How Important is Talent Management to Business Success?

Graphic of people on a seesaw weighing more than machine gears to show How Important is Talent Management to Business Success

How Important is Talent Management to Business Success?
While this question seems pretty absurd to those of us in the “people business,” from a business perspective companies and their leaders answer this question each and every day by the decisions they make and the actions they take.  And we know many employees certainly do not feel like their company’s greatest asset.

So how important is talent management to business success?  Should people really be your company’s most important asset? Let’s start with some definitions and research results.

The Definition of Talent Management
We define talent management as the proactive and thoughtful attraction, development, engagement, and retention of the talent required to execute your strategic plan in a way that aligns with your corporate culture.  While the overall functions of attracting, developing, engaging and retaining top talent are quite similar across companies, what makes talent perform at a high level is unique to each company’s strategy and culture.

In a nutshell, talent management is all about planning your human resources strategically to build business value and support organizational goals.  If you believe as we do that having the right people in the right place at the right time can be your greatest competitive advantage, then make sure you are taking the right steps to make that happen.

Talent Management Research
Our organizational alignment research found that talent accounts for 29% of the difference between high and low performing teams and organizations.  So talent matters right?  Not so fast.

Our research also found that:

  • Strategic clarity (where and how you plan to win) accounts for 31% of the difference between high and low organizations
  • Culture (how things truly get done) accounts for 40% of the difference between high and low organizations

So how important is talent management to business success? Does it really come in third place when compared to strategy and culture?  It depends.

Our research found Talent Management can make an enormous difference as long as people strategies are aligned with business strategies and cultural norms. Companies that do this well:

  • Grow 58% faster
  • Are 72% more profitable
  • Engage employees 16.8-to-1

Companies that attempt to attract, develop, engage and retain talent within unclear business strategies or misaligned cultures struggle mightily to perform.

So What Does that Mean?
Now that we have a common definition of talent management and know how it fits in with business strategy and culture – how important is talent management to business success?  In our opinion, talent management is critical to long-term business health and performance. We can only think of three instances where talent investments may be comparatively less important – especially in the short term.

  • You Are a Product-Driven Company
    For example, when Apple came out with the iPhone, their business was dramatically pulled forward by the demand for their product. While Apple still needed to attract and retain enough people to meet demand, they could theoretically under-invest in people compared to other areas in the short-term and still be a success.  While this approach would most likely have negative implications in the long-term, it may work in the short-term.
  • You Are a Business Model-Driven Company
    For example, when Netflix disrupted the media and entertainment industry with their subscription-based streaming video and home-grown content, their growth became exponential. While Netflix also seems to invest heavily in sound people strategies, they could theoretically succeed in the short-term by comparatively underinvesting in people based solely on demand for their offerings.
  • Your Strategy is Not Clear Enough or Your Culture is Misaligned
    Unclear strategies and misaligned cultures make it almost impossible to get the most out of your people investments. Ambiguity allows underperformers to hide, resources to be misallocated and teams to suffer.

Your Next Steps to Maximize Talent Management Investments
To put forth a plan that will create high performance through people make sure you:

1. Have a Clear Enough Business Strategy
Make sure you have high executive-level agreement and commitment for the business strategy. For a strategy to be clear enough to wisely invest in talent management, it must be understandable enough, believable enough and implementable enough to fully rally leadership and their teams behind it.  Without a clear business direction to link to, people strategies, which often take longer to deliver results, can become quickly minimized and diluted.

2. Align Your Culture to Your Strategy
Once your strategy is clear enough to move forward, your culture must be healthy enough, consistent enough and aligned enough with the business strategy to get the most out of your people investments. Because people and business strategies must go through culture to get results, talent management initiatives can be brought to a standstill by an unhealthy or misaligned culture.  Make sure you assess and align your culture before finalizing plans to hire, develop, engage and retain your top talent.

3. Establish Capability Needs
After your strategy and culture are aligned, your next step is to identify the critical capabilities required for the company to achieve its business goals. Then determine whether those skills and competencies are present, need to be developed in existing employees or must be hired in from the outside.  This gap analysis provides the input to your Talent Management Plan.

4. Assess Priorities and Agree Upon Next Steps
Resources are finite and people strategies often take time to come to fruition. Based upon the critical few strategic business priorities over the next 12-36 months, identify the major strategies, goals and success metrics for how you plan to attract, develop, engage and retain talent to execute current and future plans.  Then ask for what you need to confidently make it happen.

The Bottom Line
So back to our initial question – “How important is talent management to business success?”  Talent management can provide you with a competitive edge as long as it is aligned with a clear business strategy and supported by a high performance culture.  Otherwise, your talent plans are probably just wishful thinking.

To learn more about how to align your talent strategies with business priorities and your culture, download Why Talent Is Surprisingly Only 1/3rd of the Recipe for Talent Success

Comments are closed.

We partnered with LSA Global to help us invest in our people in the areas of performance coaching, diversity, and inclusion. They focused on helping us succeed and were very flexible in meeting our specific needs. LSA Global exceeded my expectations from a speed, quality, and value standpoint. I would recommend LSA Global to anyone looking for a true business partner.

Anita Luckinbill
Director, Human Resources

The Managing Virtual Teams program was extremely valuable. Your consultant/ facilitator’s fundamental knowledge of Synopsys as a company provided an incredible base to build upon while tackling the complications of managing and working with globally distributed teams. My team walked away walked away with highly useful practices and tools. It was an excellent use of our time.

Debra Martucci
Vice President, Information Technology

Here’s a token of my appreciation for ALL your efforts. I’m offering my most sincere appreciation, and it extends to all the folks who made our customized management development programs possible.

Susan Anderson
Workforce Planning Bureau

The LSA Global team was very receptive and flexible to our needs every step of the way. Their staff and facilitator demonstrated attention to detail, responsiveness, and professional courtesy. The participants were thrilled with the outcome and rated the communication skills workshop and the facilitator as ‘Excellent’. I’d highly recommend working with the LSA Global team to meet your professional development needs.

John Mastrorilli
FRDP Leader

Intuit

LSA exceeded all my expectations. We interviewed 7 potential training and consulting partners and selected LSA due to their expertise, flexibility, and breadth and depth of solutions. We were able to construct a management training course from the modules most appropriate to our needs, and are able to provide additional training from their well developed portfolio of experts. Our managers galvanized as a team throughout the session and are better prepared for the rigors of a competitive market.

Mitch Mandich
CEO

Edify

We have been able to utilize LSA’s extensive network of top-notch resources to leverage our investment in employee development. The result has been the cost effective and highly efficient delivery of quality educational and management training programs.

Steve Feller
Vice President, Human Resources

LSA custom designed a Management Development program that is absolutely “on target” for our technical managers. Their facilitator has done a superb job delivering the material in a way that is fast paced, highly interactive, and fun. She presents practical solutions to the people situations that our managers face every day. I regard LSA as an excellent partner that understands our business needs and a virtual member of our HR department.

Judith Onton
Vice President Human Resources

LSA helped us design and deliver a blended learning solution for our leaders to help drive our growth plans in a way that aligned with our specific culture and values. LSA understood our business, had deep expertise in the content areas, tailored the programs to fit our specific needs, and delivered great results. They constantly strive to deliver business impact and align their solutions with our business initiates, culture, and performance management systems. I highly recommend them to anyone looking to take their leaders to the next level.”

Beth A. Taylor
Vice President of Human Resources

Thoratec

I have worked with LSA Global at previous companies and welcomed the opportunity to bring them in to support my new organization. We worked closely with LSA to design a solution for our Client Partner Teams and Management Training on both coasts. LSA designed a customized solution for our business and organizational culture. LSA is a quality organization, one that I’d recommend to any company looking for a first class training and consulting partner that makes an impact.

Laurie Torres
Chief People Officer

LSA helped change our entire culture around meetings, making them more effective and efficient, thus enabling us to concentrate on driving more business.

Terry Wassman
VP of Human Resources

SeaTel has found our partnership with LSA Global to be very valuable and beneficial. We turned to LSA to customize a supervisory/leadership solution to meet our needs. LSA delivered a customized top quality solution. I’d recommend LSA Global to any company looking for a best-in-class training and consulting partner.

Kortney Riddle
HR Manager

I’ve partnered with LSA Global at two companies now, and I consider them a valuable and trusted training and consulting resource. They recommended just the right solution to address our management development needs and have wonderful facilitators that match YuMe’s culture and style of our management team. I would highly recommend LSA Global to any company wanting to deliver quality learning solutions with a valuable learning and development partner.

Maya Paul
HR Director

Working with LSA Global has proven to be extremely valuable and worthwhile. LSA understands our business, has deep expertise in content areas, and tailors the programs to deliver great results. The facilitator was extremely knowledgeable about Working Globally with India and her energy and passion made the session interesting, fun, and enjoyable for all that attended. The participants walked away extremely pleased along with highly useful practices and tools. I would highly recommend LSA Global to any company that has partners or offices in India.

Glenn McGillivray
Human Resources Business Partner

Intuit

LSA’s approach and ability to bring the best resources to eBay has been a great asset. They really focus on helping us succeed in any way they can and are very flexible in meeting our management and talent needs.

Mike Normant
Learning & Development

ebay

We consider LSA Global our outsourced learning and development partner. We worked closely with LSA to customize a management development program to meet our growing business needs. I would highly recommend LSA to any company wanting to deliver quality learning solutions.

Terri Wright-Scheer
Vice President Human Resources

Evaluate your Performance

Toolkits

Toolkits

Download key published insights and tools from industry experts highlighting best practices in the areas of talent, strategy and culture.

More

Health Checks

Health Checks

Want to know how you stack up against leading organizations?  Receive a complimentary benchmarking analysis courtesy of an LSA Expert.

More

Whitepapers

Whitepapers

Get up to speed on timely solutions critical to your business. Published by LSA Experts based upon client feedback and key industry trends.

More

Methodology

Methodologies

First we identify the key metrics you want to improve. Then we assemble a dedicated team of elite experts who have successfully solved similar problems with similar clients.

More

Blogs

Stay up to do date with the latest information on how we help high growth companies align their culture and talent with strategy.

More

Case Studies

Client Case Studies

Real world consulting and training approaches from LSA projects, providing insights on how your company can outperform the competition.

More