The Talent Innovation Imperative

The Talent Innovation Imperative
DeAnne Aguirre, Laird Post and Sylvia Ann Hewlett
Strategy+Business, Autumn 2009

Many executives assume that in the current economic crisis, employees are so grateful to keep their jobs that they can be relied on to deliver 100 percent.  On the other hand, the crisis only increases the need for companies to rely on their most talented people.  And while the commitment of employees is most needed in a crunch, that commitment is all too easy to lose.

For example, surveys conducted by the Center for Work-Life Policy show that between June 2007 and December 2008, the number of employees expressing loyalty to employers plunged from 95 percent to 39 percent, and surveys in mid-2009 reported similar low levels of loyalty.

Another recent study, published in the Academy of Management Journal, found that after a round of layoffs, voluntary attrition spikes by as much as 31 percent, and precisely the wrong people — those who have the strongest track records and brightest employment prospects even in a recession — are most likely to leave.

Companies that react to the crisis with across-the-board talent cuts are not just missing an opportunity to compete; they’re making themselves weaker.

By contrast, some companies are achieving breakthrough performance, superior competitive advantage, and enhanced global reach.

What are those companies doing differently?  According to “The Talent Innovation Imperative,” in the Autumn 2009 Strategy+Business, the best companies are rethinking their model for managing talent.  The article was written by DeAnne Aguirre and Laird Post of Booz & Company, and Sylvia Ann Hewlett, the founding president of the Center for Work-Life Policy.

Their research reveals that CEOs must make talent a priority by leading change in the four building blocks of global talent innovation:

  1. Differentiated capabilities.
  2. Performance acceleration.
  3. Leadership development.
  4. The fostering of a talent culture.

Let’s examine each of these building blocks.

The first building block is differentiated capabilities.

Business success relies heavily one establishing the right capabilities — a set of systems, tools, processes, and knowledge that can be put in place to reach the most critical groups of customers.  The differentiated capabilities that distinguish each company from its competitors vary widely among and within industrie...