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03.02 – The Business Case for Developing Talent
03.02 - The Business Case for Developing Talent
Let’s start by talking about why coaching and developing your talent, coaching and developing your team, is important for your business. For your organization, and the longterm success. I want to start by sharing with you a survey that was done recently, where they asked over a thousand CEOs around the world what were the major challenges that they faced in their business? They could choose from any challenges that they wanted. The number one challenge reported by these CEOs around the world, was human capital. Human capital, the having the talent in the organization that is needed to execute on the business strategy. The number one challenge wasn’t macro-global economics. It wasn’t coming up with the best business strategy.
It was having the people with the mindset and the skill set necessary to execute on those strategies and deliver results for the organization.
Ideas or topics that these CEOs reported. We need to be able to provide employee training and development. We need to more effectively raise employee engagement. We need to improve our performance management systems. We need to increase effort to retain our best talent. And finally, we need to improve our leadership development programs because our bench strength, the talent pipeline, is not deep enough with the leadership talent that is gonna take this organization to the next level. If major CEOs around the world are focused on human capital and having the best talent in place as their number one challenge.
Then we as leaders in organizations, leaders as teams, one of our responsibilities, maybe even our most important responsibility is to help develop and coach that human capital. Let’s actually hear from one of those CEOs. Mark Hurd, who you may have heard of. He helped run an organization by the name of NCR, then went on to head up Hewlett-Packard, and now is the co-CEO of Oracle. You can see from the graph here that Mark has had quite a stellar, exceptional run, in terms of his company’s performance during his tenure as CEO. One of his recent quotes from an event that he talked about the importance of coaching and developing talent.
His statement, a strategic talent management, and in particular coaching and developing talent, is no longer a nice to have investment. It’s actually a key driver of business success and financial performance. And in fact it’s the number one issue for CEOs today. Mark Hurd, his other colleagues around the world as CEOs, this is the number one issue on their mind. Is how do we invest in our talent to ensure that they are coached and developed and have the skill set to lead organizations and be contributing members of these organizations so that we can achieve our goals and aspirations? Jeff Pfeffer, who’s a professor out at Stanford, did one of the first and I think most important studies in this regard.
He was able to actually demonstrate, empirically, the importance of human resource practices, from talent selection to what we’re talking about today in terms of talent development and coaching. And what Pfeffer found in his study of financial institutions, banks, is large differences in performance. Some banks performed really well, other banks did not. And he was actually able to attribute those differences in performance back to the HR practices, and in particular the talent management and talent development practices. So much so that he found that the banks who performed exceptionally well in terms of strategic talent management, again in particular, in terms of coaching and developing talent.
The financial returns of those banks were approximately 30% higher than the banks who did not perform as well on those same strategic talent management practices, like coaching and developing their talent. So even in an industry, where the focus is on financial returns, banks. Talent management, and in particular coaching and developing talent, is driving business success. And I think that’s important for us to keep in mind. It’s very easy for us to lose sight of the importance of these investments in talent, and in particular, our role in coaching and developing talent on an everyday basis. But again, the results do not lie.
We’ve been doing some research at the University of Michigan. One of my colleagues, Gretchen Spreitzer, was one of the first to study what makes for a successful global executives. So if you want to think about the importance of coaching and developing talent, not only for business results but also career results for you, personally, her research is particularly important. What she found is that for successful global executives there are a number of behaviors, a number of attributes that really go into determining whether some executives are really successful as global executives and others are not.
And what you see here is the final set of attributes, of behaviors, that she found as differentiating the successful global executives from the less successful global executives. I’m showing you the full list here. But I want you to study this list carefully and in particular the five items that I’ve highlighted in red. First, seek opportunities to learn. Secondly, bring out the best in people. Third, seek and use feedback. Fourth, learn from mistakes. And fifth and finally, being open to criticism. All five of those critical success factors for global executives have to do with your ability to learn on your own for your own development. But then, also, to bring out the best in people.
To coach and develop your people, your talent. Help them learn from mistakes. Help them learn from feedback. Help them engage in experiences that are gonna stretch and grow them. This is the key to being a successful global executive. Is to bring out the best in yourself through your own development. But equally important, maybe even more important, is to bring out the best in other people by coaching and developing them. Even Google, a result-driven, technology organization has discovered the importance of coaching and developing talent. What you see here is the result of a project called Project Oxygen, that has gotten a lot of press.
One of my good friends, Adam Bryant, wrote a wonderful article in the New York Times about Project Oxygen and what Google had discovered. And what they discovered is using their analytics, their capabilities, but in terms of focusing on their employees. They discovered that the most successful employees at Google shared in eight attributes, and I’ve listed these eight attributes for you here. Interestingly, five out of the eight relate to what we’re talking about today. So, the other three, don’t be a sissy, be results driven.
Your ability to think strategically, and to have what they call the technical chops, the technical expertise, to be successful in this high-tech organization where the focus is on developing technology solutions that create value for their customers. You have to have the technical chops or the technical expertise to be successful. But look at the other attributes here. The first and potentially the most important is be a good coach. Be a good mentor. Be one that is gonna develop other people. Second, empower your team. Empower your people and be there for them to help guide them along the way. Be interested in them. What they need, what they care about, and in particular their own development. Listen to them.
Communicate with them so that you can help them grow and develop. And then, the last one, career development. Not for yourself, but focusing on the career development of your team, your employees. These are the differentiators that are determining who is successful at Google, and who is not. And this is data driven. If this is true at Google I expect it’s also true at your organization. I’ll share with you one final data point, and you might remember this data point from one of our earlier sessions together. What predicts career success? Again, the most important predictor out of lots of things we’ve looked at in our research is training and skill development opportunities. Predicts your promotion potential, predicts your salary.
It predicts the promotion potential and salary of your team members. And so the question for you as a leader is, are you coaching and developing, helping train and upscale your team members so that they are ready for that next promotion? So that they are achieving higher salary levels, which will help you retain them. This is one of your most important responsibilities as a leader. It drives business results and it drives career success for you and your team members.
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