Monday, 10 March 2008

Peter Cappelli: Talent on Demand

I've posted quite a bit on talent management recently (on DDI'survey, McKinsey's survey and HCI's survey. My guest blogger, Jo Jordan, has also posted on the CIPD's Talent Management conference which I chaired. And I've also asked, I believe rather provocatively, whether Talent is pink?).

And I've just read Peter Cappelli's Harvard Business Review article, Talent Management for the Twenty-First Century, which summarises his new book, Talent On Demand.

Unfortunately, I don't think these offer much to deal with McKinsey's 'talent problem'.

Firstly, Cappelli's approach assumes, I think, that everyone is talent (rather than being a result of segmentating the most valuable employees). This leads him to make proposals which would be less than great if we are talking about talent as the most valuable - for example asking them to share in the costs of their training - bye bye talent!

Linked to this, I think Cappelli undervalues the contribution that talent (and HR) can make. Whether or not you agree with me that people management strategy should inform the business strategy as well as vice versa, you'll hopefully agree that the two should be tightly integrated. So Cappelli's suggestion that "operating executives give talent planners their best guess as to what business demands will be over the next few years" ignores the contributions that both talent and talent planners can provide. Predicting demand for talent should not depend purely on current operating forecasts, but also on what the business will be capable of achieving with the right talent in place.

Most seriously, the supply chain management analogy used by Cappelli over-simplifies HCM / talent management to such an extent that the analogy becomes largely valueless. Cappelli says that "the issues and challenges in managing an internal talent pipeline - how employees advance through development jobs and experience - are remarkable similar to how products move through a supply chain: reducing bottlenecks that block advancement, speeding up processing time, improving forecasts to avoid mismatches." Yeah, right.

I'm not saying the analogy is completely useless, in fact five or so years ago, I used to use it to describe some elements of HCM myself (see this report - p11). But if you think about talent as the most important people in your organisation, then it's not useful. Treating, or even thinking about these people as 'products' is unlikely to be useful in helping you achieve your objectives.

A similar point applies to 'talent on demand'. I do think organisations need to be more innovative in using different sources of human capital, but again, I have reservations about applying this requirement to talent. McKinsey notes a major reason for high rates of failure in talent management programmes is short term thinking. Assuming that you can get your talent on tap is more likely to magnify this problem than it is to solve it.

I think at the heart of my issue with Cappelli is that "his theory, he suggests, addresses a major complaint about the field of human resources -- that it is 'touchy-feely, squishy stuff with little applicability to business problems. HR practices have typically been about meeting individuals' needs, figuring out what psychological profile they fit and what should be done to help them grow and advance. But if you're an employer who is worried about issues like the finances of the company, you would like HR to think about personnel from the perspective of money and costs, and what happens if you don't have the right people in place to do the necessary jobs."

Would you? Then perhaps that's why a decade after McKinsey's War for Talent report, you've still got problems. My bet is that Cappelli's way of managing isn't going to get you out of them.