Wednesday, March 4, 2015

McKinsey on The War for Talent

(image credit)

April 30th 2002 notes on leadership, business and economics

I finally began to read this book during our Saudi Aramco trip. I know I must read more books, especially those that top business people out there read. I must read more books to build my knowledge, my vocabulary, my thinking about the things that are critical to my work as a PDI consultant, that is, in the broadest sense: their business, their organization, their talent.

Michaels et al. identify five imperatives that companies must act on, if they are to win the managerial war for talent. In a nutshell these are the imperatives that high-performing companies have already woven into their organizations, in some form or other:
  1. Embrace a talent mindset
  2. Craft a winning employee value proposition
  3. Rebuild your recruiting strategy
  4. Weave development into your organization
  5. Differentiate and affirm your people

Establish a talent mindset
  • Establish the gold standard for talent
  • Get actively involved in people decision deep within the organization
  • Drive a simple, probing talent review process
  • Instill a talent mindset in all managers through the organization
  • Invest real money in talent
  • Hold themselves and their managers accountable for the strength of the talent pools they build
Case Study: Les Wexner of The Limited

Began in 1963, The Limited grew to be a “retail and marketing marvel” under Wexner stewardship. By 1990, it had 3800 stores and $5 billion in sales. But in the 1990s, its earnings hit the wall and its stock plunged. Wexner was beside myself.

So with the access he had with top people, he went about to speak to them about what they were doing to run their companies so well: Jack Welch (GE, of course), Wayne Callaway (PepsiCo), and Steven Spielberg (director). Wexner found that, unlike him, they hardly spent time checking sales, reviewing new ads, or working on new product concepts.

But what did they do with most of their time? They said they spent about half their time on people:
  • Recruiting new talent
  • Picking the right people for particular positions
  • Grooming young stars
  • Developing global managers
  • Dealing with underperformers
  • Reviewing the entire talent pool
Wexner not only gained insight on the criticality of a talent mindset and talent management, but also quickly adopt these and implemented them:

1. He worked with his HR people to list the company’s top 100 senior people and take stock of each of them.

2. He hired Len Schlesinger, an HBS professor, as a consultant and confidante, to help him put together a talent review process.

3. He then began to pump the organization with new talent, probably head-hunting other major organizations, including their competitors: Estee Lauder, Banana Republic, J. Crew, and The Gap. He also grabbed talent from Pillsbury, PepsiCo, and BellSouth.

Over three years, more than half of the top 250 positions were changed. One-third of the replacements were from the outside, and two-thirds from the inside.

Results: Profits grew from $250 to $445 M, and the company’s stock price almost doubled.

Wexner declared:
I used to pick sweaters; now I pick people.
Reference:  The War for Talent.

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