Link Talent Management to Business Strategy: Why and How

Link Talent Management to Business Strategy to Stay Ahead of the Game
Talent management is most effective when it ensures the right people are in the right roles doing the right work at the right time in the right way. Achieve this, and you dramatically increase the likelihood of executing your business strategy in a way that makes sense for the business AND for the people.

Why The Link Between the Business and Talent Matters
Our organizational alignment research found that talent accounts for 29% of the difference between high and low performing companies in terms of revenue, profitability, leadership effectiveness, and customer loyalty.  The catch?  The impact of talent gets severely diluted if your strategy and culture are not aligned enough to set them up for lasting success.

The good news?

When business and talent strategies are linked, you are more than two times more likely to outperform your competitors on total shareholder returns.  So the alignment of people with your business is not only more efficient, it has a direct impact on your bottom line.

How to Link Your Talent Management Strategy to Your Business Strategy
Organizationally savvy leaders grasp the why of aligning talent management with business priorities — but far fewer know the how. In assessing which employees are pivotal to current and future business imperatives, many executives still default to the corporate organizational chart. Yet the most strategic and influential roles often sit outside the top?tier titles. There is a more effective path.

Research shows that high performing cultures don’t simply map talent to org?chart positions; they link talent to value, treating people as strategic assets rather than cost centers. For instance, a recent McKinsey survey found that companies with very effective talent management programs were nearly six times more likely to report superior returns to shareholders compared with peers whose talent efforts were weak.

Further, talent management practices such as attraction, development, retention and career collaboration have been shown to contribute significantly to sustainable organizational performance — especially when the workforce is viewed through a strategic human?capital lens.

4 Fundamental Talent Management Strategy Steps to Take
This is how to align your talent decisions with their value to the business strategy so you link talent management to business strategy:

1. Start with Your Business Strategy
   While this may seem like common sense, too many talent functions are an arms length away from their company’s strategic priorities.  That makes it difficult to add strategic value through people.  Clear business strategies accounts for 31% of the difference between high and low performing organizations.

   Before you embark on your talent strategy, take a ruthless look at your strategic business plan. We know from strategic planning retreats that successful strategies must be clear enough,  believable enough, and implementable enough for people to get on board.

   Is your business strategy good enough to create a meaningful talent plan to support?

2. Define the Strategic Roles, not Just Senior Titles
   In most of our clients, at least half of critical their roles are two or more layers below the C-Suite.  That means if your focus is only on VP and above, you’re likely missing on some key talent that is playing a pivotal role in strategy execution.

   To make an impact with talent, identify the roles that create disproportionate value, regardless of where they sit on the org chart. Look for roles that are critical to the big strategic bets outlined in the strategic business plan in two key areas:

   • Roles directly creating strategic value — now or in the future?

   • Roles acting as force multipliers that enable strategic value— now or in the future?

3. Embed Talent Deployment into Business Decision Making
   We know from people manager assessment center data that top leaders treat the development and deployment of high?potential talent as they would the allocation of critical capital. Leadership teams should ask three questions and treat the people accordingly:
   • What value does this role hold today?
   • What about six to twelve months from now?
   • Is the person in this role truly equipped to deliver that value?

4. Build Agility Into Your Talent Management Processes
   Most annual talent?review cycles do not add much business value. Instead, leading firms use quarterly or ongoing assessments of critical leadership talent.  They frequently test for alignment with evolving business needs to ensure they are positioned to win.

   Embedding agility into your talent?management processes means rethinking how you identify, develop and deploy talent in rhythm with your business strategy.  You need to build more agility into your talent management processes if you have:

   • Rigid Role Hierarchies
     If talent decisions are still bound by fixed job titles and annual promotion cycles, you’ll lose speed.

   • Siloed HR Processes
     Talent, L&D, performance and mobility need to operate in concert, not as separate initiatives.

   • Lack of Skills Visibility
     Without clear mapping of skills supply and demand, redeployment and agility suffer.

   • Weak Learning Culture
     Agility demands a learning mindset; if your people aren’t comfortable with change, growth stalls.

   • Insufficient Leadership Alignment
     Agility in talent?management only works when business leaders champion, model, and reinforce it.

The Bottom Line
Linking your talent?management strategy to your business strategy requires more than good intentions — it requires a clear methodology: identify roles that drive value, treat talent deployment as strategic capital, and build agile systems that keep pace with business change. Research shows that organizations doing this consistently outperform their peers.

To learn more about how to link talent management to business strategy, download The 3 Surprising Talent Management Ingredients for Success