Don’t let your company stumble and stall

Talent management needs to be at the heart of every meaningful strategic dialogue, says CEB’s Tom Monahan


Some 15 years ago, we began amassing a database of corporate performance metrics, examining year-by-year results of every company that had ever been in the Fortune 100 and similar-size companies outside the United States – a surprisingly volatile list. Deep analysis brought to the surface business-critical insights, which were first published in the acclaimed book Stall Points.

We learned that 87 per cent of the largest companies stumble – often irrecoverably. As surprising as the prevalence of “corporate stalls” was – after all, these are massive, well-resourced companies – the data pointed to an even bigger surprise. Nearly 90 per cent of these corporate stumbles were due not to so-called acts of God or remarkably innovative disruptions, but to prosaic management missteps – often with talent gaps at the core.

These talent missteps came in all flavors – succession decisions, management misalignment and missing talent, ranging from animators to salespeople. But nearly every stalled company had a critical talent gap in either the executive suite or a strategic focus area.

Every year we address a broader array of strategic challenges on behalf of 10,000 companies on six continents. Yet no matter the topic, decisions about “people” sit at the centre. In the corporate stories of our time, talent is central to every plot, like a Voldemort versus Harry Potter confrontation in a J.K. Rowling bestseller.

While needing the right people to achieve corporate goals isn’t new, we do see a new level of chief executive and board scrutiny – for three good reasons:

1. The nature of work has fundamentally changed; employees must have new skills and competencies for businesses to thrive. These include the ability to interpret vast new volumes of data (a flow that doubles every 30 months), and the ability to collaborate across units, functions and geographies;

2. Advances in behavioural science, workflow automation, outcome measurement and analytics offer the promise of tools that enable better talent decisions, making it easier for the executive suite to find, develop, organise and retain critical talent; and

3. With the majority of HR heads reporting real pressure from corporate boards on issues as varied as management succession, diversity and critical talent retention, there is increasing, if unsurprising, demand from directors to understand talent strategy.

In the minds of today’s most effective chief executives, corporate strategy is talent strategy. The question “do we have the right people to do this?” already sits at the heart of every meaningful strategic dialogue. As a result, the best organisations are now bringing the same rigour, insight and analytic depth to talent questions as they do to strategy questions.

The productivity gains from finding, hiring, developing and managing the best talent are huge – but, as we learnt from performance data, the risks of failing are even bigger.