4.4.

3 TALENT AND KNOWLEDGE MANAGEMENT

1. GENERAL INFORMATION

No. of Credits per week 4

No. of Hours per week 4

2. PERSPECTIVE OF THE COURSE

The explosion of interest in talent and knowledge management

among academics, public policy makers, consultants, and business
people began as recently as the mid-1990s.The level of interest in
Talent & Knowledge management since then visible in a number of
ways. It is growing rapidly more and more companies have built
talent and knowledge repositories. Even new job titles have
appeared from knowledge edge developer, to knowledge facilitator,
to corporate knowledge officer

3. COURSE OBJECTIVES AND OUTCOMES

OBJECTIVES
- To impart the knowledge on talent and knowledge management.
its importance in contemporary business

OUTCOMES
- By the end of this course, a student would learn the new concepts
in talent and knowledge management and its relevance in the
corporate

4. COURSE CONTENT AND STRUCTURE

1
MODULE 1: 8 HOURS
Talent - Engine of new economy - Difference between talent and
knowledge workers - Leveraging talent - Talent value chain -
Elements of talent friendly organizations

2
MODULE 2 : 12 HOURS
Elements, benefits and challenges of Talent Management System -
Building blocks of talent management: competencies, performance
management, evaluating employee potential - Modern practices in
talent attraction, selection, retention and engagement. Talent
management & Social Media - Emerging Trends in Talent
Management
3
MODULE 3: 10 HOURS
Talent Planning – Succession management process - Cross
functional capabilities and fusion of talents - Talent development
budget - Value driven cost structure - Contingency plan for talent -
Building talent - Leadership coaching
4
MODULE 4: 6 HOURS
Return on talent (ROT) - ROT measurements - Optimizing investment
in talent - Integrating compensation with talent management -
Developing talent management information system - Psychometrics
for TM
5
MODULE 5: 12 HOURS
Knowledge economy - Understanding Knowledge management -
Types of knowledge - Knowledge centric organizations - Knowledge
management framework - Knowledge creation and capture -
Designing of Knowledge management strategy - Issues and
challenges in knowledge Management - Implementing knowledge
management strategy - Knowledge management metrics and audit.
6
MODULE 6: 8 HOURS
Conduct Interviews with five senior executives of two organisations
on their talent and knowledge management practices. Conduct
minimum one focus group discussion (FGD) on Knowledge
management Portal

5. PEDAGOGY
- Lectures
- Seminars and presentation
- Practical Exercises like industry and field visit – Individual and
Group
- Case Study discussion in each module 6. TEACHING/LEARNING
RESOURCES

ESSENTIAL READINGS
1. Berger, Lance A and Dorothy Berger (Eds.) The Talent
Management Handbook,
Tata McGraw Hill, New Delhi
2. Chowdhary, Subir, The Talent Era, Financial Times/Prentice Hall
International
3. Chowdhary, Subir, Organization 2IC, Pearson Education, New
Delhi
4. Masood,Anilkumarsingh and SomeshDhamija , Talent
management in Indiachallenges and
opportunities,Atlanticpublisher,New Delhi.
5. Elais M Awad, Hassan M Ghaziri, Knowledge management,:
Pearson
6. Sanjay Mahaopatra, Knowledge Management, Mcmillan
7. Waman s Jawadekar, Knowledge Management text and cases,
Mcgraw Hill

Return On Talent

When asked to discuss the parameters

managers use to assess their own and
their department’s performance, the
term ROI is often mentioned.
While the returns on investment are
critical to the success of any
department, there is another
measurement we sometimes fail to take into consideration.
Yet it is one facet of our business that, if overlooked, can have a far-reaching
effect on the results we achieve and the potential for future growth.
Talented employees are the catalyst for change in your organisation.
Many managers will highlight past performance to identify high-performing
employees.
But exactly how many really talented employees are being overlooked by
continuing to look in the rear-view mirror?
Talented employees are distributed all through an organisation, from the
boardroom to the tearoom.
But we often lose these people, either physically or mentally, because we don’t
tap into the measurement called Return on Talent
This return is calculated by dividing the knowledge generated and applied in the
business by individuals, by the investment that’s made in their development.
Knowledge is only one component of talented employees, of course.
It’s the overall application of that knowledge through idea-generation and its
rollout that will make the real difference.
If a person has great knowledge and ideas, yet never has them implemented, the
value of those ideas is zero.
It only becomes valuable if it’s applied.
Knowledge is only valuable when it’s harnessed and applied.
Success in your organisation depends on the application and mastery of the
talent you have available.
If you develop a creative workforce or team, build innovative processes, adopt
continual improvement procedures, improve your communication methods and
build opportunities for advancement, you start creating a culture of
improvement and tapping into the potential of employees who have the talent to
drive productivity forward.
But you also need a way to harness the knowledge that people have and bring to
the organisation.
What ways can you make this a reality with your team?
Here are three ways you can start measuring your Return on Talent:
1) Create a team who are responsible for developing talent
Please don’t just leave this to HR and expect them to run with it.
Your knowledge of what works within your department and how it can be
applied is much deeper than HR have the capability of developing.
The team dynamics have to be right and you need people who are able to
harness the knowledge and the ideas people have so they’re not wasted or drift
off into the ether.
2) Develop a means of measuring the return on talent
You need to create coaching and mentoring sessions that develop people’s
knowledge and determine the costs involved.
This entails determining the best way to coach and mentor people within the
confines of the systems you work in.
You could, for example, decide to coach each person in your team for one hour
each month.
In a team of five people, that’s five hours of your time monthly.
The costs incurred are easily monitored.
Establish a process where you can receive and categorise the knowledge that
people have and share.
Any knowledge management system has to work efficiently and productively.
When you have a receptacle you can download shared knowledge into (your
intranet may well be a suitable medium) then you can start utilising it to store
people’s creativity and innovative ideas.
3) Put in a process to increase the ROT figures
How do you approach a situation where you want to start increasing return on
talent?
Start one person at a time, function by function.
You need to assess who is actually producing the most value in your team.
This is done by talent diagnosis.
It may take you some time to determine the value each of your team is
producing, but it is worth the effort.
Start by establishing what the main constituents are that create a talented
individual in your team.
Then decide how that talent can be harnessed and utilised, through knowledge
assessment.
Get people to share ideas on how things could be improved.
As you know, they are the people doing the work, so they are closest to coming
up with the ideas on how things could be improved.
Observe how much time needs to be invested in developing the skillsets
required and the knowledge shared.
When you have this information, it’s possible to gather the figures and apply
them to a return on talent equation, which is simply the knowledge that’s
generated and applied, divided by the investment you have made in developing
that knowledge (money, time and effort).
Knowledge is one of the most important factors you can develop for business
success.
If you can increase knowledge, then other related factors like production and
sales, customer acquisition and profitability will also see improvements.
To sustain sales growth, you should concentrate on developing the return on
talent, and you’ll see the correlation between the value of the knowledge you
can develop and the end results you achieve.

How Talent
Management Is
Integrated With
Compensation
Planning
When it comes to workplace relationships, communication is the key.
Employers have to ensure that there is an enhanced and optimized
communication system across the organization and staff members can
connect even to them anytime, anywhere. Even a single case of
miscommunication can lead to disruption, decreased employee engagement,
poor performance, and low retention. One of the most common topics that is
often miscommunicated in an enterprise is compensation. It is the foundation
of satisfaction and motivation among employees and a tool for employers to
attract top talent and retain them. However, employers and employees are
never on the same page when we talk about compensation. 

Employers and HR professionals experience more frustration and complaints

among the workforce over compensation issues than any other factor. As per 
Payscale’s Compensation Best Practices Survey (CBPR), there is a gulf
between employer and employee perceptions on pay. Approx 43% of
surveyed employers have agreed that employees are paid fairly while only
21% of employees agree with the above conclusion. This gap in their
perception and opinion is the reason for all problems and issues. Hence, it has
become necessary to align talent management with compensation management
software to enable employees to understand their expectations surrounding
their performance and its impact on compensation. 
Talent management is an integral part of an organization and HR functions
that must be seen as a continuous process. It includes various modules and
features, such as employee lifestyle management, talent acquisition,
performance management, career development, succession planning,
benefits administration, compensation management, and more. These
integrated features contribute to overall business functionality and strategy in
the areas of human capital and human resource management. Reviewing
talent management monthly or quarterly will allow a company to determine
obstacles, eliminate them, identify performance gaps and slips, take corrective
measures, and find the employees who have added to the organizational
success. 

By aligning talent management with compensation planning will help you

motivate your employees to attain higher levels of performance to earn
impressive rewards. However, integrating these two aspects is not easy but
demands comprehensive knowledge and understanding of these major HR
functions. So, let’s start by getting acquainted with the talent management
system:

Contents  hide 
1 Integrated Talent Management System
2 Benefits of Talent Management Solution
3 Compensation Management: A Key Tool for Talent Management
4 Best Practices to Integrate Talent Management with Compensation Planning
4.1 Build a Pay-for-Performance Strategy
4.2 Incorporate Work-Life Balance
4.3 Improved Experience & Communication

Integrated Talent Management System

A talent management software is an all-inclusive suite that includes the four
primary pillars required to manage talent in an organization, namely
recruitment, performance management, learning and development, and
compensation management. To put it simply, integrated talent management
refers to handling traditional HR functions in an aligned manner to strategically
leverage talent. The talent management strategy of an organization must
resonate with business strategy and goals to add value to an organization. 
The base of effective talent management is its robust competency model that
guides all the tactics and strategies. By implementing a single talent
management system across your enterprise, you can ensure a smooth flow of
information regarding payroll, HR, and benefits administration. As you can
share the data in real-time and without hindrance, you can enable innovative
business growth and enhanced employee performance. 

Benefits of Talent Management Solution

We cannot deny that over the years, companies have adopted various HRMS
and ERP solutions for improved and value-driven results. HCM software and
Enterprise Resource Planning have become a mandate in organizations.
However, these systems mainly focus on transaction processing and
administration of human resources, including time management, payroll, and
personnel administration. There are still a lot of HR functions and modules
that need to be covered for efficient development, hence comes a talent
management system. 

It also pays attention to providing strategic assistance to companies so that

they can attain long-term goals in regard to human capital and talent. The
software is paired with an applicant tracking system as a standalone or suite
of products. In its most comprehensive form, talent management is the
implementation of all the integrated systems and strategies designed to
enhance several processes, such as acquiring, developing, and retaining
people with the required skills and knowledge to meet short and long-term
organizational needs. Apart from simplified HR processes and seamless
integration with primary modules of HCM, it also offers other benefits, which
include:

 Streamlined hiring processes

 Quick onboarding of recruits
 Better employee engagement
 Improved employee retention rate
 Career growth and development
 Improved team dynamics and performance
 Faster integration to company culture
 Leveraging key HR data to meet organizational goals

Compensation Management: A Key Tool

for Talent Management
Most assume that the term compensation management simply applies to the
amount a company is willing to pay to an employee in terms of money for the
services rendered by him/her. However, in this complex marketplace, this
concept goes much beyond the basic addressing of the salary of employees.
Compensation management is a process to ensure that a company’s salaries
and bonuses are appropriate, competitive, and equitable. It plays a vital role in
organizational operations, be it large or small. It is crucial for HR as it directly
affects employee retention, company performance, the hiring process, and
team engagement. Compensation tools also help in managing, determining,
and analyzing the salary, benefits, and incentives of each employee and aim
to attract, engage and retain top talent by offering competitive and broad
compensation plans while meeting a company’s budget. 

Compensation managers are responsible for working with data and

information of employees along with complex benefits administration
regulations, hence are considered a valuable asset to the business’ success.
If they fail to deal with bonuses, salaries, and other incentives efficiently, then
the people might look for better packages elsewhere, job satisfaction and
performance will decline, and other factors would eventually affect the
company adversely. As compensation is a key recruitment, retention, and
talent management tool, it should be leveraged well to motivate employees to
attain their individual and organizational goals. HR professionals and
managers can use impressive and effective plans to reward employees for
their success and contribution.

The focus of compensation management is to maintain a perfect balance

between retaining top talent and staying in-line with a company’s budget. It
also makes sure that the team members are paid fairly based on:

 Work performance
 Responsibilities
 Job market
 Position
 Experience
 Company budget

Best Practices to Integrate Talent

Management with Compensation Planning
Aligning talent management with compensation planning is an effective and
trusted way to build a workplace environment with dedicated and passionate
employees. It encourages them to put in their best efforts to achieve
organizational objectives while attaining their personal interests. An employer
can leverage the benefits of this integration along with benefits, recognition,
benefits to attract, retain, and motivate people. 

However, to achieve greater value, employers and HR teams have to follow

some basic rules and practices that are important for successful integration.
As you move toward talent management system integration with
compensation tools, make sure to follow these essential steps:
Build a Pay-for-Performance Strategy
When they link talent management and compensation planning efforts,
employers not only provide the workforce with clear and accurate
compensation guidelines but also help them understand the value of work and
the ways to improve it. Make sure that you use the performance management
module of talent management when you opt for a pay-for-performance
strategy. It is a tried and proven method, working as a true motivation tactic
across the world. In fact, in a recent survey, 90% of companies have agreed
that they use the pay-for-performance approach. One important aspect of this
strategy is immediate senior leaders or managers as they are the ones directly
working with team members and keeping eye on their performance. 

However, this method can fail drastically if managers are not trained well as
they are often uncomfortable assessing others’ performance and speaking
openly about issues related to it. They also lack the expertise and skills
required for constructive feedback and goal setting, two components that are
significant for a successful pay-for-performance program. Also, ensure that
your strategies are combined with applicable data as people want proof and
relevant information attached can assist you in the whole process. Your plan
should fulfill three criteria:

1. Fair and consistent compensation in respect to the value added by employees.

2. It should motivate higher-level of performance from all employees.
3. An increase in compensation should be done at the right pace, reflecting
employees’ current performance and the changes in the labor market.

Incorporate Work-Life Balance

Employees want both tangible and intangible rewards that are essential to
living better lives and grow professionally. When you allow them to customize
their work-life fit model, it is considered a highly-valued employment reward
these days. To testify this, a report has concluded that the most effective tactic
to retain, attract, and reward the top talent in an organization over the past
years is allowing flexible and convenient work arrangements. Moreover, there
are several well-documented trends that state that employees demand greater
work-life balance, and flexibility in work culture is a key to attain it. 
You must have come across different employees in your company facing
varied issues. Some want more family time while others need to take care of
their aging parents. Some employees prefer working from home and are more
productive that way while others seek opportunities to volunteer outside of
work to add more purpose to their lives. You can offer benefits that support
these needs and requirements, including free food, flexible work hours,
wellness programs, on-site fitness centers, etc. This will reduce stress,
improve productivity, help them have better lives, which will lead to happy and
satisfied employees. 

Improved Experience & Communication

Compensation is an exchange of value and this value is all about perception.
So, even when employers build a perfect strategy that compensates
employees according to their real value, it will be in vain if they can’t
understand it. Hence, proper communication and experience are a must to
address the preferences and needs of a diverse employee population.
Furthermore, transparency with employees is also important to align their
perception with reality. So, the biggest challenge for managers and employers
is to find an effective way to communicate compensation plans to their
employees efficiently and avoid any confusion and misunderstanding. 

Thanks to the internet, companies can provide information instantly to their

employees on a single platform. They can have immediate access to all the
data and regulations. Many organizations are implementing HCM solutions to
accomplish this, so people can just go to the website or self-service portal,
mention their details, and get all the information they want within no time.
They can also customize a menu-driven mix of benefits according to their
preferences and needs, irrespective of their geographical location, and make
informed decisions. 

Conclusion
Most of you may think that why go through all this trouble when you can
simply opt for the ‘talk about pay’ approach and get done with it. Just think
about it again. Can you maintain complete transparency and keep away from
all misperceptions by simply talking? No. By integrating talent management
and compensation planning, you can rely on clear communication, accurate
job description, and fair compensation. Employees will understand their true
value, get all the information instantly, and feel confident about being paid
fairly. 

With well-defined strategies in place, there will be a culture of openness and

you can bridge the gap in value perception. Lastly, keep the objective and
intent in your mind so manage your employees and compensation
seamlessly. 

Author’s Bio: Alicia works with the editorial team of Accomplish, a leading

company offering HR software solutions. Exploring the latest technologies,
reading about them, and writing her views have always been her passion. She
seeks new opportunities to express her opinions, explore technological
advancements, and document the details. You can always find her enjoying
books or articles about varied topics or jotting down her ideas in a notebook.
MODULE 1:
Talent - Engine of new economy - Difference between talent and
knowledge workers - Leveraging talent - Talent value chain -
Elements of talent friendly organizations

1.1: Introduction to Talent Management:

Discover:

 What Is Talent Management?

 The importance of Talent Management

 Talent Management Model

 Talent Management Strategy

 Building Your Talent Management Strategy

 The Talent Management Process

 The 7 Steps of a Great Talent Management Process

What Is Talent Management?

Talent management is a constant process that involves attracting and retaining

high-quality employees, developing their skills, and continuously motivating
them to improve their performance.

The primary purpose of talent management is to create a motivated workforce

who will stay with your company in the long run. The exact way to achieve this
will differ from company to company.

Talent management in HR

Talent management naturally encompasses many of the responsibilities of HR.

All the same, it is not enough to expect that just because you have an HR
department, you are managing talent.

You need to have a talent management strategy in place designed just for your
company to gain optimal results.

The importance of Talent Management

The simple answer is because it capitalizes on employees — arguably, the most

important asset of your company.

Talent management helps you maximize the value of employees.

As you can see from the graph above, there is widespread agreement that talent
management is effective (or even very effective) at attracting and retaining
talent as well as improving overall performance.

There are a few main reasons why this is the case.

1. It helps businesses improve performance

With top specialists in your organization, you can reach any goal.
Talent management is most effective of all when it combines three key
components: rapid talent allocation, positive employee experience, and a
strategic HR team.

2. It allows companies to stay competitive

By hiring and developing talented employees, your organization becomes

stronger and better prepared to face changes and risks.

3. It drives innovation
New technologies are always hitting the scene, whatever your industry.
Talented employees are able to find ways to harness the capabilities of new
tools and solve problems or come up with original ideas.

4. It helps form productive teams

The appropriate talent management strategy will allow you to form a more
productive team. This is far more useful than just having a bunch of creative
and talented people in your organization.

5. It decreases turnover

When employees feel valued at a company, when they know they will have
plenty of opportunities to grow in the business, they are less likely to seek work
elsewhere.

6. It leads to strong employer branding

Talent management brands your company as an employer. This helps you to

attract the best candidates for future hires.

7. It motivates others to grow

Having inspiring talent on your team will motivate other employees and help
them grow.

Talent Management Model

Whereas there is no standardized model for talent management, some HR
professionals have proposed excellent models that any company can use.

However you choose to develop your model, it must include the following.

1. Planning
Planning aligns your talent management model in line with the overall goals of
your organization.

Only with the correct planning can you ensure that you seek talent with the right
skills and experience. In addition, it assesses current employees to see what is
working well for the company.

For instance, if employees with certain characteristics tend to stay at the

organization for longer, you should plan to hire more workers like them.
2. Attracting
It is not always as simple as when one person leaves the company, you start a
search for someone else to fill the role.

For instance, your needs may change or employees may take on new
responsibilities. Talent management ensures that you always have sufficient
staff to carry out all your operations and prevent heavy workloads that could
cause demotivation.

The right strategy will attract just the kind of workers you want at your
business. Such hires will be driven, skilled, and seeking to advance within the
company.

Attracting talent is all about branding your company as an employer. You’ll

need to find ways to increase visibility in ways that allow you to present
company as a best place to work. The main consideration here is to make your
business more approachable.

Even if you choose not to hire someone for a particular position, you still need
to create a positive experience. This will give you the opportunity to hire these
candidates for other jobs or use them as ambassadors to acquire other talent.

3. Developing
The development part of the model involves taking steps to help talent grow
within the company.

It should be aligned with the employee development plan and includes

identifying roles where particular employees could move to in the future as well
as considering how to expand workers’ skills and knowledge to fulfill new
challenges facing your organization.

Talent management also looks at what will keep employees at your company
enthusiastic and willing to go the extra mile. It is necessary to provide
employees with value.

Motivation also requires the correct onboarding — to give new hires a great
impression of your company from the very beginning. This will increase the
chance that they stay with the company and work hard.
4. Retaining
Another purpose of talent management is to keep people at your company for
longer.

Employees need to continue feeling that the company is an enjoyable,

meaningful place to work.

Through training and other types of engagement, employees have the chance to
create a career without leaving the company. You may achieve this by focusing
on compensation (monetary and otherwise) as well as company culture.

5. Transitioning
After hiring and developing their skills, you need to plan for employees’
transitions.

Your aim at this stage is to keep their knowledge within the company — this is
called knowledge management.

You need to have a plan in place to promote employees or move them to

another role, department, or office. If a worker does decide to leave, you need to
know why.

Talent Management Strategy

A talent management strategy is based on the talent management model. It

should match your organization’s goals and clearly define what type of talent
you need.

You organize the talent management process based on the talent management
strategy.

There are few different types strategies you can choose from.

Strategy #1: Hire Only Top Employees

The advantages of this strategy are obvious:

 You immediately receive top talent.

 The employees will perform well and probably reach high

performance faster.

 You are able to grow your company faster.

 You are more prepared for challenges and risks.

However, there are some disadvantages:

 It’s expensive, and will cost you even more if you end up needing
to hire someone else.

 It could be more difficult to retain top talent.

 The hiring process may take longer, as you’ll probably want to

select from a wider pool of candidates.

 It can be challenging to manage team of top talent.

 Having too many top performers on a team can lead to competition

and result in underperformance.

Strategy #2: Hire Promising Specialists and Develop Them

This second option has a couple advantages:

 You can find talent faster. This may be necessary if you are in
urgent need for talent and have insufficient time to search for top
employees.

 You will likely save money on salaries.

 The employee has the potential to become a skilled and loyal

professional.

 You can hire two, or even three, promising specialists for the same
amount as for one top performer.
The main disadvantages are:
  Your company may grow slower.

 Compared to top talent, these hires lack of knowledge. This can

lead to lower performance.

 You may need to hire another specialist if the employee cannot

handle the role.

 It requires a larger investment in development.

 The strategy may fail entirely and you’ll need to revert to option 1.

Strategy #3: Combine Strategies 1 and 2

This quote describes the strategy best:

"Your team’s strength is not a function of the talent of individual members. It’s
a function of their collaboration, tenacity, and mutual respect."
Finally, the pros of combining the two above are:

 It gives you the best of both worlds.

 It also allows you to take advantage of a combination of new hires

and existing talent.

 Having top talent and potentially good specialists (e.g. young

employees) will help the specialists grow faster and motivate them.

 It leads to knowledge transfer — top talent can teach other

employees.
All the same, there is one con:

 If you have specific requirements (such as you are in urgent need

of growth or if you are on a tight budget), sticking to a single
strategy may be more appropriate.

Building Your Talent Management Strategy

Lastly, before you go ahead and launch your recruitment and talent management
strategy, make sure you include the essential components of a talent
management strategy.

1. Know What Is Your Talent Management Strategy Is For

Every organization has its own unique goals. Whether they relate to better
performance or higher revenue, your goals need to be clearly stated and
achievable. You also need to know exactly how employees will play a role in
helping you meet your targets.

2. Measure the Results

You need to know how to measure results to see if your strategy is working.
Define the metrics you’ll use and how often you’ll take measurements.

3. Assign Responsibilities
Much of the talent management strategy is down to HR, but other people at
your company will also need to be involved. For instance, C-level executives
are responsible for succession planning.

4. Communicate with Employees

Make sure your employees are clear about where they stand and know what is
expected of them. Talk to them about their career goals to ensure that your
company is creating the right opportunities.

The Talent Management Process

Now you have an understanding of why you need talent management and what
it involves. Next, you need to take a look at the talent management process itself
and learn how to apply it to your company.

What Is the Talent Management Process?

The talent management process is how you organize the management of your
human resources. It is how you choose employees, how you hire them, and how
(or if) you train them, motivate them, fire them, and so on.
The 7 Steps of a Great Talent Management Process

The following steps cover what you need to do to develop a continuous talent
management process for your organization.

It covers how to find the most talented people available and then help them stay
in your company.

Step 1: Specify What Skills You Need

What is the first step in the talent management process?

Before you can go any further, you must determine what kinds of hires you
need and what requirements they should fill.

Consider if it would be possible to teach existing employees to avoid the need to

hire anyone new.

Step 2: Attract the Right People

There are several stages to attracting talent:

1. Create targeted advertisements and post them on top job sites —

HR branding is helpful here.
2. Plan interviews and other means to identify the best person for the
job. In addition to regular questions, consider using personality
assessments, references, and tests that require candidates to
perform in real-life situations.

3. Hire your top choices.

Step 3: Onboard and Organize Work

Help new employees feel orientated by being ready for them as soon as they
enter the company.

Know what tasks you will set them, have training sessions scheduled, and
assign current employees to support new workers settle in.
Step 4: Organize Learning and Development
Remember, it is often easier to develop the skills of your current employees
than to hire new talent.

Plus, even if you do hire top talent, they will likely want to learn something in
their new role.

Plan ways for your workers to learn and grow, such as through conferences,
courses, and a learning management system to create a learning environment.

Step 5: Hold Performance Appraisals

Checking employee performance regularly allows you to see if workers could
manage additional responsibilities.

This could save you hiring new talent and it may help an employee prepare for a
promotion.

Step 6: Strategize to Retain Your Best Talent

Keep employees satisfied at work through promotions, benefits, motivating
tactics, ensuring job satisfaction, and improving company culture.

Step 7: Plan for Successions

Nurture employees for successions, such as for when a senior member of staff
retires.

Enable employees to perform to their best through continuous learning

opportunities, including knowledge management.

If an employee decides to leave the company, conduct an exit interview to find

out what went wrong — this will help you prevent the same issue occurring
again in the future.

Difference between talent and knowledge workers:

Talents versus Knowledge Workers
Most organizations do not know how to distinguish between their talents and
knowledge workers. All talents are knowledge workers, but not all knowledge
workers are talents. Talents are more than knowledge workers. To operate
successfully, every organization needs both talents and knowledge workers.
Knowledge workers may become talents through dedication and a well-defined
goal, but most don't make the transformation. The following are seven
differences between talents and knowledge workers.

Talents Make and Break the Rules; Knowledge Workers Conserve the
Rules
The main difference between talents and knowledge workers is that talents
break the rules, create, initiate, invent, direct, and send—talents take initiative,
they are proactive. Knowledge workers, in general, do not. Knowledge workers
take orders. They are studious and obedient people. Just because a person is
brilliant or has a Ph.D. does not mean that person is talented. One need not be a
genius to be a talent.

In the 1950s, when W. Edwards Deming begged American companies to

improve their quality, they didn't listen. He continued to beg into the 1980s,
when corporate America finally listened. Of course, by then Japan had a 30-year
head start, from which the Western world has never recovered. Deming
identified incredible persistence as a key characteristic of talent. His ideas
provided a great service to society but were slow to gain acceptance in the
Western world.

Breaking the rules is not necessarily the road to glory and wealth. The dot-
bombs broke all the rules of business leadership. Many had no visible means of
actually making money by offering something for sale. They simply sold their
ideas to people with money who clearly did not use diligence in recognizing
unrealistic business plans. They broke the rules and bombed out at the expense
of many broken lives.

Talents Create; Knowledge Workers Implement

Talents are your ingenuity source. They are creative. But creative talents need
support from knowledge workers to make the products and services and get
them to customers. For an example in a different arena, scientists are talents
who do research with the help of associates (knowledge workers). In business
organizations, knowledge workers help talents to transform ideas into reality.

Talents Initiate Change; Knowledge Workers Support Change

Talents can feel the need to initiate change before it becomes necessary to
change. Talents generally initiate change within the organization. But talents
need visionary knowledge workers who support the change. Without the
support of knowledge workers, it would not be possible for talents to bring
about the changes within the organization. Even the rare talents who can
intertwine talent behaviors and knowledge worker behaviors as the
circumstances demand need the support of additional knowledge workers to
implement innovations and changes.

Talents Innovate; Knowledge Workers Learn

Talents innovate, and knowledge workers learn and apply those innovations in
the organization. Talents are the teachers; knowledge workers are the good
students. A talent may create a programming language and teach it to the
knowledge workers, who would then learn, use, and refine the language.

Talents Direct; Knowledge Workers Act

Talents direct knowledge workers to perform the work. Good knowledge
workers learn to deal with the idiosyncrasies that seem to be characteristic of
talents. With the direction of talents, knowledge workers perform their work.
Knowledge workers carry out the visions and marching orders of talents.

Talents Inspire and Lift People; Knowledge Workers Receive Information

and Motivation
If you are a talented person, you likely want to help the next generation; you
want to lift the people who work around you; you want to see those people
become successful. And yet when some of those people fail, you become
frustrated. Knowledge workers don't understand this. Often knowledge workers
don't understand what talents are after because they are so different. Knowledge
workers have to understand what talents are after, what their missions are.
Unfortunately, talents are not always good at explaining their ideas and intents
to their knowledge workers. No talent is perfect. Talents need to work on their
weaknesses as they play to their strengths. If you are a talented manager, and
you have 10 knowledge workers reporting to you, you need to take time to get
them to share the excitement of the dream with you. Show them your love for
what you do and pass that ball to them.

1.2 Talent - Engine of new economy:

There was a mouse named Dilory he was working in a good organization named
“Cheese” but he wasn’t very good at his job. There was another mouse named Hilory
he used to work at a company named “Sugar”, he used to work at an organization
where he was a super enthusiast and great at his work but his organization was not
very structured & clear about their goals. Since many people like Dilory used to
work at Cheese who were enthusiastic but not very efficient, the organization
decided to design a framework named “Trap” to divide the employees as per their
knowledge and skills they possess. Cheese started to give proper training and
proper feedback to the employees about where they stand and how much
improvement has been made after the L&D. This way Cheese helped the employees
to grow in their careers and creating a better workforce. Which eventually lead to
the holistic growth of the organization. Whereas at “Sugar” even the great
employees lacked behind due to not availability of proper L&D and performance
management. So many great employees left the organization and those stayed were
not upskilled to cope up with the latest changes in the business world. It leads the
organization to the downfall and eventually a huge loss.

Now let’s get to understand through concepts.

The main purpose of any business is to sustain in the long run and make

profits. Talent management is an organization's process to recruit, hire, develop
and retain the most talented and superior employees available in the job market.

In other words, It is a useful term that describes an organization's process of hiring,

managing, developing, and retaining talented employees. It comprises all of the
work processes and systems that are related to retaining and developing a superior
workforce.

Talent Management comprises of these basic elements

1. Learning and Development

2. Succession Management
3. Leadership Development
4. Workforce Planning
5. Talent Acquisition
6. Performance Management
7. Competency Management

Benefits of Talent Management

  Gaining Competitive Edge
 Attract Top Talent
 Profit
 Reskilling & Upskilling
 Development

Learning & Development is a great resource for building employee skills, enhancing
their motivation, and contributing to productivity and engagement. It is particularly
invaluable when learning activities are linked to the employees’ developmental
goals identified in the performance management process.

Performance management is another factor that helps in retaining talent within an

organization. Making the employees aware of where do they stand helps them
rework on themselves and this leads to motivating them to be a better version of
themselves. Performance management can help to create a benchmark for
employees' talent development journey. It motivates employees to be a better
version of themselves and thus contributing to the growth of the organization.

Proper performance management can be facilitated by these

steps:

 Setting a benchmark for employees

 Offer continuous feedback
 Provide further development plans

In this uncertain and ambiguous world, everything is changing rapidly, thus an

agile business framework is very important. A workforce of motivated, talented and
agile people will help in sustaining the organization.

Everything done in an organization streams down to generate profit in business.

Maintaining a talented workforce is crucial. Learning and development and
performance management system are the factors contributing to maintaining the
talent in the organization.

Better the talent a company possesses better the profit it can generate, as humans
are the ones who are responsible for bringing in the revenue.

1.3: Difference between talent and knowledge workers:

Home > Articles > Business & Management > Human Resources

Finding and Keeping the Best Talent for Your

Organization
 Nov 29, 2002

📄 Contents

␡
1. Organizational Winning Strategy by Leveraging Talent
2. Talents versus Knowledge Workers
3. Talent Management System
4. Challenging Environment

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Talents versus Knowledge Workers

Most organizations do not know how to distinguish between their talents and knowledge workers. All talents
are knowledge workers, but not all knowledge workers are talents. Talents are more than knowledge
workers. To operate successfully, every organization needs both talents and knowledge workers.
Knowledge workers may become talents through dedication and a well-defined goal, but most don't make
the transformation. The following are seven differences between talents and knowledge workers.

Talents Make and Break the Rules; Knowledge Workers Conserve the
Rules
The main difference between talents and knowledge workers is that talents break the rules, create, initiate,
invent, direct, and send—talents take initiative, they are proactive. Knowledge workers, in general, do not.
Knowledge workers take orders. They are studious and obedient people. Just because a person is brilliant
or has a Ph.D. does not mean that person is talented. One need not be a genius to be a talent.

In the 1950s, when W. Edwards Deming begged American companies to improve their quality, they didn't
listen. He continued to beg into the 1980s, when corporate America finally listened. Of course, by then
Japan had a 30-year head start, from which the Western world has never recovered. Deming identified
incredible persistence as a key characteristic of talent. His ideas provided a great service to society but
were slow to gain acceptance in the Western world.

Breaking the rules is not necessarily the road to glory and wealth. The dot-bombs broke all the rules of
business leadership. Many had no visible means of actually making money by offering something for sale.
They simply sold their ideas to people with money who clearly did not use diligence in recognizing
unrealistic business plans. They broke the rules and bombed out at the expense of many broken lives.

Talents Create; Knowledge Workers Implement

Talents are your ingenuity source. They are creative. But creative talents need support from knowledge
workers to make the products and services and get them to customers. For an example in a different
arena, scientists are talents who do research with the help of associates (knowledge workers). In business
organizations, knowledge workers help talents to transform ideas into reality.

Talents Initiate Change; Knowledge Workers Support Change

Talents can feel the need to initiate change before it becomes necessary to change. Talents generally
initiate change within the organization. But talents need visionary knowledge workers who support the
change. Without the support of knowledge workers, it would not be possible for talents to bring about the
changes within the organization. Even the rare talents who can intertwine talent behaviors and knowledge
worker behaviors as the circumstances demand need the support of additional knowledge workers to
implement innovations and changes.

Talents Innovate; Knowledge Workers Learn

Talents innovate, and knowledge workers learn and apply those innovations in the organization. Talents
are the teachers; knowledge workers are the good students. A talent may create a programming language
and teach it to the knowledge workers, who would then learn, use, and refine the language.

Talents Direct; Knowledge Workers Act

Talents direct knowledge workers to perform the work. Good knowledge workers learn to deal with the
idiosyncrasies that seem to be characteristic of talents. With the direction of talents, knowledge workers
perform their work. Knowledge workers carry out the visions and marching orders of talents.

Talents Inspire and Lift People; Knowledge Workers Receive Information

and Motivation
If you are a talented person, you likely want to help the next generation; you want to lift the people who
work around you; you want to see those people become successful. And yet when some of those people
fail, you become frustrated. Knowledge workers don't understand this. Often knowledge workers don't
understand what talents are after because they are so different. Knowledge workers have to understand
what talents are after, what their missions are. Unfortunately, talents are not always good at explaining their
ideas and intents to their knowledge workers. No talent is perfect. Talents need to work on their
weaknesses as they play to their strengths. If you are a talented manager, and you have 10 knowledge
workers reporting to you, you need to take time to get them to share the excitement of the dream with you.
Show them your love for what you do and pass that ball to them.

1.4 Leveraging talent

 Leveraging Talent
A leader who knows the talents and strengths of every team
member has a significant advantage over a leader who does not
know.

Leveraging that talent to the workplace is most often a simple

matter of ma king the connection between the way a person
does a talent, and the way they do something at work.

Most people enjoy using their talent. If their work becomes a

matter of using a talent they already have and enjoy, they will
enjoy their work. This raises the level of motivation, improves
performance and generates significant business impact .

Can any talent be leveraged to work?

In our experience, yes. The process to leverage talent is:

 Identify the talent. This is for ma ny people the most difficult

part. Unless they have an obvious talent such as painting,
music, acting, singing and so on. Indeed, most people
believe that they do not actually have any talent! So let me
stress here, that everyone has talent!

o Ask your client what they are especially good at doing,

perhaps something they really enjoy. Take time to explore
this… they do have a talent.

 Ask them how they DO the talent.

o The most common response is “I don’t know, I just do it…”

o This is exactly what we are after here. They are unconsciously

competent at the talent.

 Break down the DOING of the talent into discrete steps.

1.5 Talent Value chain

eople are a fundamental resource for any enterprise. Unless top leadership can
harness this asset, an organization risks being eclipsed in the so-called war for
talent. Executive leadership must be strategic about talent because the most
important levers for extending competitive advantage are all related to people.
The concept of the "value chain," introduced by Michael Porter in 1985, can be
applied to talent in the form of the following "people value chain": talent attraction,
targeted recruiting, high-accuracy hiring, proactive "on-boarding," talent
identification, performance enhancement, career acceleration and succession
management. Leadership that really "gets it" takes a strategic, long-term, patient and
disciplined approach to creating and maximizing the people value chain.

Attracting and Hiring the Right Talent

Finding and identifying the "best-fit people" and placing them in the "best-fit roles" is
basic and intuitive, but it is far from simplistic. There are only two tactics that will
deliver on that score: one, having a strategically grounded "culture brand" for
attracting and recruiting the best fits; and two, being able to carry out high-accuracy
hiring.

The foundation of a strategically grounded culture brand requires crystal clarity about
the organization’s reason for being (mission), its idealized future state (vision) and its
fundamental cultural principles (core values). With those in hand, the enterprise can
craft a compelling call to action (a strategy map and blueprint for execution).

High-accuracy hiring involves knowing how to precisely screen in and screen out,
knowing which tools to use to maximize the probabilities that you are accurately
identifying a best fit as a best fit and knowing how to standardize the selection
process and replicate it throughout the organization.

First, analyze your major job categories and identify their crucial competencies.
There is a universe of about 40 competencies, various subsets of which can pinpoint
the requirements for efficacy in most work roles. Second, build a set of tools that can
measure the desired traits and capabilities for a given candidate. These include
a competency model, a behaviorally-based interview protocol and guide, a
personality test that can measure "softer" indicators and an evaluation matrix that
can be used by all members of the hiring team to coordinate and synchronize the
assessment process. Third, methodically prepare hiring teams to gauge the answers
to three questions about every candidate:

 Can he/she do this job? (Education, experience and acquired skill sets)
 Will he/she do this job? (Vocational interests, motivation, work ethic and drive)
 Will he/she fit here? (Values, sociability, independence, team orientation and
leadership/followership styles)

Proactive Onboarding

It is a leap of logic to assume that high-accuracy hiring will protect against

misalignment between the new hire and the organization’s culture, its people and all
their customs. Failing to consider all the possible hazards that can threaten even the
most able new executive’s tenure is a glaring oversight that leads to shortened
tenures.

Key objectives of onboarding coaching include aligning the executive with the
corporate culture, developing the areas that bear closely on job success, facilitating
positive communication and ensuring positive relationships with his or her team and
other stakeholders. The onboarding process in a nutshell:

1. The consultant and new hire evaluate the corporate culture of the
organization, interviewing key personnel and examining the strategic
documents and various materials that highlight the nature of the
organization’s people practices.
2. The consultant assesses the onboarding candidate. The candidate responds
to assessment questionnaires related to emotional intelligence quotient (EQ)
abilities and leadership behavior and participates in an in-depth interview.
3. With these two assessments, cultural and individual, the core of the
onboarding process can begin. The candidate goes through an in-depth
debriefing with the coach to:

 Identify blind spots, counterproductive tendencies, key strengths and potential

vulnerabilities in certain situations common to the new environment
 Create a roadmap for the candidate’s success
 Monitor performance during the first year; look for and address
disconnectsAdd new leadership competencies to the candidate’s repertoire

The new hire and coach are partners in developing strategies to integrate the
executive into his or her new role, culture and company. Together, they create an
early warning system for identifying emerging problems and initiate the steps
necessary to take the executive’s skill sets to the next level. The process is not very
different from the typical general executive coaching engagement. It simply has a
more specific focus.

Identify and Develop Your Existing Talent

Your mission, vision, core values and "strategy execution blueprint" will guide your
talent identification and development system. Once you understand how they
translate into cultural, leadership and talent management requirements, you can
make the case for talent management throughout the organization, align all levels of
management with the requirements and hold them accountable for delivering. That
delivery depends on the accurate use of a powerful weapon: a leadership
competency model that captures the essence of your mission, strategic imperatives
and talent requirements. Acting as a gyroscope, it describes and quantifies the
management and executive profiles you will need in high-value roles in the future.

Simultaneously, accelerate your high potentials’ development. Cleverly and

resourcefully exploit the learning value of stretch assignments, along with other
development modalities, such as mentoring, executive coaching and action learning.

Keep Them in the Pipeline

Any talent management approach must synchronize with the organization’s strategy.
Reverse-engineer your succession management to the organization’s human
resources strategy, which, in turn, is reverse-engineered to the overall business
strategy. Then, turn the organizational culture into a meritocracy where managers
are held accountable, recognized and promoted for being successful talent scouts
and developers. Whether your organization seeks leaders from within or without, it is
always necessary to build them. The reason is leaders, for the most part, are not
born. They are made.

The Challenge

Successful companies know it’s not necessarily core business processes that give
them an edge anymore. Today’s competitive landscape comes down to
management and leadership expertise at all points along the people value chain.

The Talent Value Chain

We are living in a time when talented people—many of them represented by powerful agents,
attorneys, professional associations, or unions—dominate in business, as they have for the
past four decades in athletics and entertainment.

In effect, all employees now can be classified as free agents and all fields of labor as
performing arts—places where field performance (not politics, popularity, personality,
potential, academic degrees, or social pedigrees) matters most, where the value a person adds
on the job is recognized and rewarded, where managers and administrators serve as coaches
and counselors and either become world-class leaders of talented people or lose their jobs.

For the first time at many business schools, M.B.A. graduates are choosing “talent tracks,”
performance fields, and entrepreneurial ventures over management positions in large
organizations, having witnessed the mass exodus of many managers in merged and
downsized companies.

We live in a talent economy. Today’s economy is “ideacentric” and talent driven. Good ideas
give birth to good products. Innovative ideas are driving the economy, creating wealth, and
making people rich. More important, some bold ideas are changing the world for the better.

Providing a climate where people feel free and motivated to cultivate and implement
constructive ideas is the challenge of talented leaders. Those who succeed in selling good
ideas to others win financially, gain power, and assume a leadership role. Indeed, the only
sustainable form of leadership is thought leadership—generating innovative ideas and making
market adjustments faster than the competition. Even though the bubble of instant “dot-com”
billionaires has burst, we have all been struck by the blinding light of the lasting truth: We
live in the age of ideas, and the talented person who generates, implements, and successfully
markets those innovative ideas wins exponentially more money, visibility, and credibility.

What every manager wants from a Talent is value-added contribution. But few managers
know how to achieve this aim. To explain how to achieve this aim, I present in this chapter
the Talent value chain.

Talent Breeds Innovation

Every successful innovation starts with imagination and knowledge.
The imagination and knowledge of talented people breed innovation. Places of innovation are
where all talented people want to work—and imagination and knowledge pave the way.

The great scientist Albert Einstein said, “Imagination is more powerful than knowledge.”
Many of Einstein’s theories in his later life are based on his own imagination. He never wrote
“proof” of those theories. Scientists are still trying to prove some of them.

Knowledge can be acquired through reading, learning, and doing. But imagination must be
cultivated and applied by each individual Talent. Every innovation starts in someone’s
imagination.

Walt Disney exercised his imagination in creating a fantasy land for kids regardless of
cultural or language differences. If people come to Disneyland from Vietnam, South Africa,
or India, without speaking any English, these people still enjoy Disneyland. By the end of the
day their kids are excited and thankful for so much pleasure. There are no cultural boundaries
or language barriers. That is the phenomenal power of the imagination.

Henry Ford mixed imagination with knowledge. He believed that one day every American
family would own a car. And he had this belief when there were no paved highways.

Bill Gates, similarly, believed that every American family would want and need a personal
computer. “Computers will do micro-surgery within the next 20 years,” he predicts. If
someone cannot imagine this in the first place, how is it going to happen?

Michael Dell can boast that only one company in the world increased its earnings and
revenues at about 80 percent during its first eight years and at 55 percent per year for the next
six years—and that was his company, Dell Computer Corporation. He achieved this by
avoiding “traditional business thinking” and dealing directly with customers.

We are entering the age of excellence, an age with no geographic boundaries. In this age,
every individual, organization, product, and service faces tremendous competition. To
survive and grow, each individual and organization must keep improving. Mediocre work
will not stand the test of time. Mediocre people, products, and organizations will suffer
demise sooner or later. Only high-quality products, services, and strategies will guarantee
survival and success. Where there is tremendous competition, you need to do something
better and different.

CEO Michael Dell notes: “We surround ourselves with the best talent we can find and
structure our business for success, even to the point of dividing up people’s jobs. This has
now become part of our culture. The first time we did it, some people said, ’You’re cutting
my job in half.’ Six months later, because of growth, their job is the same size it was before,
and they say, ’Please cut my job in half again.’ We grow our business by dividing and
conquering different parts of the market, which also helps us acquire new talent.”

Five Links in the Idea-Talent Chain

When we see a good idea from its genesis through to successful implementation, we create a
chain of events. Everybody has a good idea, but few ideas are ever brought to fruition. So,
what chain of events has to happen?

1. Anticipation
Anyone who wants to win in the marketplace must anticipate the next wave and learn how
not only to predict the next wave but also to create the next wave. With the intense
competition we have now, people depend more upon innovative ideas—ideas that anticipate
the next wave, start a trend, or at least ride a wave started by someone else.

For example, Michael Dell reports: “We strive to anticipate key trends in our business to gain
a greater share of a faster-growing market. The Internet is one example. We know that
virtually everybody will be buying computers over the Internet in five years. We want to
dominate that market and have a leadership position in sales of computers through this new
distribution channel. We also look aggressively for add-on businesses. We focus on
clearly connected businesses and services that our customers want, such as peripherals in
software, integration services, and financial services.”

2. Articulation
You may have a great idea, but if you can’t articulate it and express it well to others, it will
never see the light of day. Everyone knows of great products that have failed because the
message was not right.

For example, during the past few years, many entrepreneurs failed because they failed to
articulate their vision and mission to themselves or to others. They seemed to focus more on
having a successful IPO than on building a business. They failed to develop and articulate
their plans for success, and they ruthlessly failed their people.

3. Acceptance
After you come up with an idea, you have to make sure that the people who surround the idea
will accept it and embrace it and cherish it. You may have the best idea, but if the people you
depend on are not cherishing it, it is useless. If everyone in your environment embraces and
cherishes the idea, then you can build a successful organization and win customers’ hearts.

For example, when Jeff Bezos started Amazon.com, he made sure that all his people
cherished the idea of selling books over the Internet for the first time. At the beginning, many
people thought, “I’m not going to buy a book without touching it first.” But millions of
people are now doing it because somebody believed in the idea and led others to accept it and
bring it into reality.

4. Action
Even your best ideas may be obsolete within months, not years. So hurry. Fast action is
required. If you have a good idea, you need to turn that idea into a good product or good
service. You have to take the idea and make something out of it. Taking “action on time”
is an important characteristic of successful entrepreneurs. With the advent of new technology
and the growth of information technology and global competition, to become first you have
to act fast. Speed is a vital factor in today’s success. New products and new strategies emerge
almost daily.

For example, hundreds of dot-com companies around the globe are trying to copy eBay’s
success on the auction business; virtually none is successful. Chrysler’s PT Cruiser and 3M’s
Palm Pilot are still the leaders in their product lines due to “action on time.” Many companies
may try to copy them, but none has had similar success. The most important step that
successful leaders take is “action on time.” It is also the step where most ideas die. Almost
everyone has good ideas, but how many are acted upon? Commitment to fast action is the key
to success.

Proactive actions characterize market leaders. Michael Dell comments: “We’ve learned that
we can’t just follow the other guys. That approach won’t create a lot of value. We try to find
our own way and do things better. We may borrow good ideas from other companies when
we see them, but we’re not held to convention—and we’re not striving to be like other
companies. We’re not trying to remake our company or merge with other firms so that we
can have a different profile. We are building our own path.”

5. Leverage
The fifth link is leverage. Leverage the idea, capture market share, and create wealth. The
team who surrounds the individual Talent must leverage the idea into something much
bigger. Together they enlarge the scope and scale by leveraging the idea through alliances
and other means.

As Michael Dell comments: “We will continue to grow our business. Along with our talented
team of employees, we plan to take the company to its full potential—for our customers,
shareholders, and employees—for years to come.”

Talent drives this chain of events to turn good ideas into reality. The combination of these
five links yields the innovative product. Ideas die anywhere on this chain if there is not
commitment to the idea.

Five Ways to Create Value

As Talent, you can create value in five ways, discussed in the following sections.

Make Sure Your Idea Is Unique, Authentic, and Genuine

Explore the genuineness before you implement the idea. You may have a phenomenal idea,
but you don’t know whether somebody has already done it or not. For example, when
Amazon.com came up with the idea to sell books over the Internet, Barnes & Noble and
Borders thought, “This is a good idea.” So, they started BN.com and Borders.com. They have
had some success but not even close to that of Amazon.
Expose the Idea to the Right People and Involve Those
People Intensely
If you have a phenomenal idea, you have to select and involve the right people intensely in
implementing your idea. You may need financial help to carry the idea off. You may need the
endorsement of key players in the industry, or you may need to gather customers. Regardless,
you want influential people to back your idea and a passionate team to implement it.

Ensure That All Information Is Adequate, Accurate, and

Free Flowing at All Levels
Management should create an atmosphere that ensures that adequate and accurate
information flows freely and fearlessly up, down, and sideways to facilitate the
implementation of ideas. If information is held back, or there is lack of commitment, or
misunderstandings of goals, then the project will fail.

Provide the Right Resources to People Involved

You may have a phenomenal idea, but if you cannot provide the right resources to the right
people, then your idea will never be implemented. Provide the resources to make the product
or service the best it can be. Don’t take shortcuts that sacrifice a passion for excellence in
order to save a few bucks.

Expect Something Unexpected; Many Failures, Surprises,

and Setbacks Will Come, So Learn from These
“To invent something, you need a good imagination and a pile of junk,” said Thomas Edison.
It took Edison thousands of tries to get the electric light bulb to work. He knew that he would
get it if he persevered. The movie Titanic was far behind schedule and incredibly over
budget. If it had flopped at the box office, Viacom would have been headed for disaster. But
Viacom managed to do it right; the rest is history.

The IDEA Value Cycle

On a personal level, gaining self-knowledge and self-confidence is vital to creating value.
The “IDEA value cycle” can be spelled out as follows.

I—Invest in Yourself
Determination must be the first impulse toward becoming successful. Before you can find
anything, you must find yourself. Soar on your strengths and contain your weaknesses until
you can transform them into new strengths. Seek perfection—zero defects—in the product or
process by fostering a zero defect philosophy in your people. Invest in them and help them to
invest in themselves to gain the self-knowledge and self-confidence needed to help you win.
Without investing wisely and regularly in Talent, you can’t have great returns.
D—Different Thinking
In the future, there will be tremendous competition for everything, and the only way you can
compete is to do a different thing or do a common thing differently. The strong comeback of
Apple Computer Company is mostly credited to its founder, Steve Jobs, who characterizes
himself as well as his organization with a simple motto: “Think Different.” None of the other
computer manufacturers had ever thought about using multicolored plastic bodies for
personal computers before Jobs’s iMac. Its success is not necessarily due to the product
innovation or better performance, but rather to the “think different” strategy. Using the same
strategy, the United Kingdom’s most admirable entrepreneur, Anita Roddick, built her
cosmetics empire, The Body Shop. Roddick’s bold declaration: “Small chest, flabby thighs,
large hips, thick lips, BIG DEAL—love your body.” Different thinking creates value for the
organization and society. Cultivation of mind produces different thinking.

E—Emotional Commitment
Commitment with emotion is the key to any success. In India it is called sadhana. When the
famous sitarist Ravi Shankar was learning sitar from his guru, he didn’t leave his room for
many days until he learned the basics. He devoted all his time to sitar. That takes emotional
commitment. Throughout history, you see the greatest successes coming from those who
exhibited undying commitment. Michael Dell, Bill Gates, and Anita Roddick are emotionally
committed to their endeavors. Their emotional commitment has helped them succeed. They
all love their work. They have their own mission and commitment. Rather than jumping into
the dot-com frenzy, they focused on their own beliefs. They want to create organizations that
will dominate the economic landscape. They are passionate about making a contribution to
society and creating a business culture of enlightenment. They want to create and deliver real
value to their customers and shareholders. They have a “love it or leave it” philosophy. They
don’t do things only because they want to hit revenue numbers; rather, they “just do it”
because they have emotional commitment. Michael Dell had a dream to beat IBM while IBM
was the giant in the computer market. He succeeded by making the dream come true through
his own emotional commitment.

The success of General Electric (GE ) is largely credited to retired CEO Jack Welch’s
leadership in creating an “emotional bond” with employees. GE’s Six Sigma initiative is not
just a CEO-driven quality initiative. It is a management philosophy from top to bottom.
Everyone is learning the same language of Six Sigma’s revolutionary five-step process:
define, measure, analyze, improve, and control (DMAIC ). This philosophy creates an
emotional bond among employees. And the results show it: GE reported record results; 2000
earning per share $1.27, up 19 percent; 2000 revenues grew 16 percent to $130 billion;
earnings up 19 percent to $12.7 billion. Welch reported: “GE’s double-digit increases in 2000
demonstrate the benefits of the company’s emphasis on globalization, growth in services, Six
Sigma quality, and e-Business.”

Emotional commitment makes the difference between workers and fighters. Workers are
typical 8-to-5 performers; fighters are reaching for excellence. They want to be winners in
everything they do, whereas workers may not have that winning mentality. Workers are
contractually obligated to do their jobs; fighters are mentally obligated. Fighters are risk
takers, whereas workers are risk adverse. Above all, fighters are always emotionally
committed.
Most workers don’t have a winning mentality because they don’t have a sense of ownership.
If you own something, then you don’t want to lose it. Profit sharing, reward, recognition, and
bonuses are key ingredients to seed ownership within workers. In GE’s Six Sigma initiative,
“black belts” receive rewards for completing projects successfully and saving GE’s bottom
line. Contrast this level of commitment with that of many failed dot-coms whose owners
admitted to starting a business just to go public or to be bought out.

A—Action
The most important thing that successful entrepreneurs do is take “action on time,” as
mentioned earlier. The attitude of “Just do it”—the slogan of Nike’s founder and chairman,
Phil Knight—is necessary for any success. If you have a bright idea, you must act on it;
otherwise, someone else will eat your lunch. If you are not an implementer, find a partner
who is.

Michael Dell notes: “A lot of favorable economics occur when you take time out of the
process. Dell’s model has about eight days of inventory. One competitor has 81 days of
inventory and 40 more days of inventory in their distribution channel—16 weeks more than
our eight days. A competitor with that level of inventory can’t compete with Dell and make
any money doing it. As a result, our business is growing fast, and our profitability exceeds
that of all of our major competitors combined.”

The action at Dell is centered on customers, as Michael Dell reports:

We maintain an intense focus on the customer, even as we grow. Today, Dell is still ranked
number one in customer satisfaction surveys. Our account teams work face-to-face with all of
our large customers. We work with our suppliers to deliver materials on a pull basis. Instead
of waiting to build a machine until we have all the materials in the warehouse, and then
guessing what people will buy, we focus on how fast the inventory is moving. If we can
shorten that time, not only will we save our customers a lot of money, but also they’ll get a
superior product that meets their precise requirements.

The next frontier of competition is in the area of customer service quality. We’re constantly
looking for breakthroughs, such as our direct business model, that change the dynamics of
the game. Finding a new way to deliver a better customer experience and more value at less
cost is a good strategy.

By following the Talent value chain, you, too, can deliver a better experience for employees,
customers, and all other stakeholders.

Although Dell admits making mistakes, we learned from them. We’ve developed overly
ambitious products that tried to do everything for everybody—without a focus, they were
bound to fail. The answer is not having a brilliant conception of all the best ideas before you
start, but rather learning from your mistakes and not repeating them—and making sure that
those lessons are passed along. As Dell states:

“There is such a thing as excessive growth that is not only too fast but dangerous. We grew
in one year from $890 million in sales to $2.1 billion in sales. It was exciting, but one year
later we hit the wall. We had to learn how to understand the profitability of different parts of
our business, where our business was succeeding and where it wasn’t, and how to anticipate
and build an infrastructure to support growth.

When we had to focus on our best opportunities, we adopted the idea that return on invested
capital was a great way to measure different parts of our business. If the cost of capital is
about 15 percent and a business is earning 20 percent return on invested capital, it is
creating value for shareholders.

By segmenting our business, we found the path to grow into an organization that has many
different businesses. We have a business selling to large customers, to global customers, to
the consumer. And these businesses have different characteristics. You separate those, and
you create management opportunities. This approach allows us not only to aggressively
bring Talent into the company and grow Talent, but also to get very finely focused on the
unique needs of specialized customers and achieve high returns on invested capital.”

1.6 Elements of talent friendly management:

The Elements of a Talent-Friendly Organization

Talents thrive in organizations that help them consistently deliver offerings
that customers purchase in preference to competitive offerings while
returning exceptional value to owners and other shareholders.

Vision is what the company wants to be at a given date in the future. What
business does it want to be in? How big does it want to be? How does it want
to behave politically and socially? What contribution to society does it wish
to make? What culture does it hope to cultivate?

Mission is the purpose of the company—how it intends to achieve its vision.

Strategic intent is the actions and behaviors needed to achieve the vision.

Priorities are set and adjusted periodically to keep the company on course,
moving toward the vision. Priorities, for example, might include customer
delight and loyalty, employee delight and loyalty, market share leadership,
social and environmental responsibility, outstanding community citizenship,
sizzling revenue and profit growth, and astonishing return on assets.

Financial priorities are measures of how well people do their jobs and the
outcomes of other priorities. Tactical, short-term actions to cut costs and
increase sales tend to slow rather than accelerate long-term improvement
and growth toward the company’s vision and strategic intent. They are
deviations, backward steps from the strategic intent—often made necessary
by wrong forecasts or wrong actions to adjust to the forecasts.

All priorities should be measurable and quantified. Some priorities differ

from the financial priorities in that they are actionable in strategic objectives
and tactical adjustments. A company wins by having the best Talent pursuing
noble objectives focused on winning at the corporate level, not at the
departmental or personal level. The challenge is simply to do whatever is
necessary to deliver the best products and services to customers.

Priorities should be worded with a style. Boring priorities elicit boring

responses. Strive to put life into the language of business. Bring to mind
excitement, commitment, and an attitude of winning. One corporation
changed its job titles from words such as “vice president, distribution” to
more whimsical titles such as “vice president in charge of getting stuff to
customers.”

Lighten up, have fun, be creative, foster innovation in everything you do.

With the vision, mission, strategic intent, and priorities in place, the
management team can establish a system capable of helping the team
achieve the current year’s priorities.

Treat Your Best Talents Like You Treat Your Best Customers
As a member of a management team, you want your Talents to buy what you
are offering. As with customers of your products and services, if your
offerings don’t meet the wants and needs of your Talents, they will seek
alternatives. And like customers, after Talents have left you, they seldom
return.

Behave Like a Supplier

As a member of a management team, you want to offer what your talented
people want and need. You want to perform like world-class suppliers of the
world’s best place to work. Treating all employees like customers has many
positive effects. Developing a customer-oriented approach to employees
causes the management team members to reevaluate their own values,
attitudes, and behavior. Striving to meet the challenge of attracting and
keeping Talents sends a clear message that the organization cares about all
its employees.
Regarding bosses as suppliers and talented employees as customers runs
counter to traditional management models, but in the economy of
intellectual assets, Talents carry a brand under which they offer their
services. Management exchanges monies and benefits for their services. So,
Talents are suppliers of potential intellectual assets and also customers. In
exchange for committing their working lives to an enterprise, they expect a
fair return, usually in the form of meaning and compensation. Role
interchanges between customers and suppliers are common. Both parties
exchange goods they possessed for goods they need.

Develop Imaginative Understanding of the Customer Requirements of

Talents
Tools and methods for developing customer requirements are well known
within marketing departments. So, seek their help in developing strategies
for meeting the wants and needs of customer Talents.

Effective methods for assessing the wants and needs of Talents include
surveys, interviews, and focus groups. Substantial preparation and planning
are required to conduct these activities. It is best to conduct all three because
different information is derived from each. A good sequence is:

focus groups

interviews

focus groups

interviews

survey

Focus groups and interviews should contain a mix of people who have and
have not participated in interviews and focus groups. The questions and the
style of interactions are revised after each cycle to reflect knowledge gained
from the previous cycles. The survey should go to the entire employee
population. Don’t forget the managers. They are also employees.

To ameliorate employee fears, use an outside agency. Experienced

professionals should conduct the interviews and focus groups and provide
feedback to the management team without attribution to individuals. Take
special precautions to ensure that employees are confident that their input
can’t be traced to them.

The survey questions also need to be prepared by talented professionals.

Survey questions cannot be ambiguous because there is no face-to-face
interchange. In addition, surveys are primarily useful for statistical
validations of information derived through face-to-face dialog with
customers. Only professionals in the business of crafting surveys know the
details of avoiding the pitfalls and getting representative responses.

Finally, don’t let the process degenerate into a survey about how happy or
unhappy employees are. What you seek are the characteristics of an
organization that outstanding Talents want to join for life.

What Do Talents Want and Need from Your Organization?

If you already know the answer to this question, then your organization must
be brimming with Talents. If you enjoy a market leadership position, you
have a strong foundation from which you can build faster than your
competitors. If, however, you are having difficulty attracting and keeping
Talents, perhaps it is useful to review the wants and needs expressed by
Talents from other organizations.

People factors dominate. Talents consistently cite three needs above all
others. The first is coworkers with whom they can develop a mutual respect
and trust, learn from, bang around ideas with, and collaborate with; and
bosses with whom they can develop a mutual respect and trust, learn from,
bang around ideas with, and collaborate with.

The second most-cited need is freedom from micromanagement. Few people

enjoy being overly managed. Talents will not tolerate micromanagement:
bosses constantly looking over their shoulder and providing unsolicited “how
to” advice. Talents want and need—and often demand—freedom to work,
freedom to make mistakes, freedom to learn, freedom to innovate, and
freedom to pursue the joy of work.

A third need is freedom from fear. Talents shy away from organizations that
exhibit even tiny amounts of fear. Fear is a strong negative attribute, and it
instantly repels Talent.
Other needs include freedom to pursue ideas and passions; a strong culture
of values like honesty, trust, respect, fairness, love, kindness, and
compassion; freedom to participate in outside activities such as professional
societies or universities to stay current and continue to learn; pay for
performance; competitive compensation and in some cases opportunities for
large awards for large contributions; and a dynamic, changing organization
with a winning attitude.

Talent Satisfaction Measurement System

You need to measure Talent satisfaction with your management system just
as you would measure customer satisfaction with your products and services.
If you call your external system the “Customer Satisfaction Measurement
System” (CSMS), then a good name for your internal system might be the
“Talent Satisfaction Measurement System” (TSMS). You can measure the
effectiveness of these systems by creating a very simple survey for your
employees. Following is a template for a TSMS survey. Of course, you can
modify this template to suit your needs. The employee should respond to
each category on the right.

 
Coworkers

Boss

Company

Are real Talents

     
Always ready to help

     
Enthusiastic teachers

     
Intense, continuous learners

     
Intense listeners for understanding
     
Supportive

     
Innovative

     
Kind and compassionate

     
Honest

     
Earnest

     
Trustworthy, dependable

     
Respectful

     
Care about society-environment

     
Care about our company

     
Care about our customers

     
Care about their coworkers

     
Care about their boss

     
Care about peers-subordinates

     
Care about their family

     
Exude enthusiasm

     
Exude a winning attitude

     
Exude a passion for excellence

     
Foster rapid change

     
Listen more than talk

     
Reliably get things done

     
Have outstanding interpersonal skills
  Succession management process 

Textual version

STEP 1. Identify Key Areas and Positions

Key areas and positions are those that are critical to the organization's operational
activities and strategic objectives.

 Identify which positions, if left vacant, would make it very difficult to achieve
current and future business goals
 Identify which positions, if left vacant, would be detrimental to the health,
safety, or security of the Canadian public
STEP 2. Identify Capabilities for Key Areas and Positions
To establish selection criteria, focus employee development efforts, and set
performance expectations, you need to determine the capabilities required for the
key areas and positions identified in Step 1.

 Identify the relevant knowledge, skills (including language), abilities, and

competencies needed to achievebusiness goals
 Use the Key Leadership Competencies profile
 Inform employees about key areas and positions and required capabilities

STEP 3. Identify Interested Employees and Assess Them

Against Capabilities
Determine who is interested in and has the potential to fill key areas and positions.

 Discuss career plans and interests with employees

 Identify the key areas and positions that are vulnerable and the candidates
who are ready to advance or whose skills and competencies could be
developed within the required time frame
 Ensure that a sufficient number of bilingual candidates and members of
designated groups are in feeder groups for key areas and positions

STEP 4. Develop and Implement Succession and

Knowledge Transfer Plans
Incorporate strategies for learning, training, development, and the transfer of
corporate knowledge into your succession planning and management.

 Define the learning, training, and development experiences that your

organization requires for leadership positions and other key areas and
positions
 Link employees' learning plans to the knowledge, skills (including language),
and abilities required for current and future roles
 Discuss with employees how they can pass on their corporate knowledge

STEP 5. Evaluate Effectiveness

Evaluate and monitor your succession planning and management efforts to ensure
the following:

 Succession plans for all key areas and positions are developed;
 Key positions are filled quickly;
 New employees in key positions perform effectively; and
 Members of designated groups are adequately represented in feeder groups
for key areas and positions
When Developing Your Functional Skills you take action to improve your job, get
others to buy into your ideas, as well as participate in activities that elevate your own
exposure within your organization or field. 
 
Some actions you can take to develop Functional Skills…
 Create tools to proactively communicate your information: share goals and results
with others.
 Make an effort to teach others: explain why certain things are important to you and
the company; helping others to understand your role.
 Listen to feedback: seek out feedback from those you work with (your boss, other
departments, your employees and your customers). Understand the needs they have
when working with you and identify what you could do better to support them.
 Participate in continuous education, seminars, etc.… to update your skills.
 
When Developing Your Cross Functional Skills you take action to study the
functional skills of other jobs or professions in order to develop a more well rounded view of
the business. It is not enough to look at the people you already interact with. Instead, you
must learn about ALL business functions. Every aspect of business relates to your job. By
developing your skills cross-functionally, you will be able to identify what key professional
relationships exist, and how to improve upon them.
 
Some actions you can take to develop Cross Functional Skills…
 Learn the goals and results of other departments or other levels in your
company’s hierarchy.
 Learn what is important to other departments and individuals in your
company (their needs). Understand different roles and the impact they have on the
business.
 Establish a working understanding of what each functional area of your business
should be doing and how they should work together.
 
There Are Three Major Benefits to Developing Cross Functional
Skills
1. You will know how to talk with others so that they listen to you. 
 
2. You will understand how to show others that you respect the value they bring and
communicate with them in terms they will be able to understand and act upon.
 
3. Another benefit of cross-functional development pertains to management and
leadership. Nobody has expertise in every field, but leaders are responsible for
managing people within various business roles.  If you are managing others, you
should have a general understanding not only of their responsibilities, but the
expectation they should be setting for themselves. Managers can use cross-functional
skills as a means to set expectations for their employees.
 
4. The value of your personality and ability to get along with others is huge…and should
not be taken for granted. But once you develop cross-functional skills, your value
becomes an expertise that trumps personality. You bring value to your organization
by creating yourself as a central point resource. Very few people understand your
business, how things work, how things get done effectively (this point can’t be
stressed enough).  If you can provide that value to all areas of your company, you will
set yourself up for more responsibility and future promotions.
 
Now, one question that always comes up on this subject is: It is a very valid question. 
 This Photo by Unknown Author is licensed under CC BY-SA

Assignment 2 “How do I get cross-functional knowledge without aggravating

people?”

 What you are trying to do is chronicle process flows, understand the business and try to
integrate what you are doing to become more service oriented. 
 Be honest with people. 
 Explain to others that you want to learn the business. 
 Ask for a formal sit-down with people outside of your area of expertise to review your
understanding of what happens in each department and find out if your views are
accurate-having them fill in the blanks. 

Chapter 7. Talent Development Budget

In this chapter, I explain the importance of establishing a Talent development
budget (TDB) that accounts for the costs of attracting, holding, replacing,
training, and developing Talent. I propose a value-driven cost structure that
measures the quality of work performed against the quantity of work
performed. I recommend having a contingency plan for key Talents.

By preparing a TDB, organizations improve effectiveness and avoid poor

allocation of resources. After an organization sets its goals, it can estimate
how much to spend on acquiring, holding, and developing the Talents to
meet the goals. A shortage of key Talent will lead to severe problems. If
management spends more money in one low-priority area of business, the
whole business suffers. Often Internet startup companies spend lots of
money in advertising, which puts a company into a deep financial hole.
Similarly, organizations cannot bear excessive costs on Talents.

A TDB is not the same as a training and development budget. A training and
development budget is not allocated for attracting and holding Talent or
replacing Talent.

For example, if your CEO quits and goes to a competitor, and you have no
budget to replace that CEO, you suddenly must incur a significant,
unbudgeted expense. If you don’t have the budget, you don’t know what to
do when you suddenly lose a key person. And yet it is foolish not to
anticipate losing key Talent occasionally.

For example, when a Fortune 10 company announced its new CEO after one
of its most successful CEOs retired, three other people in consideration quit
immediately. They assumed that in the next ten to twenty years they might
not have a chance to become the CEO of the same organization. So, they
accepted positions in three different organizations. The company might have
anticipated this, but if it did not have replacement costs budgeted at that
time, it would have had to use unbudgeted funds, which is always awkward
at that level. Even if it promoted internal executives to fill those positions, it
would still incur a heavy replacement cost.

Flawless hiring of key executives is one of the critical factors for success. To
achieve flawless hiring, you must dedicate sufficient time to select the right
people, hire them, and bring them into the organization. You have to invest a
lot of money. You can’t just put an advertisement in Fortune or the Wall
Street Journal and be done.

The CEO needs to be involved in interviewing candidates and talking with

their references. If you are considering hiring me, for example, and I listed
someone as a reference, I would expect you to call my reference and say, “I
have interviewed Mr. Chowdhury. He listed you as a reference. Could you
please spend a few minutes with me about him, or could I meet you in
person to talk about him?” Most senior managers don’t do that because it
costs money.
Senior managers should have access to money in the TDB to recruit Talents
or replace Talents who leave. The cost of attracting and holding Talent and
the cost of replacing Talent are two critical costs beyond training and
development. Typically companies place training and development costs
within human resources; but they should spend more money to attract, hold,
and develop Talent.

High-potential Talent should receive the lion’s share of the Talent

development budget. Suppose seven of us work at a manager level in seven
different divisions. Of the seven, maybe two of us are identified by the
company as very talented people. So, rather than allow each of us $5,000
each for training and development, the organization should spend more
money on the more talented of the seven. Give them growth opportunities.
Make a special case for top performers who are the future of the company.
Of those seven people, if the five other people leave, the organization may
not suffer as much as if the two more talented were to leave. The Talent
development budget can be sufficiently flexible to allow different spending
levels for different people. The resulting disparities may cause the human
resources manager some difficulty because of the apparent inequities. But
that is the nature of attracting and keeping Talent. Talents are free agents.

After a company sets its goals and knows its capability, its management can
prepare a TDB and plan to fund its key resources to meet the goals. For
example, if a company plans to implement a Six Sigma initiative, its
management may set goals to train three thousand employees in two years,
spend $2 million on training and developing key Talent, and save $20 million
on the projects. After the company sets such performance goals,
management then allocates budget money to be spent in that way.

Corporations now prepare production budgets, sales budgets, cash budgets,

and capital budgets. It is very easy for managers to prepare those budgets
because they can easily determine the value of hard assets such as
machinery, buildings, land, and other physical resources. But they cannot so
easily prepare a TDB because the value of Talent is hard to quantify.

Talent can make a significant difference in any business. For example, if you
give the same brush and paints to an ordinary person and to a very talented
painter, you will see the difference in their artwork. Similarly in business,
outstanding Talent can produce outstanding results using the same
resources. To meet their goals, managers should decide if they should bring
in new Talents or train existing Talents. They should calculate the return on
investment in attracting, holding, and training Talent.

A TDB has three parts:

1) The cost of attracting, hiring, and holding Talent

2) The cost of replacing Talent

3) The cost of developing and training Talent

The costs of attracting and hiring include salary, benefits, and recruitment
costs. Holding costs include salary, compensation, and all other benefits
related to retaining Talent. Replacement costs include severance pay and all
other benefits paid to Talents who will be replaced and all other costs
associated with bringing in new Talents to those positions. Development and
training costs include all costs related to training Talent.

The first part of the Talent development budget is the cost of attracting and
holding Talent. A Talent may say, “I am doing this much work” and challenge
you or threaten you, saying, “If you don’t give me this, I will quit today. I
have a much better offer.” If you need that person in your organization, that
is a sudden and unnecessary cost. If you don’t have a budget, how can you
spend the money? Often managers lose some of their best people over a
small amount of money.

Spend money to keep a key Talent. If the Talent is demanding—if somebody

with a high performance rating threatens to leave—management should
spend money to keep that Talent. This “retention bonus” is like a re-signing
bonus. If a Talent has been working with distinction for an organization for
five years and has not been well rewarded for her achievements, she will
look for a better offer. When she receives one, she may use that offer to
negotiate a better deal with her current company. A retention bonus is not a
bribe but more of an incentive to stay.

Employees who ask for more money must present a solid business argument.
If you feel the argument is valid, then use the budget and spend the money,
especially if you cannot afford to lose that Talent right now.
Calculating the true value of a Talent is not easy. Management should decide
the value of a Talent based upon performance, success, and goodwill. Hiring
and holding good people with the right value are challenging. It is difficult to
determine, for example, the exact value of your company’s president.
Difficult though it may be, the art of determining the value of Talent and
preparing a TDB will be the key to success.

Value-Driven Cost Structure

You can determine the acquisition and replacement cost of Talent using a
value-driven cost structure. The cost of Talent is a variable cost because
Talent cost always changes. For example, the quality of work performed is
more important than the quantity of work performed.

When Talents are seen as a fixed cost, they will leave. Talents should be seen
as a variable cost. Most year-end bonuses depend on how many problems
you solve temporarily, but talented people who create long-term value
should be rewarded more than those who create short-term value. Most
organizations give a big bonus to the firefighters. Suppose I am a firefighter,
and you are a fire preventer. You are trying to design the product in such a
way that the defect would not exist in the first place. Both of us report to the
same boss, and he comes to me saying “This is a problem. Can you please
solve it within six months?” I solve the problem. You say, “I can’t solve this
problem in six months. I need nine months to a year.” But when you solve
the problem, that defect will never come back because you will solve it by
eliminating the defects from the root. In most cases, our boss will reward me
instead of you. Your reward should be five times more than my reward. As it
is, there is no reward for you, even though you are the true Talent.

The cost of Talent is highly variable. Organizations should pay their people
based on a performance measurement unit, the evaluation of performance
being the key element for determining salary. Performance should be based
upon the quality and quantity of work. Often, managers analyze short-term
operating performance but don’t assess long-term value, and so they don’t
know how much to spend to bring in talented people. Value here means the
price you pay for Talent relative to returns on your Talent investment.
Because there is no definitive market value for Talent, it is hard to hold good
people with the right value (price tag).

Performance measurement varies for different activities. For example, you

cannot use the same measurement or “metrics” in design engineering as you
use in sales and marketing. In the design and engineering department,
performance is measured against optimization of design, defects rate,
customer’s preference, and satisfaction. In the sales and marketing
department, performance is measured against percent of sales volume
increase against cost of sales.

Determining the acquisition and replacement cost of Talent and the total
value of Talent is an art, not a science. It’s never easy to determine the value
of the people in an organization. When an organization wants to acquire new
Talents, management should estimate how much it should spend to acquire
those Talents by calculating the value of those Talents from past success and
any goodwill created by the Talents. Organizations should measure the
performance of their Talents. Based upon the performance and past success
and goodwill, management should put a price tag on Talents. If managers
want to acquire new Talents who don’t have any experience or past success,
they should implement a flexible, performance-based salary structure.

Contingency Plan for Talents

Hiring talented people is costly; in fact, the hiring process itself is costly and
time consuming. There is a time gap between losing and hiring Talent.
Opportunity loss is large for an organization. As the gap becomes bigger, loss
becomes bigger. An organization’s goal should be to minimize this gap.

Managers can minimize losses that occur during this time gap by having a
standby team, making a proper contingency plan, and accelerating the hiring
process. If you don’t have a contingency plan, you will lose much time and
money. The time gap between when you lose a person and when you hire a
person will widen. It might widen to even three or four months. This gap
represents a high opportunity cost, a huge opportunity loss. A contingency
plan can reduce the damage from a loss of a key Talent. Once a friend called
to tell me his number one man in Japan had just quit. My friend had a
meeting with a client, and the employee who just quit had managed that
client’s account. “We are trying to expand our consulting service within this
client, and, now, our lead guy is gone. Can you assist me in any way?” Luckily,
I found somebody from our office to support my friend. If he had had a
contingency plan, he would not have been so desperate. He would have just
sent another person he was developing in the event that such a situation
arose.
Management has to be ready for Talent shifts by having an alternative plan
for key Talent. If you lose key Talent, you need to know what immediate
actions you can take. If you have an alternative plan, you can minimize the
impact of losing key Talent dramatically in terms of both time and cost.

In preparing a contingency plan, management should first identify its key

Talents in each area. Then management should identify the next-level
coworkers of those Talents. Encourage key Talents to share their knowledge
and strategies with coworkers by facilitating learning. Involve next-level
Talents in some critical projects to develop their strengths. Each organization
should have a contingency plan so that if it loses people in key positions,
others can step in immediately until the organization finds new Talent for
those positions or those positions can be run without bringing in new
Talents.

Well-conceived contingency plans will take care of most unanticipated

staffing problems. How much money would a contingency plan save a large
company like General Electric or Ford? It could save them millions of dollars.
After one manager quit one of the leading U.S. automaker’s profitable
division, it suffered badly.

The Power of Developing Talent

When John Martin, CEO of Taco Bell, applied the power of developing
people, his company grew exponentially. He notes:

Every business is faced with a mandate of reducing costs while improving

service. To become more service oriented and competitive, you need a
workplace full of people who are empowered, self-sufficient, and highly
motivated. Where can you find a work force like this? The answer is that you
don’t find it—you build it by providing your people with the tools, training,
environment, and freedom they need to take charge. You build it by trusting
that people have a strong desire to succeed. Why don’t more companies do
this? Fear. I know firsthand what this fear feels like. At Taco Bell, we spent
years doing everything possible to keep our workers “under control,” which
resulted in high turnover, low morale, and slow growth. Fortunately, we
recognized that our company would only go as far as our people would take
us.

Martin recalls that in the 1980s, Taco Bell was in trouble. The company had
experienced several years of negative sales growth. The stores were dark,
menus limited, and advertising flat. The industry joke was that Taco Bell was
such a well-kept secret that most people thought it was a Mexican phone
company. “When my management team came on board, we began a change,
starting with the way we listened to and responded to our employees and
customers. We asked them what they wanted, we listened, and we realized
that the products, systems, and prices that may have served us well in the
past wouldn’t satisfy our customers in the future. Following extensive market
research, we implemented the first phase of our value program and turned
our business upside-down to give our customers better quality, better service
and greater convenience—and all at a lower price.”

With the help of new technology, Taco Bell moved much of the slicing, dicing,
and cooking that took place in the back of its restaurants to consolidated
sites to allow employees to focus instead on final product assembly and
service. Martin reports:

These initiatives helped ensure food quality, order accuracy, speed of service,
enhanced safety, and improved quality of life for our people. The key to our
success is the empowerment we have given to our people. Our
empowerment philosophy is based on the premise that to change what
people believe they can do, you must first change their experience. We felt
that our people could do far more than our industry gave them credit for. If
we were serious about reaching our goals, we could either build a work force
of unmanageable proportions, or we could create an environment that
encouraged self-sufficiency and empowerment. We chose the latter. We
committed ourselves to leveraging the talent of our people, and the more
responsibility we gave them, the more they wanted. At every level, our
people exceeded our expectations. They were turned on by the opportunities
we presented and inspired by the challenges.

We are striving to break down the functional silos that limit what our people
have been told they can do. Today we are seeing more initiatives coming
from the field. By empowering our people, we have sent the message that
everything within our business is fair game.

We are creating a rich pool of highly-confident, self-sufficient, empowered

individuals. I urge you to instill an entrepreneurial spirit within your
organization. And when you do, you’ll discover a tremendous new world of
performance, prosperity, and personal reward.