The Myth Of Talent Management: Why It Doesn’t Work

by drjim on August 7, 2008

Just like the Chicago Bulls, IT managers have to find a way to manage their talent

Just like the Chicago Bulls, IT managers have to find a way to manage their talent

Everyone who has lead a team, managed a department, or run a company knows that in addition to all of the other “keeping the doors open” jobs that they have, the task that can sneak up on them at any time is staffing. This coin has two sides: you don’t want to have too many warm bodies on your team if you don’t have the paying work to support them. At the same time, you don’t want to have to few or you’ll not be able to secure new work and that will eventually lead to your firm’s demise.

Two weeks ago I found myself in the wrong position on this issue. The project that a team that I was responsible for had run into some delays. This meant that the schedule had been stretched out and yet the funding for the staffing had not been changed. What this meant is that I had to start to shed project members. This ended up requiring me to to make several trips down to the cafeteria with team members to let then know that their time on the project was up. Needless to say this was not fun for me and it was clearly not fun for them. As I did this, I was wondering what’s a manager to do to avoid this type of poor talent management?

After the bloodletting was done, I started to do some research in order to find a better way to manage talent. A smart guy by the name of Peter Cappelli over at the University of Penn’s Wharton School has spent some time looking at this situation and he reports that things are pretty grim.

What is talent management? In a nutshell, it’s an attempt to anticipate the level of need for staff and then creating a plan for how you are going to achieve it. Dr. Cappelli says that he’s found that most firms fall into one of two groups for managing their talent: either they do nothing and run around when they have to fill a position or they have a staffing forecasting system that’s left over from the 1950’s which is now inaccurate because the world is moving so much faster.

Anybody remember internal development programs? When I worked at Boeing certain workers were identified as “Hi-Pots” (High Potentials) and they were placed on a career path that rotated them through multiple departments. This approach has pretty much gone the way of the Dodo. The few shining exceptions are at GE and PepsiCo that have their famous management academies that mangers attend as part of their job. While these are great programs, who cares since only a few managers in the world have access to them.

In the 1990’s hiring folks from outside became all the rage. It was possible because there were so many people who had been shed from other companies that the pool of available talent was quite large. Bad news – that pool’s all but dried up now. Additionally, as the pool got smaller, firms who had spent money training their employees started to see them leave and go to work for their competitors. This, of course, made them even less interested in investing in training their staff.

Ok, so where do we stand right now? Most companies / departments / managers don’t have any sort of talent management plan in place right now. However, the upper management is starting to realize that this is one of their key challenges. The ultimate question is how can your firm’s talent be managed in such a way that it will allow the firm to ultimately make more money (and spend less)?

I’ve got some thoughts on things that you can do, but first do you agree that things are as dire as I’ve laid them out to be? Does your firm have a talent management program? Are YOU being managed as part of a talent management program? Post a comment & let me know.

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{ 4 comments… read them below or add one }

hughtonks August 14, 2008 at 10:44 am

This isn’t “talent management”, this is project and capacity planning.

Very few, if any, companies actually go to the trouble of finding out what their employees’ talents are, and even fewer bother to make use of them.

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Dr. Jim Anderson August 14, 2008 at 3:07 pm

Hugh brings up a good point – it’s a bit harsh, but IT staffing on the surface is basically a capacity planning problem. If you expand the scope of the problem just a bit to include other issues such as retention and growing the next batch of leaders that things really start to get interesting.

Quick question: does anyone know of any firms that do find out what their employees’ talents are and then use that information to chart a career for them? I know that Microsoft does a lot of measuring before they hire someone; however, I’m not sure if they then use that info for anything else…

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John Craig March 24, 2009 at 1:00 pm

My company has turned this whole question on its head. It doesn’t work for a lot of people, but we do consulting (and therefore projects) on a you-eat-what-you-kill basis. There’s nothing like one of these trips down to the cafeteria you mention to remove the illusion of “security” when you work for a regular company.

Now, I know from 8 years’ experience that not everyone can work in an environment like this. We’ve tried out a lot more people than have stayed with us. But we have an overhead that’s typically half what you’d find in conventional companies and everyone is either a partner or an independent consultant. So, pretty much, the money we take in goes to the folks who did the work. And, yes, we do work with people’s talents and there’s lots of opportunities to learn new skills.

Our main problem is that it’s really hard for someone to jump in–no salary, so no income unless you’re doing paid work. But, it’s my full-time gig (not so for all our folks) and I’ve made more the last several years than I ever did working at a regular job. I’m quite used to rolling along with my nose down close to the economic pavement. I’ve concluded that working for a conventionally-managed/organized company gives a false sense of security: past performance is no guarantee of future results–even if you’ve been drawing a paycheck twice a month for years. I prefer to work more directly for the people who are paying for my services. Yes, the onus is on me to produce something someone wants to pay for, but that’s actually true in a regular job–you just have a lot less control (and often no warning that a change is coming).

I would say that there’s not going to be a solution to capacity planning–any more than there is to software project time/cost estimation. The thing is, when you pretend you can do it, you basically give a false promise to the employee. At my company, we all know work is fundamentally uncertain and we are in a position to have some measure of personal control over how we react to it.

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Dr. Jim Anderson March 25, 2009 at 2:08 pm

John: Ouch! You are living on the edge. It sure sounds that when times are good, they are VERY good, and when times are bad, they are VERY bad. If you can handle the ups & downs, then you’ve found the right place to work (for you). Quick question: if everyone is a partner or an independent, then who is out scouting for your next gig? Do you have dedicated sales people or is this just something that everyone has to find for themselves. That could take up a lot of time…!

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