Talent Management 2012 - Summary Paper

The TalenT managemenT summiTThe nexT generaTion of leadersJune 14th 2012 • Hotel Russell, London

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The TalenT managemenT summiT 2012 summary reporT

Senior executives consistently rate access to talent as the key determinant of their long-term success. Without the right skills and capabilities in the right places in an organisation, companies will struggle to live up to their potential.

The financial crisis and its aftermath have created a new set of challenges for executives tasked with recruiting, developing and retaining talented managers. Executives today must be comfortable with rapid change and near-unprecedented complexity. As companies shift their emphasis to the growth markets of the world, they must ensure that they have the right experience and skills in place. And they must nurture and develop a new generation of professionals who have very different needs and expectations from the one before.

It is against this backdrop that Economist Conferences hosted The Talent Management Summit, a one-day event held on June 14, 2012 at the Hotel Russell in London. Invited speakers and high-level attendees from a variety of industries took part in a lively discussion around the challenges and opportunities of talent management, and how companies can position themselves to succeed in today’s highly turbulent and fast-changing world.

The TalenT managemenT summiTThe nexT generaTion of leaders

inTroduCTion


Major macroeconomic and environmental trends are forcing companies to rethink radically their talent management proposition. As economic power shifts to the east and south, companies must identify, develop and retain a new generation of managers and leaders from emerging markets.

Recruiting managers in growth markets remains a key challenge for many companies, even though there is no shortage of potential candidates. “The challenge we have that the majority of future business growth will come from the East and South, and yet we don’t have the depth of managerial talent to serve that growth,” said one speaker.

In emerging markets, we are seeing a shift from capitalism to what Karl Schwab, Head of the World Economic Forum, refers to as “talentism”. This is an era when human capital is more important than financial capital, and where skills and capabilities will be the driving force behind economic, political and social developments. But in emerging markets, talent gaps are impeding this transition.

TalenT in emerging markeTs

“If you imagine that our organisation is a pyramid shape, then in emerging markets we have a surplus of people at the bottom of the pyramid, and there are many people outside of that pyramid who don’t have the skills to climb up the ladder. There is a surplus of unskilled talent and a deficit of talent at a senior level.”

One speaker provided a neat illustration of where these gaps lie. “It used to be that we could take out our wallets and outbid for someone,” he explained. “Now, we take out our wallet and there is not even a person to bid for because there is not enough supply. We have to think differently if we want the skills to operate in these markets, and that requires helping communities and providing a platform for the right management capabilities to be developed. This is not a corporate social responsibility issue – it is about creating a sustainable talent framework.”

The challenge of creating the right skills and capabilities in emerging markets cannot be underestimated. One speaker described how his company is collaborating with like-minded companies and governments in regions like Africa to tap into communities and provide benefits to them. “We are not talking about producing 100 new employees here,” he explained. “We are trying to find ways to up-skill 1000s of people. This is an opportunity for us to compete for that talent down the line. It is a long-term issue that will take many years to address.”


Building a talent pipeline that can deal with change and complexity has become a critical capability for HR professionals and talent managers. Talent needs to be agile so that it can respond quickly to fast-moving trends.

But as one speaker outlined, there is an inherent contradiction between the talent that companies think they need, and the approach they take to running their business. “There is a loud and clear message that managers need to get out there and innovate or try something different,” argued the speaker. “Yet at the same time, managers are constantly told not to mess up, and keep everything stable. This means that they default to strategic choices that are safe. We need to recognize that the world is just not like that. It is messy and disturbing.”

A willingness to tolerate failure is essential to resolve this contradiction, argued one speaker.

The imporTanCe of agiliTy

“We believe that any failure is the company’s fault, not the individual’s. What this does is to eradicate fear. When people are not scared of losing their jobs or being reprimanded because an idea has failed, they are much more likely to try new things and take risks.”

Providing an environment in which employees are willing take risks enables talented managers to rise to the top. Implementing any new idea can be difficult, because the individual must seek out the resources, convince managers and put together a cross-functional team to implement the idea, but if someone can do all of those things, then they are clearly worth watching closely.

Building a workforce that is agile and thrives on change depends on moving employees around and giving them fresh challenges on a regular basis. “We need to send these individuals out to the periphery of the organisation but also ensure that they spend time in the centre and understand how the company works,” said one speaker. “Agile leadership relies on our ability as business leaders to test individuals by giving them cultural and leadership challenges.”

One speaker emphasized the importance of hiring what she called general athletes rather than experts. Although some experts, such as legal officers or accountants, will always be necessary in any organization, the danger of hiring experts is that it creates silos in the organization. “We want to hire people who have the potential to work across multiple functions,” she said. “If we hire people who have general capabilities, then we can move them around, give them broader experience and keep them happy and engaged.”

But although breadth of experience is valuable, one speaker argued that flexibility was just as important. “We want managers who can work in a changing environment and adjust their leadership style to meet the needs of different markets and situations. Agile leaders are vital to be able to handle the current pace of change.”

Developing an agile workforce requires companies to start thinking about the underlying traits that will facilitate these capabilities at an early stage. “It’s important to look at graduate level and the baseline capabilities and emotional maturity that will enable the company to flourish regardless of the external situation,” said one speaker.

One speaker highlighted the value of “disruptive learning”, which gives individuals experiences outside of the work environment that challenge and stretch them. For example, they may spend time working with a charity, helping homeless people or working in schools. “Disruptive learning helps people to think about how they can co-create and innovate in a different way,” explained the speaker.


In recent years, companies have made considerable progress in creating an environment that enables women to reach senior leadership positions. But as panellists explained, there is much work to do. The figures speak for themselves. There has been a big shift at the board level in UK plc, but not yet in the executive layer beneath that. There is a big drop-off between what is started at the top and what takes place further down.

The good news is that there is no need to sell diversity – most people at a senior level in organizations understand that, to perform to the best of its abilities, a company needs a diverse workforce that reflects the diversity of its client base. Academic research has shown that there is a strong correlation between having senior women and strong performance. It is impossible to prove a causal relationship but, as one panellist argued, it would be unwise to ignore this correlation.

One key problem preventing greater progress is a lack of data. Many companies do not have sufficient information about how women progress in the organisation and therefore don’t know the scale or nature of the challenge. “Lots of companies can’t give data on recruitment or different salary levels between men and women,” noted one panellist. “There is a lack of measurement and understanding.”

Where companies are being successful, argued one panellist, is where initiatives from the top are cascaded and where real engagement takes place. These companies are very specific about what they want to achieve and they measure it at every stage to track their progress towards those goals.

Just as important as the structural changes that need to be made are the changes in mindset. There needs to be an understanding throughout the organisation that there is value to be gained from a more diverse workforce. Values must be lived and breathed – not just uttered by the top echelons of the company and then forgotten. “You can have the best framework in the world, but without the right mindset, there will continue to be beliefs and behaviours that hold women back from reaching senior positions,” argued one panellist.

One example of this are the assumptions that recruiters make about a female candidate. They may automatically conclude that a female candidate will not have the time to dedicate to the role because of family commitments, for example. These assumptions, while sometimes well intentioned, need to be weeded out. “It is important to understand what biases people hold,” said one panellist. “By holding conversations, we can identify these biases, but we need to be open and understand that they exist.”

Most panellists were reluctant to support quotas for women in senior positions, although there was support for the effect that they have. One speaker worried that, in companies where quotas may be enforced, there would be doubts about a woman’s abilities if it were felt that she has been placed in that position to meet a quota requirement. “There is a danger that quotas can be handled very badly,” argued the speaker.

Sponsorship programmes, in which talented women are paired up with senior business leaders as an advocate, were considered by most panellists to be a valuable tool. There was more debate over whether networks were valuable. One panellist argued that networks are a vital forum in which women can share concerns and knowledge, and build confidence. Another worried that they are not as useful as is generally supposed, and that what is needed is sponsorship from a senior level to help open doors.

Companies have made a lot of progress in creating a working environment that is more conducive to women reaching senior positions. Policies that allow practices such as home working help to promote diversity because, without them, some people are automatically excluded from the workforce. But more needs to be done, including helping to allow managers to give permission to create a better balance.

One speaker argued that companies need to start conversations early with women to find out what aspirations they have from a family perspective. By putting women into roles where they perceive that they are making a meaningful difference early in their careers, they are much more likely to return to work after starting a family. Companies that fail to take this into account are wasting a huge amount of resources.

women and TalenT


The rise of this generation has coincided with the emergence of digital and social media. The “net generation” are experts in these tools – in general, they understand the implications of these technologies better than the CEOs of the organizations that they are joining. Their adoption of these technologies gives them a profoundly different worldview from their parents. As one speaker said, Gen X may have had a penpal, but Gen Y has 100s of Facebook friends around the world.

Although many speakers said that they were using social media as part of their talent management processes, many agreed that they were not doing enough. One tool that is widely used is LinkedIn. One speaker said that his company realised that potential employees wanted to read about senior leaders and about their journey and experience to their current position. They therefore ensured that senior leaders had a LinkedIn profile that potential candidates could access.

Other companies said that they were using tools like Chatter, an enterprise social network tool, to share information. “We have learned that the conversations we have are a great teaching device,” noted one panellist. “Each of us has a piece of information that we can contribute to a conversation and, by working collectively, we learn at a quicker rate and can apply our knowledge in different markets.”

Companies also need to learn how to engage Gen Y through their corporate social responsibility efforts. Most Gen Y want to work for an organisation that is having a positive impact on society. If companies are merely paying lip service to CSR, Gen Y will see through it and be disappointed. “Candidates want to understand the values of the organisation much more than in the past,” said one speaker. “They are more selective now.”

Gen Y value skills rather than the employer. They will typically prefer learning development opportunities over salary. As one speaker noted, the average Gen Y individual changes jobs 14 times by the time they are 35. This raises important questions over how companies compete to attract these individuals.

One speaker argued that Gen Y brains are “wired differently” in the sense that they are better able to multi-task. This has an impact on the kind of work that will suit them and to which they will be attracted. They are likely to prefer more collaborative, project-based work. “Organisations will have to adjust the way they structure work or find it difficult to recruit,” argued the speaker.

One way in which companies can gain a better understanding of Gen Y is through mirror boards – these are essentially boards of executives, comprised of younger employees that discuss company issues. By tapping into these conversations, senior business leaders can gain a better understanding of the needs and expectations of this generation. Some companies are also adopting reverse mentoring, where older employees learn from younger ones – particularly around the use of social media.

The generation that was born between 1980 and 2000 – so-called Generation Y – is having a profound effect on how companies manage, recruit and retain talent. Around the world, there are 2.3bn Generation Y – and almost 50% of the world’s population is under the age of 27. Finding how to capitalize on this generation is one of the biggest challenges and opportunities facing global companies.

Generation Y managers are looking for a diverse, challenging career that will give them a range of different experiences. But as one speaker noted, the reality of most organisations is that they cannot deliver on that promise.

generaTion y

“Generation Y are tremendously excited by the challenges that the world faces and are willing embrace disturbance, change and some degree of person risk, but then they come into an environment that is safe and does not offer any excitement. Organisations need to become more comfortable with provoking and containing anxiety.”


High-potential schemes can be an important tool for developing the future pipeline of leadership. As a number of speakers described, these can comprise a number of different strands, including coaching and mentoring, regular interaction with the board and a highly structured career plan that provides exposure to different functions and geographies.

The success of high-potential programs depends on the managers who provide the necessary sponsorship. “It’s important to put in place metrics that track the success rate of these programmes,” argued one speaker. “Managers should be rated on how many high-potentials have been retained, promoted and reached the expected level.”

Giving high-potential managers exposure to senior business leaders – and business leaders exposure to talented managers – can help companies to understand more clearly what capabilities they have in the organisation. “A lot of people don’t have the opportunity to see our senior leaders,” argued one speaker. “We make sure that we expose our senior leaders to the talent in our organisation and get to see them in action. Visibility is essential.”

So why do companies not do more with high-potential programmes and try to extend them? One problem is lack of funding – it is simply too expensive to extend these programmes beyond a small cadre of talented managers. Yet despite the important of high-potential programmes, one delegate argued that companies need to do more and look to the middle managers as well – the so-called “permafrost” in the organisation. “It’s important that we don’t just think about the needs of the top talent,” said the delegate.

Not everyone supported the concept of high-potential programmes, however. One speaker considered it much more important to provide an environment in which anyone can rise to the top, rather than identifying 10% and focusing only on them. “Those who are intellectually capable of rising the top will do so without the intervention of a high-potential programme,” argued the speaker.

high-poTenTial programmes

performanCe managemenT

A systematic approach to performance management is vital to ensure that a company has the right leadership capabilities in place. One speaker described how his company carried out forced ranking on its top 100 leaders every year to make sure they are performing and meeting their goals. This can then be used as a basis for setting goals and identifying where potential gaps might lie.

“Leadership development is the most critical thing we do. We need a structured approach to investing in authentic, purpose-driven leadership that will create future leaders to serve the organisation.”

Equally, companies need to put in place processes to address weak performance. One speaker argued that his company was fairly ruthless about this and that, if a manager was scoring a 2 out of 5 on a performance scorecard, this would be serious grounds for concern. “We’ve built a culture where this is not where you want to be,” he said. “This is not about failure, it’s just that the person may not be right for the organisation.”


Others preferred a more nurturing approach. One speaker described how their company ranked the top leadership but that, rather than finding ways of getting rid of the bottom 20%, they tried to see how they could be coached to improve their performance. “Instead of chastising poor performance, we work out how to improve it,” said the speaker. “This might mean changing their role several times until we find something right for them.”

One speaker argued that talent management can be broken down into three phases: understanding the talent gaps that exist in the organisation; recruiting employees to fill those gaps; and then developing those employees so that they make a valuable contribution to the organization.

The identification of talent gaps needs to be woven into the strategy process. As a company conducts its strategy review, it needs to apply an organisational readiness tool that can measure where the company is in terms of its talent, skills and culture. This should enable business leaders to understand whether or not they have the talent to achieve their ambitions. A roadmap or action plan can help to prioritise and determine what needs to be done in key areas. “These action plans need to be living documents that cover all geographies, functions and categories,” argued the speaker.

Filling talent gaps will typically depend on a combination of internal development and external recruitment. One speaker pointed out that there is a greater shareholder return from talent that is developed and promoted internally than is brought in from outside. But this is not an either-or situation. Companies need to do both in order to thrive. There also needs to be a co-ordinated approach to internal development and external talent search. In many companies, these activities can be quite separate.

Developing internal talent is crucial to ensure that the company has the capabilities to meet its needs. This is particularly important when it comes to succession planning. When looking to recruit new senior leaders, the consensus view is that it is better to seek an internal candidate. One speaker pointed out that 70% of the top team in his company had started at the bottom of the organisation. “You need to grow your oats,” he explained. “This means identifying people very early in their career and putting in place a structured programme to get them to the top.”

The development of internal talent begins at the recruitment stage, but companies face stiff competition to bring in the most promising young managers. One speaker emphasised the importance of tracking perceptions of the company among the potential workforce.

balanCing inTernal and exTernal TalenT

“We need to ensure that we are the number one employer in as many markets as possible. It is essential to guarantee that a career with our company is an attractive proposition.”

When recruiting at a more senior level, there is a common bias towards external recruitment because companies do not appreciate the capacity that they have in their talent pools. One speaker argued that companies need to uncover this latent talent, which almost certainly exists, rather than automatically defaulting to external recruitment. In addition, buying in talent can be expensive, because it takes time for new employees to become accustomed to the culture and processes of the organisation. “There is a huge amount of value to be gained from building a better understanding of the existing talent pool,” he argued.

Analytics can be a useful tool to help companies understand where talent lies in the organisation and what gaps exist. But to get to this stage, companies need to put in place definitions and taxonomies of talent. This remains rare – very few companies can say that they have clear visibility into where top talent exists in the business.


Talent development is one of the most important responsibilities of any business, and the primary determinant of its success. As speakers and delegates made clear throughout the day, HR and people professionals face a daunting set of challenges to ensure that they recruit and retain the right people and put them in the right roles. With the business environment and global economy changing at an extremely rapid rate, and with organisations becoming increasingly complex, the pressure to find the right talent is greater than ever.

The demands of talent management are encouraging new approaches and tools. Analytics is emerging as a powerful way of enabling companies to understand more about their available talent, identify gaps and manage performance. Companies are also experimenting with new styles of leadership and organisational structures. Command-and-control hierarchies are increasingly falling out of favour and, in their place, is a model that one speaker described as “suggest and assist”.

Above all, the challenges of the business environment emphasise the importance of hiring the very best people. Recruiting individuals who are OK or who meet an immediate need without thinking of their long-term potential will not work. The costs of hiring, training and then re-hiring when an individual leaves or does not work out can be significant. If companies can reduce these costs, and create a workforce that is engaged, willing to learn and comfortable with change, then they will have a much better chance of thriving in today’s highly complex business environment.

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Talent Management 2012 - Summary Paper