A CEO’S GUIDE TO TALENT

MANAGEMENT TODAY
By Vikram Bhalla, Jean-Michel Caye, Deborah Lovich, and Peter Tollman

W ith today’s focus on advanced

technologies, it’s easy to overlook a
simple fact: all that tech is meaningless
Companies require a fresh view of recruit-
ing and talent development that takes into
account the fact that the technical talent
without the talent to put it to use. In an they need, especially in more advanced
age of automation, robotics, and artificial fields, may not be immediately available.
intelligence, human talent is more import- They need to manage teams made up of
ant than ever. While the best CEOs recog- traditional employees, techies, contingent
nize this and put people at the center of workers, and people from outside the orga-
their agendas, many others continue to pay nization (such as agencies and suppliers).
lip service more than they actually devote They need to figure out how to “reskill” or
time to their “most important asset.” “upskill” people displaced by automation
and other technological advances. The
About a year ago, we pinpointed 12 princi- numbers are big—up to two-thirds of cur-
pal forces shaping the demand for, and rent headcount. In our workforce planning
supply of, talent. (See Twelve Forces that assignments, we are finding that an aver-
Will Radically Change How Organizations age 66% of employees will experience sig-
Work, BCG Focus, March 2017.) Half of nificant change in their job profiles in the
them have to do with technological and next five years. In addition, companies
digital productivity and shifts in ways of need to create hundreds, maybe thousands,
generating business value; the other six re- of new job profiles from scratch.
late to changes in resource distribution
and in workforce cultures and values. Tak- It’s an enormous challenge—one that
en together, they amount to a new type of should be at the top of every CEO’s action
industrial revolution in how companies list. For those who want to get it right, here
work, which means that management are five simple ways to think about estab-
teams need to adjust how they create their lishing a people advantage that is as real
people advantage. and powerful as any other competitive ad-
 vantage out there. A word of warning, how- a two-by-two matrix). It’s the most presti-
ever: simple is not the same as easy. Effec- gious form of recognition we have.
tive talent development and management,
especially in a time of fast-paced, tech-driv-
en change, takes a concerted commit- It’s Not Just About the 2%
ment—and, most important, time. In the US National Basketball Association’s
2017 season, two teams with below-average
payrolls—the Golden State Warriors and
It’s About Time the Boston Celtics—won their respective
Great talent management is like raising divisions. Golden State went on to win the
kids—it’s all about how you spend your NBA championship. At the same time,
time. CEOs and their leadership teams often eight teams with above-average payrolls all
devote just a few days a year to talent man- finished with losing records. One big rea-
agement, when 30 to 40 is closer to what’s son: teamwork—specifically, cooperation,
required. (Is 10% of your time too much to or acting in ways that improve the effec-
devote to your most important asset?) tiveness of others, often at personal cost.

A few years back, respondents in a survey Players on the Celtics and the Warriors “as-
of 2,000 executives said that their leader- sisted” their teammates far more frequent-
ship teams spent fewer than nine days a ly than players on other teams—on aver-
year on activities related to talent manage- age, 15% to 30% above the league average.
ment. Top executives at “best-practice com- An assist (passing the ball to another play-
panies” spent 20. Given the importance er rather than launching a shot oneself )
and complexity of managing talent today, embodies cooperation because players for-
the time required has greatly increased— feit personal points in order to set up a
maybe doubled—but our experience tells teammate who potentially has a better
us that the average actual commitment has shot. The sacrifice is real: basketball is a
not changed. And if executives at levels team sport, but the NBA celebrates its
three, four, and five don’t see the top team stars, who earn tens of millions of dollars
committing significant time to talent devel- each season, and points scored are the big-
opment, they will quickly conclude that gest determinant of that pay—40% more
other priorities deserve the lion’s share of than any other tracked metric. The individ-
their attention as well. ual reward for assists can’t match the pay-
off for points, but teams that transcend in-
We’re not just talking about talent reviews. dividual interests and foster higher levels
These deserve as much time as leaders can of teamwork score points and win games.
commit, but so do the daily and weekly op-
portunities to interact one-on-one or in The idea that the top 2% of your people
small groups with direct reports and staff. merit 80% of your talent attention has be-
These interactions are where coaching and come a tenet of conventional wisdom. Prob-
mentoring take place, where leaders get ac- lem is, it’s always been an exaggeration, and
tively involved in the careers of others, and the importance of the 2% is declining in to-
where those leaders can make a real differ- day’s world. As more companies realize that
ence. agile ways of working are the new normal in
our fast-moving information age, they are
At BCG, we try to practice what we preach. turning to cross-functional teams to speed
The firm’s partners are rated annually on things up and get work done. These teams
two important scores (among others): client heighten the importance of abilities such as
success and apprenticeship, with the latter communication and collaboration and miti-
determined through an upward feedback gate the impact of the 2%, no matter how
program in which everyone in the firm can skilled they are. The stars can still rack up
participate. Those who rank near the top on points, to be sure, but to be most effective,
both axes (about 8%) receive the Northeast even they need the help of those with skills
Award (named for the top-right quadrant on they don’t have. Working in teams can have

The Boston Consulting Group | A CEO’s Guide to Talent Management Today 2

 other benefits, too: employee engagement, leader that has been viewed almost 4 mil-
measured in quantitative surveys, increases lion times. Roselinde started talking about
dramatically. new ways of leading before anyone else—
she was truly prescient—arguing that lead-
ership in the 21st century will be defined
Be the Change You Wish to See by the answers to three questions:
Leaders are hardly immune to the changes
taking place. In fact, as companies bring •• Where are you looking for the next
onboard new technologies (including those change to your business model or your
that automate or replace tasks now han- life? The answer can be found in what
dled by humans), reorganize around cross- you are doing today.
functional teams, and become more depen-
dent on ecosystems of partners and other •• What is the diversity measure of your
organizations, success comes to require personal and professional stakeholder
adaptive, agile leaders who can themselves network? Great leaders understand that
embrace change, let go of old habits and a more diverse network is a source of
behaviors, and lead their organizations in better understanding and solutions,
new ways. because it gives them access to people
who think differently from themselves.
Some of these “new” characteristics are al-
ready well established among forward- •• Are you courageous enough to abandon
looking leaders. Four capabilities of the a practice that has made you successful
adaptive leader that we identified years in the past? Great leaders dare to be
ago are still valid: different. They don’t just talk about risk
taking, they actually do it.
•• Navigating the Business Environ-
ment. Adaptive leaders embrace Great leaders adapt to their times. They
uncertainty and adopt new approaches spend a lot of time and effort thinking
in order to chart a course amid turbu- about what’s going on around them and
lent conditions. what’s about to change. They learn to be
comfortable outside of their comfort zone.
•• Leading with Empathy. Adaptive And they encourage others to do the same
leaders develop a shared sense of in their daily interactions by recognizing
purpose and manage through influence and rewarding adaptive behaviors in their
rather than command and control, companies’ performance management sys-
creating cohesion in a time when talent tems.
is increasingly dispersed geographically,
functionally, and organizationally.
Look to the Front
•• Learning Through Self-Correction. As with the 2%, companies devote a lot of
Adaptive leaders encourage—indeed, time to their 150, or even 350, top-echelon
insist on—experimentation. Of course, stars—the leaders of the future. They typi-
some experiments will fail, but this is cally spend much less time supporting and
how adaptive organizations learn. developing the leaders who manage cus-
tomer-facing functions or functions that
•• Creating Win-Win Solutions. Adaptive have a direct impact on growth, profitabili-
leaders focus on sustainable success for ty, or other critical performance metrics.
both the company and its external These frontline leaders work at the rock-
network of stakeholders. (See “Adaptive face of value creation; they are also key to
Leadership,” BCG Perspectives, Decem- embedding a company’s purpose through-
ber 2010.) out the organization—which our research
shows contributes directly to performance.
Our colleague Roselinde Torres has deliv- (See Purpose with the Power to Transform
ered a Ted Talk on what makes a great Your Organization, BCG Focus, May 2017.)

The Boston Consulting Group | A CEO’s Guide to Talent Management Today 3

 In a digital world, where creating and man- their knowledge are going to be-
aging the customer experience is the basis come irrelevant. Even people work-
of relationship building, frontline leaders ing in administrative areas see new
are a key success factor. tools coming and are worried about
what their jobs are going to become.
The move from individual contributor to And we have a responsibility to an-
manager is the single biggest change in swer the anxiety generated inside
role for any staff member, yet in many our company by this unprecedented
companies these newly minted “leaders” flow of new approaches and tech-
get little or no helpful support. Many re- nologies. The upskilling and reskill-
ceive only a token welcome-to-manage- ing of our people is a massive task
ment training session or some manage- that we must all be involved in if we
ment modules to look at when want to keep our workforce engaged
multitasking. and productive.

CEOs at people-advantaged companies It can help to look beyond the existing or-
play an active role in developing this man- ganization. As part of its digital transforma-
agement cohort by directly participating in tion program, Renault established a digital
their training (on a selective basis, certain- center with a multifaceted mandate, in-
ly, but frequently and visibly enough to get cluding digitizing internal processes, creat-
noticed), and they get their senior manage- ing new ways of working, and fully leverag-
ment teams to make the same commit- ing the value of data. The center is charged
ment. Top leaders help provide frontline not only with delivering digital projects
managers with practical solutions to the but, equally important, with building the
problems they face. In the process, front- company’s digital and agile competencies
line leaders build their capabilities in the through internal training and external re-
real work they do every day, which both cruitment.
embeds necessary change into the organi-
zation and fosters more engaged teams To pursue this part of its mandate, the digi-
that increase productivity and deliver a tal center established a talent incubator
better experience for customers. (See How that handles a mix of more than 300 peo-
Frontline Leaders Can Deliver Breakout Per- ple, of whom one-third are Renault em-
formance, BCG Focus, November 2016.) ployees, one-third are outside contractors
or contingent workers, and one-third are
new hires recruited by the center. These
For Winners, Talent Creation Is people work together in fast-moving, itera-
a Daily Responsibility tive, agile teams on projects assigned by
Every company has learning and develop- the broader business that have clearly de-
ment programs, but these are typically fined business objectives. Each team has a
geared to produce incremental improve- product owner, who comes from the auto-
ment rather than transformative capabili- motive business and works with the team
ties. Companies must address their talent until the project is completed and its objec-
needs in a comprehensive and transforma- tive achieved.
tional manner that is embedded in the day-
to-day operations of the organization. Read The digital center and talent incubator
what Carlos Ghosn, chairman and CEO of serve multiple purposes for Renault. The
the Renault–Nissan–Mitsubishi Alliance, incubator and its multifunctional teams
had to say recently at Davos: teach employees agile ways of working (on
the job) and show them how effective
This sudden storm from all the new those methods can be. Contingent workers
technology coming—digitization, ar- and new hires include a lot of technical tal-
tificial intelligence, robots—is a ent that the company needs in order to ef-
huge cause of worry for our engi- fect its transformation. The digital center
neers. They’re worried that they and can attract such talent more readily than a

The Boston Consulting Group | A CEO’s Guide to Talent Management Today 4

 more traditional organization. By integrat- human capital with the same rigor as a
ing these people into blended teams with capital asset investment. (See “Make Tal-
internal employees and assigning the ent, Not War,” BCG Perspectives, Decem-
teams real business problems to solve, Re- ber 2011.)
nault facilitates a form of technology trans-
fer between digital talent and internal em-
ployees—who are assigned to the incuba-
tor, in part, to develop new skills. When
product owners and team members finish
W hile each company will approach
the talent challenge in its own way,
winners share the view that talent is a criti-
their time in the digital center and return, cal business priority and act accordingly. Ev-
or move into, the traditional business, they ery discussion of strategic priorities and op-
serve as evangelists for new ways of work- erational plans addresses talent-related
ing with real-life success stories that facili- questions. What talent do we need in order
tate a broader culture shift toward a more to execute these plans? Do we have it?
digital organization. Where will we get it? How will we build it?
At these companies, CEOs ensure that their
In one of our early publications on the sub- line leaders feel enabled and accountable
ject, we defined talent as simply “the peo- for delivering on the talent agenda. HR has
ple who bring competitive advantage to a an essential seat at the table. But at the end
company.” We observed that companies of the day—and on the bottom line—it’s up
with an effective approach to talent man- to mangers throughout the organization to
agement take an end-to-end view that is make sure they have a plan to put the tal-
grounded in business strategy and treats ent they need in place and to execute.

About the Authors

Vikram Bhalla is a senior partner and managing director in the Mumbai office of The Boston Consulting
Group. You may contact him by email at bhalla.vikram@bcg.com.

Jean-Michel Caye is a senior partner and managing director in the firm’s Paris office. You may contact
him by email at caye.jean-michel@bcg.com.

Deborah Lovich is a partner and managing director in BCG’s Boston office. You may contact her by email
at lovich.deborah@bcg.com.

Peter Tollman is a senior partner and managing director in the firm’s Boston office. You may contact him
by email at tollman.peter@bcg.com.

The Boston Consulting Group (BCG) is a global management consulting firm and the world’s leading advi-
sor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all
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information, please visit bcg.com.

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The Boston Consulting Group | A CEO’s Guide to Talent Management Today 5