How to Align Your Talent and Business Strategies
A strategic approach to hiring, retaining and deploying talent is increasingly being recognized as the cornerstone of modern business success—though developing and executing a strategy that effectively uses an organization’s people to help it navigate change and evolving goals is easier said than done.
That’s a gap RJ Heckman hopes to fill. His new book, The Talent Manifesto, is designed to provide CHROs and C-suite executives a roadmap for creating a talent strategy and aligning it with the business strategy to maximize success—a process that requires an HR team that is well-versed in data analytics and focused on enhancing the user experience. Heckman highlights best-practice examples of corporations that have disrupted their talent strategies smartly and also introduces the concept of the “Talent Waltz”—the delicate dance he says all organizations need to undertake to align their organizational and talent strategies.
Heckman draws upon his 25 years in talent-management consulting and leadership development, including his experience as a CEO, an HR leader at two Fortune 100 companies and his current work as vice chairman of Korn Ferry. HRE recently spoke with Heckman about The Talent Manifesto and his outlook on the strategic role of HR leaders in organizational success.
A focus of the book is the increasing need to align business and talent strategy. What are some of the factors fueling the importance of this alignment?
Growth is stalled in many companies, and CEOs are really struggling with how to differentiate themselves, [leading them to pursue] business strategies that have become far more specific. They’re evolving and moving more quickly, yet I think they’re struggling with the execution of those strategies—so they’re turning to their teams for help. Teams need to be staffed with employees who have the capabilities that are needed to execute ever-changing strategies, meaning alignment is more important than ever—especially if CEOs are going to be able to deliver the growth in earnings their shareholders expect.
Do you think this is a need C-suite executives are recognizing, or is there a gap there?
I am optimistic. CEOs can’t change the trajectory a business is on until and unless they figure out the talent equation. We are seeing heightened levels of interest in getting that talent equation right, or improving it. The alignment is important, and I think CEOs are seeing that need more and more and really feel the need to partner. [Alignment] is much more about partnering—a CEO/CHRO approach—than a CEO telling his or her staff what is expected and how to execute it. With that humility come a better partnership and stronger outcomes.
You mentioned in the book that HR staffers should understand data analytics but still be able to tell an effective story based on those data. How should HR departments be making that buy-versus-build decision when it comes to either upskilling current departments or adding new talent?
Be very conscious and intentional about the HR department’s charter, and how much is operational—covering compliance and HR operations—and how much is more strategic. After that, it’s really about how the Talent Waltz works. The first step is defining what is needed and what the HR department is expected to deliver—advancing strategy, driving organizational performance, containing costs, driving compliance. The next step is to evaluate talent and carefully diagnose how many of their people have the capabilities to both understand and work well with data and be able to tell that “so what?” story based on the data and their interpretation strategy. What we’re finding is that, when they do those steps, the gaps are pretty significant. The third step in the Talent Waltz is to close those gaps. Where are the [high-potentials] who have the motivation and the cognitive skills to get into the data and the strategy and dig deep? And then, to the extent that there aren’t enough people with those skill sets, we’re finding that HR leaders are importing people from other functions and more quickly closing those gaps.
Do you find most organizations struggle with one particular step of this three-part Talent Waltz?
I think data is where they struggle the most. To frame that, CEOs are increasingly recognizing the criticality of the partnership with HR, and what HR is going to have to do is give back with specific approaches for defining how talent strategy can align with business strategy. Usually, a CEO can tell you what they need, but they don’t speak in specific-enough terms, so the HR leader has to be able to translate from broad edicts around growth, innovation or diversity into much more specific talent requirements. In that way, they’re codifying what the talent strategy must look like in order to support and drive business. When it comes to speed and simplicity, they need to deliver a much higher level of specificity in terms of how to execute. But you can’t walk into a CEO’s office and just make up good data. Organizations are repeatedly making very explicit decisions about people with very low-quality data. It’s not uncommon for organizations to spend about 25 percent of every dollar of their income on people; for labor-intensive businesses, the service sector among them, it’s very common for them to spend 60 percent to 65 percent of every dollar on people. Yet the quality of the data they have on people that goes into their compensation decisions—many spend billions on variable compensation every year—is sorely lacking.
Agility was a focus of the chapter on user experience. Agility has become such a buzzword in HR; do you see any risk in that?
Agility is definitely a buzzword that could be risky when it means chasing a shiny object and dropping what might be working for something new that’s more of a fad or in fashion, or just doing something because another high-tech company did it. For us, agility in the user experience means speed and simplicity. The concept of agility is very specifically measured around change agility, meaning when we’re stuck—when our employees, throughout the lifecycle, are not satisfied with HR and the support being given—can we figure out what to do? Results agility is another piece that’s very specific; if HR is OK operationally but weak strategically, can they figure out what must stop, must start or must continue? Those approaches are different than chasing shiny objects; they’re intentional and purposeful against a strategy, which aligns with the tenets of the book—an HR group must be strategic, data-driven and operate with speed and simplicity.
How different of a book would you have written, say, five years ago?
I was in HR and then I stepped away for 10 years to be the CEO of a business. When I reentered HR, the first thing I did was interview dozens and dozens of CHROs. I was looking for the opportunity to learn about all that had changed in those years and, unfortunately, I didn’t find that much had changed. That was really a concern to me, and why I wrote this book. I did hear from some best-in-class companies that have truly focused on driving change, and that brought about stronger organizational performance, with the things they were doing aligning—strategy, data, speed and simplicity. Five years ago, there were maybe fewer great examples, but I’m afraid the field hasn’t changed [as much] as it should have. I find those folks who are really making the right changes are in the minority.
But I’m very optimistic about the potential HR has. There are so many great stories of success I highlighted in the book. If we can increase the pace of change and adoption rate of these changes, the potential for HR is extraordinary—because the impact that talent makes on the organization, and that HR can help ensure happens, is extraordinary.