Deciding who is a talent

APMM) that it hampers our ability to understand how talent management can lead to inter-organisational value creation. The labels, terminology and possibilities associated with talent management are closely associated with intra-organisational value creation, and replacing the associations and the taken-for-granted may require new labels.

284

for example, one may be a talent in relation to a customer. This point will be discussed later in this chapter, which shows that determining who is particularly value to the inside of the organisation is not necessarily aligned with who is valuable to the outside of the organisation.

Decisions made about who is a talent, and therefore warrants increased investments of some sort, are mainly based on who creates value for the inside of the organisation, rather than who creates value from the outside in, for example the customer-facing roles. As it has been discussed, the perceptions and assumptions about where talent management can create value are highly influenced by history. It is, consequently, very difficult to go beyond value creation outside the traditional sphere of the formal organisation and to view value creation in an outside in perspective, for example, value to customers or in the intersection of Damco and its customers. Value is typically determined on the inside of the organisation and according to internal relevance criteria in terms of who is a talent and thus particular valuable to the organisation. Basing these decisions on internal criteria implies that talent (value) is primarily defined either as leadership talent or as individuals who are particularly successful in managing their managers and other internal stakeholders.

As we saw in the previous chapter, most talent initiatives target leadership talent, which potentially represents a contrast to the customer focus. As we also have seen, history emphasises the view of talent as leadership talent, as do talent processes, and this view is also largely reflected in conversations with business leaders:

‘… because talent is a person who has not yet reached the ‘full potential’, and is a person you can get out of as a company…in my book a talent is someone who is still capable of taking a bigger job in the Group (Ed. the APMM Group)…’

(Appendix A, Executive 7)

‘... it sends a signal that if I’m part of that group, something good is waiting for me, an expectation of a bigger job, a bigger salary. If you have the right people, energised people, ambitious and so on. I think their performance is pretty hardcore, no matter what. Personally, I don’t think it makes a difference whether I‘m part of an aggressive bonus scheme or not. It’s the thought of the possibility to be promoted and win an even bigger position, moving forward, that’s more than

enough to motivate me – and I think it is for most other people as well. It is the potential that matters.’ (Appendix A, Executive 10)

Above, we see the leaders considering the potential of something bigger, such as a bigger job or a bigger salary, to be the key matter in defining who is a talent.

When discussing talents, the potential is automatically included in the discussions.

For example, they mention an employee who is clearly a high-performer, but who does not have the potential to take on additional responsibility (Appendix A, PSS 1) – and therefore is not defined as a talent. This implies that talent remains leadership talent. Another leader defines talent as someone who can still grow within the organisation: ‘…so there are lots of opportunities for jobs in the organisation, and then we can define them as talent.’ (Appendix A, Executive 9).

This statement implies that if a person is no longer able to move up in the organisation (to bigger jobs), that person cannot, by definition, be a talent. Thus, talent remains to be about leadership potential. In the organisation there is a bias for viewing talent as leadership potential, which has historically been the approach, both at APMM and in theoretical field of talent management (Chapter 4).

In the discussions about people, high-performers, and talents, there is a tendency to focus primarily on leadership (which is what is relevant at the APMM Group level, but not necessarly at a business unit level). It seems much more difficult both to describe and figure out what to do with the employees who do not fit into the ‘leadership potential frame’, for example, supply chain specialists or strong salespeople (Appendix A, PSS 2). Interestingly enough, however, these are often the roles that have the capacity to drive and create value for the customers actively and directly. Despite the difficulties in describing talent outside the framework of leadership potential, and despite the fact that the talent management process rarely addresses talent outside this category, both HR and business leaders recognise talent as more than leadership, and they reflect on the inherent challenges presented by the persistent focus on leadership potential:

‘The nice lady in customer service, who has been here for 10-15 years and knows all our customers. She doesn’t have a problem spending an extra hour, because this is personal. It has something to do with her being a talent, she does not fit the way we define talent.’ (Appendix A, Executive 7)

286

‘He is outstanding with customers; he took ownership of a very unpleasant case, where we were about to lose [Ed. a very substantial amount of money]. We are talking about doing the right things, delivering, and how good this person is commercially; is this a person who can help us attract new customers, retain customers and develop the business we have with existing customers?’ (Appendix A, Executive 9)

’Talent is not just a general management type. Curt is definitely not a general management talent, but he is absolutely a talent within his area of expertise. His knowledge is unique, he does something unique, his method of working is unique, his interest and passion are unique.’ (Appendix A, Executive 10)

These leaders express a view of talent that goes beyond leadership talent. It is about being good or having a unique skill. This skill is not necessarily leadership, but could involve many other types of functions that are of value to the organisation and the customers. Thus, we have seen leaders expressing the view that a talent can be a person who is exceptional with customers, who is a great leader, who delivers, and who offers outstanding customer service. This implies that a in the organisation a double logic is at play between intra-organisational and inter-organisational value creation. An intra-organisational logic applies when talents are seen as those who create (perceived) value for the inside, primarily represented as leadership potential. An inter-organisational logic is also at play, since despite the prevailing perception of talent as leadership, leaders do display an awareness of value creation outside the organisation, which is difficult to ignore completely, for example being excellent with customers. These two perceptions of value creation may represent a tension, since what represents value to the inside might not constitute value to the outside. The dominant perception of value creation is the intra-organisational view, in which value is framed by the traditional shareholder understanding of value, as something that should be controlled and optimised within the boundaries of the organisation. This view is compatible with the rational and closed system logic (Thompson, 2003), as also reflected in the GD Logic. In order to be a talent, the person needs to be defined as a talent by someone, and generally, this is in the hands of management. In other words, internal stakeholders are the ones who evaluate and define what is value and what is not, which is contradictory to value being defined by the beneficiary (Vargo & Lusch, 2008a). Thus, there is a dominant perception of value creation through talent management practices as an intra-oganisational matter.

When the leaders evaluate who is a talent, for example in the PSS process, they seem to feel that the process is somewhat arbitrary, influenced by team dynamics and power aspects. This view is highlighted in the excerpts below:

‘Ahh ... to be frank, it was a bit of a lottery the way we did it, right. In terms of the timing. It was a tap on the shoulder and if you knew someone and could get them in your team. I’m not talking about the PSS process itself but what immediately proceeded it and influenced it.’ (Appendix A, Executive 6)

‘If it was a democratic process, it certainly had a low participation rate.’

(Appendix A, Executive 4)

‘If you get a cue from him, then, eh ... it matters… it’s black or white, nothing in between, and if you’re black, you’re doomed. It’s not that I disagree, but maybe the decision is a bit too rash, it can actually change a man’s life… And at the end of the day, he risks being sacked. It’s a pretty big decision.’ (Appendix A, Executive 5).

The above examples illustrate the perception that the decision about who is a talent, who creates value for the company, is fairly arbitrary and highly characterised by an intra-organisational perception of where value is created. It implies that in order to be a talent, one needs to be excellent at creating value, as value is perceived on the inside of the company, for example, being good a managing upwards. Thus, the decision about who is particularly good at creating value for the organisation is made internally, largely based on internal success criteria and is implicitly assumed to lead to value for the customer – if customer value is considered at all. As we shall see later in this chapter, that is not necessarily the case.

However, the understanding and underlying assumptions of value creation is gradually being expanded. Legitimacy for talent decisions are increasingly found also on the outside of the organisation, for example by giving the customer a say in who is a talent (what is value), as we saw in the CPPS in Chapter 6, or by referring to external success criteria in internal discussions on talent decisions, e.g.

288

by determining who is a talent based of who creates value for the customer. An example of this was when the PSS was introduced in 2009. The talent process was highly influenced by team dynamics and power games, which played a vital role in determining who came out as a talent (Appendix A, PSS 1). At this point in time, no reference was made to the outside, and no one was evaluated/decided as a talent because he or she created value for the outside of the organisation, or if even he/she was good with customers. Two years later, when both the talent process and the leadership structure were more established, the dynamics changed. There was a stronger emphasis on the customer, both in the talent discussions and in the eventual decisions. For example, there was discussion because a person had been moved from one job to another without the customer being notified. The management team predicted that this would be a problem that had to be taken care of. Further, when there was disagreement about the performance of individuals, and thus disagreement about who would be a talent or not, the ability to act and think commercially, to have strong customer relationships and to command credibility within the industry was used as leverage for a particular decision about who was a talent (Appendix A, PSS 2). In this sense, talent decisions increasingly reflect an expansion in understandings of value creation, moving from an intra-organisational to an inter-intra-organisational understanding. This further implies that what is considered valuable to the outside of the organisation suddenly comes to have an impact on internal talent decisions. The ability of a person to connect externally has consequences within the organisation, and vice versa.

It is, nevertheless, interesting that when the customer perspective is included in the talent evaluation and decision-making process, a somewhat different picture emerges, than if the process only is concerned with an intra-organisation perspective. The experience from one of the CPSS illustrates this, and it is clear that there is a difference between what is considered value (talent and key positions) on the inside of Damco versus what is considered valuable on the outside of the organisation, to the customer. An HR professional explains:

‘The customer PSS works across functions, as the customer doesn’t care about region, title or function – they are interested in who creates value for them. And that could be anybody.’ (Appendix A, HR professional 3). The same informant continues later by telling about the CPSS structure and practical implementation:

‘Damco has prioritised the top 30% mission critical positions, in total 22 positions, which the customer was to confirm the prioritization – and the

somewhat unexpected happened, that they choose only 11 positions to be mission critical.’ (Appendix A, HR professional 3).

Above, an HR professional describes the difference between the inside and the outside understanding of what is value creating. Unlike Damco’s internal perspective, the customer does not care about, for example, region, function or level. Even more interesting, the customer actually sees value creation as taking place in different positions than Damco does. In a different context, a similar picture emerges in a customer presentation on doing business with Damco:

‘We need flexibility from a service provider in our company – just need the solution, not the problem. Be careful not to run everything so god damn rigid, so it is not flexible: you all want to perform to your managers, put in to high numbers, with all these great people in this company you can do much more, don’t listen to the managers, they do make wrong decision. Don’t go against them, but ask why, does it work, make sure you know.’ (Appendix A, customer presentation 5)

This example illustrates a contrast between internal (as represented by evaluation) and external value (as perceived by the customer, the beneficiary). The customer points out that in his experience, there is too much focus on performing internally (e.g. running things in a ‘rigid and bureaucratic’ manner, in systems that are viewed as valuable by management), rather than performing externally, with a focus on the customer business (e.g. listening to the customer’s needs for flexibility). Linking this customer perspective to a people process, as talent management, inside the organisation, it becomes relevant as if people processes are centred on intra-organisational value creation, they reinforce individuals to focus on intra-organisational value creation. At least if they want to be considered successful and achieve associated benefits. The examples illustrates that what is considered, evaluated and rewarded as valuable internally might differ from what is considered and evaluated as valuable externally. For a company, the only way to realise this may be by actively engaging with the customer about what is valuable to the customer, also when it comes to people decisions.

As we saw in the examples above, talent management rests on certain underlying assumptions about value creation. These assumptions are largely compatible with the GD Logic that assumes organisations as rational and closed systems, in which value is internally found and defined, resources are considered tangible and

28:

possible to optimise through control and measurements (Thompson, 2003; Vargo et al., 2008). As we also saw in the previous chapters, a customer focus naturally implies understandings of value creation that are compatible with a SD Logic that assumes organisations as natural and open system, in which value can be found and created throughout the entire system (Damco, customer etc.), resources are dynamic, infinite and produces effects, and value emerges in-use (Thompson, 2003; Vargo et al., 2008). Therefore, the strong focus on intra-organisational value creation represents a contrast to the intended way of competing in the market by employing a customer focus and achieving a sustained competitive advantage.

This contrast further appears when we explore what is considered valuable on the inside of the organisation, as this might not equal what is considered valuable on the outside. This implies that talent management does have a potential for being a value-adding activity if we rethink where it can create value and includes the inter-organisational perspective.

7.3 Value from a shareholder perspective or value from a