10 Mar The New Talent Development Mandate
This post originally appeared on www.td.org on Wednesday, June 01, 2016.
Understanding and aligning to the CEO’s agenda for driving growth
While many CEOs are focused—and rightly so—on an agenda for driving growth, businesses are still falling short, described by what is now becoming a familiar phrase: the gap between strategy and execution.
This adaptive struggle between the CEO’s growth agenda and its implementation has increased complexity in the workplace, creating a variety of productivity problems in today’s workforce. In the face of lackluster results, talent development leaders are confronted with an alarming imperative: Find a way to help change the business game or become irrelevant.
As such, this is the new talent development mandate of the 21st century: Enable breakthrough performance in a radically shifted world of work, and understand that business leaders must systematically reconsider their organizational assumptions and principles and adopt a new approach to the way of working.
As CEOs look to lead new business strategies, they in turn launch initiatives led by their lieutenants, generating a wave of activity and hustle. From the CEO’s perspective, the pace of change demands a dual result: Minimize disruption to existing operations and improve the ability to execute.
The question then becomes: How effective are these initiatives in producing the anticipated results?
The gap between strategy and execution
In spite of many well-intended efforts, the numbers don’t lie. Taken in aggregate, sales, general, and administrative spending outpaces revenues, and margins continue to erode. There is a cause-and-effect chain that explains why this gap between strategy and execution is so difficult for organizations to overcome:
- Many businesses are inherently biased toward their own internal environment and the way things always have been done.
- This gravitational pull contributes to a major disconnect with customers—in particular, with the new mechanics of how buying decisions are made.
During the past 10 years, a perfect storm of technology innovation, economic pressures, and readily available information has shifted the balance of power to buyers. Businesses used to have the luxury of defining value to customers, communicating that value, and differentiating based on features and benefits. In today’s world, it’s quite the opposite.
Executive teams are adjusting their business strategies to respond to elevated customer expectations in almost every industry segment. Radical innovations in consumers’ ability to use technology to research, vet, procure, and receive goods and services has elevated the demand for choices, faster service, and higher quality interactions.
In response to the evolution of customers and buyers, businesses are shifting their strategy in unprecedented, tectonic ways—from Amazon’s evolution from a bookseller to a one-touch, one-stop-shop procurement hub, to the emergence of an entire collaborative economy of peer-fulfilled products and services. From the executive suite down to business unit leaders and their teams, the pressure to work harder and smarter, with the goal of delivering more value to customers, is unrelenting.
This pattern of strategic concerns generates a common implication: The value your company brings to the table must be clarified and communicated, and also linked to the skills and knowledge of customer-facing, revenue-generating roles. Consequently, CEOs are taking a systematic view of their growth agenda to include recasting the value of products and solutions, and retooling the human capital needed.
To HR and talent development leaders, these industry and market forces, coupled with radical shifts in strategy in response to increasing customer expectations, should not (and cannot) be considered business as usual.
So now the talent development function is being told by the CEO to partner with the business to help enable the growth agenda or we will shift your resources to areas of the business to implement what is needed to support the business strategy.
The heart of the challenge
The cascading effect of an inside-out bias, which then reinforces a lack of common understanding of customer problems, lies at the heart of the challenge, as initiatives and activities proceed with old ways of working and an incomplete view of customer realities.
Leaders are well aware that the more they understand how people buy, the more they can inform the buying decision-making process. Yet, they still struggle to crack the code on how buying decisions have truly evolved. In business environments, the disconnect between an enterprise and the decision-making dynamics of its customers is especially acute:
- Customers are thinking about their roles differently, but their job titles may have very little to do with the actual work that they perform.
- The number of people involved in making decisions about driving new results, change, and supporting technology is ever-increasing and involves multiple organizational levels.
- To tackle today’s unprecedentedly complex challenges, buyers are required to work more cross-functionally. This means they often struggle to blend a variety of different perspectives together.
Given the way customers are trying to solve problems, consider the challenges that organizations create for themselves as they attempt to help customers get what they need, especially when those needs collide with existing functional silos. These brackish-water scenarios play out across all of the functions in today’s organizations:
- The ability for agents to execute a more service-focused strategy requires a blend of technology, operations, marketing, service, and sales all working together to help them achieve that goal. Yet few organizations have a way to develop a cross-functional solution.
- To execute sales strategies that involve selling the entire breadth of the portfolio, salespeople must rely on product, marketing, sales, and training groups. Yet these tend to be more focused on getting things done in their own silo and lack the common view to unify their efforts.
- When employees start aligning themselves to the needs of customers, they suddenly find themselves outside of standard operating procedures, and working outside of normal company processes and procedures. When that happens, managers have a choice to make: Reinforce what used to work or coach and enable what will work going forward?
This is where the new talent development mandate begins to take shape, as the gap between your company and your customers continues to widen. While some processes and technology can modestly shorten this gap, the burden of communicating the full value of your company still rests on the shoulders of client-facing, revenue-generating roles, and the teams that support them. At the same time, the executive team demands greater speed and breakthrough results.
Herein lies the opportunity for the talent development function.
A new way of working
Increasingly, talent development leaders are stepping up to do the heavy lifting to figure out how managers and their teams must work differently to add value to their organization’s customers. These forward-looking leaders focus on uncovering customer problems, and helping their people solve those problems or create new products that customers never knew they needed. They work to overcome the internal friction that stands in the way of execution.
Initially, the shift is not easy. As internal departments rethink their value contribution, and groups of people learn to team together to create new outputs, talent development leaders can expect the friction and confusion that comes when people are pushed out of their comfort zone.
Moreover, talent development functions are leaving a major opportunity cost on the table, as business strategies suffer from poor adoption and execution lags in the trenches. Talent development teams need to tackle the inevitable friction and confusion that employees will experience as their businesses make strategic shifts, and as employees’ roles and responsibilities shift from old ways of working to new ways.
Aligning the company to today’s sophisticated customer is not easy. From an talent development perspective, there are implications at the execution level where human capital needs to be resourced, on-boarded, trained, and reinforced in alignment to the future state. To move forward, talent development leaders need to:
- Take a top-down, human capital strategy view. To effectuate change, and also make it stick, talent development leaders need the full endorsement of their executive team and CEO.
- Adopt future-state principles, and stick to them. To successfully bring the CEO’s growth agenda to fruition, talent development leaders must turn to principles that are customer-centered, value-driven, and focused on problem-solving.
- Build a coalition of the willing. The way to the breakthrough performance that CEOs seek is not universally understood, nor is it a given that constituents will proceed willingly toward the change that lies ahead. Talent development leaders who are ready to pursue this new agenda will need like-minded leaders with whom to partner.
Drastic measures, such as a massive reorganization, are not the optimal path to breakthrough. Instead, talent development leaders need to proceed methodically, adhere to the new mandate and shift people to a new way of working that is directly aligned with the CEO’s growth agenda to achieve organizational success.