“If businesses managed their money as carelessly as they manage their people, most would be bankrupt.”
In fact, The Talent Masters stress that, “Continuous learning is a given for masters of talent” because, “In the fast-changing global marketplace, the half-life of core competencies grows ever shorter.”
Talent is important, the authors point out, because the products that companies sell perish – and people are needed to create new products. This requires institutional learning and the development of the skills and capabilities of people. Without developing people, “All you have are diminishing assets, which are products and solutions, and you have people who are leaving, and the company basically goes down.”
The authors follow up with, “Continuous learning is a given for masters of talent. They emphasize experiential learning, and enhance its value by giving their leaders intellectual stimulation and training on specific topics through in-house or external educational programs. The educational piece helps leaders understand nuances they might not be aware of when they have their heads down doing their jobs.”
None of these observations are new, but the authors did a good job of articulating the need for continuous learning and developing people, albeit with a leadership focus. And while the observations are not new, many companies are still struggling with living up to much as what this book points out, like the need for differentiation versus conformity: “Differentiation breeds meritocracy; sameness (the failure to differentiate people) breeds mediocrity. The latter happens all too often in companies that automatically equate high performance with achieving or exceeding agreed-upon financial goals.”
As you would expect from the title, the Ram Charan and Bill Conaty take issue with the strictly financial management orientation that some leaders gravitate towards, as the last sentence above indicates. In fact, they come right out and state at one point, “…financial people truly don’t understand how to run a business. They can run the numbers, and the numbers will always go straight up, but when things get in trouble, they don’t have anything they can do but fire the CEO.”
They put this problem in context by quoting Joe Rice, a founding partner of CDR (among the oldest private equity firms). “One reason firms have been so slow developing operational capabilities is that almost all of them were started by financial people,” he says. “To get good operating people, you have to be willing to share the economics and the decision process, which is hard to do if the partners are all financial people who’ve been very successful.”
Interestingly enough, this sharing of the economics and the decision process is what the authors point out as critical, particularly for leaders. “Business is a team sport; it isn’t ultimately about individuals. The best decisions don’t come from the smartest person in the room; they come from a group of smart people gathered in the room. Leaders need to know what they don’t know.”
The authors have experience with GE, and naturally brought some of GE’s management into the discussion when it comes to conversation on talent management: “Most companies partition their management systems into discrete areas: 'Today we talk about people, tomorrow we talk about strategy, next week we talk about operations and budgets.' At GE, all are part of a continuous loop.”
In fact, the authors note that GE doesn’t operate the way that most companies do. While it might seem logical “that strategy must come first since it determines structure,” GE actually holds their Session C (annual HR review) before the strategy session. The reasoning is that “Strategy comes from the minds and cognitive makeup of people—their abilities to differentiate what matters, their understanding of trends in the external environment, their risk appetite, and their skill in modifying a strategy in the face of change. A strategy can only succeed when the right people conceive and execute it.”
Part IV of the book is “The Talent Mastery Tool Kit” – provides a great deal of information that is designed to help make the ideas and practices described in the first three parts of the book actionable. As Ram Charan and Bill Conaty note, “The right words are important, but words are not enough. Time and regular attention send stronger signals.”
The toolkit begins by summarizing the Principles of Talent Masters and providing a checklist to help you determine if your organization has the culture of a talent master. A dozen true/false questions are asked, such as:
- Leaders are thoughtful and rigorous in pinpointing people’s specific talents and where those talents would flourish.
- Leaders at every level are vigilant about spotting new talent in the ranks, not just among the people reporting directly to them. They see it as a major part of their job.
- Leaders spend time with leaders at lower organizational levels to see them in action doing their jobs. They are hands-on developers of talent.
Topics such as succession planning and constructive feedback examples are also included in the toolkit, along with some lessons learned (the hard way).
Talent management alone will not make a business successful; there are definitely other factors that drive success. But The Talent Masters did provide a solid perspective on the subject of talent management and the need and advantages to managing talent, along with some great tools to use.