Written by
Changeboard Team

Published
03 Mar 2015

The leadership development horizon - Dr Mark van Dongen, HR director of global growth projects at Cr

03 Mar 2015 • by Changeboard Team

How do we define talent?

Talent is defined by the speed at which people can and want to grow within an organization. For someone to be classed as ‘talent’, they must ensure their value increases faster than their cost to the company. To continue to progress in demanding environments, individuals need to process decision support information quickly and learn fast. They also need a strong drive and to engage heavily with their organization.

Spotting potential

We researched 34 heads of HR, representing 337,500 employees from 11 countries and 18 sectors, to find out how their organizations identify and develop potential future leaders within a management development (MD) process. We found that 33% of these companies did not have an adequate definition of talent and just half assess talent capabilities – on IQ (58.1%) and EQ (41.5%). It’s likely that the remaining half rely on academic qualifications as a measure of talent potential – a risky method since intellect is just one factor that influences educational achievement.

Less than half of those surveyed said they checked whether their employees’ personal values matched those of the organization. By investing money and developmental effort in people whose values deviate from your company’s, you could be investing the future talent pool of another organization.

Are you investing?

In the US, a sizeable $125.88 billion was spent on development during 2009, with almost a quarter of this being allocated to leadership. However 44% said they do not have a valid selection system for entering individuals into an MD scheme.

Spending on developing talent has shown a 200% return on investment versus a negative return when investing in the wrong talent. This makes a clear case for introducing solid processes and systems, with clear definitions of what the organization is looking for in talents, what needs to be developed and how this is achieved.

When developing talents, you have to consider what you need in 15-20 years' time. Yet many companies measure and develop talents versus existing competencies. This will only ensure that when these talents move to senior executive seats, their skills are not what you need.

Developing HRs strategic signature

In 97% of cases, HR owns the MD process. However, in many companies management development is still unsophisticated, perhaps because HR has not taken true ownership of developing leaders, lacks influence on C-level leaders or does not have the knowledge to make the right decisions.

Top tips for HR leaders

  • Professionalize in the area of leadership development, become knowledgeable about talent development and truly own it
  • Ensure HR talent follows the same track as non-HR, including expat and cross-functional moves, when needed. This enables them to join talent networks and gain credibility among their peers
  • Treat management development within HR as a unique specialty requiring specific knowledge
  • Assess your organisation's processes and bring them up to international standards using professional methods and tools. For instance, values can be matched by looking at competencies, measuring learning agility and individual engagement with the company.

When we know what to do and why, it is a lot easier to own and drive the MD process, instead of simply supporting it. The business knows professionally developed future leaders will make strategic difference in the future. If we prove we can develop them in such a way, the maths becomes easy.