Matching talent to value

IcubeBuzz

We’re really testing for, where is the hard-core
work and strategic decision making and leadership
happening? In the cybersecurity example, one of
the things that we look for frequently and have
discussions about is, how much value is at risk?
And how much do we want to assign in terms of
protecting risk? That’s where cybersecurity roles
come in rather frequently.
Mike Barriere: One thing I would emphasize is the
front end of this. When you think of value drivers,
let’s say you think of some that might be around
organic growth, let’s say revenue growth as an
example. You start to look across the organization.
Let’s say you want to grow a billion dollars on the
top line. You look at your commercial groups, sales,
and marketing. You look at product or operations,
depending on your business, and then you look at
those enabling functions.
You could literally take a billion dollars of top-line
revenue growth and say, OK, 30 percent of that has
to come from sales and marketing. They have to go
out and create the demand. But obviously, that’s
not all of it. We have to deliver the product. Maybe
there’s an R&D contribution, or maybe there’s a
real operations component. These are the creator
roles, because they’re so important to generate
the demand for, in this case, the top-line revenue
growth, as well as the delivery.
So maybe 30 percent is in sales and marketing,
another 30 percent in operations. Now you still
have 40 percent of that value, which could come
from these enabling functions like technology or
HR to provide the talent to the sales teams or the
operations teams. You start to build this mapping—
and we have a great way to model this—of the
value driver. What functions are contributing what
percentage of that value? Then that’s where you
get into the valuation of the role.
Let’s say you take 30 percent of a billion [dollars] into sales and marketing, there’s a value there, and
you say, OK, well, there’s seven roles in marketing
that are absolutely essential to grow top-line
revenue. They’re those key account managers
that we’ve been using as an example. You then
distribute that value across those roles. There
are some heuristics that we work with, some
percentages, whether you’re a creator or enabler
type of role. But the beauty of putting this into a
model is that then you can do sensitivity analysis.
So maybe it’s 60 percent on the front end and only
20 percent on the product side, or vice versa. You
can quickly see the impact on the kind of roles that
pop up.
Simon London: So we’ve had a robust conversation
as a management team about what our value
agenda is. We’ve hammered out some areas of
ambiguity. We’ve done the hard work of then
identifying the roles that are really going to matter
over the next few years. What happens next?
Mike Barriere: The fun stuff. First is, if these are
the roles, what does success look like? I come
from HR, so I can pick on myself. Usually, HR
doesn’t have up-to-date, nimble, and dynamic role
descriptions that capture what a role needs to
do today.
This is part of the issue, Simon, where a lot of our
HR processes are dated and not designed for this
period of exponential change and disruption. The
first thing, when you say this is a critical role, we all
agree it’s one of the top 50, is to define, and Carla
mentioned it, a role card.
A role card consists of the mission for the job, and
then in language of jobs to be done, what are the
five to seven things that are most important that
this role has to accomplish to be successful? You
also know the value that the role should capture.
It should be written in a language that’s clear,
concise, and tied to those value drivers that we
talked about.
Some roles might hit two or three or even four
value drivers, and you want to be clear that this
is exactly what needs to be done in the role to
capture that. That’s half the role card. The other
half is, how are you going to assess somebody
against those requirements?
Matching talent to value 5
Role descriptions were designed to stand the test
of time. A lot of them are old, static, they’ve been
around. Compensation teams use them to price
jobs relative to market. Search firms use them.
We’re talking about something different. We need a
much more nimble, concise way to think about jobs
and design jobs, so you don’t get this phenomenon
of double-, triple-hatting somebody, or having
them do 60 percent non–value-add work.
We want to be really crisp, and that’s why we
even changed the language to role card, not a job
description, because you want to be clear about,
this is what this role needs to do over, like, a threeyear time horizon, and this is the value that you can
measure success in the role against.
Simon London: It’s a hybrid between a role
description and your annual objectives, somewhere
in the middle there. It’s a different critter.
Carla Arellano: Yes, very much so. When we’ve
developed these baseball cards or role cards for
leaders, one of the first things that happens is
the reaction that, oh, we have the person in this
role doing 50 other things that are not on that list,
usually followed by, how would we expect them to
actually deliver this, when we have them doing all
these other things. And are they best placed for
everything else?
The other thing, where Mike was going with this
notion of the knowledge, skills, attributes, and
experiences, is that most organizations have
moved people into roles based on the fact that they
were successful in this other role, or somebody
likes them and knows them, and they’ve worked
well together for a very long time.
But the focus should instead be on, do we want
somebody who can build a team of very diverse
profiles to go do something different or hard?
Or do we want somebody who can be a strategic
negotiator with customers? Those are very
different requirements for a role. Getting specific
on those and how you might measure it can be
hard. But the rewards are very high.
Mike Barriere: Now we’re going into the third
step, which is the matching. We defined the value
agenda, the drivers, we know where the critical
roles are in the organization, we write the role cards,
and now it’s time to assess and match the talent.
A lot of times you’ll find that you don’t have your
best talent in a good percentage of the critical
roles and your best talent is somewhere else and
not even on the radar for these kind of roles. That’s
why the matching is really important.
Simon London: What’s the percentage of
mismatch? When you do this for the first time,
do you find that organizations are 70 percent
mismatched? Or in most organizations is it more
like 10 percent of the roles cause some serious
head-scratching and conversations once these
cards are laid out?
Mike Barriere: What comes to mind is a recent
experience where we found 45 percent of the roles
were a great match. The incumbent was the best
fit. Twenty percent to 30 percent typically have
gaps, but they’re addressable. They do have some
gaps, but they are the best talent you have, and if
you have clarity about how to help them address
their gaps—which we can get to in a minute, the
techniques for that—typically, it could be in the
ballpark of 20 to 30 percent that are mismatched.
It doesn’t mean you fire them. It means that there’s
probably a better role for them, or you’ve got to
look either internally or maybe go external.
These are not the roles you want to give somebody
a stretch assignment for. These are your critical
roles that are going to deliver value, so you really
want to put your best players in these roles.
Carla Arellano: I think the other thing alongside
that, Simon, that I’ve seen frequently is looking at
the team around a role or looking at the team of
roles. Because you might find that there’s a gap
of an incumbent to a role. You might also find that
across a team, there’s a core missing experience
or capability set that you need to complement in
some way.
6 Matching talent to value
I have an organization that’s been going through
a restructuring for quite a while. None of the
individuals in critical roles had actual restructuring
experience, which was a little bit of a flag. It wasn’t
that every single one of those roles needed to have
it, but it was important that at least one or two of
them did to get there. There’s that individual view,
and then there’s a little bit of a team view as well.
Simon London: This goes back to my slight
skepticism about how easy it is to assign value to
roles, because I think we’re acknowledging that so
much of what goes on in an organization is a matter
of team production. There are teams delivering
value, not individuals.
If you say you need to reinforce a role by
bringing in somebody else as a wingman—it’s
a gendered phrase—but a wingman effectively
who compensates for one element. Aren’t you
immediately beginning to undermine this idea that
it’s that role and that role alone that’s delivering
the value?
Mike Barriere: No, I have a very strong view on that.
A critical role leader needs to absolutely leverage
the team—and it might not even be their own team.
There could be an important collaboration across
function or function to a business unit or across a
business unit.
Now we’re getting into, how do you optimize value
capture for that critical role leader? They’re on
the hook. You need somebody responsible. If you
just try to tackle it from the team dynamic, you’re
going to miss something. We like to think that
there’s a critical role leader that’s on the hook, but
part of their success is going to be driven by how
well they build the team around them and how well
they can build cross-functionally or collaborate
horizontally in the organization. It doesn’t put teams
aside and say it’s only the role that’s important.
To be successful in the role, team competency is
absolutely essential.
Simon London: Ultimately somebody has to be
on the hook, though. I think that’s the message.
Somebody has to own the delivery of that value.
Mike Barriere: Exactly, because that happens a
lot. You take a team approach or you do something
broad strokes without really having that person
who you look at and say, that’s their role, the
value is tied to them in that role. But the way they
succeed involves not only the team, it involves
the workforce. And does the workforce have the
capabilities? What about the culture, how they
run the place. Do they take out organizational
bureaucracy, so they can move with speed and
agility? A lot of the organizational things light up
here, but this is the front end to prioritize the role.
Then how do you make a leader successful in that
role vis-à-vis the top team and the organization and
the capabilities and the culture to run the place?
Simon London: Do you get pushback from
organizations at that cultural level? That doing this
in this way just feels kind of countercultural?
Carla Arellano: Definitely. Maybe more than
pushback, there tends to be a very deep-seated
philosophical question for organizations. One,
about what’s the difference between critical and
important, and how do we make sure that we’re not
creating a stratification of our workforce and making
some people feel more important than others?
A lot of organizations—this is going to sound a little
bit harsh—confuse fairness with, everybody has
to get everything the same no matter what. They
end up struggling to feel comfortable doing the
approach, and then figuring out what they would do
differently for that group of critical roles than they
might do for other roles in the organization.
There’s also this sense of what’s the urgency?
And where Mike was going about the culture
and the agility that you create in an organization,
to make sure that those critical roles are able
to be successful and deliver on the value. That
likely will require a shift from the way things are
normally done to drive forward a different sense
of urgency than you might have had in terms of
certain things.
Mike Barriere: I have two principles related to
this, Carla. It’s that development matters for
Matching talent to value 7
everybody. Every employee in an organization
should have the opportunity to reach his or her full
potential, and you want to provide that, especially
as leaders.
While that’s important, it’s also important to
think about the future of the company. Therefore,
who are those talents that you absolutely want
to get into the most critical roles? You need to
do both, but many times, we only do the broader
set. Because there’s a culture that it’s one team,
rather than there being a specific set of certain
people. That’s why we really put the emphasis on
the roles that matter, and then not only looking for
the 50 people, but what’s the succession pipeline
behind them?
There could be a couple hundred people that you’re
also developing to be ready to take those roles in
the future.
Simon London: It’s true, every organization treats
people differently. It’s just that we’re used to doing
it based on hierarchy. The difference here is, we’re
focusing on value first and role first, and that can
feel a little unusual. But it’s not like everybody in
an organization gets the same treatment today
anyway. Hierarchy takes care of that.
Mike Barriere: I’d add that it is hierarchy, but it’s
also the definition of top talent, or when you use
the nine box to try to find out who are our highest
potentials. Companies segment already, but they
segment the talent, not the roles. Then you need
more of a fact base of who has the potential? And
potential for what?
We’re saying it’s potential to be successful in
critical roles. To leverage the fact that most
companies are already segmenting talent, we’re
saying, segment the roles first, and then match
the talent and get that right, and then broaden
it. Broaden development and leadership and
opportunity and tackle it that way.
Simon London: If you think about what a CHRO
needs and what a good HR function needs in a
company that’s going to do all this well, what are
the gaps that we often see?
Mike Barriere: The first part is guts. The CHRO
has to have the moxie to push up against the
CEO and the CFO, the exec team, and call out if
the value agenda is not clear. If it’s ambiguous
or fluffy or ownership is not quite there, this is
the moment that a CHRO can really say, “Hey, if
we want to leverage our human assets, we need
much more clarity about drivers and where in
the organization is the most critical, because we
want to deploy our talent just like you would think
about deploying the financial capital.” The role
of the CHRO, particularly with the G3, is to
increase awareness and to lead. We need to take
our value agenda and our value drivers into
the organization.
From there, the CHRO does need a good sense
of the business and the industry and what are the
trends. To Carla’s point, the CHRO is an officer first,
and you happen to have an HR talent tool kit, but
the role is about understanding the business, the
business dynamics, the ways that the company can
achieve value in the future.
Carla Arellano: Mike, one of the things that you
said really jumps out at me. CHROs are probably
most comfortable, but I think if you get into some of
their teams, there tends to be less comfort. And it’s
this concept of really knowing the business and the
industry and how it makes money.
What I tend to find is, it might be that an HR leader
understands it but might feel uncomfortable
engaging a business leader on where value is going
to come from, and why they think they’re going
to achieve a certain margin, or what is the plan to
capture that digital growth?
There’s something about what you said earlier
on, having the moxie but also enabling that in
your team and giving them the comfort level
that they have just as much right, as well as
the demand on them to really understand what
needs to happen and by whom, so that they can
engage productively.
8 Matching talent to value
Simon London: So, I think we’re out of time for
today. Carla and Mike, thank you so much for
doing this.
Carla Arellano: Thank you, Simon, it was a pleasure

Source: https://www.mckinsey.com/business-functions/organization/our-insights/matching-talent-to-value

Leave a Reply

Your email address will not be published. Required fields are marked *