Strategic HR Review

Driving high performance in the talentpowered organization

Peter Cheese

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Peter Cheese, (2008),"Driving high performance in the talent#powered organization", Strategic HR Review, Vol. 7 Iss 4 pp. 25 - 31
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Driving high performance in the

talent-powered organization
Peter Cheese

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Abstract
Purpose The aim of this paper is to discuss the importance of talent management to strategic
success, to identify the challenges in building talent power and to explore how to overcome those
challenges. It summarizes some of the thinking from the book, The Talent Powered Organization

Peter Cheese is a Senior

Executive at Accenture,
London, UK.

Design/methodology/approach The paper starts by setting the context around todays major HR
issues and the importance of talent management. Talent is now the key to strategic success, but is
conversely getting harder to find and easier to lose. In tackling these issues, every organization must
deal with a world of change and variability. The paper drills down into how to embed and sustain talent
power. It explains the importance of understanding and measuring how talent contributes to an
organizations performance and goes on to examine the other capabilities and processes required to
ensure that talent is not just retained, but is also actively multiplied.
Findings The paper asserts that an organization needs to put in place key processes in order to retain
and actively multiply talent. They include: maintaining visible leadership that is focused on talent;
encouraging and rewarding line managers for nurturing talent; and modernizing HR and training to
identify, develop and deploy talent to the best effect.
Practical implications The theory is backed up by examples from different parts of the world that
demonstrate practical solutions to tackling specific challenges to building a talent-powered
organization, including: Valero Energy; Yahoo!; Campbells Soup; Unilever; and SKM.
Originality/value The paper discusses the importance of talent management to strategic success, in
order to identify the challenges in building talent power and to explore how to overcome those
challenges.
Keywords Skills, Retention, Employee development, Performance management
Paper type Research paper

he world is changing at a bewildering pace, not just in terms of business and

economics, but socially, demographically and environmentally. Everywhere new
markets are opening up, new workforces are emerging and new ways of working are
challenging our thinking. As a result, every organization today must cope with a world of
expanding diversity, change and contrast, including:

a global abundance of talent, but local scarcity;

an ageing workforce, meaning fewer young workers and more old workers;

rising demand for new skills, but a growing deficit in basic skills;

new work arrangements and career expectations;

more diverse and distributed workforces; and

ongoing shifts in the nature of work.

These changes are quickly driving workforce and skills issues to the top of every business
leaders strategic agenda. The underlying fact is that, in todays business world, the key to

DOI 10.1108/14754390810880507

VOL. 7 NO. 4 2008, pp. 25-31, Q Emerald Group Publishing Limited, ISSN 1475-4398

STRATEGIC HR REVIEW

PAGE 25

strategic success is talent, but talent is harder to find and nurture than ever before, and
easier to waste and lose.
In this new context, we must think about all types of talent. It is no longer good enough to
focus thinking on high potentials or the senior leadership cadre, and certainly the old
paradigm of finding the best and brightest and giving them free rein has failed organizations
think of the problems in the banking industry today. Talent is about all the skills and
capabilities organizations need to succeed, but also about recognizing the more critical
skills to executing the business strategy and differentiating from the competition. In
construction industries today, for example, this can be plumbers, bricklayers and general
construction workers, so our context for talent now is not the preserve of the most educated
or highest paid.

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However, too few organizations today are managing talent strategically. To do this, an
organization needs first to really understand the talent imperatives aligned with its own
business strategy, in both the short and long term, and to take a strategic approach to
meeting these imperatives. It needs to discover increasingly diverse talent in new places,
and establish comprehensive and more integrated processes for recruiting, deploying and
developing this talent. And it needs to build engagement among its talent, so it stays around
to realize its full potential.

Discovering talent in new places: strategic talent sourcing

Given the new context for talent, an organizations ability to discover talent and attract
greater diversity of talent is becoming the new source of competitive advantage. Traditional
industries in particular are really waking up to the reality of ageing workforces, and their
inability to recruit new talent in the right places at the right time. Yet businesses in new market
sectors are also struggling as they fight to attract the best people. India, for example, is
witnessing one of the fiercest talent wars in the world in the IT services sector, with
NASSCOM (the IT industry representative body in India) highlighting the increasing skills
gap and predicting a shortfall of up to 500,000 IT software engineers.
Talent strategies must therefore not only seek to clarify the future skills needs of the business,
but must also very carefully examine the different options and sources for talent in simple
terms, whether to buy, borrow, build or rent talent for future business needs. This requires a
thorough understanding of the specific skill and talent needs, but also the different talent
markets around the world. If you want to grow in China, you had better understand where
current and future talent is coming from and how competitive you are likely to be in attracting
scarce talent, such as business management and leadership skills.
Many organizations are thinking about sourcing talent in the way they think about supply
chains for other resources.
Valero Energy, the Texas-based oil refining organization, needed a world-class staffing
capability for its rapidly growing and increasingly international company, so it built a global
labor supply chain system to strategically manage talent needs, sources and acquisitions.
Projected talent needs are determined through analyses of past experience and the
performance of various components in the chain is monitored continuously to assess the
cost, speed, quality and dependability of talent acquisitions through these sources. By
analyzing aggregate data on the sources of talent and subsequent job performance, fit with
organization, culture and retention, Valero can determine the best talent suppliers. If
suppliers yield low-quality hires, the company switches suppliers to ensure continued

An organizations ability to discover talent and attract greater

diversity of talent is becoming the new source of competitive
advantage.

PAGE 26 STRATEGIC HR REVIEW VOL. 7 NO. 4 2008

access to high-quality talent. The talent supply chain has realized impressive efficiency and
effectiveness gains in sourcing talent and a more strategic capability. It has dramatically
reduced time to fill and cost per hire, from US$12,000 to US$2,300, during a time of rapid
growth, and Valero now forecasts demand for talent three years in advance, determines the
best talent suppliers and makes strategic decisions about staff deployment.

Tailoring employee value propositions: segmenting the workforce

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Equally important is clear assessment of current employee value propositions and their
relevance to the talent market segments being targeted and how new channels to market are
being used to reach prospective employees. Experience from customer relationship
management is very relevant in this context. For example, marketers today will talk of the
critical importance of word of mouth if you are not delivering on your promises to
employees or if your recruitment processes are poor, this will quickly come out on chat sites
and blogs, such as those on the career information website, Vault.com
Examples of creativity can be found in different industries but short cycle, fast-moving
industries, such as the technology sector, have had to be more creative than most. For
example, Yahoo! used a menu-driven approach for individuals to pick and change the
personal gains and working relationships they seek from work. They crafted an employee
value proposition (EVP) that speaks to all the different kinds of people who are attracted to
working at the company and all the different reasons they are engaged in their work there.
Libby Sartain, chief people officer, and Cammie Dunaway, chief marketing officer, took the
lessons and principles from product branding to create an internal and external brand life
engine that communicates the unique meaning, promise and overall experience the
organization offers customers and employees. Employees are encouraged to define for
themselves how Yahoo! is their life engine. For example, during the roll out of the EVP,
employees received a customizable license plate frame that read: Yahoo! My ___ Engine,
and they were asked to fill in the blank with their own EVP. Through such initiatives, Yahoo! life
engine gave employees and recruits the sense of being part of a bigger whole, while at the
same time being uniquely personal for each employee.
Campbells Soup, on the other hand, particularly wanted to appeal to more diverse age
ranges of employees, so it focused on tailoring EVPs to different age brackets and
generations. It segmented potential recruits based on generation-based preferences and
refined its EVP to address these segments. The company is also working with the Institute for
the Future on further defining generation-based differences and has started to experiment
with programs such as offering reduced work hours, telecommuting and other flexible work
arrangements to those nearing retirement age.

Creating sustainable advantage: embedding talent management

Organizations that build distinctive, integrated capabilities aligned with business strategy
demonstrably outperform their competitors. This is the essence of the talent powered
organization. However, to ensure this competitive edge is sustained over time something
else is needed: the focus and responsibility for finding, growing, developing and engaging
talent must become truly embedded throughout the organization. Creating such a talent
mindset and culture has to start from the top. Accentures own research has clearly shown
that those organizations assessed as leaders have much higher engagement of senior
management in talent and workforce issues than those assessed as laggards (see Figure 1).
Engagement on talent issues from the top must translate through the organization. Clear
alignment of measurement and assessment, as well as development of leaders at all levels
in their ability to multiply the talent that works for them, is vital. Too often the investment we
make in middle levels of management, in training them to better manage and develop staff,
is insufficient and results in the realization of the often quoted Peter Principle, whereby
staff in a hierarchy are promoted until they reach their level of incompetence (Peter and Hull,
1970).
Creating a truly aligned talent mindset and culture also requires that the organization truly
understands and measures how talent contributes to performance. Talent powered

VOL. 7 NO. 4 2008 STRATEGIC HR REVIEW PAGE 27

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Figure 1 Accentures research

organizations measure investments in talent processes and capabilities to ensure that they
are defining, discovering, developing and deploying talent in ways that create value. As has
been said before, what gets measured gets done, and this is as true for talent management
as it is anywhere.

Importance of measurement: understanding value

Economists have shown that there has been a significant shift over the last ten years in
business market value. Today, 70 percent or more is typically attributable to intangible
elements such as brand and reputation, and of course to human capital (Ballow et al., 2004).
So, more than ever, robust measures of an enterprises talent or human capital are essential.
However, measurement historically has generally focused on the costs of HR administration
activities and processes. Ultimately, cost data of this type points only to efficiency of
processes and not to effectiveness or value. The comparatively minor costs of HR
administration activities in comparison to the overall costs of the business (typically of the
order of 1-3 percent) mean that even very efficient administration activities only show small
overall savings to the organization.
While HR administration costs are the easiest to measure and have been the focus of HR
benchmarking to-date, leading organizations are moving beyond these measures to get
better understanding of value. Some macro measures of the effectiveness of investments in
people, such as revenue or profit per employee, are being implemented and on a relative
basis have some value. Connecting to real business outcomes is important but care has to
be exercised in not overstating the connections and being clear on causal links. Always
enlist the support of the finance function and the CFO, who themselves are becoming much
more aware of the need for good analysis and measurement.

Ensuring robust processes

Turning to processes, all organizations have talent management and development
processes in place in some form performance management, succession planning,
rewards and so on. The key is how consistently they work together across the organization.
This reflects the maturity of the processes, not just whether they exist and if they are cost
efficient. For most organizations the various talent-related processes work in silos and are
variable in how well they are executed. There is also often inconsistent visibility and
measurement of their maturity and effectiveness.

PAGE 28 STRATEGIC HR REVIEW VOL. 7 NO. 4 2008

Take performance management, as an example. It is a key part of most employee value

propositions and promises employees that they will receive regular feedback, that they will
be fairly and objectively evaluated and that it will be clear as to how their rewards and career
progression relate to their performance. Yet we know from feedback from employee
satisfaction surveys and commentary of employees almost everywhere that this is not
happening consistently and the connections between evaluation, performance
management, reward and career development are at best opaque.
Making these processes more consistent and integrated requires not only well-structured
processes and good systems support but also good measurement, good training and line
manager support. Communication and training at all levels around these critical talent
management capabilities is a strong indicator of whether that organization is likely to be a
leader or a truly talent powered organization.

Building on strong processes at SKM

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Sinclair Knight Merz (SKM) is an Australian company that provides consulting services in
engineering and mining. Operating in an industry where companies compete on the basis of
their people, the organization was looking for ways to increase its ability to manage and grow
its workforce capabilities.
SKMs human capital processes when analyzed were apparently very strong. However, a
number of areas of improvement were identified that could give the organization vital
competitive advantages in workforce performance. For example, although the HR function
had many best practices in place, executives were surprised to learn how few employees in
non-managerial roles knew about them. This prompted HR to increase communication to
staff. SKM also recognized the need to improve recruitment of top talent and it put in place
an internal capability in key geographies. This initiative had immediate effects, reducing time
to recruit key staff, increasing the firms ability to handle large recruiting assignments and
significantly increasing managers satisfaction with the HR recruiting service.

Transforming HR
Much has been written about where HR is going and the need to invest in it and improve
support to the business. Leading organizations everywhere are looking at how to
significantly improve the functions capabilities and value-add. Many are scaling up their HR
capabilities and seeking to manage people consistently across all parts of the organization.
Efficient and effective HR capability has four key pillars:
1. Harmonized processes and policies. Consolidation of processes and policies to
consistent formats and approaches, leading to more consistent management of people.
2. Integrated HR systems and information. A consolidated database of information
providing one truth for HR information and integrated systems to support integrated
processes.
3. Shared services. Consolidation of administrative and transactional activities into a
common or shared service structure with an integral service management measurement
framework. This enables other areas of HR, particularly business partners, to focus on
their roles and maximize the value they are adding.
4. Focused and improved capabilities and governance. Organization of the activities into
specific areas of capability to ensure focus, improve governance and ensure adequate
oversight and appropriate management of all parts of HR across the organization.

Every employee can pursue developmental experiences that

contribute to the business by proactively taking on new
responsibilities or getting involved in new activities.

VOL. 7 NO. 4 2008 STRATEGIC HR REVIEW PAGE 29

These are all essential foundations to enabling a truly talent powered organization. They
provide the opportunity to build a base of consistent knowledge about the workforce, to help
ensure people are being managed consistently and to position the organization to respond
to the challenges outlined earlier.

Unilever HR transformation to achieve efficiencies

As a key part of a company-wide initiative to streamline the business and operating model,
Unilever, the largest consumer goods company in the world, established a global HR
transformation program with the aim of commercializing and streamlining HR and improving
its overall global effectiveness. Introduced in 2005, the program called the One Unilever
program was put in place with a view to achieving annual savings of e700 million a year,
including savings of at least 20 percent in HR. The HR transformation program included
initiatives to provide line managers with new and enhanced self serve tools, to increase
access to global workforce data and to leverage benefits from the organizations global
scale.

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Unilever is partnering with Accenture to help transform its HR operations in 100 countries,
following the signing of a seven-year business process outsourcing agreement in 2006.
Accenture, as the outsourcing partner, will provide recruitment, payroll administration,
reward administration, performance management, workforce reporting and core HR
administration. Accenture will also provide vendor and content sourcing and development,
program planning and delivery, learning system hosting and management and
administrative services.
The HR processes and systems are being redesigned to support more common ways of
working and shared service operations globally. Support is provided across Unilevers three
geographic regions through six shared service centers. Unilever is retaining key areas of
capability around high-value HR processes and all of the HR business partners who work
alongside business leadership.

Everyone is responsible
To truly drive high performance as a talent powered organization, talent multiplication
capabilities must be sustained and supported by everyone. Discovery of talent cannot be
left to the HR function line managers and employees must see the identification of new
talent sources as their responsibility too.
This reflects the fact that formal learning activities are necessary but not sufficient for
developing talent. Everyone in the organization must contribute to building the capabilities of
others through everyday activities like performance feedback, coaching and knowledge
sharing, as well as mentoring and developmental relationships. Every manager and
supervisor has the opportunity to deploy talent to create value when he or she assigns
people to jobs and tasks. Every employee can pursue developmental experiences that
contribute to the business by proactively taking on new responsibilities or getting involved in
new activities.

The five steps to becoming talent powered

Our experience shows that, to become a talent powered organization, a business needs to
undertake five key actions:
1. Maintain visible leadership that is focused on talent.
2. Build an overall talent strategy, aligned to the business strategy, to look at both short and
long term talent issues and options.
3. Encourage diversity, and understand how to attract and retain more diverse talent from
more diverse talent sources.
4. Develop and reward line managers for nurturing talent.
5. Modernize HR and training to better enable the key processes of talent discovery,
development and deployment.

PAGE 30 STRATEGIC HR REVIEW VOL. 7 NO. 4 2008

With these actions in place the measurement and alignment of talent management activities
can sustain a virtuous circle of talent multiplication. The power of talent multiplication lies in
the dynamic integration of capabilities in defining, discovering, developing and deploying
talent, and the alignment of those capabilities with business strategy.

References
Ballow, J., Burgman, R., Roos, G. and Molnar, M. (2004), A New Paradigm for Managing Shareholder
Value, Accenture Institute for High Performance Business, Wellesley, MA.
Cheese, P., Thomas, R.J. and Craig, E. (2007), The Talent Powered Organization: Strategies for
Globalization, Talent Management and High Performance, Kogan Page, London.
Peter, L. and Hull, R. (1970), The Peter Principle: Why Things Always Go Wrong, Bantam, New York, NY.

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About the author

Peter Cheese is managing director of Accentures Talent and Organization Performance
practice and co-author of the book The Talent Powered Organization, which was published
in November 2007 (Cheese et al., 2007). Peter Cheese can be contacted at:
peter.cheese@accenture.com

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