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 / Autumn 2009 / Issue 56(originally published by Booz & Company)


The Talent Innovation Imperative

Talent Culture

A talent culture is made up of the values, beliefs, behaviors, and environment required to attract, engage, and retain committed and competent employees. Companies that develop this type of culture as a key element of their corporate brand consistently outperform companies that do not. Great cultures are not created by accident; they are the result of specific and deliberate practices and strategies, beginning with the following:

Build engagement. More than 100 studies have demonstrated the correlation between employee engagement and business performance. Engaged employees are far more productive and committed. They are more likely to make progress toward company goals, as well as the goals of their own group. But only one in four employees, on average, is “engaged.” Although the drivers of engagement vary from one organization to the next, four factors predominate: (1) whether employees feel respected, valued, and recognized; (2) whether they perceive their job to be important to the success of the enterprise; (3) how much pride they feel about the company and what it stands for; and (4) how much trust and confidence they have in company leadership. Improving these factors can represent a substantial and cost-effective opportunity for forward-looking companies.

A good place to start is with more direct communication from the top. In any turbulent period, when leaders don’t provide accurate and timely information, people start to assume the worst. Time Warner Inc. broke this pattern as part of its response to the economic crisis of 2008. The company organized a series of “skip-level” lunches where CEO Jeff Bewkes hosted groups of high-potential employees several layers down in the organization. The targeted employees were high performers, and although they did not have regular access to top leadership, they were network “connectors” (people who communicated directly with many others) and “influencers” (people whom others turned to for advice and clarity). Both the employees and the CEO stressed the value of the lunches.

Rethink organizational and career designs. Companies should develop talent models with 21st-century assumptions built in: tailored to their organization, with greater variation in roles, more efficient training, and more flexible career advancement opportunities.

Enhance the talent brand. Critical to attracting and retaining pivotal talent is a company’s ability to build (and protect) a differentiated employer brand to present to prospective employees, recruiters, customers, and others. If a company doesn’t do this well, it will be noted on Internet sites where employees and high-potential recruits share their impressions. The company’s culture should thus be visible to the outside; the brand should reflect and embrace the values of the company, emphasize its focus on talent, and differentiate it from its competitors.

Cisco Systems Inc. has deliberately built a talent brand based on innovation through collaboration. For example, it has set up a series of action learning forums. In each, a 10-person team, with members recruited across every conceivable line — rank, function, generation, geography, and gender — works together for three months with the assistance of a coach to further one of the company’s top strategic priorities. Venture capital prize money is awarded to winning teams, guaranteeing that the best business plans are funded and will get off the ground.

An immense amount of new value creation has been generated by these action learning forums. One idea, a set of network-based standards, protocols, and technologies for the nation’s emerging smart grid electric power generation infrastructure, is expected to deliver billions of dollars to Cisco over the next five years. Additionally, 20 percent of those who participated in these teams have been promoted, and only 2 percent of these high-potential employees have left the company. The forums are a powerful and defining element of Cisco’s talent culture.

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  1. Tony Avirgan, “Economies of Major Developed Countries Will Shrink in 2009,” Economic Policy Institute, February 18, 2009: Links demographic shifts to loss of economic potential.
  2. Shumeet Banerji, Paul Leinwand, and Cesare R. Mainardi, Cut Costs, Grow Stronger (Harvard Business School Press, 2009): Introduces a capability-based approach to shrinking expense while building a right to win in key markets. 
  3. Sylvia Ann Hewlett, Top Talent: Keeping Performance Up When Business Is Down (Harvard Business Press, 2009): Spells out critical changes needed in attracting, holding, and building new structures for high-performing and high-potential employees.
  4. Sylvia Ann Hewlett, Laura Sherbin, and Karen Sumberg, “How Gen Y and Boomers Will Reshape Your Agenda,” Harvard Business Review, July 2009: Guide to the “remarkably similar” intentions and demands of these two cohorts, and the implications for talent management.
  5. Per-Ola Karlsson and Gary L. Neilson, “CEO Succession 2008: Stability in the Storm,” s+b, Summer 2009: Booz & Company annual CEO succession study suggests that corporate leaders need to do much more to foster the next generation of highest-level executives.
  6. Edward E. Lawler III, “The Talent Lie,” s+b, Summer 2008; Talent: Making People Your Competitive Advantage (Jossey-Bass, 2008): Two resources describing how “few organizations seem to walk their executives’ talk when it comes to the management of talent.”
  7. Cesare Mainardi, Paul Leinwand, and Steffen Lauster, “How to Win by Changing the Game,” s+b, Winter 2008: How to invest in a capabilities-driven strategy, with some discussion of talent approaches.
  8. Richard Rawlinson, Walter McFarland, and Laird Post, “A Talent for Talent,” s+b, Autumn 2008; Theodore Kinni, Ilona Steffen, and Brenda Worthen, editors, Capturing the People Advantage: Thought Leaders on Human Capital (s+b Books, 2008): Interviews with leaders in the human resources function and others who have developed many aspects of talent innovation in their companies.
  9. Center for Work–Life Policy Web site: Access point to the center’s work on “on-ramps and off-ramps”; reversing the brain drain for women in science, engineering, and technology; and other talent- and diversity-related issues.
  10. For more business thought leadership, sign up for s+b’s RSS feed.
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