Build a talent strategy to achieve your

desired business results

Carol Bergeron

Carol Bergeron founded Bergeron Successful companies make their talent strategy part of their strategic planning
Associates in 1998 and has 20 years of process and integrate it into daily operations. They strive for the alignment of their talent
experience in organizational effectiveness
with the organization's vision, goals and business strategy. When combined with the
consulting. She works with business leaders
alignment of the tools and systems used by employees, these organizations are
to optimize organizational results through
people. Carol accomplishes this through the positioned to effectively compete and win in the marketplace. However, positioning
design and implementation of customized your organization for success is one thing, while making it happen is quite another.
workforce strategies and solutions that are
The success of business strategy execution is dependent upon people. It is people
aligned with business strategy. Carol, a
board member of the Institute of who choose to analyze the competition and put together a well-positioned business
Management Consultants, New England, model. They formulate vision, goals and shape strategy to meet their goals. People
can be reached at develop, explore and convert new technologies into marketable ground-breaking
[email protected] or products and services. They also choose to delight customers with impeccable
www.bergeronassociates.com customer service. All of these choices that people make every day directly impact on
business results. The bottom line is that people are an integral part of leading a
winning organization.

As further proof of how talent strategy development and execution impact on

organizational results, consider the following recent research:

The whole is bigger than the sum of its parts. Companies that choose to improve their
entire human capital system rather than speci®c components perform better.
Performance indicators have included: productivity, revenue, pro®ts, market share
and shareholder value.

A few examples
Huselid and Becker studies of over 2,800 ®rms: companies pursuing an integrated
high-performance work system (i.e. a talent strategy) had a 65 percent higher market
value over those using other systems that were not holistically integrated.

Great Place to Work Institute, 2001: the 100 best places to work generated 1,289
percent total shareholder returns over ten years compared with a 372 percent ten-
year return by companies on the Dow Jones.

Watson Wyatt's Human Capital Index1 2001: the ®ve-year total returns to
shareholders for companies with a high human capital index (HCI) score was 64
If people really are your most important
percent, ®ve-year total returns for companies with a medium HCI score was 39
asset, then how can you ensure this is
percent and 21 percent for those earning a low HCI score.
re¯ected across the organization? A
talent strategy could just provide the An organization's ability to implement business strategy impacts on organizational
answer. results more than the business strategy itself.

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HANDBOOK OF BUSINESS STRATEGY 2004, pp. 133-139, # MCB UP Limited, ISSN 0894-4318, DOI 10.1108/10775730410494206 PAGE 133
Huselid & Becker studies: strategy implementation has ten
times greater impact on shareholder value than does strategy
content.
`` Failing to address employee
wants and needs may prevent you
Companies that perform better consider their employees a
from attracting and retaining the
source of competitive advantage and this belief in¯uences how
the business is managed. It is re¯ected in their values, attitudes,
talent you need.
''
actions, talent selection and management practices.
also address other talent options such as: free agents,
Great Place to Work Institute: good and great companies differ consultants, strategic partnerships and other entities to
on the basis of leadership's ability to execute strategy, great which work is outsourced.
place to work characteristics including high levels of trust,
productive teaming, encouragement of innovations and One great place to start is to select an internal talent champion
outstanding products and services. to lead and shepherd the process of talent strategy
development, implementation and measurement. Your talent
Prominent thought leaders who operate as the con®dants to champion will need to collaborate with stakeholders in order to
hundreds of corporate executives consistently hear that having generate a broad range of ideas and build commitment.
the right people with the right skills at the right time and place
focused on the right goals is one of the most pressing challenges Having a talent strategy in place is just as important in dif®cult
facing executives today. This holds true in both boom and bust economic times as it is in good ones. Whether your talent
economies. Whether or not an organizational leader places value strategy is designed for the entire company, division, business
on people due to moral convictions or purely for competitive unit, department or work group, putting it into business context
advantage, it is agreed that this is a critical factor. is a prerequisite for success. This leads us to the critical
concept of organizational alignment.
Economics, competition, globalization, technology and other
factors play a role in the design of business strategy. However, Organizational alignment is the art of getting your vision for the
winning organizations know that in today's ®ercely competitive future; organizational goals and related business strategy to
marketplace, a well-designed and executed talent strategy, achieve that future; a prepared, knowledgeable and motivated
that enables people to meet business goals and organizations workforce; and the systems and tools used by the workforce
realize their visions, is imperative and not an optional action. pointed and moving in the same direction.

Developing and implementing a talent strategy is an art, not a The talent strategy process: build it, implement it and
science. While there are some methodologies and tools that measure it
can be used to accelerate the process, starting with an overall There are generally three phases, each of which has several
framework is best. The right kind of framework is adaptable and steps (see Figure 1). Building the talent strategy is the ®rst
can be applied to many organizations regardless of the reason phase. Document your action plan on how you intend to get
for a new or revised talent strategy. and prepare your workforce to execute the business strategy
Common de®nitions effectively. The action plan consists of a mix of projects for

The following are common de®nitions used in describing the

overall process of developing a talent strategy. Figure 1

Business strategy consists of the outcomes your organization

seeks and the initiatives your organization takes on to produce
those desired results.

The talent or workforce strategy is a concise action plan which

outlines how you acquire, cultivate, retain and organize the
talent needed to execute your business strategy. It describes
the core knowledge, skills and behaviors required by the
organization. The goal of the talent strategy is to ensure that an
organization has the right people with the right skills and
expertise available at the right time and place to achieve goals.
A talent strategy re¯ects the varied human capital needs your
organization has for both the short and long term. An effective
talent strategy may focus on full-time employees, but it should

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acquiring, cultivating, developing, rewarding and organizing and how do you measure the effectiveness of those key
talent. It also includes initiatives needed to deliver a value business processes? De®ne the core business processes
proposition to employees. Once established, the talent strategy that enable your organization to deliver customer value.
should be reviewed annually and more frequently if signi®cant Determine the measures of success for the key processes.
changes are occurring in the organization or its environment. Research how you have been performing against those
measures.
The ®rst phase of the talent strategy results in a documented
Using the hotels example, the two chains may have some
action plan. The next phase is to put the action plan into place.
common core processes like making reservations, registering
This phase is largely focused on designing and implementing
and checking out. The low-end hotel may design simple
the projects outlined in the action plan.
standard processes as a way to keep costs down. While the
The last phase consists of monitoring performance outcomes luxury hotel will differentiate itself by the way the same
as the mix of projects is implemented. Essentially, it is here processes are performed. Its focus will be to perform the
where you determine progress made toward meeting your processes in a way that makes each guest feel special and
goals. Determine if the results produced are still the ones you well taken care of. Further, it will provide other services not
want. If the results are not congruent with your goals it is critical found in the low-end hotel such as: a concierge, dry cleaning,
to reevaluate the organization's needs and decide how to restaurants, boutiques and health club amenities.
proceed in order to get moving in a uni®ed direction.
3 What key capabilities (i.e. knowledge, skills and behaviors)
Understand the business context must we have as an organization to deliver value to
In building a talent strategy we must ®rst acquire a deep customers? De®ne the knowledge, skills and behaviors
understanding of the business and its interdependencies. needed most to execute core business processes that
Failing to accurately understand the business context usually result in delivering value to customers.
results in an unconnected talent strategy, poor use of At the high-end hotel, in order to provide guests with that
resources and less than optimal performance. feeling of being pampered, employees would be expected
to provide excellent customer service, be able to think on
Even if you are con®dent that you have a solid understanding of their feet, solve problems and respond quickly to guests'
your business, follow these same steps to re-con®rm it. The requests. In order to do that they would need to understand
printed word 20 years ago was transmitted in business by mail, how far one should go to pamper guests. Compare that
then by overnight couriers, then by fax. Today the standard is with an organization in an entirely different business.
e-mail. Business strategy needs to be dynamic out of necessity Consider the company that grows its business by
in today's fast-moving environment. Customer and employee increasing its capacity to process on-line ®nancial
needs combined with marketplace pressures may prompt transactions. The company would have greater focus on
changes in business direction, as will innovative leaders with process improvement and the ability to marry and
new perspectives. implement IT systems to support those processes.
One of the most effective ways to achieve or re-con®rm 4 What value does your organization offer to its employees?
business context is to position yourself to con®dently answer Given the core business processes and key capabilities that
questions in four fundamental areas. enable you to deliver customer value, determine the kind of
1 What value does your organization deliver to its customers? culture, work environment and underlying value system you
Think about the reason your company is in business; its need. Understand why employees join and stay with your
strategic purpose and direction. Identify what you are trying ®rm.
to achieve and what you are aspiring to become. Determine The luxury hotel would need to clearly communicate to
why your customers choose to do business with you rather what lengths employees should go in responding to guest
than your competitors. requests. If the hotel really wants employees to con®dently
Assume you are in the hotel chain business. Do your make on-the-spot decisions then it must recognize that
guests keep coming back because of the clean, yet basic, mistakes will be made and have tolerance for people learning
accommodation provided for an economical price? Or do from them. Recognition and rewards for doing the right thing
you get repeat business because your guests appreciate will go a long way in creating the tolerant work environment.
being pampered and are willing to pay a premium for high-
It is important to recognize the relationship between the answers
end service? Both types may be in the same industry but
to these questions. The customer value proposition drives the
appeal to clients for different reasons.
core business processes and they drive your talent needs. The
2 What are the core business processes in which your employee value proposition will help you factor important
organization must excel in order to deliver customer value considerations from the employees' perspective into the talent

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HANDBOOK OF BUSINESS STRATEGY 2004 PAGE 135
strategy. Failing to address employee wants and needs may
prevent you from attracting and retaining the talent you need.

In our example, the quickest way for the luxury hotel to suffer
`` Honesty is required to identify
realistic talent gaps between what
from increased employee turnover is to encourage employees
you currently have and what you
to con®dently and promptly respond to guest requests, fail to
provide a vision of what outstanding customer service looks
need.
''
and feels like, then punish employees who take the initiative.

Here are some tips on how to gather relevant information. You recruiting new hires could be fragmented. Some managers
will need to leverage several data sources to ensure you are would hire applicants with excellent customer service skills
working with current realities. while others would not screen for that critical orientation.
Meanwhile, employees who exhibit effective customer
If you are new to the organization the more obvious statements
responsiveness on the job may be punished for doing so.
about an organization's strategic direction and the value delivered
to customers are found in documents such as quarterly and Carefully review your ®ndings to capture themes and trends
annual reports, press releases, marketing materials, Web sites, that answer the questions:
speeches, published articles and customer survey results. Even if
J What value does your organization deliver to its customers?
you have been with the organization for a while and may have
written some of the material yourself, reviewing them to ensure J What are the core business processes in which your
that they are still relevant can be critical. Equally important are the organization must excel in order to deliver customer value
internal communications such as organizational performance and how do you measure the effectiveness of those key
measures, presentations, company newsletters and employee business processes?
survey results. In some organizations, typically larger ones, these
J What key capabilities (i.e. knowledge, skills and behaviors)
documents are easily found. In other less structured ®rms the
must we have as an organization to deliver value to
information may not be readily available and may need to be
customers?
gathered through conversations with other important decision
makers. J What value does your organization offer to its employees?

Connecting with other decision makers or ``stakeholders'' to Share your ®ndings with the leaders you interacted with through
gather or con®rm information can be rewarding, yet it is not one-on-one discussions or group meetings. Devise an action
without its challenges. Stakeholders are key players who may plan to resolve disagreements and create a common direction.
in¯uence your workforce strategy and those who are affected This last step will allow you to ®ne-tune the data you have
by it. They may include leaders at all levels, employees, gathered. It will help you validate the foundation on which you
customers and suppliers. After you have identi®ed the choose to build your talent strategy.
stakeholders then make use of one-on-one conversations,
focus groups, and informal surveys. Pick the forum(s) that Identify missing organizational capabilities?
works best for your organization. Through your discussions, distinctions will be made between
Collecting this information should lead to many discoveries. where the organization is today and where it needs to be in the
Take the time to review your ®ndings. While you will bene®t from future in order to realize its vision. Be sure to consider all the
con®rming what you thought to be true, expect surprises. For distinctions so that your assessment is complete.
instance, stakeholders may disagree on business direction, Seek to understand the connections between business
goals or the measures of success. They may have differences strategy, the customer-value proposition, core business
of opinion on the customer or employee value proposition. If processes and business goals and objectives. Examine the
this is your ®rst time through this process you may ®nd many initiatives the organization will take on to achieve the goals and
areas which are incongruent. Select several of the major points objectives. Critical success factors to achieving the goals may
and focus on achieving resolution with those ®rst. Do not get include excellence in using new or existing systems and tools
bogged down in trying to solve too many issues at once.
and the structures that support them. Systems may include
Highlight the areas of agreement and disagreement prior to
standard practices or methodologies the organization uses to
sharing the results. Determine which disagreements are so
get work done, such as project management or product
signi®cant that resolution is needed before moving forward.
development methodologies. Examples of tools necessary to
Back to our hotel example, if not all members of the executive achieve goals may include speci®c technology, equipment and
team of our luxury hotel agreed with the customer-value facilities. The support structures may include information, work
proposition of pampering guests, then the skills sought when or communication ¯ow and how work is de®ned and assigned.

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The systems, tools and structure may provide insight into the The cultivation component of your talent strategy addresses
knowledge, skills and behaviors required of the people who do the issue of continual development of your talent pool. The
the work. expertise and skills you have today may be insuf®cient for
tomorrow. Here you will describe future needs and how you
The health insurance industry has been undergoing major
intend to go about developing your workforce to meet those
changes in how it conducts business. Never before has there
needs. For example, a ®nancial institution recognizes that it
been so much pressure to perform all transactions on-line while
needs to accelerate succession planning since most of its
ensuring 100 percent con®dentiality of patient records.
current executives plan to retire ®ve years from now. The talent
Transactions are completed by many parties including
strategy captures the ®rm's planned efforts to cultivate its next
patients, employers, physicians, care centers, labs and
generation of executives and includes: leadership training
hospitals who provide health-care services and brokers. You
based on a leadership competency model speci®c to the
could expect talent needs of health insurance companies to
re¯ect increased knowledge and skills in implementing and using organization, project work where the high potential employees
advanced IT systems. Much of the work is accomplished by a work together to not only get important project work done, but
series of cross-functional teams with members at local and to develop strong working relationships with each other, and
remote sites in addition to users. Thus an important system need, coaching to support and advance these experiences.
that impacts on talent needs, is project management capability. A The retention component of your talent strategy takes into
knowledge management system would serve a purpose in account how you intend to recognize people for their
promoting organizational learning with each completed project. contributions, reward them for results and retain them.
Honesty is required to identify realistic talent gaps between Typical initiatives may include: formal and informal
what you currently have and what you need for the future. In recognition programs and the re-design and alignment of
most instances, organizations that work through this process compensation and bene®t plans. Do not forget the less tangible
invariably recognize some de®ciencies in the organization's contributors to retention. These may include deliberate actions
ability to execute business strategy. They also admit that the to create an environment where employees are provided
de®ciencies may not have been fully realized without thinking continual opportunities to do challenging work and are allowed
through the interdependencies in a methodical way. to lead and in¯uence in valuable ways.

An effective approach to identifying voids in the organization's The organization component of your talent strategy will include
ability to execute business strategy is through broad input with setting clear company goals and cascading them through the
key stakeholders. This may sound familiar, as it is the same organization right down to individuals. It will include de®ning the
approach recommended for gaining a clear understanding of work, how the work is organized, and the assignment of roles
the business. A talent champion who seeks broad input into and responsibilities to people, project teams and departments.
identi®cation of problems, presents ideas to solve them and How information and communication ¯ows throughout the
puts the ideas into action creates bene®ts to the organization. organization is also captured in the organization component of
Those bene®ts include: diverse opinions, a broader range of the talent strategy.
innovative ideas and increased commitment to implementation.
Recognize that in creating your talent strategy you will have
Create the action plan assumed some cause-affect relationships between selected
projects and their impact on business outcomes. For example,
Once you have identi®ed the business context and gaps in
you may have assumed a strong relationship between
systems, tools and talent, target the most signi®cant gaps that
employee preparedness and employee turnover. Taking it a
impede progress. Begin to brainstorm ideas on how to ®ll the
step further, unprepared employees may adversely impact on
gaps, giving consideration to the four major components of a
customer satisfaction which may impact on revenue.
talent strategy ± acquiring, cultivating, retaining and organizing.
Your talent strategy should also include the creation of a
The acquisition component of your talent strategy has to do
compelling employee value proposition which will likely cut
with how you intend to secure talented people to perform
across all four components. It includes: creating products and
important work in executing business strategy. Your talent
services that customers appreciate and employees can be
strategy will articulate the mix of talent acquisition that happens
proud of, good tools and environment conducive to getting
through internal and external hiring, full and part-time
work done well, career development opportunities, opportunity
employees as well as other non-employee resources.
to in¯uence, and recognition and reward programs that make
Selecting the right people not only includes assessing the
employees feel their efforts worthwhile.
right knowledge and skills, but also includes assessing
individual motivation and the alignment of individual and Turnover among customer service representatives was on the
company core values. rise. The customer service staff felt inadequately prepared to

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HANDBOOK OF BUSINESS STRATEGY 2004 PAGE 137
service products on customer sites and under-informed on effectively achieved using the tools and techniques of project
important customer business issues. Turnover was negatively management.
impacting on the service received by customers and increasing
Start with a simple charter or de®nition statement for each
the costs to the organization. Talent strategy initiatives included
project. This helps to establish common expectations and should
retraining current service personnel, ensuring new hires were
re¯ect the expectations of the key stakeholders. Practicing
properly trained, and redesigning communication ¯ows so proven project management techniques including planning and
important information was transmitted to service personnel in a implementation are important. Stakeholder management must
timely manner. Turnover decreased and customer satisfaction include check-ins at key milestone achievement points. It helps to
increased. maintain project visibility among stakeholders who in¯uence the
Be careful to manage expectations about the talent strategy. continuation or discontinuation of projects and their assigned
Be sure your brainstorm list is not perceived as the ``®nal'' talent resources. The roll-out step within project implementation is often
strategy. This type of inaccurate expectation could taint underestimated but critical to the successful integration of the
expected results and slow or stop progress. As companies project into daily operations.
come to grips with economic realities, most recognize early on Project management calls for measurement of actual
that they do not have the resources to design and implement all outcomes against the targeted ones. Assess how well the
projects on the initial brainstorm list. Thus somewhere in the project was managed and completed. Minimally include:
process the organization must select and prioritize those planned vs actual costs to get the project done and the
projects that are most promising. The output of this phase is planned vs actual time for project completion.
the documented action plan we call the talent strategy.
Proven project management techniques are not the focus of
Success factors this article, but be aware that you may already possess the
skills, tools and systems to successfully implement projects
J Recognize that creating and sustaining organizational
that require broad input and action.
alignment is a journey and not a one-time event.
Monitor results and revise
J Identify a talent champion early on.
It is in this phase where actual solution and performance
J Develop, implement and monitor the talent strategy with
oriented results are tracked and compared with previously set
broad input because it fosters better ideas, commitment
targets and past performance. Variances between actual and
and provides a basis for accountability.
targeted results, reasons for the variances and identi®ed trends
J Challenge existing organizational capabilities so that are explored. Revising the talent strategy and/or business
implementation of your talent strategy serves to effectively strategy is the last step.
®ll in the gaps. There are a variety of ways to think about organizational
J Keep talent strategy planning, implementing and monitoring metrics. Consider a mix of strategic and operational measures
as simple as possible. as well as lead and lag indicators when measuring solution and
performance oriented results. You will want to measure
J Put some teeth into the talent strategy: give it organizational individual projects in your talent strategy, the overall
visibility and resources, and reward people for achievement. effectiveness of your talent strategy and related business
J Communicate, communicate and communicate. outcomes. A few examples are shown in Table I.

J Whether using a top-down or bottom-up approach, build For projects in your talent strategy, include pre-project
momentum through relevant, small and consecutive wins. implementation measures such as how well the project is
received upon initial roll-out or announcement of its roll-out.
Design and implement Why is this measure important? It may provide insight into why
A well conceived talent strategy is useless without putting it into a particular project was successful or not. More importantly it
action. Remember our earlier statement: an organization's may prompt you to modify your approach for implementation to
ability to implement business strategy impacts on improve receptivity within the organization.
organizational results more than the business strategy itself. During project implementation insightful metrics may include
The same principle holds true for implementing the what was actually learned through the project's roll-out. For
components of your talent strategy. The talent strategy example, upon completion of designing a new hire selection tool,
consists of a series of projects that will be completed in do the interviewers understand why the tool was designed and
order to ®ll voids in your talent so that the business strategy can how to use it? Following training sessions on the new IT system,
be executed well. Thus the output for this phase can be did people understand the core business process that it

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 Table I
Strategic measure Operational measure
Have the right person with the right skills on the payroll at the right time Time to fill a job requisition
Have the right person with the right skills ready to move into an Number of high potential employees who finished a
executive leadership position prescribed number of developmental job rotations
Lead indicator Lag indicator
Customer survey satisfaction scores Revenue
Customer retention rates
New customer accounts
Employee survey satisfaction scores Employee turnover
Employee achievement of incentive compensation

supports? Did they learn and retain it well enough so they can be reasons may include performance standards have become
productive on the job? Perhaps you implemented a new incentive obsolete, a business process is too complex, tools are
compensation system to reward speci®c business results. Do the inadequate to properly perform the work, the skills and
people eligible for the incentive plan understand it? What results knowledge of those doing the work is insuf®cient or perhaps
are being rewarded and why, in relation to business direction? pro®ciency in doing the work is lacking due to insuf®cient
frequency to practice. New laws or compliance issues may
Post-project implementation measures seek to measure how
have affected how we view actual results.
prevalent the new tool, system, skill or behavior is used or
demonstrated. Examples include: the frequency of using the new The next question is: ``What are we going to do about it?''
skill, reduced cycle times or errors in getting work done. Other Perhaps the variance between actual and targeted results is
measures may include employee satisfaction rates and trends insigni®cant since the trend is moving in the right direction.
over time, given the newly implemented employee satisfaction Therefore we may choose to do nothing different. Perhaps the
survey. Some projects may warrant return on investment (ROI) variance is signi®cant and causes us to exert efforts on further
calculations due to project uniqueness, amount of investment, development of skills, the redesign of a complex business
visibility or expected impact on business results (see Figure 2). process or the addition of better tools to get the job done.
Perhaps the variance causes us to better understand a change
Be careful not to select too many metrics to monitor. Pick the in the marketplace. That kind of assessment could prompt us
ones that are true indicators of business performance and be to revise our business strategy and reassess the continuance of
sure you have the capability to measure them. If not then decide speci®c components in the talent strategy.
if you should create that capability or pick an alternative measure.
Monitoring how well your initiatives are impacting on business
Capturing measures positions you to effectively monitor results results is not only a regular practice of organizations that
and trends. You have assumed some cause-and-effect outperform their competitors but a means of fostering
relationships between speci®c talent initiatives and desired organizational learning. Further, those same outstanding
business results. When actual results are not moving in the right organizations modify and adjust talent solutions and
direction in meeting targets, we must ask ourselves why? There initiatives based on learnings.
may be many reasons such as: our assumed cause-effect
relationship was wrong, business direction, customer Make talent strategy a priority
expectations or market conditions have changed. Other Like the world in which we live, a talent strategy is dynamic.
Each time your business strategy changes there may be
Figure 2 implications to speci®c parts of your talent strategy and thus
warrant its review and revision. Failing to take this step could
mean that your talent strategy becomes antiquated, stale and
ineffective. Review the talent strategy and its metrics at least as
frequently as you do your business strategy and its metrics.
Just like any new skill, practice is a prelude to pro®ciency.

Become one of the growing numbers of progressively-minded

executives who recognize that people are the most powerful
source of competitive advantage. Develop and implement an
organizationally aligned talent strategy and lead your ®rm to
organizational excellence. J

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