At our 2013 ReThink Conference – an annual summit focused on best practices in global Human Capital Management – we had the pleasure of interviewing Jim Collins, author of the international bestseller Good to Great. Among his many valuable insights was his emphasis on the fact that when all is said and done, it’s people who really make the difference and distinguish great companies from good ones.
The key is to align your talent with the opportunities and roles that fit their passions, their natural abilities and what makes them significant within the organization. Effective human capital management is dependent on hiring and retaining employees who share the same values as your organization and can then excel at building or participating in winning teams – growing from good to great. But, as Jim points out, managing talent – attracting and keeping enough of the right people in an organization – is a journey, not a sprint.
In his interview, Jim shared three specific challenges that can hamper a company’s journey from good to great:
1. Missed opportunities– Companies don’t flounder from lack of opportunity, but from an inability to seize those opportunities by having the right talent in place. For example, many organizations struggle to employ enough exceptional young leaders. Hiring and then developing enough raw talent to remain productive and engaged with the organization for decades is an often overlooked means of being more prepared for opportunity and provides for more stability in the long-run.
2. Never ending turbulence and uncertainty– The business world is continuously changing, and, it’s unlikely that change will slow down anytime soon. The processes and programs that create success today are unlikely won’t be as effective tomorrow. There is no “new normal,” only a continuous cycle of “not normal,” presenting challenges that need to be met with creativity while staying aligned with an organization’s core values.
3. Short-term pressures– Growing from good to great is not a quick endeavor. Like any growth cycle, it takes time. Jim’s research indicates that companies generally take seven years to see a turning point, and he hypothesizes that it can take as many as 25 years to build a great, enduring company. If you want to be great, you need to be in it for the long haul.
The great news is that as organizations succeed in placing the right people in the right roles, the resulting benefits and contributions to the overall success of the enterprise are abundant. The right employees tend to be self-motivated in doing the best work they can – they want to be part of a winning team, and they want to contribute real results for the benefit of the company. This type of commitment is contagious, so the greater the alignment between talent and values, the better a company is positioned to prevail through challenging shifts in the market and to embrace opportunities.
So how do you effectively manage talent so that your journey from good to great doesn’t lose momentum?
Despite the still-tenuous job market, reports indicate that more and more people are giving thought to leaving their jobs. While the reasons for this trend are many, the role of employee engagement — or the lack thereof — cannot be overlooked. Studies show that employee engagement is at its lowest level in years, with at least one in four employees describing themselves as actively disengaged and another one in four employees describing themselves as only moderately engaged. Some of these disengaged employees are not performing up to expectations and some may even be negatively influencing the performance of those around them.
The ADP Research Institute’s study Pay For Talent: The Next Generation of Talent Management Strategy outlines a compensation strategy to retain key talent that recognizes past performance while tying factors like potential, critical skills, risk of loss, and future corporate goals and needs into the overall reward process. Compensation is a lever that organizations can use to not only reward past performance, but to incent the right employees who have the skills and passions to become the organization’s future leaders. That’s what Pay for Talent is all about: driving differentiation in compensation to ensure that the organization rewards those employees who offer the most value.
Why is this multi-dimensional approach so important? If your organization has a high-performing employee with the potential to deliver even more value in the future, you need to not only reward that employee for past contributions, but incent him for future actions. Otherwise, you risk losing that valuable employee to another company in the war for talent. In fact, leveraging compensation through Pay for Talent is far and away the best plan to connect and engage with Millennials – addressing a key challenge in the journey from good to great.