With Australia’s economy still transitioning to the post resources boom era, many organisations large and small are revisiting their strategies to gain a competitive advantage in new market conditions.
One commonly overlooked factor when determining a company’s business direction or vision is whether the organisation has the skills internally to implement its chosen strategy, and if not, how they are going to attract the right talent to deliver this.
This predicament is especially true at the executive level with leaders responsible for implementing changes critical to overall business success. All too often organisations are determining a business strategy without fully assessing whether their existing leaders have the skills necessary to deliver it effectively. This can lead to unrealistic expectations being created, turnover of key employees and ultimately a lower level of business performance than anticipated.
Given the challenges being created in Australia’s economy by the seismic shift away from the resources boom, this article discusses what organisations can do to mitigate this risk, and how to use talent management solutions to inform decisions on achievable business strategies.
As indicated above, effectively assessing the skills of the existing leadership team can be an important element in determining business strategy.
For example, the decision to enter a new market – either via a new product or geographical location – will be impacted by the relative skills and experience of the existing leadership team to deliver this. One way of establishing this would be to introduce performance management tools such as 360 degree reviews, psychometric testing or benchmarking to determine whether the current leadership team has the ability to deliver on the goals of the business. By having a clearer picture of what its current executives strengths and weaknesses are, organisations can more effectively plan which strategy to embark on and better understand the associated costs of taking such a decision.
Once the assessment stage has been completed, a decision must be made on whether to develop skills internally or approach the market to effectively “buy in” those skills from outside.
Developing leadership skills internally is often seen as the best long term solution, but this has to be balanced with the factor of time – it often takes longer to develop the skills of existing leaders than source these skills in the external market.
In addition, many organisations have existing leadership development programs for their executives, but only the best effectively align those programs to the overall business strategy. A company that has a clearly targeted or future-focussed program to develop their existing and future leaders’ skills will ensure that they are well positioned to achieve their businesses critical objectives when the time comes for action.
Alternatively, it may be that the best solution to implement the preferred business strategy is to source leadership skills from outside of the organisation. However, once this decision has been made, it is important to assess the gaps in capability and experience within the business in order to source such skills and manage this process effectively in the open market.
While it is true that many large corporates more recently have begun developing their own sophisticated internal recruitment teams adept at identifying talent through innovative methods, many HR departments are often ill-equipped to conduct a search for the type of executive required, either through lack of experience or available resources.
In this situation there may be a case to partner with an Executive Search provider that specialises in a particular sector or area of the market – particularly when evidence suggests that the best candidates in the market often don’t reply to job advertisements. In the end this will always come down to cost but one must remember, often the costs associated with making a “bad hire” at the executive level far outweigh any initial recruitment fee.
In summary, it is our belief that talent management can play a significant part in the formation and successful implementation of effective business strategies. However, our experience shows that this isn’t always recognised at board and senior executive level, which can have an impact on future business performance. The challenge for HR departments around the country is not just to establish the importance of talent management, but to link this to the business strategy.
