How and Why we Must Differentiate Talent

Consider what goes through the head of your CEO or Senior VP’s most days. “If I could only get more of my people to perform like Joe, we’d be such a more high-performing organization.”

If you interview most top business leaders, you’ll find that they spend an inordinate amount of their time on people issues:  Who is the right person to open that new operating division we’re locating in China?  What can I tell Bill that will help him improve his performance in his key new role?  Is the new senior VP candidate I just interviewed the right person or should I keep looking?  Who are the people in engineering (or sales or manufacturing) we should promote to greater leadership and how do we find these people?  How do we build the next generation of leaders around here?

These types of questions come up whenever I meet with senior business leaders.  And at their essence is a simple question:   I know what high-performance looks like – but how do I create more of them across the organization?

I recently developed a new speech for our 2010 research conference (IMPACT 2010: The Business of Talent®), entitled “New Imperatives for Learning and HR” – and one of the seven imperatives I discussed is the need to “differentiate talent.”  Let me give you a few thoughts on this topic.

Who Differentiates Talent?  All managers do.

In most companies, the problem of finding the “high-performers” doesn’t fall upon the CEO, it falls upon all the managers in the company.   In fact, as one savvy top executive put it to me a few months ago, “your job as a leader is not to hoard top people to make your group succeed, your job is to build as many leaders as you can and then turn them over to the company to be moved into new positions.”  The essence of a high performing manager is his or her ability to figure out what drives high-performance (and then use this information to create more high performers!).

How do you Differentiate?  Who are really the High Performers?

The more difficult question is identifying who these high performers are.   When one team outperforms another (e.g. a sales team), is it because of a single person, the manager, the teamwork they have, or just luck?  How does a manager identify what we may call the “pivotal” talent in the team?  And just because a manager gives one person a great performance appraisal, does that really mean that this person is “the top contributor?”

One way do to this is called “high performer analysis.”  One of the companies we’re working with (I will talk about who this is soon) is a large consumer brand with thousands of stores throughout the US.  This organization looked at store sales across all its geographies and selected the top 40 performing stores.  They then did a detailed analysis of the store managers in these stores and compared them to the store managers in the 40 “average” performing stores.

They looked at age, tenure, experience, personality characteristics, skills, competencies, and a variety of other factors.  What they found was essentially a “heat map” of the specific characteristics which “define” high-performing managers in this particular company.

How do you Create More of these High Performers?

Once this work is completed, the next step is to redesign the employee branding, recruiting, succession, training, and leadership development for these roles.  This redesign will build directly upon the upon the key characteristics of these high-performers.

In this particular case, for example, the client found that one of the attributes of a high-performing managers is a passion for quality.  In this particular business store cleanliness, order, and accuracy have a huge impact on sales.  The managers who are meticulously organized and quality-oriented drove much higher sales.  (This may or may not be true in all businesses, by the way.)

So what does this Mean to HR?

Which gets me back to the original point of this article.  In the “fourth stage of HR” (and I will describe these four stages soon), human resources professionals stop spending so much time worrying about “overall employee wellness” and spend far more time helping the business leaders “find and replicate” high-performance.

Look at it this way.  Businesses spend 3-5% of payroll on HR and training-related activities.   And much of this is dedicated to must-have programs like compensation, benefits, employee communications, and record-keeping.  With the discretionary training and HR dollars we have, shouldn’t we spend most of them on finding and replicating high-performance?  I think so.

This whole topic – that of differentiating, measuring, and replicating high-performance, is part of HR’s next-wave.  While the whole area of integrated talent management has been hugely important over the last five to ten years, this next wave, which I call the “fourth stage of HR,” will be even better.

More to come… I welcome your thoughts and comments…

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  • Great article, and great example with those 40 top performers vs 40 average performers. Any thought on managing also the diversity that might foster strong performance although different working styles?
    http://projectmanager1.blogspot.com/2010/09/managing-people-diversity.html

  • Maurice Stewart

    In order to attract high-performance, isn’t the design of a company’s compensation and indirect benefit program critical? Why then should a company not spend 3-5% of payroll here? How about current employees? Wouldn’t it demotivate them is a company is focussed on looking for high-performance talent externally rather than close “gaps” through training activities?