“You have the numbers and I have the noise. Together, we can advance the company.” That’s what I told a CFO I had just begun working with while we were riding the elevator up to Mahogany Row on the top floor of a city skyscraper. That got his attention—and the thinking immediately won him over. CEOs must know their talent as well as they know their numbers. People drive the numbers.
When it comes to knowing numbers, CEOs rely on a slew of financial reports and professionals; and it’s a good thing too, since they are accountable to the board, financial institutions and shareholders for hitting the numbers. However when it comes to knowing talent, CEOs often feel like they are grabbing at air. There is a huge risk for CEOs who don’t have accurate and reliable talent data at their fingertips, and inevitably, the consequences show up in the numbers. The cost of not knowing your talent is staggering: a bad hire can cost up to 10 times a new hire’s salary; well-intended employees lacking clear goals and objectives only perform up to 60% of their potential; and poor succession planning can shut a company down.
So, where is the talent data and once it is found, how can talent data be turned into business intelligence?
1. Start with easily accessible information. Rather than brush aside people problems as isolated incidents for HR to handle, recognize that people problems reveal critical information about a breakdown in some aspect of your talent management system. Rigorous and honest analysis of people problems transforms incidental data into relevant business intelligence with which to reshape and enhance the way a company recruits, develops and engages employees.
One CEO felt helpless about a consistent pattern of losing her specialized software developers to the competition. For years, she assumed they left for more money. But when we investigated more closely, the CEO discovered a smoldering tension that caused her top talent to leave. Tensions stemmed from a lack of performance objectives, a fear that good ideas would be credited to the wrong people, and ironically, the history that the best talent has to leave to get ahead. With this intelligence, the CEO made swift improvements.
2. Maintain a list of talent inventory. CEOs review a mountain of reports on a regular basis, including cost per/FTE, bank statements, tax and accounting reports, insurance and benefits policies. The same cannot be said for talent data. And without information and data, trends cannot be identified and the ability to invest more in what’s working or correct a process that is broken is nearly impossible for CEOs.
Talent inventories give CEOs a map of what talent exists and where, and allows them to see and evaluate people across the enterprise. One CEO reported that he knew he should be promoting from within but he didn’t know who to promote or how he would backfill those positions if they were promoted. We conducted a series of talent inventories, brought leaders together, facilitated a focused and measured discussion on each leader’s group of direct reports, plotted and slated talent, and designed a succession map for 1-3 years ahead. The CEO said that this process put him on a path he never thought possible.
3. Spread the responsibility around. Everyone in the company is responsible for talent. Leaders, managers and employees. CEOs must clarify who is responsible for what: Leaders must be able to forecast talent needs and influence hiring, training and promotion decisions. Managers must be able to define performance objectives for the jobs they oversee, and have developed skills to conduct meaningful and productive performance reviews.
Human Resources is responsible for consistent, reliable and predictable talent management processes and standards, compiling talent information and making strategies available for the company to achieve a productive and engaged workforce. Employees are responsible for meeting performance expectations both in terms of productivity and positive attitude.
4. Invest in technology. Talent management software keeps track of an employee’s career with the company. Analyzing data across the employee lifecycle can be used to recruit others more effectively, pinpoint where training would increase productivity, identify future organizational leaders and align rewards to performance.
CEOs need to know that valuable talent data exists in their organization. They must employ strategic talent management processes to transform this talent data into business intelligence. By bringing leaders together, focusing more on the honest conversations than on templates and forms, CEOs are in the competitive position to make sound decisions and execute quickly.