Despite the challenging economic climate, firms with a long-term view continue to invest in their leaders. Traditionally, when budgets get tight, leadership development and succession management programs are often the first things companies cut. However, proactive talent management is even more critical during tough times to avoid talent shortages when the economy improves.
Rather than slashing budgets, here are five strategies that help companies get the most out of investments they do make in talent management:
§ Focus on competencies that make a difference. Rather than offer “leadership development 101”, it is more effective to assess the competencies or skills that are most critical to the future success of the business, and focus skill development in these areas. If Innovation and Strategic Acumen are important areas of focus, then it is beneficial to offer programs that will help leaders build these specific skills. In addition, leverage internal data (e.g., performance management or 360° data) to determine the key development areas for most leaders. If aggregate data suggests that leaders are strong in Innovation but weaker in Strategic Thinking, this information will help prioritize training needs.
§ Take learning and development out of the classroom. Many organizations are creating activities that provide on-the-job learning opportunities such as action learning projects where leaders work on solving real business problems. Recently, an insurance company recognized that there was a need for its senior managers to enhance their level of customer focus and financial acumen. The CEO sponsored an action learning project where these managers worked in teams to solve two important business issues. The teams generated high-quality recommendations to address these challenges, while gaining knowledge that addressed their top development needs. Other companies are using on-the-job training opportunities, cross-functional teams, or rotational assignments to help leaders enhance their skills.
§ Focus on high potential leaders and critical roles. Rather than using a “one-size fits all” approach to talent management, focus on high potential leaders who will be critical to the future success of the organization. The best practice to high potential identification is to use some form of assessment to provide objective data on these leaders. In addition, determining what roles are of strategic importance to the company is another worthwhile step to ensure that there is a talent pipeline for those roles. While succession for key executive positions (e.g., CEO, CFO, and COO) is important, it is also beneficial to identify potential gaps in bench strength for other critical roles (e.g., sales management positions) throughout the organization. Investing differentially in talent is a strategic decision that pays off.
§ Offer alternative delivery strategies. Due to travel restrictions and opportunities to increase efficiency, many organizations offer online training programs or blended learning solutions (a combination of web-based and in-person meetings), which results in tremendous savings. Other organizations are using internal resources to facilitate their leadership development programs. Rather than simply reducing the number of leadership development programs offered, use creative ways to ensure that leaders receive the necessary training to be successful in the future.
§ Measure the impact of leadership development on business performance. Companies with data that illustrates the return on investment (ROI) of their leadership development initiatives have a powerful business case for talent management. Senior executives who understand the importance of strategic talent management continue to invest in their leaders. Therefore, it is important to implement a measurement plan that will help demonstrate the value of talent management initiatives. For example, data that shows the link between leadership development and customer satisfaction or other business metrics is particularly compelling.
Companies that invest in talent during tough times are more likely to see the pay off when tough times are a thing of the past.
