Aligning Talent with Strategy for Enhanced Performance
Last month Kavi Chawla wrote about the advantages of taking an ecosystem approach to dealing with the challenges of sustainably managing talent. In this post, I shift the focus from the macro conditions he explored to the alignment of the micro processes within the firms, including training and development programming as well as management practices, with overall firm strategy. Companies that intentionally orient their human capital management towards the specifics of their overall strategic planning frequently obtain both greater productivity and returns.
Training and Development
It is well established that the knowledge, skills and experience embedded in the members of any organization influence its success over time. As we consider opportunities for training and development, it is crucial that managers balance the needs to increase general human capital with that which is specific to firm needs. General human capital refers to skills acquired through education that may be deployed in a large number of firms, for example, basic accounting precepts or standard accounting practices.
Of greater influence on success, however, is often the investment in firm-specific human capital which represents familiarity with the unique culture, procedures, and routines within an organization. While firms in the region are reporting increased spending on talent development, too much emphasis on general training will not allow for the greatest performance gain. Growing emphasis on the nationalization of the workforce in the GCC provides an opportunity to design training with this balance in mind. Done improperly, employees may simply become more mobile and move to the highest bidder in light of the current talent shortage. Given the high cost of turnover, it is imperative that both training and management practice recreate incentives for workers to stay.
In order to take full advantage of the firm’s training and development efforts towards improving employee abilities, management practices must also effectively address the other two elements of performance modeling, motivation and opportunity.
The climate within the firm has to provide conditions under which employees are motivated to apply their new expertise on behalf of the firm. At a minimum, this environment should satisfy the main precepts of organizational justice, namely fairness in procedures, rewards and interpersonal relations, as well as attend to the reasonable needs and expectations of organization members. Given that compensation is often not enough to keep employees, positive work relations, well-designed recognition programs, and growth opportunities aligned with the firm’s strategy are of increasing importance.
In terms of opportunity, job design and the task environment should also reflect the new abilities and knowledge that employees have acquired. The company will not reap the benefits of its training efforts if the development path of its employees does not evolve with them. Ideally, development programs, the motivational environment, and opportunities to grow and apply new skills should work together synergistically. This synergy both ensures the firm benefits from possible improvements in positive workplace attitudes, such as commitment and satisfaction, enhanced productivity at the individual level, and overall growth in firm performance.
Of course, in order to optimize the benefits of all these efforts, company leaders must also have in place a strategic planning process that allows managers at all levels to align their efforts. Even the best strategic human capital plan may fall short of its potential if there is not a compelling shared vision that provides an overall direction for creating value and continuously improving execution. In a time when many MENA firms are moving towards managerial professionalization and changes in senior leadership, there is opportunity to reassess the bases on which they complete with local and global players across the region, and then put in place human capital plans to meet their goals.
Jeffrey A. Kappen, PhD
Bâton Global LLC