Talent your most important resource...

Initial Key Questions

When asked to work with a client who expresses an interest in Talent Development we would always want to establish the following with the organisation and the senior team...

• What does the business mean by “talent”, how is it defined, what examples exist currently etc... it’s an easy request but not so easy to define when pushed. There are answers but they need facilitating
• How committed are the senior team really to the investment of time and money to grow the next generation? (We say this because Talent Development isn’t exclusively an HR issue and without everybody on board the cynics will be proven right if it falls flat)
• What are the strategic goals of the organisation and what talents would enable these to be achieved?
• How is the presence of talent to be identified, what measures, assessments etc?
• How would the talented be segregated/fast tracked?
• What freedom does the organisation afford to the talented i.e. are those with initiative allowed to run with it or strangled by policy?
• How would the non-talented be appeased? (Selection processes/non-selection etc)
• What are the barriers to talent development – previous attempts, union membership, policies and practices – misguided equal ops and diversity rules and the decisions behind previous promotions?
• How is the talent to be tested – what scope for projects, learning, mentoring etc?
• How would suspected “potential” which didn’t materialise be dealt with?
• What’s in it for the talented to stay? – On-going prospects, managing the expectations of the “What now?”
• How will the organisation cost and measure the hidden elements of talent development i.e. management time in coaching and mentoring

Until the organisation is clear what the pro’s and con’s are they often run the risk of tinkering around the edges and reaping little reward.

At GP we recognise there are hundreds of companies who would be prepared to take an organisations money and deliver a same old talent programme which is little more than a core skills programme.

Less than 20% of how we develop is gained through the classroom. People are learning all the time and, therefore, the organisation needs to be clear what it wants to teach through its actions, behaviours and support – this comes from the top.

War for Talent Rages in the City

Recently we interviewed 34 senior leaders of UK banks. This was Bath Consultancy Group’s second inquiry and we wanted to investigate whether the financial crisis had led not only to new strategies being implemented but also whether banks had taken the opportunity to change both their approach to leadership and the embedded culture within their organisations.

Significantly, we found that while there had been major change in terms of strategy only 13% of leaders had undertaken a culture change programme and only just over a quarter had changed their approach to leadership development.

Our experience is that if culture stays the same, it becomes harder to implement sustainable changes to strategy. If banks manage to quickly return to growth the appetite to change will decline, so there is little chance of avoiding some of the same mistakes.

Results from interviews with leaders in major UK banks

In a survey of leaders from major banks, 71.4% of leaders report that their organisations are not cutting remuneration. 50% of banks are losing employees to competitors and further comments suggest that there is a war for talent with some banks offering 50% salary increases and guaranteed bonuses in non-income generating roles, in an effort to capture talent from their competitors.

It would appear that in spite of considerable public pressure, little has changed with regard to pay or culture change, although there does appear to have been a significant shift incorporate strategy. The interviews, carried out by the Bath Consultancy Group confirmed that 91% of financial leaders had undertaken a new strategy, yet only 13% had changed the culture of their organisation and just over a quarter (26%) had changed their approach to leadership development.

David Jarrett, Chief Executive of Bath Consultancy Group commented on the results of the survey: “Changing a strategy to survive the economic crisis is of course needed. And this seems to have worked as most banks we spoke to are now experiencing growth, or expecting growth to return shortly. What is disappointing is that most banks have not taken the opportunity to undergo a substantial shift in leadership behaviours and the culture of their organisation. In our experience, if a culture stays the same, it becomes harder to implement sustainable changes to strategy."

Changing banking culture by changing leaders

In 2009, a similar survey by the Bath Consultancy indicated that 80% of respondents felt their culture needed to change. In 2010 this increased to 87%, yet only 13% of leaders had seen a significant shift in their organisational culture.

When asked how to change culture, leaders recognised that the most effective way is to change the approach to leadership development, although few could identify specific programmes, that might help them to do so.

Rupert Harding, Head of Financial Services at Bath Consultancy Group, said, “What is clear is that those who truly embrace the need to change culture will become the talent magnets of tomorrow, while those who rely on remuneration alone are simply in trouble. We are now working with Financial Institutions helping them see that developmental investment yields the best return in when it comes to talent retention and performance."

Leadership development in UK banks

Most leaders say that their banks have maintained their investment in leadership development with 30% creating new leadership programmes. The major shift is that these programmes are being delivered internally with a reduction in external spend.

Where a change in management and leadership approach has been adopted 79% reported that it had proved successful. Spending in individual and team coaching remains solid.

Coaching is recognised as a core development tool, but the interviews show that it is still only senior management and human resources who have an appreciation of the value of a coaching culture. There is little penetration of coaching into line management and the organisation as a whole.

Organisations investing in internal coaching capability and quality controlled external coaches report the strongest developmental performance.

Rupert Harding concludes, “Past events have demonstrated that the call for change cannot be louder, but current change strategies are not addressing culture. In short, our banks may be destined to repeat their mistakes, unless the underlying culture of short term views, transactional relationship and performance pay are changed. Unless they start to find ways of retaining talent without remuneration incentives, the existing culture will prevail and we already have evidence that this is not sustainable.”