? (n=24)
90% HR
10% other
How do you spend your time? (n=24)
3% Compensation & Benefits
10% Individual career management
4% Mobility management
7% Performance management
9% Recruitment
24% Succession planning
22% Training & Development
21% other
In which industry does your company operate? (n=24)
29% Consumer
34% Industrial
29% Financial Services
8% Pharma
How would you rate your company’s performance on talent management? (n=24)
Compensation & Benefits
13% To be improved
29% Standard
50% Good
8% Excellent
Individual career management
21% To be improved
33% Standard
33% Good
13% Excellent
Mobility management
42% To be improved
33% Standard
25% Good
0% Excellent
Performance management
17% To be improved
17% Standard
66% Good
0% Excellent
Recruitment13% To be improved
33% Standard
46% Good
8% Excellent
Succession planning
13% To be improved
25% Standard
50% Good
13% Excellent
Training & Development
33% To be improved
21% Standard
25% Good
21% Excellent
% may exceed 100 due to roundings
18 Strategic Talent Management: The emergence of a new discipline
Appendix 3 Heidrick & Struggles’ Talent Management Diagnostic
7PsWhat do I need to ensure
future success?
What have I got today? What will I do to close the
gap and keep it closed?
Pressure What are the talent
issues that are impacting
performance?Howare/
should these be addressed?
Purpose
What is the main focus of
Head of Talent effort? Is it
aligned with the key talent
issues and the strategy?
Person What skills and experience
are critical to the role? Do
these exist?
Profile What is the internal and
externalimpactoftherole/
function? What “brand”
promises exist?
Power What are the decision rights
held by Head of Talent?
Process Where is Head of Talent
involved in top executive
processes and forums?
Pools Whatisthesizeand
definition of the talent
pools? Is Head of Talent
responsible for internal and
external pools?
Heidrick & Struggles 19
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Heidrick & Struggles is the leadership advisory firm
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