Heidrick Strategic Talent Management2012[1]

Strategic Talent Management

The emergence of a new discipline

A view from the FTSE 100

Executive summary

“If we don’t connect business and talent

strategy, we will be nothing more than a

typical HR unit, focusing on activities and

not on impact and outcomes.”

Activities or outcomes – what’s your

focus? The cumulative impact of global

demographic trends, combined with

on-going economic uncertainty and

aggravated by a critical skills shortage

creates a powerful talent triple whammy

facing business. In response, forward-

looking companies are bringing talent,

particularly leadership talent, to the

top of the agenda and are assigning

responsibility for aligning business and

talent imperatives to a senior talent

executive. We are beginning to see the

steady emergence of a new discipline of

Strategic Talent Management, led by a

Head of Talent or a similarly titled role. In

order to increase our understanding of

this relatively new role and its challenges,

we approached the leading practitioners

in FTSE 100 companies, in the latter half

of 2011, to conduct research and in-depth

interviews. The results are intended to

serve as a guide for CEOs and Heads of

Talent when evaluating their approach to

senior talent management.

We found that the drive for structured talent management

generally comes from a CEO who has recognised the

importance of attracting and developing a superior pool

of leadership talent that will enable the business to deliver

on its strategy. A ‘flat world’ produces a number of tensions

that Heads of Talent are expected to resolve. The drift

of business from the West to East creates demand for a

diverse set of leadership capabilities.

Some senior executives readily understand that talent

is a central enabler of strategy and that great talent

management can be a source of sustainable advantage.

A good number though, still regard talent development as

a hygiene factor. Talent management in these companies

can become an exercise in gap-filling and tactical

recruiting.

Our research convinces us that CEOs will continue

to appoint a Head of Talent as a way of combatting

this reactive mentality and creating awareness of the

importance of talent to corporate success. It is for this

reason that Heads of Talent tend to be viewed as distinct

from the rest of HR, even when they report to the

company’s top HR executive.

But despite the advantages of being CEO appointees,

many of the Heads of Talent we spoke to are struggling

with paradoxes and ambiguity as they attempt to create

alignment between business and talent strategy. They

are often tasked with bringing consistency to talent

management across decentralised business units, but they

Strategic Talent Management The emergence of a new discipline

2 Strategic Talent Management: The emergence of a new discipline

have little or no power over hiring or promotion. They are

balancing the strategic, external talent challenges facing

the company with tactical and internal challenges, often

with only influence to help them.

The global economic crisis and the huge increase in

unemployment have not made their role any easier.

Counter-intuitively, there is still a marked shortage of

people with the skills required to lead global companies.

The concerns of baby boomer and ‘generation X’

executives are important, but the future of most

companies rests with the next generation.

In the context of these challenges, there is a need to share

best practice to create the conditions for success. Based

on what we have observed and the insights that we have

been able to glean, we have developed a framework called

the 7Ps which will be helpful in structuring the role of a

Head of Talent: Pressures, Purpose, Person, Profile, Power,

Process and Pools.

Overall, our research revealed an embryonic but emerging

business discipline with little consistency around

objectives or methodology. We discovered a complex

set of factors, many of them contradictory, affecting

performance and success. Even with the high stakes

attached to successful talent management and the right

framework to help them succeed, winning Heads of Talent

will still have to be diplomats rather than commanders,

achieving results through relationships and persuasion.

Encouragingly, we found many Heads of Talent who had

adopted this approach.

Heidrick & Struggles’ role as a leadership advisor to global

organisations gives us a privileged perspective on these

emerging trends and we undertook this study to start

an on-going conversation with CEOs, senior leaders and

Heads of Talent on how to maximise the business impact

of leadership talent.

5 yearsaverage length of time Head of Talent

role has existed in the company

3 yearsaverage length of time current

Head of Talent has been in the role

17% Heads of Talent that report to the CEO

157average size of top talent pool managed

90%whole career spent in HR

23number of different job titles

identified in our survey for the role

6 out of 10average score in answer to:

“How well do you think your

organisation manages talent?”

Heidrick & Struggles 3

There is a growing body of evidence to

support the idea that companies that

align business and leadership talent

imperatives have a greater chance of

sustainable success. It feels intuitively

correct; if you have the right leadership

talent in the right place with the right

skills and behaviours, then the odds of

successfully executing on your business

strategy are high. Many of our CEO clients

agree and have moved leadership talent

to the top of their agenda, assigning

responsibility to a senior executive.

At Heidrick & Struggles, our belief is that these Heads

of Talent have an important role to play in improving

corporate leadership, and that an effective Head of Talent

could have substantial impact on a firm’s competitiveness.

We wanted to test this theory by learning more about

these senior talent executives: who they are, what they do,

the agenda they address, the context within which they

operate and what constitutes success in their role. Top

talent executives from 24 FTSE100 companies helped us

in our research. The firms we surveyed use a wide range

of titles for these leaders, but in this report we will refer to

them as Head of Talent.1

1 see Appendix 1, ‘A note on titles’

Together with these executives, we identified a series of

practices, tools and competencies that can help create the

conditions for success within this role and for the company

as a whole. In addition to the survey findings we have

brought additional insights from Heidrick & Struggles’

leadership consulting experience, as well as from research

conducted at Harvard Business School.

The report is divided into three parts: A summary of our

findings; a review of the context within which these talent

executives operate and finally a few tips for attaining

success. We hope that it will be useful both to CEOs when

they consider how to execute on their talent agenda and

to the senior talent executives who are responsible

for making the alignment of business and talent

strategy a reality.

Introduction


The Head of Talent is still a relatively new role, and companies use their executives in a wide variety of waysMost of the Heads of Talent we interviewed have been

recently appointed, and some were the first Head of Talent

their companies had ever hired. Unlike more established

functional roles (CFO, Chief Marketing Officer, etc.) the

Head of Talent is a newcomer and is rarely present on the

executive team. We found that on average the length of

time a Head of Talent role had existed in the company was

five years and that many of the current appointees had

been in the role for about three years.

A good number of our interviewees indicated that they

were still working out how they were expected to relate

to their colleagues. A few companies have well-grooved

talent management processes, but most are still exploring

Part 1 Principal findings – An embryonic but emerging discipline

how they will select and develop high-potential managers,

conduct regular talent reviews and report on their

progress.

As a result, we discovered great variety in the ways in

which Heads of Talent operate and relate to line managers.

Some are focused primarily on infrastructure for talent

and leadership development – processes, systems, and

metrics. Others spend more time on specific development

initiatives: business school programmes, projects that

involve high potential managers, and the like. Still others

spend time ‘walking the floor’, trying to keep high-

potentials engaged and providing front-line intelligence

to senior line leaders (fig 1).

There are few patterns that a CEO can rely on when

appointing a first Head of Talent, few models that a newly

hired Head of Talent can easily adopt. As we will explain

in Part III, this means that Heads of Talent must take the

initiative in structuring their own roles.

24%22%

21%10%

9%7%

4%3%

Succession planning

Training and development

other

Individual career management

Recruitment

Performance management

Mobility management

Compensation & Benefits

figure 1 – How do you spend your time?


A wide variety of ‘Hot Topics’ that keep Heads of Talent awake at nightInterviewees split their ‘Hot Topics’ into two categories

– strategic and external talent challenges facing the

company and tactical and internal issues. There are few

surprises on either list, but several of the ‘mega’ themes

resonated with our experience and wider research on

leadership talent. Generally, we see that Heads of Talent

are battling to create alignment between business and

talent strategy:

Globalisation and Emerging Markets

A ‘flat world’ produces a number of tensions that Heads

of Talent are expected to resolve. The drift of business

from the West to East creates demand for a diverse set of

leadership capabilities that can not only bridge the gap

between established western management approaches

and emerging eastern ones, but can also manage the

balance between what can and needs to be done at the

centre and what should be done locally. Many of the

interviewees talked of developing a new ‘glocal’ talent

model, blending global consistency with local delivery

needs. Many Heads of Talent appear exasperated by

the challenges of identifying, attracting and retaining

leadership talent in emerging markets – “we say we are

going into (emerging markets) but have no clue how

to operate or source talent or how to expand our talent

agenda in these new markets”. Some told us that they had

learned a hard lesson that what attracts talent in emerging

markets is different from what retains it and creates

performance. A few even fear that despite their best

efforts “half the investment will walk out.”

Succession and Leadership Pipeline

Heads of Talent tended to confirm our experience that

succession planning at all levels, but particularly at the top,

is reactive. The following quote, taken from our 2011 Board

Study,2 reflects the situation “A company’s leadership

talent is its single most important asset and has become

a critical governance topic for boards. In general, the time

and effort devoted by the board to the development and

2 European Corporate Governance Report 2011 – Challenging board performance, Heidrick & Struggles, 2011

Hot topics

StrategicDiversity

Demographics

• Agingpopulation

• Generationalmix

Globalisation & Emerging Markets

• Globaland‘Glocal’talentmodel

• RelocationofbusinessfromWesttoEast

• Identifying,attracting&retainingtalentin

emerging markets

Mobility

• Willingnesstomove

• Skillsgapsacrossgeographies

Critical skills gaps

• GlobalshortageofGeneralManagers

• Lackofcommercial‘savvy’

• Fromproducttocustomer-centric

competencies

Succession

• Internal/Externalpipeline

Retention

OperationalWorkforce planning

Business ambivalence

• “Don’tgetthetalentmanagementthing”

• Resistforceddistributionandperformance

management

Career transitions

• Sizingrolestosmoothcareermoves

• Internalrotationsandtransfers

Quality of talent professionals

Development plans and internal coaching

Talent metrics, data and tracking

Change fatigue


succession of its senior leaders is inadequate.” The statistics

are quite worrying too – only 58% of boards we surveyed

in EMEA had an effective CEO succession planning process

and 46% had a vetted and viable candidate who could

immediately step in as CEO if necessary. In the face of the

critical skills shortage we explore later, many companies

want to mitigate their leadership risk by aligning their

talent agenda and pipeline practices to create ‘succession

ready’ pools, both inside and outside the company.

Interestingly, we noted that few Heads of Talent had

responsibility for creating and managing external talent

pools.

A common theme for the Head of Talent is the creation of consistency across decentralised units

Many of our interviewees conveyed a history roughly like

the following: As a result of decentralisation and corporate

downsizing,linemanagersbecameresponsibleforhiring,

developing and retaining talent in their units. This had the

advantage of making the line managers accountable, but

it often led to inconsistencies. Many respondents told us

that their CEOs now wanted ‘an integrated and consistent

approach’, more often driven by a desire for effective

rather than simply more efficient senior talent processes.

The CEOs could see that some divisional leaders did a

great job in building their teams to the point that they

could act as ‘net talent exporters’ to other parts of their

organisations; others experienced high turnover and had

to look outside their units for succession. Achieving more

consistency across units thus became part of the mission

for many of the Heads of Talent we interviewed.

At the same time, our interviewees did not expect

the return of ‘big central HR’. The Heads of Talent we

interviewed typically ran very small teams. Most had

power that was indirect. There were few big budgets

– in fact the majority of Heads of Talent didn’t know

the proportion of the overall HR budget that they were

allocated. They were expected to increase consistency

across business units, to identify and deliver a more

integrated corporate talent strategy. But most of the

power in the companies we looked at rests with the line

leaders, a theme we return to later.

Most Head of Talent roles manage a relatively small talent poolThe typical Head of Talent does not look after all of the

talent in the company, but an executive or top talent pool

that is a small proportion of the employee population.

Our research and that of other firms (starting in the mid-

1990s) showed that these top pools averaged 150 leaders,

regardlessofthesizeofthecompany,withmostofthem

numbering under 250. Despite over a decade of mergers

andsubstantialgrowthinthesizeofmanycompanies,

this number has not changed. The average Head of Talent

we interviewed had just over 150 people in their managed

talent pool.

The people in these relatively small talent pools are the

‘group leaders’ or ‘high potentials’ or ‘critical list’: the name

varies across companies, but the intent is to focus on those

who have the potential to grow into larger roles.

The 9-box matrix that plots each manager on axes for

performance and potential seems to be a favourite tool of

the talent managers we interviewed. In many companies,

‘the list’ of high-potential leaders is derived from this

matrix. One reason for the popularity of the 9-box matrix,

we think, is that it is relatively easy for talent managers to

use and to explain to their CEOs and business colleagues.

We were surprised to learn that, in the majority of

companies we looked at, the people ‘on the list’ aren’t

told that they are on it; the existence of the list may be

acknowledged, but the list itself isn’t made public. This

may be to avoid internal discord; it may also reflect a

lack of confidence in the process on the part of talent

managers.

In some cases, corporate talent managers have the ability

to redeploy high-potential leaders from one unit to

another. But in most companies, hiring and redeployment

depends on line managers, with talent managers playing

an advisory role.

Our research also suggests that many companies could

improve the way they allocate leadership development

resources. On average, 70% of funds spent on leadership

development go to formal training; our view is that

this ratio should be reversed, with 70% allocated to

experiential, job-related development. We were therefore

encouraged to hear many of our interviewees speak


of project-based work, in which high-potentials are

encouraged to work together on strategic issues. Others

described how they got involved in relocation, mobility,

special training programmes and career counselling.

Our interviewees spent 22% of their time managing

training and development programmes. That strikes us

asaboutright,giventhe70/20/10ruleofthumb.

Heads of Talent see ‘relationship building’ as being a key competency for their successWe asked Heads of Talent to identify the three key

competencies that underpin success in the role. Some

of the interviewees focused on technical skills and

experience of HR processes and approaches but many

identified relationship building, commercial acumen

and internal awareness as top of their list. Our research

suggests that a majority of our interviewees are strong

in the relationship and associated influencing skills and

have built deep and advisory-type relationships with their

colleagues. But as we will discuss later, many have yet to

fully develop and demonstrate the commercial acumen

that would bring organisational buy-in and credibility.

Other key competencies that were raised include: self-

confidence, resilience, strategic thinking, adaptability,

customer orientation.

Heads of Talent measure performance, using primarily operational metricsWe asked the Heads of Talent how they measured their

own performance. Each had come up with some system

of metrics, though several were just beginning to develop

these and discuss them with line management. There

was a considerable range in the elaborateness of talent

metrics. One Head of Talent said: “We’re a very lean

organisation so it’s easy to follow the people in my pool

and get a good sense of whether they are happy or not.”

Another commented: “The CEO can see the value of our

work in our leadership presentations, and now there’s a

waiting list for our development programmes. The CEO

doesn’t need convincing.”

The systems in other companies are more complicated.

One Head of Talent prepares an annual ‘People Balance

Sheet’, bringing together all people metrics in the

company and trying to link talent health to business

strategy. Building on that approach, such a scorecard

could include:

• headcount(changesovertime)

• rateoftalentchange(external/internalmoves

divided by headcount, attrition ratio at the top)

• talentmixanalysis(potentialagainstperformance)

• proportionofnewjoinerstotheentire

employee group

• tenureinpositionorcompany,

measured by year bands

Several companies measure line managers on talent

management activity; the resulting score figures in the

manager’s bonus.

The majority of the Heads of Talent we interviewed did

not try to relate their talent measures to the company’s

financial output or share price performance. Rather,

they focused on operational measures: completion of

assessments, number of talent reviews done by line

managers, participation in leadership development

programmes, and ratio of external hires. As one of

our interviewees commented: “It’s difficult and often

meaningless to try to calculate ROI on talent initiatives.

Instead, you need to look at what you are doing relative

to your industry and competition and see whether it’s

making a difference.”

Succession figured prominently in the metrics that several

Heads of Talent employed. A Head of Talent explained: “I

have a clear picture in regard to external hiring numbers

at the top level, and the impact of that on the business. I

want to see around 10 internal appointments – rather than

hiring externally – by Christmas. It’s better to move people

around, rather than to bring them in from outside. We are

thinking of setting similar targets for 2012.”


Most Heads of Talent feel their companies could do a better jobWe asked Heads of Talent to rate their firms’ overall

performance on talent management from 1 to 10. The

average overall rating, and the most common, was 6 out of

10. A few felt they were doing very well, but most thought

that they could improve: “We need to be more joined up,”

said one, referring to line management. Another manager

stressed implementation: “Right now I’d give us a 3.5 or 4

out of 10. But over the next two years, I expect it to go to

an 8. Our plans have huge potential; now it’s about how

we take the ideas and make them happen.”

Asked to evaluate a set of specific talent practices, Heads

of Talent felt Mobility management and Training and

development were areas where there was room for

improvement (fig 2).

Several Heads of Talent reminded us that they operate

through line managers, rather than directly, and that

metrics should reflect this. “I don’t want to take credit for

someone else’s work,” said one.

figure 2 – How Heads of Talent rate their company, by area

“The CEO can see the

value of our work in our

leadership presentations,

and now there’s a waiting

list for our development

programmes. The CEO

doesn’t need convincing.”



Mobility management


Recruitment

Succession planning

Training and development

To be improved Standard Good Excellent


As we reviewed our research data, we

were struck that Heads of Talent operate

in an environment of contradictions and

significant ambiguity. A few of these

contradictions really caught our eye:

High unemployment and the critical skills gapThe global economic crisis and the huge increase in

unemployment have led some to think that talent is

readily (and cheaply) available. “My CEO sees the recession

as a great opportunity to pick better people, but there is

a challenge to keep the talent management momentum

up and ensure that we match the right people to the right

opportunities.” Our interviews and Heidrick & Struggles’

broader work confirm that high quality leadership talent

is not easily found. It is true that there is currently a glut of

job-seeking graduates, but experienced CFOs, divisional

general managers and CEOs remain challenging to secure.

In difficult economic times, candidates with good jobs are

cautious about changing firms. Companies have to fight

hard and pay well for talented managers. The situation is

uneven across industries and roles, but many sectors still

experience ‘seller’s markets’ for talent.

Heads of Talent told us that they are struggling to find

executives with the right level of leadership experience

and capability. “The world seems to be running out

ofgeneralmanagersthatcanruneverything–P&L,

supply chain, talent – it appears people are specialising

too soon.” We also heard that companies are finding it

difficult to source talent with ‘commercial savvy’, capability

around brand building, marketing and brand behaviour.

Increasingly, as companies migrate from product to

customer centric approaches, Heads of Talent are looking

in vain for those with client relationship building skills.

Even when they succeed in luring talented managers from

other firms, CEOs cannot be sure that the superstars they

hire will perform well in their new environment. Research

by Boris Groysberg of the Harvard Business School

suggests that ‘superstar’ talent is rarely as portable as we

imagine.3 A company hiring a star performer from outside

should, on average, expect him or her to underperform,

significantly, and for several years, unless steps are taken

to quickly and effectively integrate the new executive into

the company culture.

So it appears that the ‘War for Talent’ is not over; the

battle lines have just changed. Talent management has

become more than just acquiring new executives and

is increasingly focused on developing, motivating and

retaining them. Our work shows a steady trend toward

recruiting to the top team from within and organic

development of leaders. However, we still see that

many companies do not yet have these deep leadership

resources to draw upon or prefer to ‘trade’ in the talent

market to meet their needs.

Heads of Talent have significant work to do, even in these

tough times.

Serving the CEO agenda and the lack of airtimeThe drive for improving talent management generally

comes from the CEO, who as we identified earlier is

looking to increase effectiveness and impact of senior

talent on business results. We found that relatively few

Heads of Talent (around 17% of our sample) reported

directly to the CEO, with the vast majority reporting into

the HRD (fig 3). Contact with the CEO and other senior line

3 see Boris Groysberg, Chasing Stars (Princeton, 2010); Heidrick & Struggles and The Economist Intelligence Unit, The Global Talent Index Report: The Outlook to 2015

Part 2 Contradictions, ambiguity and credibility


executives also appeared ad hoc and relatively infrequent.

A number of interviewees talked of ‘being around’ when

the CEO or the EXCO were in town or of briefing the CEO

before the annual talent update to the board. Those with

direct reporting status or strong professional relationships

with the CEO felt that visibility gave them an edge in

dealing with some of the difficult senior talent issues they

faced.

Responsibility without authorityCEOs expect their Head of Talent to create consistency

between line divisions, but rarely give them direct

authority over hiring, promotion, deployment or retention.

They were expected to increase consistency (as well

as efficiency and effectiveness across business units)

to identify and deliver a more integrated corporate

talent strategy. But most of the power in the companies

we looked at rests with the line leaders. Our Heads of

Talent confirmed this when we asked them what made

a successful Head of Talent. Moreover, they told us the

winning talent manager operates through influence and

suggestion rather than by exercising power. Interpersonal

skills were critical we learned, as was the ability to build

trust. Heads of Talent explained their need for resilience,

tenacity, energy and the ability to deal with setbacks. The

Head of Talent must therefore take a lead without formal

authority.4

4 formoreonleadershipwithoutauthority,seeRonaldHeifetz,Leadership without Easy Answers (Harvard, 1998).

HR or business roleWe also found ambiguity around the positioning of talent

management, with many suggesting that sitting within

the HR function impacted credibility and acceptance by

the business. Interviewees told us that engagement was

higher where they demonstrated ‘commercial savvy’ and

spoke ‘business’ rather than ‘HR’ language. “The challenges

we face are all internal. There’s a real ambivalence around

talent here, the business is just not interested.” Others

felt that positioning talent in the HR function only served

to confuse internal clients: “If talent is everywhere and

everyone has it – what’s the difference between Talent

Management and HR?”

Finally having often been asked by the CEO to bring

transparency to senior talent management processes, our

respondents were surprised that the list of ‘Hi-Pos’ (high

potentials) was a closely guarded secret, sometimes even

secret from those on the list. “Executives in the ‘top talent

pool’ are critical to the success of the company, but their

names are often not known except at the very top.”

In the next section, we explore ways in which Heads of

Talent can learn to navigate this ambiguous environment.

174

3

HR Director

CEO

more senior Talent Manager

figure 3 – Who do you report to within your company (position title)?

“The challenges we face are all internal. There’s a real ambivalence

around talent here, the business is just not interested.”


Our interviews suggest that the most

successful Head of Talent will take the

lead both in defining ‘what success

looks like’ for them and the company

and in creating alignment between

themselves and their colleagues about

their role. Winning Heads of Talent will

be diplomats rather than commanders,

achieving results through relationships

and persuasion. They will forge strong ties

with their colleagues in line management,

and they will work to link talent strategy

with business strategy.

Define your own value propositionAs we noted earlier, there are very few blueprints that

companies can rely on when they bring a Head of Talent

into the organisation. The winning Head of Talent will

therefore take the lead in proposing the value that he or

she intends to add to the company, and what it will take to

deliver that value.

Beth Axelrod was the first Head of Talent appointed by

WPP; she is now the global head of HR for eBay. In an

interview about her experiences, she explained how such

a conversation might begin:

“You’re trying to drive ad sales from X to Y. You

need growth to come in these particular areas.

And for the growth to come in these areas, let’s

talk about the implications for talent and for

the organization. Then, let’s talk about what

capabilities you have today – where you’re good

and not so good. So, we’ll have to fill out those

capabilities. In addition, you’ll need a different

cost structure because your margins are going

to start to be squeezed. Let’s talk about where

you have people and why you’ve got so many of

them in high-cost locations.” 5

By taking the lead in this way, the Head of Talent can

catalyse a productive discussion about talent in the

company, and about the value that the CEO and other

executives expect their Head of Talent to contribute. It

is worth revisiting this value proposition periodically,

to ensure that the company and Head of Talent remain

aligned on the value that this role is to deliver.

Achieve alignment around seven key dimensionsAlignment around the Head of Talent’s expected

contribution is critical. Our interviews suggest that it is also

important to seek consensus around the ways in which

the Head of Talent will work with other executives in the

company.

The following checklist – 7Ps – will be helpful in structuring

the role of the Head of Talent.

Pressures

How immediate are the company’s talent issues?

Where are talent problems interfering with corporate

performance? Where are the ‘pain points’ that existing

leaders (in HR, in the line, etc.) seem unable to address?

Purpose

Why has the company hired a Head of Talent? What

are the problems that they are asking the manager to

5 “The challenge of hiring and retaining women: An interview with the head of HR at eBay”, McKinsey Quarterly, September 2008.

Part 3 Creating the conditions for success


solve? Are they primarily about recruitment, retention,

succession? The purpose of a Head of Talent will depend

on many things: the company’s culture and its traditions,

the capabilities already present in HR, and the willingness

and ability of line managers to act as talent managers

themselves.

Person

What skills should the Head of Talent possess? What

experience should he or she have? For example, a leading

investment bank has regional talent leads (Europe, Asia,

and North America) who don’t have wholesale banking

experience. But the CEO recently decided that the global

Head of Talent needed to be deeply rooted in investment

banking to facilitate easier communication with people

at headquarters.

Profile

What internal and external profile should the talent

manager maintain? Our interviewees emphasised the

importance of ‘getting around the company’, meeting

their portfolio executives in person. A CEO who wants

such a broad internal profile for the Head of Talent will

need to support the executive in gaining access to diaries,

key internal business events and even some client facing

meetings.

The CEO and Head of Talent also need to agree on the

right external profile. Some of the Heads of Talent we

interviewed have relatively modest external profiles, but

communicate widely within their companies.

Power

What decision making powers does the company want

to invest in its Head of Talent? Will they have veto over

senior hiring decisions? Over deployment of leaders in

‘high potential’ pools? Where will the Head of Talent have

to operate through persuasion and where through direct

decision making?

Process

Where will the Head of Talent get involved in top executive

processes and forums? To clarify, it is often a good idea to

pose some challenging scenarios: for instance, suppose

that the company wants to take over a smaller competitor.

Will the Head of Talent be involved before the deal is

agreed? Or will he or she read about it in the newspapers

and then be told to help integrate top talent in both

companies? There is no ‘right’ answer here; alignment is

what matters.

Pools

Finally, which talent pools will the Head of Talent manage?

Some companies divide their pools; one large industrial

company for example, has one talent manager for roughly

the top 100 and another for the next 250. It is essential

that everyone on the top team understands who falls into

the Head of Talent’s portfolio, and what interaction he

or she will have with them. Few of our interviewees had

responsibility for external pools, a key source of ‘ready

now’ talent.

We saw several Heads of Talent use this type of checklist

to define the current position of their role and impact

and set a plan for the future. In the appendix we offer a

template for CEOs and Heads of Talent to use to review

the current situation and future goals of their senior talent

management strategy.

Operate as a diplomat, well connected to colleaguesWith very few exceptions, Heads of Talent operate with

little formal power. They succeed or fail primarily through

influence and persuasion. The winning Heads of Talent

seem to get two things right.

First, they get plenty of ‘air time’ with their colleagues –

not necessarily the CEO, but certainly the executives who

matter. One Head of Talent told us of “an open, continuous

dialogue with the business in terms of people asking what

they need and what I and my team can deliver.” Many

Heads of Talent meet regularly with line executives to

conduct succession and development reviews. This is a

role where walking around and talking can be essential to

success.

Most Heads of Talent had somewhat less frequent access

to their CEOs. In many cases, these meetings took place

less than once a month, and often with a corporate

executive team or executive committee. A formal report to

the board or executive committee was often a motivator

for meetings between the Head of Talent and CEO.

Second, successful Heads of Talent are diplomatic,

managing their relationships like politicians. One

interviewee said: “I have profile with the business heads.

I knew it was important to have high impact early on,


and to build good relationships quickly.” Many of our

interviewees were quick to distinguish their roles from

HR, feeling that ‘not talking like HR’ gave them more

credibility with line managers. All were aware that, in most

cases, they were not the decision makers around hiring,

retention or reward.

Connectivity – linking business and talent strategyOur interviewees recognised the difficulty, but told us that

a strong Head of Talent will find ways to connect talent

and business strategy. A few interviewees felt that they

were running tightly ‘joined up’ systems. According to one,

“Business strategy feeds talent strategy which in turn feeds

succession.” But the majority reported breaks in the chain

linking business strategy and talent strategy, and they saw

this as a problem.

“If we don’t connect business and talent strategy,” said one

of the managers we interviewed, “we will be nothing more

than a typical HR unit, focusing on activities and not on

impact and outcomes.”

We don’t find this result surprising. In company after

company, functional leaders – finance, IT, marketing, HR

– struggle to connect their planning with the flow and

direction of the business. The task is easier for the older

functions; ones that CEOs know how to work and how to

lead. For a relatively new area like talent management, line

managers often don’t know how to take the first steps in

aligning it with their business strategies. As we suggested

above, the Head of Talent needs to take the lead here.

What is the best way to forge a strong connection with

company strategy? A good starting point: work backward

from the company strategy to the talent requirements

it implies. Many global firms are seeing their areas of

strongest growth shifting from North America and

WesternEuropetoAsia,theMiddleEast,AfricaandLatin

America. What implications does such a shift have for

executive talent? What does this imply for senior executive

mobility? For leadership development in the company?

Another approach we have found helpful is to work

forward, looking at talent or leadership risk facing the

company. The oil and gas industry, for example, faces a

severe shortage of senior engineering leadership, because

of demographic shifts and a decline in enrolment in

petroleum engineering courses in the past. What risks

does this imply for these firms’ growth? How should talent

risk impact an oil firm’s forward investment programme?

It is easy for the Head of Talent, concerned with the

executives they are responsible for, to develop an inward

focus. We encourage Heads of Talent to look forward

and outward, as well. The concerns of baby boomer and

‘generation X’ executives are important, but the future of

most companies rests with succeeding generations. These

leaders have different views about work, communication

and collaboration. A smart Head of Talent will get to know

them and look carefully at their needs.

The board of any company will be concerned both with

implementation of its strategy and with risk to future

performance – and therefore, the CEO will also be so

concerned. Focusing on these issues will help Heads

of Talent keep their work directly relevant to the most

pressing issues of the company. It will also keep the

CEO’s door open.

ConclusionA new strategic talent discipline is emerging but there

remains confusion about the nature, scope and real

business impact of leadership talent professionals and

functions. Our research suggests that this discipline is

in an embryonic state, still developing, working hard to

create credibility and traction in the organisation and with

critical business leaders. However, the Heads of Talent

we met are taking the lead in communicating their value

and mission to the business and using their influencing

and diplomatic skills to seed change amongst the top

population of their companies. They see their role as long-

term in nature, aligning business and talent imperatives,

drivers of behavioural and cultural change from within.

To help improve the focus and impact of these efforts we

propose a simple and practical checklist style diagnostic

(appendix 3). Our 7Ps (Pressure, Purpose, Person, Profile,

Power, Process, and Pools) is intended to help CEOs and

Heads of Talent to map out the gap between their long

term aims and current reality. Our hope is that it will help

create greater clarity around the strategic importance of

this key business role and function. “I need to make

talent meaningful to my colleagues,” one Head of Talent

told us. We think that this is good advice for every

Head of Talent. n


A total of 24 people participated in our

on-line survey, all of them senior talent

management professionals within FTSE

100 companies. To add further depth to

these findings we conducted detailed

interviews, either face to face or via

telephone, with 20 of those respondents.

Additionally, we leveraged Heidrick

and Struggles’ network of senior talent

executives to conduct more ad hoc and

informal discussions around the themes

we uncovered. The talent management

professionals we spoke with represent a

strong cross section of leading players and

industry sector listed on the London Stock

Exchange.

The interviews and study were developed

and produced by London based Heidrick

& Struggles leadership consultants.

We would like to thank all of the Heads

of Talent for the time they have spent

participating in the research.

If you would like to contribute

to the dialogue, contact us at

[email protected]

Annabel Parsons

Partner

[email protected]

Victor Prozesky

Partner

[email protected]

Caroline Vanovermeire

Principal

[email protected]

Dave Tullett

Director Centre for Leadership Innovation

[email protected]

Rebecca Curran

Associate Principal

[email protected]

Sarah de Corday-Long

Associate Principal

[email protected]

About the survey


Appendix 1 A note on titles

We chose ‘Head of Talent’

to refer to the top talent

management executive in

a company. The executives

we interviewed have the

following titles.

Director of Group Resourcing and Development

Director of Group Talent Development

Director of Organisational Capabilities

Director, Group HR and EHS

GeneralManagerHumanResourcesandLegal

GlobalDirectorofOrganisationalDevelopmentandLeadership

GlobalHeadofTalent,LeadershipdevelopmentandChange

GlobalLearning&DevelopmentDirector

GlobalPracticeLeaderTalentManagement

Global Talent Director

Group Head of Talent

Group Head of Talent, Resource Development and Resourcing

Group Head of Talent Management

Group HR Director (2)

HeadofLeadershipDevelopment

HeadofLeadership,TalentandLearning

Head of Resourcing and Development

Head of Talent & Development

Head of Talent Management

LeadershipDevelopmentDirector

Senior Talent Manager

SVP Global Talent and EMEA Human Resources

VP, Talent Management


Appendix 2 Responses to our survey What is the gender of the Head of Talent? (n=24)

33% Male

67% Female

How long have you been with the Company? (n=24)

63% 0–5 years

26% 5–10 years

11% 10–20 years

How long have you been in this position? (n=24)

33% 0–2 years

46% 2–5 years

21% 5+ years

When did the Head of Talent (or closest equivalent) position first exist in your company? (n=24)

25% 0–2 years

25% 2–5 years

50% 5+ years

How many people do you have in your Top Population / Talent Pool? (n=24)

153 average Top Population

What is your level of study? (n=20)

40% Degree

40% Masters

10% MBA

10% n/a

How many years of professional experience do you have? (n=20)

0% 0–5 years

0% 5–10 years

32% 10–20 years

68% 20+ years

Was your previous role within? (n=20)

85% HR

15% other function

Were you recruited externally or internally for this position? (n=20)

50% Externally

50% Internally

What responsibilities do you encompass regarding the Top Population? (Select all that apply) (n=24)

25% Compensation & Benefits

71% Individual career management (promotions

and rotations)

42% Mobility management

58% Performance management (target setting,

assessments)

66% Recruitment (head-hunters, on boarding)

91% Succession Planning (people reviews, etc)

83% Training & Development (Corporate University,

Development plans)

Who do you report to within your company (position title)? (n=24)

17% CEO

71% HRD

12% more senior Talent Manager


How many people report to you? (excluding personal assistant) (n=24)

8 average

What was your career path prior to becoming Head of Talent? (n=24)

90% HR

10% other

How do you spend your time? (n=24)

3% Compensation & Benefits

10% Individual career management

4% Mobility management

7% Performance management

9% Recruitment

24% Succession planning

22% Training & Development

21% other

In which industry does your company operate? (n=24)

29% Consumer

34% Industrial

29% Financial Services

8% Pharma

How would you rate your company’s performance on talent management? (n=24)


13% To be improved

29% Standard

50% Good

8% Excellent


21% To be improved

33% Standard

33% Good

13% Excellent

Mobility management

42% To be improved

33% Standard

25% Good

0% Excellent


17% To be improved

17% Standard

66% Good

0% Excellent

Recruitment13% To be improved

33% Standard

46% Good

8% Excellent

Succession planning

13% To be improved

25% Standard

50% Good

13% Excellent

Training & Development

33% To be improved

21% Standard

25% Good

21% Excellent

% may exceed 100 due to roundings


Appendix 3 Heidrick & Struggles’ Talent Management Diagnostic

7PsWhat do I need to ensure

future success?

What have I got today? What will I do to close the

gap and keep it closed?

Pressure What are the talent

issues that are impacting

performance?Howare/

should these be addressed?

Purpose

What is the main focus of

Head of Talent effort? Is it

aligned with the key talent

issues and the strategy?

Person What skills and experience

are critical to the role? Do

these exist?

Profile What is the internal and

externalimpactoftherole/

function? What “brand”

promises exist?

Power What are the decision rights

held by Head of Talent?

Process Where is Head of Talent

involved in top executive

processes and forums?

Pools Whatisthesizeand

definition of the talent

pools? Is Head of Talent

responsible for internal and

external pools?


Copyright ©2012 Heidrick & Struggles International, Inc.

All rights reserved. Reproduction without permission is prohibited.

Trademarks and logos are copyrights of their respective owners.

201201JNTSEC73

Heidrick & Struggles is the leadership advisory firm

providing senior-level executive search and leadership

consulting services. For almost 60 years, we have been

building deep relationships with the world’s most

talented individuals on behalf of the world’s most

successful companies. Through the strategic acquisition,

development, and retention of talent we help our clients

– from the most established market giants to the newest

market disruptors – build winning leadership teams.

www.heidrick.com

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