Successful talent management requires a sustained, three-pronged effort to recruit, engage and retain the best talent available. To succeed, a company needs strong, supportive leaders and a caring, innovative culture. These authors have worked with several of Canada’s top business leaders and they document their experiences – and the best practices for managing talent – in this article.
Competitive advantage and business results depend more than ever on recruiting, engaging and retaining the best talent – people who are highly effective at both leadership and technical skills. But how do leaders make that happen?
In every area of strategy, increasing research shows what is needed, but making theory work has become the biggest challenge. Every organization can read the findings, but can it implement them? The answer, as this article illustrates, is simpler than many believe. It involves creating healthy, innovative cultures and strong, supportive leaders.
A caring, supportive culture
There’s an old truism: People don’t leave companies, they leave bosses. If they’re managed well, challenged and afforded appropriate support, people can overcome obstacles and achieve amazing results. The prospect of such opportunities draws excellent people to companies. If it is not delivered in practice, they won’t engage or stay. Leaders at every level make this difference. They in turn need support from a positive, performance-focussed culture, which companies must establish.
In this article, eight senior experts who walk the talk with effective practices in talent management generously agreed to share their experiences with us. Similarities and differences in execution offer valuable lessons. All emphasize the importance of strong, supportive leadership and caring performance cultures. All are striving for a consistent fit between their chosen tactics and the culture they are working to achieve. All apply, in varying degrees, consistent, scientifically proven approaches to measure success. These measures will be discussed below.
Starting with the end in mind: Hypotheses to test
A recent round up of 10 top global management trends by McKinsey & Company identifies one key to success: “Management will go from art to science.”(1) Science requires fact-based planning aimed at specific ends, pushed forward step by step with measured experimentation.
What are we trying to achieve? We want business success. That requires talent. So, what defines a culture that attracts, engages and retains talent? People at all levels want similar things: to live their values and achieve their goals, to contribute in meaningful and innovative ways, to see a clear connection between their work and the organization’s vision, to be listened to and respected, to work for an organization known for excellent customer care…and to have a life outside work. So how do we achieve that?
Organizational effectiveness research and practice tell us that a culture that enables people to achieve these ends requires resilient, agile, emotionally competent leaders at all levels. Emotional competence – being aware of oneself and others and managing oneself and relationships with others – shows up today as one of the key leadership elements in business success.
Examples provide measures
The value of setting clear goals and measuring results, even for such intangible factors, is illustrated in an example cited by colleague, Byron Stock (2), who works with corporate leaders to strengthen leadership and team capabilities, and improve their ability to manage change and get results. One current project involves working with senior management of an IT team tasked with implementing a major change within a global fast food company. Following workshops and coaching, team members achieved improvements in the order of 35% to 55% in six pre-identified Emotional Intelligence goals: reducing stress and worry, managing emotional reactivity, influencing others, increasing personal creativity, improving teamwork and improving work-life balance… all critical given the pace, complexity, and innovation involved in the change. The project’s senior director credits this work for improved scores on employee engagement surveys and for much of the project’s early success.
Evolving into a performance culture
Tim Hockey, Group Head, Personal Banking and Co-Chair, TD Canada Trust (TDCT), tells us about the challenges of managing talent in a large retail organization. He credits the bank’s efforts to create a “caring performance culture” to align the efforts of 31,000 dispersed employees with producing sixteen quarters of steadily improving financials.
TDCT promotes a culture where clear goals are set, performance is measured and rewarded, and employees are given the ample support they need to succeed, In fact, the bank did a study of one thousand managers that clearly showed how working steadily over time toward clear goals strengthens employee engagement and commitment from year to year. The results showed a strong correlation between employee satisfaction, customer satisfaction and financial results.
Hockey also points to the success of strategic recruiting efforts. TDCT may send up to 22 executives to a recruiting session at the Richard Ivey School of Business, for example, with a focus on making personal connections rather than giving speeches. He looks for candidates who fit the organization’s values and who will thrive in the “caring performance culture” he promotes.
“Coaching without a performance culture is unfocused, but a performance culture without coaching is unfair,” says Hockey. At TDCT, the drive for results is balanced with a commitment to coaching and support – integral to the caring side of the bank’s culture.
David Maister in his book, Practice What You Preach, (3) uses concrete statistical methods to show that results are actually caused by better leadership skills and human resource practices.
One of this article’s authors personally experienced the same results during his tenure as Senior Vice President at Hudson’s Bay Company. Whenever store managers were switched, a weak one would routinely ruin financial performance while better ones raised even poorly performing stores by solid margins. Unfortunately, finding enough strong leaders is a growing problem, given the increasing demand and current demographics.
Developing leaders throughout
The issue of current and future talent shortages focuses the importance of Marcus Buckingham’s (4) point about “playing to the strengths” of people and capitalizing on them. That requires building supportive cultures, strengthening skills, creating important conversations and assigning development projects to enhance collective IQ and EQ.
Intellectual Capital experts note the value of improving intellectual and emotional management skills among managers over time. Daniel Goleman (5), the author and emotional intelligence guru, speaks about the critical role of climate/culture in predicting the business performance of the organization. He writes about the impact of managers’ moods on business results. Positive is good! He quotes a study by David McClelland which found that when senior managers had a critical mass of emotional intelligence capabilities, their divisions outperformed yearly earnings goals by 20%. (6)
Innovating with practices and people
We are learning more about a new area of innovation and creativity: maximizing cognitive functioning and the partnership of IQ and EQ. Given increasing overseas competition for talent and business results, the author (The World is Flat) and New York Times columnist, Thomas Friedman (8) and others point out that in North America we will differentiate ourselves through innovation and creative relationships and partnerships. He speaks of moving from a world of command and control to one of communication, consulting and collaboration. Welcome to the world of Wikis! To innovate and compete, we will need people who are smart, agile, resilient, creative and excellent at relationships.
What does it take?
Now that we see that superior results are possible with these skills and practices, how do we tune up our organizations’ ability to act? The specific answers are as varied as organizations’ cultures themselves. The common element among successes, however, is that organizations don’t stop trying to improve. They steadily seek ways to enhance their management of people and measure their results.
Recruiting, engaging and retaining talent
All three areas – recruiting, engaging and retaining great staff – are interdependent. Doing any one with excellence has positive spill-over effects while doing one badly can be fatal to overall leadership efforts.
At First Ontario Credit Union, CEO, John Lahey focuses time and energy on recruiting well and broadly. “Recruiting is about strategy and fit…how does the person fit to make the team stronger and get you faster and further to reaching your goal?” He says, “EQ is most important” in achieving this fit. To get it, he will even “give up something on the technical side”. For effective recruiting, “you need to step back and think about future challenges…e.g., do we need technical expertise or its intelligent use?”
Lahey points out that recruiting provides several opportunities: to make the team stronger, to keep it the same, or to make it weaker. “Under no circumstances should you recruit if you can’t make the team stronger….rather you back off and try again”.
First Ontario’s recruiting process for key roles includes a behavioural, project-oriented, case-based panel interview, plus a project plan presentation to an executive panel. The process is tailored to the position being filled. “The final candidates were neck and neck until the presentation. With a 30-day plan and specific actions, one candidate clearly demonstrated a practical, experiential-based view,” says Lahey.
This example points to the value of a rigourous recruiting process involving the right people and activities. First Ontario benefited. So did the candidate, Clare Aker, who summed up the experience: “…the contact with the CEO…gave me confidence to know that as much as I was interested, they were interested in me.”
Once we have recruited the best talent, the challenge and the opportunity lie in engaging that talent in ways that will maximize their contribution. Scott MacLeod, VP Media Strategy, CanWest MediaWorks, Inc., notes the importance of excellent leaders in engaging employees. He believes what makes them excellent includes a high level of communication and a focus on people and their learning and development to help them move forward. “All employees need to understand business strategies and plans in order to contribute”, he says. He emphasizes respecting people rather than “sitting on top of them” – allowing them to do their jobs without insisting on particular hours of work, face-time and draconian deadlines. That way, he points out, people actually choose to work longer and stay focused on success.
At CanWest, says MacLeod, “rapid expansion required improved training, development and succession processes. The board approved 20% of annual management bonuses based on successfully implementing human resource goals and 90-day priorities, including development and succession plans and performance expectations and evaluation.”
Younger leaders and employees, says MacLeod, are encouraged to learn how to “manage up” constructively, to use their willingness to question authority, and to seek and suggest more options to improve decision-making. They are given cross-functional developmental assignments and opportunities to manage change and innovation.
At the same time, MacLeod notes the common struggles people face to develop and maintain work-life balance. Managers have to learn to handle different styles and approaches to work. MacLeod suggests tactics like recognizing successful performance, making work a bit more fun (like golf putters in cubicles!), challenging people to think differently and encouraging story telling.
What’s most clear about engaging talent? The twin objectives of excellent results and highly engaged staff are paramount. Neither can be sought at the expense of the other.
Arguably, one chief executive in Canada with one of the biggest talent management jobs is Gordon Nixon, CEO of RBC. Nixon says, “Recognizing the importance of human capital to an organization like RBC is paramount.” RBC’s goal is to “motivate, recognize, and retain talented people within strong and positive cultures. Our businesses are so diverse, so we have many sub-cultures, but our vision and values bind us across the company.”
Zabeen Hirji, RBC’s Chief Human Resources Officer, points to RBC’s “Total Rewards” philosophy. “Looking at our rewards more flexibly and giving people choices over their life cycles has a lot to do with engagement and retention. It’s one reason we see a lot of people spending much of their career with us.” Hirji says, “Our people can grow and advance in many specialty areas, while some choose to move across the company. We are redesigning our total rewards to motivate people to stay longer in their chosen roles and professions. Learning and career development, challenging work, workplace culture and recognition are key. And diversity in the broadest sense is critical to create vibrant communities and retain talent.”
Employee engagement is a retention strategy, as well as an enabler of strategic alignment. Mr. Nixon adds, “Training and leadership development require a lot of focus….leadership visibility, including with senior leaders, is the key to employee engagement and commitment. At RBC, this has resulted in 90% of our employees showing up as committed to our ‘client-first’ vision and values.” Commitment runs both ways via RBC’s five core values: Service, Teamwork, Responsibility, Diversity and Integrity. “We don’t recognize people who may be the best producers if they don’t live up to our expectations for behaviours such as working well on a team.”
The overall message about retention – a quid pro quo: organizations want innovation, productivity and business results. Employees want opportunities to develop and contribute…and have a life. The route to mutual benefit lies in paying attention to the things that will engage and retain people…and in turn, reflect mutual values.
Leadership pulls it together
Not surprisingly, successful talent management requires good leaders and managers. The leader’s role in talent management is visible in the comments of Dave Bullock, Managing Director, Private Client Group, Russell Investments Canada: Retention of direct reports is most critical, but ensuring succession for folks looking to move up is key to success. We’ve had close to zero turnover. Our compensation and benefits combination qualifies us as a Top 100 employer. We try to give people project responsibility outside the scope of their day to day jobs – projects initiated by them or us – to move both them and the business forward.
“Most important is to ensure people have the abilities and tools to do their jobs; then, once a decision is made, let them run with it. We use objective setting with two focused discussions per year about how they’re doing and what’s possible in their career futures. We want people to see clear linkages to compensation and promotions in areas like being team players. We expect people to work hard, but we don’t expect longer than normal hours or face-time. We need EQ to enable people to deal with others in all aspects of business, especially sales.
“On stimulating innovation which helps retain the best talent, people have to see that their leader is listening to them so they believe they can positively influence change. We create opportunities to have fun and celebrate wins. We build collaboration via cross-functional teams and monthly all-staff meetings. Ours are said to be among the few wholesale fund brokers allowed to go into customer branches because our people listen to clients rather than just selling products. Our best products are developed through these interactions.”
Not coincidentally all the contributors to this article have found proven value in best talent management practices. Ultimately, what drives effective recruiting, engagement and retention is a healthy organizational culture and the focus of senior leaders on people, their performance, development and careers. In the end, individuals, organizations and society all benefit.
- McKinsey & Company, The McKinsey Quarterly, Member Edition, 5 January 2007
- Byron Stock of Byron Stock and Associates LLC
- David Maister, Practice What You Preach, 2002
- Marcus Buckingham: “What Great Managers Do”, HBR, Mar. ’05
- Tom Stewart, Intellectual Capital: The New Wealth of Organizations, 1997
- Daniel Goleman, Richard Boyatzis, and Annie McKee, Primal Leadership, 2002
- Daniel Goleman, “What Makes a Leader?,” HBR, Nov./Dec. 1998
- Thomas Friedman, The World is Flat, 2005