TALENT MANAGEMENT now features prominently on the CEO’s agenda, with many spending as much as half their time spotting, preparing and monitoring promising executives. In many cases, CEOs now also participate directly in development activities such as mentoring and teaching leadership skills
TALENT MANAGEMENT now features prominently on the CEO’s agenda, with many spending as much as half their time spotting, preparing and monitoring promising executives. In many cases, CEOs now also participate directly in development activities such as mentoring and teaching leadership skills.
A recent whitepaper by the Economist Intelligence Unit, in cooperation with Development Dimensions International (DDI), found that CEOs believe strong talent management leads to improved financial performance, but they do not explicitly measure return on investment.
While talent management has traditionally been the domain of HR, the whitepaper found that two factors largely account for increased CEO involvement in the past few years: the shift in focus towards intangible assets such as talent, and increased board scrutiny in relation to both ethics and performance.
“Now it is a strategic necessity for these executives not only to keep abreast of the latest developments in the company’s talent program but also to plot strategy, own associated initiatives and regularly participate in events related to talent management,”the whitepaper found.
“As talent management has grown in importance in recent years, so has the role of HR departments. This is positive news for senior HR professionals who have long been seeking greater involvement in matters of strategic importance.”
The in-depth survey took in 18 CEOs and two COOs from large companies across 10 countries, including the US, the UK, France, Japan, China and Australia.
Of the 20 executives interviewed, seven spent 30-50 per cent of their working time on talent management, and a further seven executives estimated their time commitment to be about 20 per cent.
The remaining executives said talent management is a priority and either spend 5-15 per cent of their time on it or could not provide a time estimate.
“Top executives now consider talent management one of their highest priorities,” said Nigel Holloway, research director, Americas, at the Economist Intelligence Unit.
“They are motivated to develop great executives because of the competitive advantage it brings to their companies.”
Bruce Watt, managing director of DDI’s Australian operations, said CEOs spend substantial time on activities to build leadership capability; however, HR’s role is to connect these in a coherent strategy based on business needs.
“The findings underscore that it is no longer a case of whether talent management is on the Board agenda, but ensuring the CEO receives adequate strategic support in tackling the issue,” he said.
“This shift in focus provides an opportunity for HR executives to get closer to the CEO and be an essential contributor at Board level.”
The survey found that although executives engage in talent development activities and succession planning, much of their involvement is ad hoc and does not stem from a formal plan explicitly linked to corporate goals.
Furthermore, all the executives surveyed write formal evaluations of the people who report directly to them –usually half a dozen senior managers.
Performance reviews are a key part of their companies’ approach to talent management, they said, ensuring their organisations identify the best candidates and spot weaknesses in their executive pipeline.
