While there are exceptions to this conclusion, it is more commonplace to see lagging talent strategies and business systems. When it comes time to build budgets, the lack of forethought into what it will take to execute in terms of both capabilities and systems, becomes an unaligned mess.
Budgets become grocery lists of investments that are only very nominally linked to the business strategy. No one is thinking through what capabilities and systems are truly critical to enable the strategy execution.
As I mentioned, HR executives need to adopt a mindset shift and assume a more proactive role during the strategy formation. They need to exert their influence on the leadership team when making choices of where to play and how to win. They need to come prepared to share a clear understanding of where the organization is today from a talent and a HR systems perspective.
This means leaders need to already have in place an effective means of classifying the current talent capabilities they have, where the gaps are against the current strategy and knowledge of their pools of talent in each of their core areas. An infrastructure of integrated approaches to assessment, talent planning, attraction and hiring, performance management, and compensation needs to be functioning at a high level to provide HR executives with the necessary data for strategic decision making. Furthermore, HR executives must have sufficient knowledge of the business, the competition and the consumer.
Otherwise, recommendations on strategy will lack sufficient credibility. With the data and knowledge available then HR can make strategic investment decisions.
If you have clarity around the business strategy and know where you are today in terms of capabilities and where you need to be to execute the strategy, then making these decisions will be straightforward. Your plans need to be directly tied to the business strategy.
That can mean you allocate some of your investment across frontline leaders as you implement a new service model. Or, perhaps it is an investment in high potential mid-level leaders who need to make the transition to managing larger scope across broader global teams. Failure to make the strategic connection and to monetize the ROI will lead you to arbitrary HR decision making and ineffective solutions. Similarly, the absence of the right talent development solutions will bring further failure in delivering against the capability requirements for the strategy.
The keys to strategic talent investment: link business strategy to investment choices, to solution identification, and follow through with execution and measurement.
The first, financial criteria, are not all that different from traditional VCs no matter what the Sand Hill crowd will tell you. We have our return hurdles, we have our investment committees, and we have our view of the world. The second, strategic criteria, are more subjective.
Sometimes we invest to fill in gaps i. If the groups are not aligned to maximize the value of the investment, things can get tricky. That said, some are very good and rational. These should really be considered on a case-by-case basis.
He first started in digital media as a co-founding employee of Click2Asia, a venture-backed online media company. He leveraged his digital media experience and oversaw the growth of the digital media portfolio. In his free time, Paul enjoys competitive BBQ dry rub only and practicing mixed martial arts.
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