Having great talent is what makes organizations thrive and grow. While focusing on the performance of the leaders of today is important, organizations should look to the future as well to ensure they have the talent required for long-term success. This means focusing on pipeline and leadership development at every stage of the employee lifecycle. Attracting and selecting the right talent, assessing and developing them against the needs of the future, and making informed decisions in valid and responsible ways are what effective talent management is all about.
While this sounds easy enough in theory, for many organizations implementing a strategic TM system of this nature can be quite challenging. In a recent benchmark study of 80 top development companies, only 8 percent of those who responded indicated they had fully integrated TM programs. This finding reflects both a technology and a mindset issue. Despite the myriad of HR systems and applications available in the marketplace, many organizations still face siloed functions, disconnected systems, and poor data quality. In addition, many line and HR leaders lack “digital fluency” when it comes to leveraging insights regarding their talent.
So what is the solution? There is no easy fix, but organizations can jumpstart their leadership development efforts by digitizing the entire talent management process. Driving “digital fluency” in the organizational culture and talent processes will unlock a key lever for building future leaders.
Start with Design Thinking
The first step to digitizing TM is to start with design thinking. Developing future leaders cannot be done in a vacuum. Even world class programs and processes will fall flat if they are designed and executed in isolation of the user, the end-state, or the larger system and cultural context around them. By employing design thinking the purpose and flow through of the entire TM process will become more targeted and integrated.
"Despite the myriad of HR systems and applications available in the marketplace, many organizations still face siloed functions, disconnected systems, and poor data quality"
Once you have determined the future business needs and leadership capabilities required, it is important to take a hard look at (1) what your current processes and tools are measuring, (2) the type and quality of integration you have via technology, and (3) other aspects of the organizational culture that enable or inhibit these linkages (hint—this reflects an organizational systems mindset). This will probably mean building new or enhancing existing selection systems, assessment tools, development programs, coaching interventions, talent reviews, and succession processes that facilitate data connectivity in a seamless and integrated manner. It should also mean the end of traditional “big binder” talent reviews that become out-of-date the moment they are printed, as well as having real time data to tell a story whenever you need one.
Be careful when considering shiny new tools though. Just because an application can link people to competencies it may not support your strategy if you don’t have the infrastructure or future-focused content in place yet. In fact, implementing something new and cutting edge could cause more harm than good unless you are fully prepared for it. Design thinking assists with the process by prompting change with the end user/goal in mind. With a sound strategy and design thinking in place, however, there are powerful new tools and technology for linking capability from end-to-end.
Leveraging Integrated Data for Actionable Insights
The second major step in digitizing your TM system is ensuring the data collected throughout the employee lifecycle is accessible, digestible, and presented in ways that generate meaningful insights for users. These include HR professionals, managers, and senior leaders all of whom should have a vested interest in developing the leadership pipeline. Start with how users want to see talent information, not what data geeks think is most compelling. The key is ensuring the data can actually be used to inform decisions real-time.
While selection is straightforward, internal decisions regarding leadership development and succession are less so. Ideally this should be an “on demand” approach with real-time information at HR and leaders’ fingertips. When individuals are being discussed for higher positions (e.g., can Camilla become CFO one day?) data regarding her strengths, opportunities, development plan, mobility, performance and potential ratings, and experiences should be readily available. When it comes to open roles, the capabilities required for success and the developmental experiences it offers are important data points that can be digitized as well. Technology that matches these two data streams is even better, as long as there are no systematic biases in the algorithms.
Digitization matters because it better reflects reality. Although many traditional HR processes have been designed as calendared events, talent reviews and decisions can happen at any time. Yes, there will always be comprehensive talent reviews conducted with senior leaders, but given the speed of change in organizations, real-time TM is the new normal. Digitizing leadership information and insights is the key to making fully informed, timely decisions about your talent and developing leaders for the future. In addition, the data can be used to produce powerful insights at the global level too (e.g., regarding succession bench strength, diversity and gender pipeline, percent of new hires becoming high-potentials by function, region, etc.) with a simple query or via a talent dashboard if mass customized.
Building Digital Fluency in Senior Leaders
The final step here is to focus on building the “digital fluency” and capabilities of your HR and line leaders. In short, they need to think big and embrace new technologies in the way they approach their work. As with most change efforts, start at the top of the organization for maximum impact so leaders can model the new behaviors. Banishing the use of paper reports, white papers and decks in favor of tablets with talent systems in the cloud is a great start.
Research has shown that transparency is important for the emerging workforce; therefore organizations need to be more open in how they use data to make decisions. Technology is key enabler here as it facilitates linkages and access to information like never before. But the data must be meaningfully applied. What good is a digitized TM system when the insights are underutilized or ignored outright? It is up to HR to ensure capability has been built to leverage insights into actions.
One important caveat is that not all talent tools are created equally. It is critical that tools that produce data for decision making purposes be psychometrically validated within that organization to ensure there are no systematic biases (e.g., by gender). Companies that get wooed by the glamour of exciting new “talent signal” applications (e.g., games, email scans, etc.) in the marketplace may face significant legal risk if the due diligence is not done first. I-O psychologists are experts in this area.
Finally, remember that good judgement is the key to any business decision made – whether digitized or not. Just because the latest algorithm or AI model recommends a certain person-job match or high-potential designation does not necessarily mean it’s always right. Just like any other business process, a digitized TM system should be used to better inform talent decisions, not solely dictate the outcomes of future leaders.