Every year, Minneapolis-based Fairview Health Services plucks 10 top performers from its manager and director ranks to participate in its High Potential Program. “It’s a year-long program for people the company believes will move into executive roles on day,” explains Laura Beeth, a 2005 High Potential “graduate.”
The executives-to-be have regularly received high performance ratings, have expressed interest in climbing the company hierarchy, and are nominated by organization leaders. They apply for admission to the program; an executive team winnows the field down to 10 people who represent a blend of leaders from all pockets of the 22,000-employee organization. Beeth, for example, a human-resources professional, was grouped with, among others, a surgeon and leaders from nursing, pharmacy, and allied health.
Once assembled, this group is assigned to work on community projects that are important to Fairview. Beeth’s group addressed an organization-wide challenge identified by the CEO: unifying a complex, multi-site medical services provider in a way to best serve patients. To do so, the group met off site for two days a month, bringing their respective expertise to bear on the problem, and were given leadership instruction by various guest speakers, typically Fairview executives. In addition, each participant was matched up with executive coaches and mentors from within Fairview, who imparted wisdom and provided exposure to otherwise inaccessible areas of the operation.
For participants, “It’s a wonderful experience,” says Beeth, who was system director of workforce development and placement in Fairview’s career service area when she was admitted to the program, which has since been renamed the Excel Program. Today, she is system director of talent acquisition for the entire organization.
At Fairview, this ongoing commitment to high-level training is an integral part of a comprehensive talent management framework, which spans the entire employment cycle, “from predicting talent all the way to retaining talent,” Beeth says.
Done systematically, with buy-in from company executives, talent management fortifies a company by strengthening its parts. “The smart talent managers out there understand that the process is not just about developing individuals, as important as that may be,” explains Durwin Long, assistant dean of executive and professional development for the University of St. Thomas’s Opus College of Business in Minneapolis. “It’s about building organizational capacity.”
But talent management is anything but widely adopted, and generally only by large enterprises. A 2009 study conducted by Human Resource Executive magazine and Bersin & Associates, an Oakland-based research firm, revealed that a mere 5 percent of the nearly 1,000 responding firms had a clearly defined talent management system in place. And the recession likely is tempting companies to shift their gaze from the horizon to the growing number of revenue-draining obstacles in the foreground.
Yet if organizations aren’t continually developing talent, they’ll be without the leadership they need long term. “Even in tough economic times, if you don’t invest in some way of developing your current leaders, and especially your future leaders, you’re going to hurt your organization in the long run,” says Colleen Connors, senior vice president, human resources and facilities, for Blue Cross Blue Shield of Minnesota. “There is a consistent talent pipeline that you have to address.”
“Regardless of the recession,” Long adds, “the demographics of the country are changing in dramatic ways. Globalization is not stopping. Technology is not retreating. The Baby Boomers are still going to retire, whether or not they delay their retirement for a few years because of stock market losses. Looking just narrowly at the U.S., there simply are not enough Xers and Millenials to pick up for the retiring Boomers. This is going to create succession and leadership issues. It’s going to create talent gaps in organizations.”
Not Just One Size
The concept of talent management emerged in the 1990s and has quickly evolved into far more than a buzzword applied to traditional human resources (HR) practices and processes. In fact, as more companies embraced the notion that their business success was directly linked to the talents and skills of their employees, HR departments became increasingly aligned with company leaders.
“There’s been a trend, broadly, towards evidence-based HR, which suggests that companies should be bringing more measures, structure, and rigor to HR, just as you do in other areas of the business,” explains Mark Kizilos, assistant dean of executive education at the University of Minnesota’s Carlson School of Management. “That’s led to much of talent management now being based on collecting good data . . . so you can make decisions about your talent based on good information. Consequently, human resources has more of a voice at the senior executive table, because now you have concrete information.”
Within the talent management framework is executive education, which can include less formal techniques—on-the-job training and internal coaching and mentoring among them—as well as more structured open-enrollment classes and customized programs designed and delivered through partnerships between internal talent managers and academic institutions or consultants. The training approach depends not only on a company’s business model and objectives, but also on the needs of the recipients. “There is no one-size-fits-all approach,” Connors says.
That said, executive training has increasingly migrated away from traditional classroom settings and into the environments in which leaders and prospects work every day. “The old model of classroom training, where the idea is that students are vessels to be filled with knowledge, the kind of expertise that you pour into them, that has changed,” Kizilos says. “There’s been this realization that learning is dynamic and it’s embedded in organizations.”
Consequently, Kizilos and Long agree that more businesses are tending to look for customized solutions in which the individuals being developed and the skills with which they’re being equipped fall precisely in line with the organization’s strategic objectives. “That way,” Kizilos says, “you’re developing both individual capability and organizational capability.”
For example, St. Thomas has partnered for several years with a large employer that has served relatively stable markets for a half century. “This particular organization sees value in a customized program because it is facing some specific business challenges,” Long explains. “What’s happening now is that demographic changes, technology changes, and the recession are forcing them to change and innovate in ways that are unfamiliar to many employees. What we can do for this organization is develop programs that can provide that booster fuel to individuals, but that are tied specifically to this organization’s succession planning.”
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When training is customized and happens in house, “it tends to be more topical, more strategic, and better owned,” claims Kevin Wilde, vice president and chief learning officer for Golden Valley–based General Mills, Inc.
General Mills operates an in-house institute and has ongoing programs for new and experienced managers, as well as a type of program conducted periodically for its top 500 executives. When the company needs outside expertise, Wilde says, it generally imports it, rather than sending an ambassador out to acquire new knowledge and bring it back to the fold.
“I do appreciate outside experts and academic programs for bringing good thinking into the organization, but we tend to cherry-pick them and bring them in when we need certain things. Then we have better adoption and sustainability,” he explains. “An old mentor of mine once said, ‘Never send a changed person back to an unchanged team.’ In other words, if you send one person to a program and they get excited about a new technique, when they bring it back, that will be a hard sell. Instead, when you bring great outside thinking in, you get an internal team to wrestle the issue to the ground, and the chances of having a real impact systematically are much higher.”
Experts agree that for talent management to succeed, it must have engagement from senior leadership. At General Mills, for example, senior leaders, including the CEO, teach classes in the new and experienced manager programs. “We have a strong philosophy of leaders teaching leaders,” says Wilde, who notes that, in his 11 years with the company, the consistent message from the CEO and senior leaders has been: “Talent is going to win, let’s invest in it.”
That investment doesn’t necessarily have to apply additional pressure on already buckling bottom lines. “Certainly, formal training is an important component, but there are many other ways to develop leaders that are very cost effective,” Connors says. One strategy, she says, is placing candidates in a mentoring relationship, either as the mentee of a senior leader, or the mentor of a recent hire. Outstanding performers also can lead cross-functional teams grappling with internal projects or the company’s annual giving campaign.
Wilde offers the example of General Mills’ annual individual development plan (IDP) process. Every General Mills employee is encouraged to create an IDP—a plan for personal growth, skill development, and training goals—and discuss it with his or her manager. “For employees, it’s a chance to align with their boss in terms of where they’d like some more formal training or how they’re maybe getting ready for their next job,” he says. “For managers, it’s a chance to play out one of our expectations, which is, as a manager, you’re not just here to get great results, you’re here to develop great talent.”
Wilde’s department then measures the IDP process using an employee survey. The most recent survey revealed that more than 82 percent of General Mills’ employees had a productive IDP discussion in 2008. “Obviously, we’re working to get that result higher,” he says. “But to say that four out of five of your employees report that they had a really good development discussion recently with their boss, I think that’s a great score.”
For some emerging General Mills leaders, their IDP will include involvement in community or nonprofit groups. “If you’re a freshly minted MBA, we may not give you a multimillion-dollar brand and a budget from day one, but if you get on a great committee at United Way, for example, you could really have some large responsibilities early on and learn a lot of the lessons of leadership.
“What do these things cost? Not much, just a little bit of time and a little bit of attention. They’re just examples of that commitment to continue to help employees grow,” Wilde says.
“If you’re consistently doing these things,” he adds, “you’re going to win.”