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Lack of Talent Isn’t Your Problem. How You Use It Is.
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Executive Summary
  • Top performing companies don’t have more A talent. They simply deploy that talent better.
  • These companies take four specific steps to understand which roles will create disproportionate value and get the right people into those positions.

Companies retooling for today’s changing world worry about successfully recruiting and retaining the right talent. Close to 75% of executives surveyed by Bain & Company expect that the skills and capabilities required for their businesses to succeed will change over the next 5 to 10 years. Yet they estimate that less than half of their best talent possess the critical capabilities their most important roles will require. 

Our research has found, however, that most companies do not actually require a massive influx of new “A” talent to succeed, and that top performing companies typically have no more A-level talent than their competitors. What sets these top companies apart is how they deploy that talent. They are much more likely than competitors to have their A talent in their business-critical roles.

Business-critical describes the roles that are disproportionately important to executing a company’s strategy and to delivering executives’ agenda for creating value. On average, executives categorize approximately 40% of their roles as business critical, but our research finds that only roughly 5% of roles in a typical organization are truly business critical.

Though limited in number, these business-critical roles can exist at every level of an organization: in the C-suite, on every managerial level, and across teams deep into the organization. Take the example of one global multinational consumer products company that recently began planning a global expansion. During the process, executives recognized that they needed to focus on different levels in the organization. Some of the roles determined to be critical to the expansion’s success include its global head of marketing, a C-suite position; several local country general managers who sit a few management levels down on the organizational chart; and sales teams on the ground. Now that the company has identified these key roles, business leaders working with their HR partners can focus on ensuring the best possible talent fills them.

Executives intuitively understand the need to place top talent into business-critical roles, but we find they often face three primary impediments to doing so. First, they don’t know which roles are business critical—or, as noted above, they think too many of them are. Second, they lack a clear understanding of what is required to succeed in those roles. Third, the organization doesn’t have consistent processes and approaches for matching the right talent to these roles.

Four successful steps

To overcome these challenges, the best performing companies typically do four things right:

  • Take a “strategy back” approach to defining business-critical roles. Rather than simply deciding that a position responsible for a certain size of P&L, head count, or some other metric fits that “critical” description, they look closely at the individual elements of their strategy and ask what is required to deliver on it.
  • Create profiles of what success in this role would look like. These profiles detail the ideal experience of any candidate as well as their motivations and capabilities—competencies plus potential—and whether they fit well into the organization’s culture.
  • Rigorously evaluate talent currently serving in these roles and compare them with the role profiles in order to establish the size and nature of any gaps. Then do the same for any other potential internal candidates.
  • Address their talent gaps with a thoughtful mix of talent development, deployment and redeployment, and, when appropriate and on a targeted basis, with new talent acquisition.

Talent is critical in every organization, and private equity (PE) firms that invest in many different industries are particularly attuned to the critical role of talent management in deal success. Even so, many lack a consistent, repeatable process for swiftly making talent decisions. The PE firms that have been able to outpace their competition on this dimension have done so by thoughtfully connecting their talent strategy to their overall value creation plan (VCP) for each portfolio company. This involves using specific value-creation levers and key initiatives to first define their business-critical roles and then create detailed “success profiles” for each. This is clearly linked to their desired investment outcomes.  

Current and prospective talent can then be evaluated for each role using a broad set of interview, assessment, and reference techniques that evaluate professional experience, track record—and context—of results, as well as capabilities and motivations. Key questions include: How do they perform their roles? How do they lead? What motivates them? Will they be a good cultural fit? For companies embracing a more distributed working model, this evaluation can be applied to a broader talent pool.

One PE firm was recently struggling to align with one of its portfolio company CEOs on the best way to invest in talent in order to successfully execute the VCP. By mapping the specific, measurable priorities of the VCP to the company’s organization chart, the firm was able to identify several clear talent gaps and make the case to the CEO, anchored in a rigorous analytical approach, that these new hires would be critical for success. The exercise transformed the conversation between the PE firm and the CEO, and several searches were launched. Interview guides based on the detailed “success profiles” were used to evaluate candidates and ensure continued alignment between the PE firm and portfolio company CEO during the candidate evaluations and selection process.

Leading organizations like this understand the process doesn’t end here. Deliberately deploying great talent into the roles that matter most is an ever-evolving and continual responsibility. As strategy shifts and the talent pool evolves, companies with a thoughtful, rigorous approach will enjoy a sustained advantage over the competition.

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