1Introduction

Due to changing demographic patterns, organisations universally are facing an increase in the number of employees due for retirement and adwindling number of younger workers available to replace them. Between40% and 70% of all senior executives will become eligible for retirement inthe next five years at most major corporations (Gandossy & Kao, 2004).

This demographic shift is changing the nature of the psychological con-tract, and employees are more able to pick and choose between employers.The highly educated professional employee is less a malleable resource forthe company and more a mobile investor of his or her own intellectual,social and emotional capitals. The labour market is increasingly favouringthe employee in the employment relationship. Understanding and effec-tively managing the psychological contract will help organisations thrive,but there needs to be clear agreement on the contributions that theemployees make and employers expect. Promises about careers, develop-ment and how talent is managed will be more rather than less important inthe future.

McKinsey’s report talent management as a strategic priority for organ-isations and yet over half of line managers are resistant to the process(Gutheridge et al., 2006). Similarly, the results of IOMA’s HR critical issuessurvey for 2006 identified talent management as the top issue for 75% ofrespondents (Sandler, 2006). Appreciation of the link between talent man-agement and the bottom line is increasing amongst the HR fraternity. LexWerner of ‘The Limited’ found that the company’s results improved dra-matically when he spent half his time on people rather than half his timeon finances (Handfield-Jones et al., 2001) suggesting that if you manage theright people in the right way, the finances look after themselves. Yet talentmanagement is more than just spending time looking after people andhuman resource management.

Finding a clear definition of talent management is difficult. In the con-versations that have taken place while researching this book a number ofconflicting views and interpretations have been presented. Some see it as

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strategic, others as organic. Some see it as operational, others as strategic.Some see it as integral to the performance management system, others see it as distinctly separate. Some see it as applying to everyone, whileothers see it as segmenting. While the talent management process maydiffer between organisations, some common understanding of what wemean by talent management is necessary if it is to be conceptualised andresearched. Hence, the definition of talent management presented here is:

Talent Management is the additional management, processes and oppor-tunities that are made available to people in the organisation who areconsidered to be ‘talent’. (Blass, 2007)

This does not mean that one should not be concerned with the moregeneral processes, such as performance management, that are available toeveryone in the organisation, but the talent management system is theadditional elements that are afforded to high potentials/high performers, orhowever else the organisation chooses to define talent.

The impact of talent management may vary from industry to industryand workplace to workplace. Industries such as PR, consulting and otherprofessional services stand or fall by the people they recruit and retain, andhence may have a larger pool of ‘high potentials’ within their organisationsthan other industries which are less affected by individual personalities butstill need a solid talent base on which to build the organisation. Regardlessof the sector, industry or organisation, talent management appears to be animportant consideration when the future of the organisation is contem-plated. However, moving from this strategic realisation to an operationaltalent management process is something that many organisations are strug-gling with.

This book is based on a large-scale research project initiated by theChartered Management Institute and Ashridge. It set out to explore talentmanagement practices in organisations, searching for areas of best practice,and areas that organisations are struggling with, in order to gain an under-standing of the reality of talent management in organisations today. Whilethe book acknowledges that there may be no single right way in which todo talent management in an organisation, it does offer some guidance tothe factors that organisations should be considering when designing andreviewing their talent management systems, and offers examples of howsome organisations are dealing with these issues in practice.

It would not be right to continue without saying a huge thank you to theorganisations who agreed to be the case studies for this research. Twelve ofthe organisations have agreed to be named and published in full so you can benefit from identifying with the organisation and their public image,reputation and HR practices. Others have agreed to be published anony-mously so that you can benefit from their learning and practice, although

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you will not be able to understand the context in which they operate as fully.Finally a number of case studies withdrew from the research once their casestudy had been completed. This was particularly disappointing and a chapterappears at the end of the book reflecting on why this might have been, whatwe can draw from this, and key ideas that can be taken forward.

The case studies were carried out through interviews and documentaryanalysis, with the talent champions in the organisation, senior managers,middle managers and ‘talents’. The case studies focussed on the opera-tionalisation of the talent management strategic process, looking at thepractice that was occurring against the policy outlined by the talent man-agement champions. They built on a literature review of over 200 sources,and were supported by a survey of the Chartered Management Institutemembers which had a response rate of over 1,500 people across the UK.The sample was broadly representative of the UK management populationin terms of sectors (private, public and voluntary), industry, gender, ageand level of seniority in the organisation. This is a strong base therefore onwhich to examine management attitudes towards and experiences of talentmanagement practices. Finally, focus groups were held with HR managersand talent champions during the research process to ensure that there wereno blind spots arising in the areas of analysis.

The structure of the remainder of the book is a combination of casestudies reproduced in full, and chapters of commentary drawing out salientpoints from the case studies, pairing them with the survey results and keyfindings from the literature, and drawing out key learning points for organ-isations to reflect on in the future. The case studies are published in sep-arate chapters without commentary so that you can get a feel for eachorganisation as they presented themselves to us.

Strategic perspectives

Two key findings from the research need to be explained up front. The first is the strategic perspectives and the second is the operational dimen-sions. Not that much ‘good’ literature has been published with regard to talent management. This could be because it is a relatively new conceptso there is not much research available, or it could be because the academiccommunity is not taking it particularly seriously and seeing it as a muta-tion of succession planning and other HR activities. This is not the case.However, when the field is relatively new, the ground is uncharted and amap of the territory needs to occur. This is what the next chapter does byreviewing a range of the literature in HR issues that could be linked totalent management, in addition to reviewing what little literature doesexist on talent management itself. It became clear from this reading thatthose who were writing in the field were viewing talent management froma number of different perspectives. These are presented in Chapter 2 with

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regard to their implications for HRM, and are taken forward as the ‘strategicperspectives’ throughout the rest of the book. An additional perspectivewas added to those stemming from the literature as it arose from the Net-work Rail case study, where a ‘change management’ perspective emerged.

The strategic perspective shapes the way in which the talent manage-ment system is viewed, implemented and operationalised, so that the sameactivity can result in a different action and/or outcome depending on theperspective employed.

There is the process perspective which proposes that it includes all pro-cesses needed to optimise people within an organisation (Farley, 2005) asthey truly believe that the future success of the company is based on havingthe right talent – so managing and nurturing talent is part of the every dayprocess of organisational life.

There is the cultural perspective that believes talent management is amindset (Creelman, 2004), and that you must believe that talent is neededfor success (Michaels et al., 2001). This can be seen where every individualis dependent on their talent for success due to the nature of the market inwhich they operate, and is typical of organisations where there is a ‘free’internal labour market, with assignments being allocated according to howwell they performed on their last assignment. Alternatively this can be anorganisation where the development of every individual’s talent is para-mount and appreciated, and allowing people to explore and develop theirtalent becomes part of the work routine.

There is the competitive perspective which is underpinned by the beliefthat talent management is about identifying talented people, finding outwhat they want, and giving it to them – if not, your competitors will(Woodruffe, 2003). This tends to be the default perspective if no other per-spective is taken, if only as a retention strategy. It is also seen in the profes-sional services firms where they generally adopt the competitive approachbecause their business proposition is based on the talents of their people.

There is the developmental perspective that proposes talent managementis about accelerated development paths for the highest potential employees(Wilcox, 2005), applying the same personal development process to every-one in the organisation, but accelerating the process for high potentials.Hence the focus is on developing high potentials or talents more quicklythan others.

There is the more general HR planning perspective which claims talentmanagement is about having the right people matched to the right jobs atthe right time, and doing the right things (Mucha, 2004). This is oftenidentified with companies currently experiencing rapid growth which tosome extent is driving the talent management system, and once theybecome more stable in terms of size of operations their perspective mightchange. Succession planning tends to be more prominent in organisationstaking this approach.

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Finally, there is the change management perspective which uses the talentmanagement process as a driver of change in the organisation, using thetalent management system as part of the wider strategic HR initiative fororganisational change (Lawler, 2005). This can either be a means of embed-ding the talent management system in the organisation as part of a broaderchange process, or it can put additional pressure on the talent managementprocess if there is widespread resistance to the change process.

Operational dimensions

You will find as you read on through this book that every case study organ-isation does something completely different. How then could we draw anyconclusions from the research? Although each organisation does do differ-ent things, there are common strands along which organisations havemade decisions. These are what we have called the ‘dimensions’ and 18 ofthem have been identified in this book. While each organisation placesitself in a different position along the dimensions, they can all be analysedin line with the dimensions, and indeed in each case study there is adetailed breakdown by dimension to help you make comparisons.

There are six dimensions that contribute to how talent is identified anddefined in an organisation:

1. Size of Talent Pool – How many people are considered in the talent pool?The extremes are only 1% of employees through to all 100% of employees.

2. Entry Criteria – How easy is it to meet the criteria to enter the talentpool?The extremes are very easy where anyone can be considered for entry atany time through to very difficult where certain criteria need to be met toqualify for entry.

3. Decision Process – How many people are involved in deciding who is tobe classified as talent?The extremes in this dimension are concentrated decision making, usuallyresulting in it being the line manager, through to distributed decisionmaking of some form.

4. Permanency of Definition – How permanent is the labelling of talent?The extremes here are ‘once talent – always talent’ through to the label oftalent being transient.

5. Recruitment as a Source of Talent – Where are key vacant roles recruitedfrom?The extremes here are all internal candidates through to all external candidates.

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6. Transparency – How transparent is the talent management system?The extremes are that it is fully transparent with everyone appreciatinghow the system works and their personal talent classification, through tothe system being untransparent, sometimes to the point that individualsdon’t even know there is a system in place.

The following seven dimensions impact on how talent is developed in theorganisation:

7. Development Path – How are people developed once they have beenidentified as talent?By an accelerated path whereby they receive the same development aseveryone else only faster, through to a completely differentiated, bespokeroute that is designed to meet that individual’s needs.

8. Development Focus – Where does the focus of the organisations devel-opment activities lie?The extremes are on strengths or on weaknesses.

9. Support – How much support is provided to the talent pool within theorganisation?This ranges from a highly paternal approach where an organisation nur-tures new talent positions through to individuals being left to sink or swim.

10. Influence on Career – Who has the most influence on an individual’scareer?This can range from the individual themselves, to their line manager,senior management teams, HR and peers across the organisation.

11. Connected Conversations – How many people can an individualdiscuss their career options with?The extremes here are just their line manager through to anyone they wishto talk to in the organisation.

12. Organisational Values – How do the organisation’s values help to moti-vate those in the talent pool?In some organisations managers are motivated by challenge and com-petition, in others collaborative and supportive cultures are used to serviceand dedication.

13. Risk – How much risk the organisation is prepared to tolerate has animportant impact on the outcomes of the talent management system.

Finally, there are five dimensions that impact on the structure and systemsthat support the talent management process:

14. Performance Management – How is someone’s performance measuredin the organisation?

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The extremes are by outcomes or outputs that individuals achieve over aperiod of time, through to the process or inputs they contribute throughthe way in which they perform, i.e. results or behaviours.

15. Talent Management Processes – To what extent are the structures andsystems supporting the talent management (TM) system understood?The extremes here are explicit structures and systems such that everyone isaware that there is a process and how it works, through to implicit struc-tures and systems that nobody is conscious of, and hence may not identifythem as existing at all.

16. Use of Technology – How central is the role of technology in support-ing the system?The extremes are IT independent such that the system is largely paper-based, through to IT dependent where a computer package is used for longitudinal analysis and tracking purposes.

17. Systems Flexibility – How static is the application of the system?The extremes are prescriptive or static at one end, through to evolving orchanging at the other.

18. Ownership of Talent – Where is talent owned in the organisation?The extremes are local ownership within business units through to sharedownership around the organisation.

Each of the case studies is discussed in terms of an overview of how thetalent management system works; a breakdown of the positions of the casestudies against the dimensions outlined above; bullet points drawing outareas of particularly good practice and areas where the organisation mayfind they have to pay more attention in the future; and finally a ‘fictitiousnarrative’. The narratives have been written to try to capture what it feelslike to be talent managed in that organisation, as the research team feltthat something was lost in the interpretation of the case studies withoutthe capturing of the personalities involved. These narratives are completelyfictitious and have been written by the team to capture the feelings theywere left with after completing the case studies. They are all written aspoints of dilemma and have been included to allow you to get a more emo-tional response to the talent management systems as it is people who aretalent managed at the end of the day, not machines or systems. It is easy tolose the personal element in talent management and the narratives seek toredress this.

Introduction 7

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