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Beyond Competencies: Meshing Your Talent Strategy with Your Business Strategy

Whether the challenge is reducing operating costs, improving service excellence, or enhancing brand recognition, organizations need an effective way to link their people strategy to their business strategy. That is, understand what it takes for people to succeed in their new business environment and align their talent management systems—hiring, development, performance management, etc.—to identify and develop people who succeed.

Successfully executing your business strategy starts with creating a comprehensive view of what it takes to be successful in a job, function, or level, and then integrating that description into all of your talent management systems.

All too often well-defined ‘competency models’ developed by HR fail to resonate with strategy-setters because it is not in their language. This often results in a failure of senior executives to drive the necessary change. This disconnect between strategy and a comprehensive approach to managing the talent who will execute it is evident in current succession management statistics.

A May 2007 report from Bersin & Associates found that 51 percent of respondents cited lack of potential leaders as their first or second top challenge. In a separate study conducted by DDI and the Economist Intelligence Unit in 2008, 55 percent of respondents said that their firms’ performance was likely or very likely to suffer in the near future due to insufficient leadership talent. And according to the same study, the greatest barrier to effective strategy execution was placing the wrong person in a key role (as selected by 36 percent of respondents). Even more recently, a DDI-sponsored study from the Aberdeen Group, The 2009 HR Executive’s Agenda: Driving Business Execution and Employee Engagement revealed that the top three work force challenges most concerning to HR executives for 2009 are retaining top talent (75 percent of respondents); developing leadership skills of existing managers (74 percent of respondents), and recruiting top talent (71 percent of respondents).

So how can you ensure you have the right, capable leader in a key role—executing your most important strategies? Building Success ProfilesSM is the most effective way to connect business strategy and people capabilities. They’re fundamentally different from other approaches (such as competency modeling) because they look beyond mere competencies to create both a way for business people to talk about managing talent, and a way for talent managers to understand what the business needs.

Success ProfilesSM holistically capture the requirements of job success—what knowledge, experience, competencies, and personal attributes are critical to drive business strategy in a job, job level, or function (See Figure 1). These profiles define what enables individual, group and eventually business success—or conversely, contributes to failure if lacking. Accuracy in defining success along with comprehensive coverage of the four components in the model are the cornerstone of an effective business-based, talent management system.

Figure 1: Think Holistically: The Complete Success Profile

think-holistically-scaled

How does this link between business strategy and people requirements work? Consider again a company facing growth. To meet current and future challenges, this company determined that “Driving New Product Innovation” will be a critical factor or business driver for achieving growth. So to create Success ProfilesSM that align talent management systems with business strategies, it was critical to define what people in each job or level need to do effectively to bring new offerings to the market. For example, each level within the organization has different responsibilities to contribute to success:

Senior Leaders

When the driving business need is product innovation, our research shows that Change Leadership, Selling the Vision, and Empowerment/Delegation are critical competencies for senior leaders to possess when facing this challenge. Some examples of what this will actually look like that come to mind: senior leaders at a car company charge their staff to double the fleet’s fuel efficiency within a decade; to launch a product that supports an emerging technology or trend; or introduce an entirely new product that develops a market that didn’t previously exist.

Entry- and Mid-level Leaders

Frontline leaders and managers play a large role in implementing a change that requires increased innovation. Past competency profiling efforts demonstrate that Facilitating Change, Coaching, and Customer Focus are critical competencies for these leaders to successfully implement this required change. These leaders are the executors when it comes to innovation. They’re taking big ideas from senior leaders and making them real. They’re also motivating their teams to support the effort. And in tough economies, they’ll be vital in deciding which innovations are well-timed, using their thorough knowledge of the organization’s customer base.

Frontline Associates

Individual contributors also play a critical role. Research shows that competencies and personal attributes such as Adaptability, Initiating Action, and Continuous Improvement contribute to successful innovation at this level of the organization.

Frontline associates play a key role in innovation as well. Often, these hands-on workers are the ones who see flaws in a plan or a product that weren’t obvious when the idea was conceptualized. When frontline associates are innovative, they infuse change and improvement to the overall process. They tackle tough problems, and improve the overall end result.

Motivational fit for "Driving New Product Innovation" is similar at all three levels. When innovation is the business driver, associates should be excited by change rather than comfortable with the status quo. Innovators like to problem solve, and value the chance to be in on something new. Location fit is another kind of motivational fit that can’t be overlooked. How well, for example, would an engineer adapt to an isolated desert environment that goes along with a job testing explosive devices? He may love the work, but can he find satisfaction with the compromises he must make to do it?

Many companies realize that it’s not enough to simply state the business driver for a job or level. In order for an aspirational business driver to be more than 'words on the company poster', the business drivers must link to critical people capabilities. The people capabilities (or Success ProfilesSM) shape the talent management systems to hire, train, evaluate, and promote people at each level.

In DDI’s new white paper, Success ProfilesSM: Comprehensive Talent Management through Holistic Job Analysis, we detail challenges organizations typically face when executing a business-relevant talent management strategy and show you how to build accurate Success ProfilesSM. We also demonstrate how these enriched profiles form the foundation of an effective organization-wide talent management and succession process across all levels of the organization.

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