It does not matter what strategies are laid out in the boardroom, translating them into action will be only as good or bad as the talent the organization is able to attract, retain and engage
In the past, many organizations have made a conscious choice of buying talent rather than developing it. But the make versus buy option will slowly disappear
The CEO’s role is that of an integrator. The person needs to take a holistic view of the business opportunities and then craft a strategy to make sure the organization wins in the marketplace. That is a tall task. It would involve understanding the product, the supply chain, the marketing and sales function (to be the Chief Marketing Officer), making sure the business is profitable through his understanding of Finance (like a Chief Financial Officer). The regulatory environment has to be understood to make sure that the CEO is not violating the law of the land and that the books are squeaky clean (Chief Risk Officer). The CEO has to understand how technology can be an enabler for the business (Chief Technology Officer).
To deliver all this and more, the CEO needs to understand talent management – how to attract and retain the right people who can deliver the organizational vision (Chief Human Resources Officer). Hiring talent has never been so tough. We are in an age where talent leaves companies faster than they come in. Though they are a lot more agile, they are impatient and ambitious. These qualities may seem bad, but a lot of organizations actually thrive on them.
India has one of the world’s largest and youngest populations. i.e. the proportion of the working age population is likely to rise from around 58 per cent in 2001 to over 64 per cent by 2021, according to a CII-Deloitte GenNext Workforce Study, 2013. Soon, companies will face the onslaught of managing the aspirations and the concerns of multiple generations. If that is not enough to scare the corporates, here’s more:
Younger workforce: There will be around 63.5 million new entrants to the working age group between 2011 and 2016. The bulk of this increase is likely to take place in the relatively younger age group of 20-35. The CEO will also have to incorporate new-age practices in order to keep up with the youth. Some of the CEOs routinely leverage the younger employees who are tech-savvy to keep themselves abreast with the latest in technology. The younger employee is a reverse mentor to the CEO. Technology is intricately woven into the fabric of the business that it is hard to succeed without understanding technology. Technology is a great leveler. The CEO is no exception.
Slow Growth: A Corporate Executive Board research indicates that 80 per cent of the global GDP growth through 2030 will come from Asia. In the same breath, the research tells us that the cost of hiring in Asia is three times more than in Europe. Those who are hired expect to get promoted 30 per cent faster than global peers, a region that has 25 per cent more low performers than other regions. Even after all that fuss, only 22 per cent show any intent to stay. This comes at a time when growth will come from deep insights about consumers and markets will be created based on innovations. This needs a different approach to managing talent and people.
A Broken System: The education system also seems to be lagging behind what the New World needs. It is no surprise that employability related surveys are telling us that the number of employable graduates, engineers and management students is less than one out of three at best.
A New Workforce: It does not matter what strategies are laid out in the boardroom, translating them into action will be only as good or bad as the talent the organization is able to attract, retain and engage. There is a new generation in the workplace that has very little in common with the older workers. They are a lot less employable, much more impatient and ambitious. This technology savvy generation is always connected and has access to information in real time. Talent strategies have to take the new normal into account.
Make versus Buy: In the past, many organizations have made a conscious choice of buying talent rather than developing it. This strategy always works when the organization has its talent in place and the odd gap has to be plugged in. It is always faster to hire someone who has the right skill set. But the make versus buy option will slowly disappear. In 1997, McKinsey & Company released a book that introduced a new phrase, “The War For Talent”. That term was born during the dotcom era. The focus was on acquiring talent. That paradigm has gone long since, but our approach to talent has not.
Slow Growth Fast Change: The new business environment is very different from the fast pace of growth that we experienced at the turn of the century. Growth will now be at a slower pace and in an environment where change is fast and constant. That means acquiring talent will not solve the problem anyway. No matter who is hired, the firm will have to invest in growing their capabilities. It will not be about training people, it will be about learning agility. When the environment is stable, training is good enough. In a rapidly changing backdrop, the talent management process has to be able to identify who has learning agility. For the first time, organizations will have to learn how to work with skilled employees who are globally dispersed but have to be brought together for projects.
Talented freelancers will have to be managed differently from tenured employees. The leaders have to create an employer brand that is attractive enough for such people. Being able to get people ready to take advantage of short windows of opportunity will need a different approach to development.
Leaders will have to get measured not only by what they can deliver themselves, but by their ability to attract, grow and nurture talent. They will need to learn how to communicate digitally and through social media. Today, we laugh indulgently at senior leaders who are poor mentors or who do not understand social media. That is a mindset of the nineties. We have to stop believing that talent is a make versus buy decision. We do not have that luxury anymore.
The job of the CEO is to be an integrator of all the functions. This will probably be the most important one he will need to learn – how to be the Chief Talent Officer.