CHAPTER 5
S
TARTING
O
UT
The Talent Focus Decision
The most dangerous strategy is to
jump a chasm in two leaps.
—B
ENJAMIN
D
ISRAELI
The Talent Focus Decision, otherwise known as the Make/B uy de-
cision, d eals with the question of whether you should rely primarily
on the use of internal devel opmen t (Make) or external replace-
ment (Buy) to st rengthen your lea dersh ip bench. This decision is
summarized in Figure 5-1. As I’ll discu ss at length in this chapter,
while all organizati ons make some use of both appro aches , the
attempt t o stra ddle these strate gies and do ‘‘some of both’’ is likely
to s imply diffu se your reso urces and se nd confusing mess ages to
your organization about what you are at tempt ing to accomplish
with your talent development efforts.
At t he sam e time, it’s important t o keep in mind that, as with
the other four talent decisions that I’ll be discussing, the Ta lent
Focus Decision isn’t irreversib le. Over time you may encounter
changing business co nditi ons th at req uire you to adapt your talent
strategy to shi fting requiremen ts. La ter in this chapte r, I’l l prov ide
a few exam ples of condition s that can prompt s uch ch anges to
strategy.
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Figure 5-1. The Talent Focus Decision.
Buy
Make
The Talent
Focus
Decision
When to Use It:
•
High-change scenario.
•
Fast turnaround.
•
Radically different skill
sets.
•
Need for “blood
transfusion.”
•
Lagging leadership.
Pay-Offs:
•
Rapid replacement.
•
External benchmarking.
•
Break with culture.
•
Attack competitors.
Pitfalls:
•
Culture wars.
•
Loss of continuity & expertise.
•
High initial costs.
•
High short-term disruption.
•
Retention risks.
When to Use It:
•
Slow-change scenario.
•
Steady-state scenario.
•
Similar skill sets.
•
Stable career ladders.
•
Best-in-class.
•
Stable workforce.
Pitfalls:
•
Requires sustained effort.
•
Promotes insularity.
•
Extended time-line.
Pay-Offs:
•
Cultural continuity.
•
Retention (we promote from
within).
•
Known players.
•
Transfer of tacit knowledge.
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79S
TAR T I N G
O
UT
The Make Strategy
Employ th e Make Strategy if you as sume t hat bu sines s cond ition s
are stable enough to ensure that y our leadership ca reer ladders will
be relatively s table over t he next few y ears, and th at the develop-
ment experienc es you are o f ferin g to managers will be app licab le
to tomorrow’s business cha nges. After all, t here i s no point in
spending the next several years running leaders through formal
leadership dev elopm ent t rainin g prog rams, job rotation p rograms,
or mentor programs if the sk ills that they are developing will be
obsolete by the time t hat th ey com plete such a ctivi ties.
This decision also assumes that y our current internal po ol of
leadership talent is sufficiently b ro ad and strong. One way to gauge
this is to ask yoursel f how the lea ders i n your compa ny wou ld far e
if they were forced to compete against external job applicants for
their own jobs.
Pay-Offs Associated with the Make Strategy
Because the Make Strategy can provide a relatively broad and st a-
ble pipel ine of leadership talent, it offers a numb er of advantages.
By making use of such development avenues as mentors, cross-
functional assignments, job rotations, and forma l development
programs, it su pports orga nizat ional conti nuity by allowing junior-
level managers to learn the business from more seni or-le vel ex ecu-
tives. Therefo re, when compared again st the Buy St rategy, this op-
tion usua lly produce s leaders who are more knowled geabl e about
the intricacies of their bu sines ses. A recent study of 373 companies
by Hewitt Associates found that the top twenty companies, like
GE a nd Johnson & Johnson, which were characte rized by stronger
leadership pro grams, also tended to perform better.
1
A second a dvant age of the Ma ke Str ategy is that it fo sters the
continuation o f corp orate values by fi lling leadership roles with
managers who have been repeatedly tested aga inst those values,
and who have been mentored by senior-level executi ves wh o model
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