Bench Strength

CHAPTER 1

T

ALENT

S

TRATEGY

The Key to Organizational Effectiveness

Strategy without tactics is the slowest

route to victory. Tactics without strategy

is the noise before defeat.

—S

UN

T

ZU

,C

HINESE MILITARY STRATEGIST

CEOs and senior execu tives are qu ickly coming to the conc lusio n

that a dis tingu ishing char acter istic of successf ul org aniza tions is

the ability to identify, develop, and deploy excep tiona l lead ershi p

talent. Research such as the 1997 McKinsey study, The War for

Talent, and McKinsey ’s 2000 foll ow-up study have m ade bu sines s

managers and HR leaders aware of t he signific ant ga ps tha t exis t

between t heir t alent management requiremen ts and their ability to

successfully execut e agai nst th ese require ments .

Since then, these con clusi ons ha ve been rein force d by several

other res earch studies. More specifically, when w e look at the data

there are five conclusions that w e can d raw about th e current state

of leadership t alent manag ement.

1. Many companies feel u nprep ared t o capture an d develop the

leadership talent that they need to succeed. In one survey that

spanned 264 exe cutiv es from six c ountr ies, almost two-thirds of

PAGE 1

1

................. 15735$ $CH1 02-27-06 09:39:40 PS

2 B

ENCH

S

TRENGTH

respondents rated th e abil ity to develop effective leaders as critical

to addres sing marketplace challenges, yet only 8 p ercen t felt confi -

dent in their abi lity to man age le aders hip ta lent.

1

2. Executives feel that during the next fe w years, these leadership

challenges wil l become eve n greater. O nly about 25 percent of sur-

veyed com panies were confi dent i n their ability to have i n place the

high-potentia l tale nt that they would need to driv e future gro wth.

2

3. The projected shortf all of leadership talent is li kely t o affect

ALL secti ons of our talent pipeli nes, not just retiring baby boomers.

By 2 020, execut ives believ e the United States will experience a 15

percent reduction in professionals within the 35 to 44 ag e group—

the age segment that has tra ditio nally const itute d a critical part of

the high-potential ( HIPO) leadership pipel ine.

3

4. Most orga nizat ions are just beginning to address these talent

issues. Only 24 perce nt of respon dents in one online survey on

leadership talent indicated that their orga nizati ons had a clear plan

for developing leade rship talent, and only 29 percent indicat ed

that their organizations were effecti ve in connecting talent manage-

ment to the needs of their business units.

4

Over half of respondents

sur veyed in one study indic ated that their leadership talent identifi-

cation an d development system ha d been in pla ce less than three

years.

5

5. The chall enge of building a strong leadershi p team is a global

organizationa l issu e, extendin g well beyon d the b order s of th e Unit ed

States. A recent Hewitt study cit ed findings from previo us research

studies t hat conclude that management turno ver in Chine se com-

panies may be as high as 40 percent, with many other A sian c om-

panies re por ting that they face critical challenges in d evelo ping

their leaders.

6

The Emer gen c e of the Chief Tal en t Of fic er

One area in which the new emp hasis on talent ma nagem ent is re-

flected is in th e evolving role of the Human Resourc es department.

PAGE 2

................. 15735$ $CH1 02-27-06 09:39:41 PS