Talent management was a key theme in two recent surveys conducted by WomenCorporateDirectors, Harvard University and Heidrick & Struggles - 2012 Board of Directors Survey and Dysfunction in the Boardroom Among a number of topics, board members were asked to assess the sophistication of their talent management function, alignment of their talent strategy with the business strategy and the effectiveness of their executive succession planning.
Results indicate that while North American, Australian and New Zealand companies have the most mature talent management functions, there remains much room to progress. For example, only 20% of respondents believe they effectively attract top talent, 19% believe they effectively hire top talent, 16% believe they effectively develop talent and 12% believe they effectively assess talent. That said, board members understand the importance of talent management, with "41% of women and 43% of men citing this strategic issue" and non-US responders stating that "securing top talent is the #1 obstacle to strategic success."
Additional results include but aren't limited to:
- Talent management expertise is the second most underrepresented skill on boards according to US directors, while those outside the US believe it to be the primary gap
- Less than 5% of the respondents rated HR-talent management, succession planning or evaluation-assessment as their board's strongest skill
- 1% of men and 0% of women rated succession planning as their strongest areas of board expertise
- 38% of US and 53% of non-US boards have vetted an emergency successor
- 43% of women and 48% of men say that their boards do not have an effective CEO succession planning process
- 60% believe that their boards do not have an effective board succession process
It is encouraging that the board members surveyed are increasingly becoming aware of the competitive advantage talent provides. As stated in our prior blog entry on the business case for competencies, CTK believes workers at the 80th percentile, on average, are twice as productive as their peers at the 20th percentile. An effective talent management process is required to ensure the appropriate talent is in place. Furthermore, talent management is not solely the responsibility of the HR organization, nor simply the executive team - it is imperative that talent management be integrated into the overall business strategy and become a responsibility of all parties within and outside (partners, customers, etc.) the organization.
It would be interesting in future surveys to understand the use of a competency-based talent management approach within organizations. For those directors who believe they have an effective CEO succession planning process (greater than 50%), how objective (use of competencies) is the evaluation? And how far up and down the chain of command does a competency-based approach exist? CTK believes behavioral-based competencies and competency models are the "glue" not only for effective succession planning, but all aspects of talent management (e.g., hiring, development, assessment). Other factors should be considered during succession planning as well - e.g., performance, retention risk, experience, potential.