The 2 Most Visible Indicators of a Highly Optimized Talent Strategy: Part 1
I work with small- to mid-sized companies on talent strategy. It is my area of expertise, and it’s what my team and I dedicate all of our working time to help solve for clients. I learn from clients, I read articles and studies, I write blogs and LinkedIn posts with free guidance for companies struggling with hiring, retaining talent, performance management, building strong leaders, and creating great workplaces.
I identify problem areas, review foundational processes, build roadmaps, distill lessons learned from high-performing organizations into actionable advice - all of this results in a huge pool of data and knowledge. Over time, patterns reveal themselves.
I have observed a pattern in organizations that are able to keep top talent. In essence, the pattern comes down to two main and very visible indicators:
The most senior leader (the CEO, Executive Director, Managing Director, etc.) understands the strategic significance of an effective talent strategy, and
Managers invest time developing high-quality professional relationships with their direct reports; and they do it consistently across all functional areas.
Surprising in their simplicity and transformative in practice, these outcomes are the bedrock of organizational excellence.
Indicator 1: The most senior leader understands the strategic significance of an effective talent strategy
Human capital accounts for as much as 70% of an organization’s operating expenses. CEOs who internalize this and truly leverage human capital as a strategic asset create high-performing organizations. However, when CEOs view employees simply as a cost, a nuisance, or a means to an end, the opportunity and options for business success become far more limited.
An effective talent strategy that’s aligned to the business priorities signals to current and prospective employees that this workplace is worthy of their commitment. It provides a beautiful blend of humanity, direction, and purpose that inspires workers to deliver their best work while feeling safe to raise questions.
For any of that to happen, the CEO must fully embrace a mindset and display behaviors that signify the importance of people to achieving the strategic priorities. I’m constantly amazed by the power of a leader to influence action at all levels of an organization simply through demonstrating consistent behavior over time. And I love it when I hear stories of a manager who - when stuck - pauses to think about how the CEO might handle a difficult employee situation.
I’ve been keeping track of the foundational elements that high performing small- and mid-sized organizations share as well as the indicators that show the impact. After years of working with leaders in corporate, government, and nonprofit organizations, I’ve narrowed them down to the ones I see in practically every high-performing organization.
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High Peaks Group client, the New York Charter Schools Institute, is deeply committed to optimizing its talent strategy. Despite being an organization of less than 30 people, its leaders prioritize role clarity, career progression & development, competency definition, and consistent management practices. All this leads to a compelling Employer Value Proposition that attracts great talent.
What’s common among CEOs who understand the importance of talent strategy
Values alignment. CEOs who understand talent strategy have personal values that are tightly aligned with the organization's values. Often they’re the same, and the business feels like an extension of the most senior leader.
Deep commitment to purpose. CEOs will reference the organization’s purpose at moments of peak challenge and frequently use it as a teaching tool.
Strong relationship with HR. It’s more than having a seat at the table. CEOs who spend time with the CHRO in strategic planning sessions end up with less friction and move faster.
Emotional intelligence. Leaders with emotional intelligence understand the nuances of human interaction well. They don’t lose focus or patience when things go sideways.
Results-orientation. Even the most human-centric leaders are focused on results. They have a clear sense of what good looks like and what’s expected.
Boundaries. They know when to give someone a second chance, and when to let someone go. They have limits and are very clear when someone crosses a line.
Clarity. Not only are these leaders clear, they endlessly strive to make things clearer. They also insist on clarity from everyone around them.
Observed business outcomes when a CEO “gets it”
Stronger Employee Value Proposition (EVP). Businesses tend to have a magnetic culture where people want to work. Employees know they have a good thing going, and they don’t want to leave.
Improved Hiring and Retention. With investments in hiring the right people and creating an environment where they want to stay, these organizations see lower turnover and save a ton of money.
Less Drama/Lower Friction. Organizations tend to have less drama and interpersonal friction. Their processes reflect the ways different functions and people work together.
Stronger Employee Engagement: Employees feel valued and are more likely to be motivated to contribute to the organization's success.
Increased Productivity and Innovation. A culture that fosters creativity and innovation, leading to new ideas and improved products or services.
Better Decision-Making: Across the board, people make better-informed decisions, as they have access to the right expertise and perspectives within their organization.
Stronger Leadership Pipeline. These organizations identify and develop future leaders within the organization.
Improved Financial Performance. They have healthy financial performance and withstand market dips more effectively.
In our next blog, we’ll dig into Indicator #2: “Managers invest time developing high-quality professional relationships with their direct reports; and they do it consistently across all functional areas.”
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