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 to pilot a customized behavioral interviewing program to help ensure that we continue to hire the best and brightest as we continue to rapidly scale. LSA’s ability to understand our business and our unique culture combined with their desire to ensure that the best practices framework truly fits our performance environment and is highly adopted by our people is a real blessing. Most other firms want to just ‘give you training.’ Not LSA, they are focused on helping me hit our hiring forecasts and attract A players.

Jennifer Remling
Director of Global Recruiting

AKQA

“We turned to LSA to help us custom design and deliver a leadership and management development curriculum to help drive performance. They have done an excellent job diagnosing the business situation, designing an approach that fits our culture, and delivering a first class solution.”

Sally Buchannan
VP 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

LSA’s customized Effective Presentation Skills program has helped me elevate my presentation skills to the next level. I now have a much greater self-awareness of my presentation skills and can leverage off of my strengths while working to improve upon other areas. I would definitely recommend this solution to anyone for whom business presentations are an integral part of their job.

Jim Elliott
Senior Marketing Manager

Samsung

Over the years, both at 3Com and now at Redback, I’ve found LSA Global to be a valuable resource. The recent compliance program that they delivered for Redback’s executive and management team was the right solution, of the highest of quality, and customized to our business and culture. I would highly recommend LSA to any company looking for top quality solutions.

Gina Fulton
Vice President of 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

I continue to be impressed by the level of leadership development and management expertise and quality of advice and facilitation that LSA has to offer. What a smart and client-centric group of great people who really know how to help leaders attract, engage, develop and retain top talent.

Tracy Esposito
Director, HR Business Partner

What a personal and professional pleasure it has been to Partner with LSA. They are truly a strategic partner with Wyse. For more than 5 years, LSA has been engaged in delivering various training and development solutions for Wyse, from custom on-site programs targeting specific core competencies, to working individually with clients to build job skills, and offering invaluable services to me and my team as we continue to build our learning programs. LSA’s representatives do more than sell a product, they offer a full service solution: they understand our business, our strategic initiatives, and the needs of our customers.

Jeff Rangel
Director of HR

LSA is an instrumental training outsourcing partner in helping us to build management capacity and strategically invest in our people. Their flexibility, depth, and breadth of expertise allows us to deliver top quality solutions that are directly tied to key business plans. Their ability to custom design, deliver, and evaluate our Management Curriculum has been excellent. They are true business partners and a pleasure to work with.

Margaret M. Mader
Vice President, Human Resources

Hyperion

I highly recommend LSA Global to anyone who is looking to improve individual or organizational effectiveness through their top quality programs and broad range of expertise.

Greg Pappas
VP of Human Resources

What a refreshing change from the half-baked psycho-babble you normally get from training and consulting organizations. LSA gives you the practical and results-oriented assistance you need to define and reach your goal.  They provide a results driven plan – not just a temporary fix. They are great to work with, and even more importantly, they “get it!”

David Fiano
Vice President Human Resources

I have worked with other training companies and found it to be more of a seller/buyer relationship than one of matching the right expertise to our business issues. That’s what LSA does – ask the hard questions, listen, and understand our business needs. We receive the benefit of their expertise from assistance with personal development plans to enhancing team performance, to looking at enterprise-wide challenges. It’s all about helping our business succeed as we grow. Right now, LSA is providing great ideas, a fresh approach, and valuable guidance as we develop our management team and accelerate our client relationship management results.

Kristin Westland-Kaune
Director, Team Development

We signed up with LSA early on–as their 22nd Member! Since then, our organization’s learning needs have increased and decreased and increased again with the changing times. The beauty of the LSA business model is its flexibility…when we needed to supplement our own internal resources, we used LSA services knowing that we could depend on the outstanding quality of the leadership development and management training programs they provide.

Margie Bunting
HR Manager

LSA’s consultant designed and delivered a half-day team building solution for our recent conference. It included careful customization to integrate the design with our new mission and values. Everyone had fun and identified key issues with our teamwork. Altogether a great program!

Bob Ward
Director of HR

I had been working with LSA for many years with my prior company. Currently, I’m with a company who hadn’t done much basic management skills training. After identifying and presenting a program recently, our managers are excited and talking in the halls about the great experience. LSA saves us time in delivering the right training for our needs.

Phyllis Moracco
HR Director

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