The business case for talent management

Damco’s top 120 leaders discussed the talent challenges and opportunities in a talent management workshop at a leadership conference (Appendix A, Global leadership forum 1). Their perception of talent challenges and opportunities reflects what can be considered the business case for talent management. The objective of the workshop was to assess the business challenges to be addressed by a new talent management approach in Damco, which was to be developed.

Until then, the IMPACT programme had been the only (and very newly established) talent initiative in Damco. The outcome of the workshop is presented below, as a snapshot from a follow-up on the meeting:

252 Source: Appendix A, Strategy document 6

Above we see that the leaders identified three business challenges that require the organisation to focus on talent management. They need talent management to be able to meet aggressive growth targets, to be able to compete, and to generate profit. Beside these three identified business challenges, the leaders identify a people gap in the organisation due to the discontinuation of the traditional MISE programme (also described in section 1.1.1). The leaders point out that they need a talent pipeline, particularly in the emerging markets, in order to meet the growth target, and they identify high turnover as a challenge. It is interesting that the leaders mention these particular business challenges as issues to be addressed by talent management. The three challenges could be addressed by any other management initiative besides talent management, for example performance management, process improvements, IT improvements, cash flow improvements etc. In this sense, the discussion topic of the day (talent management) seems to become the solution to some very broad (and common) business challenges.

Supposedly, growth, competitiveness and the need to generate profit are challenges experienced by most global organisations – most need to grow, compete and generate profit (in whatever market and industry they are in). Thus, the business challenges that talent management is supposed to address become very broadly defined and lack specific indications for practical implementation and relevance. The customer focus, as a way of competing, generating profit and

growing the business, is not explicitly mentioned as a business challenge to be addressed by talent management. However, it is mentioned that being a talent requires being customer-focused, which represents a contrast to previous assumptions (Appendix A, PSS 1).

The most specific challenge that talent management is seen to be able to address is the ‘lack of people pipeline’, which could in fact relate to any business problem.

Most businesses want to ensure a people pipeline. In this sense, the request from business leaders for talent management becomes very broadly defined, in a way that is not specific to Damco’s business agenda. The implications are when managers are asked to identify the business case for talent management, the outcome is very generic, broad and unspecific in relation to what the business needs to deliver. The business case, as articulated by the managers, is largely anchored in a history and a rhetoric that reflects talent management as related to concepts of individual development and individual management. Thus, if HR is to incorporate the customer focus into talent management, HR cannot rely on managers to translate business challenges into talent management practice.

Business managers can identify, prioritise and articulate business challenges;

however, HR needs to translate business challenges, industry dynamics, etc into new ways of understanding and practicing talent management, be able to rethink talent management and thus create business-relevant and value-adding talent initiatives. If the task of translating business challenges into talent practices is taken up by HR, it offers an opportunity for HR not only to optimise programmes and processes, but actually to change the way HR practices contribute to the business. It does however require a very proactive mindset and approach.

Beside the uncertainty and the lack of specificity and direction that the above example illustrates, it also illustrates another important point. There is actually an attempt at and an (emerging) interest in doing things differently within HR. There is an attempt to address and consider business challenges in connection with the efforts to create a new talent approach in Damco. This is important, as it shows an awareness that talent management needs to do more than simply drive individual development (and assuming that improved business outcomes will follow). It needs to drive an organisational agenda and reinforce a strategic agenda. This indicates that the focus on individual development is not necessarily due to any assumption that this is the best or right way to practice talent management. Rather, it seems to be for historic reasons and simply due to a lack of alternative

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understandings and practices, as the concept of individual management is ingrained into the practice of talent management. Thus, both business leaders (Chapter 5) and HR professionals attempt to work in new ways, interact in new ways and develop business and HR in new ways. Nevertheless, it remains challenging to apply a different mindset based on the introduction of the customer focus and the underlying value assumptions and translating it into practical implications. Past forms of rhetoric and mindsets based on value understandings associated with a GD Logic mindset and assuming organisations as closed systems (Thompson, 2003) dominate current practices. For example, as we have seen, when business leaders are asked to consider which business challenges talent management should address, their answers are characterised by a rhetoric in which talent management addresses the historical problem of people resources (growth as a generic term, people pipeline, lack of people resource). HR has an intention of using business challenges as a starting point for talent management, but it remains challenging to translate business changes and input from the business into fundamentally changed talent practices.

The mismatch between intention and reality, and the difficulty in translating one into the other, is found at an HR forum. At the HR forum (Appendix A, Global HR Forum 2), the customer focus is incorporated into the agenda with the intention of setting the scene for the subsequent discussion of a future HR strategy and for a subsequent discussion on talent management initiatives as part of the people strategy. Below an extract from the field notes:

‘A senior leader explains the intention with the people strategy: – it is to bridge business challenges with HR priorities, and the people strategy should align global priorities with regional priorities as well as combine basics with HR and leadership. He continues by pointing out that it is complex to create the link between business challenges and what we [HR] do. A regional HR manager comments on this by saying, ‘How much can we as HR add value?’ For example, we may encourage a culture, but it is difficult; much training is functional training and driven by the function, so we can mostly create the culture. Another continues by pointing out [what HR can do]: for the whole industry there is no such thing as a senior sales person. Looking at CVs across regions, two strong positions within sales and then move on to general management. Then a third person contributes to the discussion about the role of HR and what kind of value HR can add by

saying, ‘I always say, let’s go back to the individual and ask what you want to give back into the job.’ (Appendix A, Global HR Forum 2).

The above excerpt from the discussion is followed by a discussion of the people strategy, which only remotely addresses the customer focus. Rather, the discussion maintains the same rhetoric and focus areas (individuals and pipeline management) that have historically dominated the talent management discourse (section 1.1.1 and Chapter 4). This example is, first of all, another illustration that in HR there is an attempt to work on driving a strategic direction in which the customer focus is essential for business success. Further, it illustrates that there is an attempt to link HR priorities with the outside where business challenges arise, as we also saw earlier in this chapter. Third, it illustrates that it becomes very challenging when the awareness is to be translated into a practical discussion on how the business direction translates into changed ways of practicing HR and talent management. For instance, as expressed in the above example, ‘most training is functional, so we can mostly create a culture’ and in the comment on

‘let’s go back to the individual and ask what you want to give back into the job’.

Both these quotes show that despite the focus on linking HR to the outside and business challenges, the discussions immediately come to focus on concepts of individuals and the traditional reference points within talent management. Thus, the discussion reflects and rests on traditional value assumptions of talent management, which are more transactional and as reflected in the GD Logic.

Fourth, the example illustrates that within HR, the mindset is one of the biggest challenge for rethinking talent management as a driver for an organisational agenda.

HR has traditionally been very strong in people development (under the label of talent management) and process planning (see also section 1.1.1), thus solving the problem of a lack of people resources. When past ways of working and past purposes (what talent management should drive) are questioned by changed value assumptions, it becomes challenging to rethink one’s own practices – despite good intentions. Therefore, reframing both the potential and the problems within talent management remains a challenge, and as we have seen, there seems to be a tension between the intention and the actual practice of talent management. This is also evident in the design purpose of talent management and in the follow-up and measurements of talent management. This will be explored in the following section.

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