The 4 Stages of Talent Management

Making People a Competitive Advantage

Consistently having the right people ready for promotion is something that great companies are very good at. The “right people” are smart, motivated, aligned with your company’s direction and culture, and they are strong leaders. The problem is that most companies underinvest in making sure that they have a stable and predictable source of future leaders. Most companies struggle because they don’t have a system for building this stability into their talent management processes.

Some companies actually invest a lot, but only periodically. They invest a lot of money (when they need to, but without a structured approach) at the last minute when they realize they have big leadership gaps. This happens when an important leader retires, is lured away by the competition, or when a company comes to realize that their development of people has not kept up with their goals and strategy. The companies who are great at talent management don’t focus on it periodically but pay attention to it consistently. These companies often have a real competitive advantage.

I recently got a call from the head of HR for a well-known company who wanted to know if we could help determine whether a talented executive could grow into a C-level role at his company within six months. This is a good call for a consultant. Our potential client said that if we could help this future leader, we might be able to build and run such a program for the company.

While we like to work with folks who are facing a massive increase in responsibilities, like this executive, I found myself asking questions like, “Why is the company only beginning to ask these questions now for such a critical role? Why six months?”

I was interested in the company’s talent management practices as much as I was interested in this candidate’s readiness for this promotion. Talent Management is the corporate name for all the things that companies do (or don’t do) in order to attract, manage, develop, promote, and inspire their people.

When we get a call like this from a company that wants a program to quickly accelerate a potential leader, we ask them to step back and look at their needs more broadly. Having an approach that ensures you have great future leaders is larger than getting the next individual C-level executive ready, and it’s only partly about the execution of the programs you do have. More than anything else it’s about your overall system and approach to talent management. Today only a few companies are really strong at identifying the talents they need to enact their strategies, placing the right people in the right jobs, getting their most capable people ready faster, and determining who has the highest potential to take on the most critical leadership roles.

Through our research and practice, we have found that companies go through four predictable stages as they strengthen their ability to grow leadership talent. Companies tend to cross through these stages in order, though the borders between the stages are not hard and fast, and a company doesn’t necessarily need to complete one stage before starting the next one.

The time it takes to pass through these steps is different from company to company and is entirely dependent on the amount of planning, effort, and resources the company puts into its talent management system. Of particular importance is how committed senior leadership is to building this organizational competency, and the alignment of the talent management approach with the company’s culture and operating model. Companies that are strong in talent management are smart about learning from their mistakes—because growing a new skill inevitably includes mistakes and missteps.

The 4 Stages of talent management are:

  1. Programmatic, talent management is a set of individual programs.
  2. Systemic, talent management is a system of connected programs, tied to an organizing HR principle or structure.
  3. Strategic, talent management is a system of connected programs built directly from the company’s strategy, operating model, and goals.
  4. Cultural, talent management is a key part of all of the company’s management practices, not a separate aspect of a leader’s job. All business planning at Stage 4 companies has a clearly defined people plan, and a forward-looking analysis of future talent needs, just as they have a budget and financial contingency plans.

Knowing the level of maturity of your company’s ability to attract and make the most of top talent creates clarity for what your company needs to do in order to strengthen its talent management processes and capabilities. (In our second article on the 4 stages of talent management, we’ll help you identify which stage your company is in.)

For my new client with the executive whose development they would like to fast track, we are meeting soon to discuss his identified development needs. But more importantly, we are also meeting to evaluate the current stage of the company’s talent management system, and to build a plan to make their culture and people a competitive advantage by fast-tracking their ability to manage and grow talent.

This article is part 1 of a series on The 4 Stages of Talent Management and is based on an unpublished manuscript by John Philbin, Ph.D. & Ed Gubman, Ph.D. (2007).

John Philbin

John is a co-founder of Happy Work Spectacular Life who, if he wasn't helping people with their careers, would consider himself a ghost researcher. His claim to fame is that he is a champion race walker (he actually came in second place).

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