The New Faceof Talent Management

Making Sure That People Really Are Your Most Important Asset

©2009 for the American Society for Training & Development (ASTD)

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ISBN 10: 1-56286-683-4 ISBN 13: 978-1-56286-683-9 Product code: 100901

About ASTDASTD (American Society for Training & Development) is the world’s largest association dedicated to workplace learning and performance professionals. ASTD’s members come from more than 100 countries and connect locally in 133 U.S. chapters, 26 Global Networks, and 12 Global Partners. Members work in thousands of organizations of all sizes, in government, as independent consultants, and suppliers.

ASTD started in 1943. In recent years, ASTD has widened the profession’s focus to link learning and performance to individual and organizational results, and is a sought-after voice on critical public policy issues. For more information, visit www.astd.org.

Dear Colleague,

For many decades, talent management has been synonymous with succession planning for high-potential employees

and top executives. Most organizations did not regard talent outside those two groups as a critical asset requiring focus. But in certain industries such as service, hospitality, or retail, and others where knowledge workers were the heart of the business, it became clear that the skills and abilities of many types of employees were essential for business success. Talent, or human capital, began to be regarded as an asset just like physical assets and financial capital. And when organizations discovered that even with good systems and processes, and the ability to execute well, they could not produce enough innovation, the advantages of managing human capital differently became much clearer. Many CEOs began to realize that they faced no greater problem than leveraging knowledge workers. While many CEOs claimed that people were their most important competitive advantage, few of their organizations followed through with action.

Acquiring, developing, deploying, engaging, and retaining employees with the right skills and abilities are all part of managing talent. It is not that organizations do not manage each of these processes as employees move through their careers. And in many firms, these activities support business goals and are strategic in nature. But seldom are they integrated into a comprehensive, strategic talent management function. Up to now, there has been no standard definition of talent management and no common model for implementing it. A 2007 ASTD survey found that 75 percent of the respondents admitted to having no agreed-upon definition.

That is why ASTD has developed a definition of talent management and identified the common components of a truly integrated, comprehensive approach that can be applied in most organizations. The talent management community needs leadership to help them gain the full advantage of their human capital.

We invite your comments and insights on the definition and model of talent management presented in this paper. We know that both will evolve with use so we urge you begin to implement them in your organizations and give us feedback. Please send your input by email to talentmanagement@astd.org.

Together, we can step up to the challenge of reinventing talent management.

Best regards,

Tony BinghamPresident and CEOASTD

The ASTD Talent Management Advisory Committee

Jeanette Harrison, ChairVice President, CSBS Operations Training, American Express

Susan BurnettNational Managing Director, Talent and Development, Deloitte Services LLP

Jim CapraraVice President, Global Human Resources Development, Ciena Chair, ASTD Board of Directors, 2009

Mike HansenConsultant

Rob LauberVice President, Global Training, Yum Brands

Edward E. Lawler IIIDirector of the Center for Effective Organizations, University of Southern California Professor, USC Marshall School of Business

Daisy Ng Senior Vice President, Talent Management, Darden Restaurants

Kevin Oakes CEO, Institute for Corporate Productivity (i4pc)

Deborah WheelockLeader, Global Talent Management Center of Expertise, Mercer

Table of ContentsLetter from the ASTD President and CEO ......................................... 1

The ASTD Talent Management Advisory Committee ......................... 2

Section 1: Introduction ................................................................... 4

Section 2: The Need for a New

Approach to Talent Management ............................................... 5

A New Definition of Talent Management .................................... 8

Section 3: Success Factors for Talent Management ......................... 9

Section 4: Leading Talent Management ........................................... 10

Section 5: An Action Plan for Leading

Talent Management .................................................................. 13

Section 6: Examples of Companies Taking New Approaches to Talent

Management ............................................................................ 14

Darden Restaurants, Inc. .......................................................... 14

Steelcase ................................................................................. 15

Computer Sciences Corporation (CSC) ...................................... 16

References and Resources .............................................................. 17

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Section 1 Introduction“For companies that are truly competitors in the knowledge economy, what was good enough performance yesterday is rarely good enough today—and will almost never be good enough tomorrow. For most organizations, the best way to meet this challenge is to become human-capital centric, to focus on making talent their most important source of competitive advantage. “

Edward E. Lawler III Author of Talent: Making People Your Competitive Advantage

Today’s economy runs on knowledge and more value is created in a knowledge economy when organizations focus

on knowledge work. That single fact has changed the way organizations operate, how they conceive their business models, and what employees do on the job. As the knowledge economy has unfolded, the strategic management of talent for optimum performance has become the indispensible key to competitive advantage.

Many of the current approaches to employee acquisition, retention, and development no longer work to produce the human capability that today’s organizations need to succeed. And while technology-based performance management systems provide the means to track and measure talent management efforts, they can’t compensate for lack of a coordinated strategy.

Back in 1997, a McKinsey report, “The War for Talent,” alerted the business world to the importance of talent as a competitive advantage. But more than a decade later, there is still no common definition of talent management nor is there any model of leadership for the kind of comprehensive approach that is needed. Research in 2008 by ASTD and The Institute for Corporate Productivity (i4cp) revealed that only one in five organizations believes it manages talent effectively to a high degree.

To take the lead in addressing the lack of comprehensive talent management in most organizations, ASTD created a definition of strategic talent management and identified the common components of an integrated approach. The ASTD model for integrated talent management covers a suite of processes that maximize employee capability throughout the organization and link capability to strategy and business results from recruitment through retirement.

Simply stated, effective talent management means putting the right employee with the right skills in the right position at the right time. This responsibility involves the whole organization and is facilitated most effectively by those whose core capability is the strategic development of talent throughout the entire employee life cycle—the organization’s learning professionals.

A 2008 report from Deloitte asked “Do you know where your talent is?” Today’s burning question is “Do you know what capabilities your organization must have to succeed and how best to deploy and develop them?” This whitepaper addresses that question.

This paper will

• set the context for the need for a new approach to talent management

• define and describe talent management and its components

• describe success factors

• establish the leadership role of the learning professional in integrated talent management

• present an action plan for organizational leadership of comprehensive talent management

• provide examples of organizations that are leading the way in talent management.

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Section 2 Setting the context

Talent management is in a state of transition as organizations grapple with the need to execute strategies,

stay competitive, - serve customers, and - address skills gaps. Many are moving away from traditional human capital development strategies that focus mainly on executives toward more comprehensive efforts to find, develop, and retain the right talent for every critical job in the organization.

But the emerging picture is far from clear. An ASTD/Institute for Corporate Productivity (i4pc) study in 2008 found 20 different elements that comprised talent management in the companies they studied. Performance management was the most common component, followed by training, leadership development, high-potential employee development, and individual professional development. While each of these elements and others contribute to managing talent, the study showed the lack of a common definition and set of practices for linking talent development to enterprise performance.

Throughout 2008, ASTD worked on reinventing talent management to meet the needs of knowledge-driven organizations. The goals of this effort were to:

• define talent management as a comprehensive, integrated approach spanning the whole enterprise and the entire employee lifecycle

• create a definition of talent management and make it the industry standard

• identify the leadership role that learning professionals play in the new approach to talent management

• present an action plan for the organization’s talent management leaders.

Comprehensive talent management must start from the top of the organization and receive an adequate amount of time and resources from key managers. Edward Lawler, director of the Center for Effective Organizations at the University of Southern California, recommends that as a rule of thumb, senior managers should spend 30 to 50 percent of their time on talent

management, and in certain kinds of organizations, such as professional service firms, even more.

“Talent management is the most important process in human-capital-centric organizations,” he says. “Decisions about people should be made with the same rigor, logic, and precision that are applied to decisions about capital investment, products, technology, and physical assets. To do anything less is to risk creating an organization that cannot perform effectively.”

Many CEOs agree that finding and keeping employees with the right skills is a top management challenge. The world economic crisis that began in 2008 made it clearer than ever to CEOs that managing for survival is not just about controlling costs but about getting the most value and the best performance from their people. Jack Welch, in his book Winning, states that talent management deserves at least as much focus as financial capital management and not just when an organization is trying to acquire talent or implement change.

In challenging times, smart organizations protect their human capital. Taking the opposite approach can have dire results, as the example below of Circuit City shows.

In March 2007, facing declining sales and competition from online and other electronics retailers, the company laid off its most talented, experienced employees, who were a key factor that distinguished the chain from its competitors. In 2008, New York Times columnist David Carr wrote that “with a single stroke, the chief executive of Circuit City wiped out [the company’s] future.” Following a one-time financial gain from the layoffs, morale plummeted and sales declined further. In November 2008, Circuit City sought bankruptcy protection and in January 2009, it closed for good.

During the economic crisis of 2008, U.S. unemployment rose to its highest level in 14 years and employers around the world laid off hundreds of thousands of workers. This massive and swift elimination of people from the workforce highlighted the

The Need for a New Approach to Talent Management

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importance of knowing where critical capability needs to be in an organization and where it actually exists.

“Downsizing forces talent gaps into the open and makes it imperative for organizations to use and rotate remaining talent for maximum productivity,” states Tamar Elkeles, vice president of learning and development at Qualcomm. “That is when a company most needs a process that identifies the strengths and capabilities that drive competitive advantage. “

The system is the thingInterest in talent as a factor for business success gained traction in 1997 when the management consulting firm McKinsey & Company wrote about a “war for talent” among winning companies. McKinsey analysts interviewed thousands of managers to determine what made the difference between successful and unsuccessful companies and concluded that the best had leaders who were “obsessed” with talent. They found and hired top performers and had “a deep-seated belief that having better talent at all levels is how you outperform your competition.” To attract and keep talent, some of these companies rewarded their stars disproportionately to their experience or their performance. Enron was a prime example of this principle in action, and its spectacular collapse was a powerful lesson on the dangers of an approach to talent that was too one-dimensional. Enron’s demise showed clearly that it is not enough just to hire smart people and pay them well. Their capabilities must be well understood by the organization and applied to specific performance goals with accountability for results.

Malcolm Gladwell pointed this out in a July 2002 article in The New Yorker. “An employer really wants to assess not potential but performance. If talent is defined as something separate from an employee’s actual performance, what use is it, exactly? The broader failing … is the assumption that an organization’s intelligence is simply a function of the intelligence of its employees.”

That is why successful talent management must be systemic and integrate every major process—from recruiting to retirement—that contributes to the maximization of capability.

Two analysts at the management consulting firm, Deloitte, recommended a comprehensive approach to talent in a paper called “It’s 2008: Do You Know Where Your Talent Is?” They noted that acquisition and retention strategies don’t work without methods for engaging employees and continually developing the skills of “critical talent”—those employees who drive the lion’s share of a company’s business performance and generate higher-than-average value for customers and shareholders.

The Deloitte paper emphasized the need to develop talent not only by traditional classroom or online means, but through experiences that stretch employees’ capabilities and create connections with

people who will help them achieve their objectives.

Wharton School professor Peter Cappelli has also recommended changes in the way companies should approach talent management. He believes that neither outside hiring nor internal development—the only two ways to get talent—are adequate on their own for business environments where uncertainty is the norm. As companies work through the 2008 economic crisis, Cappelli’s viewpoint is particularly apt. In his book Talent on Demand: Managing Talent in an Age of Uncertainty, he recommends using supply-chain management practices, particularly just-in-time supply, to maximize talent in an organization. “Finding the right mix is the key—using internal development for the components of talent that we are absolutely sure of and outside hiring—the just-in-time component—for the parts that are uncertain,” he says.

“The management of supply chains is about managing uncertainty and variability. This same uncertainty exists inside companies with regard to talent development. Companies rarely know what they will be building five years out and what skills they will need to make that happen,” he says.

Cappelli points out that static forecasting and planning models for talent are often wrong. “Who predicted the current financial crisis?” he asks. Likening talent to inventory, he maintains that having a “deep bench” of talent can be a costly mistake if that talent is unexpectedly not needed. “Inventory is costly, and for talent, the big cost is that qualified people won’t wait on the bench for an opportunity to appear. They’ll leave for opportunities elsewhere.”

Companies could lessen the effects of faulty predictions by “coordinating talent questions across divisions” and putting “talent development efforts into one common program.” Coordinating avoids duplication. When one division is long on forecasts and another is short, combining them cancels out mistakes. “Running two talent management programs separately means they will both be wrong,” he says. “We need to face up to the fact that talent needs are uncertain. As a result, we need systems that are responsive.”

Cappelli’s book cites a number of companies, such as Dow and Capital One, that combine sophisticated forecasting models with methods for determining attrition rates, promotion rates, and other talent-related factors. Both companies also use simulations to deal with uncertainty in forecasting and planning.

A leading example of a company taking an even more comprehensive systems approach to talent management is Darden Restaurants, the parent company of such brands as Red Lobster, Olive Garden, Longhorn Steakhouse, Bahama Breeze, Seasons 52, and The Capital Grille. At Darden, a systemic framework addresses all facets of talent management for the organization. Based on Darden’s business strategy—to win financially and be a special place to be—it addresses culture, organization structure, objective alignment, and leadership behaviors.

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The framework has seven components: organization development, acquisition, assessment, team and individual development, performance excellence, career planning and the creation of career paths, and rewards.

Together, the integrated talent management system drives organization capability, capacity, and engagement at Darden Restaurants. As a result of the systems model, Darden was able to accelerate talent succession readiness for pivotal roles 25 percent year over year, improve overall employee engagement as measured by employee survey results, and facilitate talent sharing and deployment across brands, efficiently minimizing the cost of recruitment and productivity loss.

Talent Management at Darden

Darden’s Business GrowthStrategy Enabled By

Linkage and Alignment Desired CultureEffective Organization Structure and Roles and Accountabilities Clear and Aligned Objectives (WHAT) Clear Leadership Behaviors (HOW)

OrganizationDevelopment

TalentAcquisition

Talent AssessmentSelection Development

Team and IndividualDevelopment

Performance Excellence

Career Pathing and Planning

Rewards

Enabling the desired culture change and building the required talent capability and bench strength

Organization capability, capacity and engagement

Darden winning financially and being a special place

A new definition of talent managementASTD defines talent management as an organizational approach to leading people by building culture, engagement, capability, and capacity through integrated talent acquisition, development, and deployment processes that are aligned to business goals.

The common components of talent management include

• acquisition of employees

• career planning

• assessment

• succession planning

• organization development

• performance management

• team and individual development

• retention.

The components of talent management may vary by industry, by organizational maturity, or by workforce demographics, but the overall focus should be on integrating and aligning all the components with key goals and strategies of the organization.

Many factors drive talent management efforts. ASTD research revealed these needs as the leading drivers:

• executing strategies

• retaining talent

• providing customer service

• innovating and changing.

The configuration of talent management practices and priorities should be carefully managed to take the form that best supports an organization’s strategic focus. ASTD research shows that most organizations focus on two areas—building needed competencies and then leveraging them by putting them in the appropriate place in the organization and measuring their impact through some form of accountability for results.

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Talent Management is an organizational approach to leading people by building culture,

engagement, capability, and capacity through integrated talent acquisition, development, and deployment processes that are aligned to business goals.

Organization Development

Succession Planning

Retention

Assessment

Team and Individual

Development

Performance Management

Talent ManagementCareer

Planning

Acquisition

Engagement

Capability

Culture

Capacity

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Section 3Success Factors for Talent Management

The ASTD/i4pc study examined a diverse group of organizations to discern the best practices

of an effective talent management program. The ASTD Talent Management Advisory Committee, comprising leaders in talent management, also recommended factors for success, based on their experience or research. Analysis of the two approaches yielded the following set of success factors for a strategic, enterprise-wide talent management effort:

• Drive talent management from the top of the organization to ensure that it will have support from senior managers and not fall into silos

• Ensure that talent management efforts support key organizational strategies

• Align all components of talent management to support optimal performance

• Manage talent with a long-range perspective but the ability to respond to changes

• Manage talent actively and strategically, in good times or bad. A downturn in business performance is not an automatic signal to eliminate critical talent or cut back on training and development.

• Nurture talent-oriented corporate cultures

• Use talent management metrics

• Cultivate the skills needed to manage talent effectively.

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Section 4 Leading Talent Management

Two powerful lessons of the volatile global economy are how important it is for organizations to anticipate

change and yet how critical it is to have the right people in the right jobs at the right time. It has become a practical necessity to operate as if people—human capital—are every organization’s most important asset.

Lawler points out that “there is no way to achieve the rate of change, the amount of innovation, and the focus on customers that is required in an increasing number of businesses without staying focused on human capital.”

Susan Burnett, of Deloitte, adds, “It is critical that as executive leaders are engaged in a strategy dialogue about what the firm will look like in three to five years, that they also consider what kind of capabilities the business will need to execute those strategies successfully. This essential input to the talent management process forms the basis of effective workforce plans, strategic development priorities, and succession strategies that build the leadership pipeline. Without this perspective, talent management will not be connected to, and enable, business growth and success.”

If, as Lawler advises, organizations must be more human-capital centric, learning professionals must take a leadership role in making that happen. Organizations that want to excel in customer service, innovation, and other functions that require high human capabilities must rethink their approach to human capital planning. Lawler goes so far as to say that “business strategy should be determined by talent considerations and it in turn should drive human capital management practices.” The expert resource on talent development should play a key role in strategy, organizational design, and change, and have accountability for employees’ effectiveness.

Talent management leaders must be able not only to define and build capability but also employ business knowledge, communication skills, teamwork, and knowledge of learning technology to make talent management a successfully integrated and effective effort across an organization.

Every company organizes talent management in the way that best suits its priorities but many companies put a single person in charge of leading and coordinating the overall effort to help ensure a seamless approach. Burnett adds, “More and more I see end-to-end organizational structures emerging, where a single leader owns talent acquisition, talent development, performance management, and succession.” By integrating the talent management functions under one leader, companies are better able to overcome the vertical silo structures that have slowed progress in the past.

In a growing number of progressive organizations, leading talent management is the responsibility of the company’s learning function and the top talent officer. Talent is their “product” and managing employees’ work experience, assignments, and development is one of their core competencies. They see development broadly comprising not just learning, but also coaching, mentoring, assignment management, performance management, and technology-enabled access to knowledge. As a result, learning professionals have expertise and experience with many of the levers of talent management.

Today’s learning executives are called on to do much more than direct the learning function, plan a company’s learning strategy, or guide the development of high potential employees. Although each of these roles is important and contributes directly to performance, learning professionals are taking on larger roles as the owners of talent management for the enterprise. Organizations such as Steelcase and The Gap recognize that managing talent throughout the employment life cycle should be a centrally directed function that links workforce capability to specific strategic goals.

This approach differs from managing a traditional learning function in some significant ways. It’s based on the premise that the goal of talent management is to support human capability for the organization as a whole so that at any time or under any economic conditions, employees are capable of peak performance. Talent management is not about creating learning events or providing education to target audiences. It is about creating an environment that maximizes the organization’s human capability. The expanded roles of the learning professional are threads that tie together an organization’s total effort to manage talent comprehensively and strategically.

The essential skills of the talent management leaderA key leadership role in talent management is the continuation of a trend that has been transforming the organizational training function from the role of delivering education to one of enabling and supporting better performance throughout the organization. The leaders of such training functions align learning with strategy and key processes. They know how to demonstrate the value that learning adds, and how to make the case for investment in human capital development. They understand how to translate performance requirements into roles and capabilities, and how to determine whether an organization has the talent needed to accomplish its goals. They integrate talent management processes across key functions.

The successful leader of talent management will have these key business skills:

• analyzing needs and proposing solutions

• applying business acumen

• building trust

• communicating effectively

• driving results

• influencing stakeholders

• leveraging diversity

• modeling personal development

• networking and partnering

• planning and implementing assignments

• thinking strategically about human capital.

Appropriate know-howPlaying the role of corporate-level executive devoted to talent management requires a wide range of knowledge about human capital development. New approaches to the practice of talent management require broad thinking about the talent requirements of the organization and how to meet them even in rapidly changing circumstances. The leader of talent management must know how to integrate many approaches into a common plan and how to coordinate work across many parts of the organization.

The executive-level talent manager will also be directing the work of others with deeper levels of knowledge in the specifics of talent management. The ASTD Competency Study, Mapping the Future, identifies these key knowledge areas for the role of talent manager:

• workforce planning

• succession and replacement planning

• job analysis

• career development theories and approaches

• individual and organization assessment

• ethical and legal standards for career counseling and organizational restructuring

• career counseling

• coaching and mentoring

• performance consulting

• manager and leader development best practices

• performance management systems and techniques

• approaches to maximize workforce diversity

• career exploration and lifelong learning.

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Typical roles for the talent management leaderAssuring that the organization has the human capability to meet its strategic challenges requires the talent management leader to play many roles. Here are some examples:

Role: identifying the critical skills that will deliver competitive advantage. Winning organizations identify which skills and behaviors, such as technical excellence or outstanding customer service, differentiate them from others and create their competitive advantage. The talent manager translates the competencies and capabilities needed for competitive advantage into specific skills and ensures that they are present in the workforce. This may require special acquisition and development.

Example: FedEx determined that truck drivers’ performance had more impact on corporate performance than the pilots’ performance because the drivers were the key to customer satisfaction as well as on-time delivery of shipments and packages. Consequently, FedEx put special emphasis on talent management for drivers.

Role: creating the employer brand by assuring that potential employees understand what kind of investment the company will make in them, and that working for the organization is only for a special few. Companies can attract and retain top talent by having a strong brand as an employer—a company that treats employees as valuable assets.

Example: Google is known for having a strong employer brand. They use a complex screening process to find the best talent with the strongest cultural fit. Then they support their knowledge workers with many formal and informal opportunities to learn and do innovative work. Google consistently ranks at the top of the Best Places to Work list.

Role: demonstrating accountability for talent management initiatives

Example: At Telus, a Canadian telecommunications company,the expectations for talent management success come directly from the CEO. The talent management function is responsible for attracting, developing, engaging, and retaining the company’s talent. These efforts are measured through performance objectives and through a balanced scorecard for the talent management function.

Role: workforce planning in changing times

Example: Capital One, following several acquisitions, faced the challenge of planning for its expanded workforce. They used data mining, manufacturing models, and information from their PeopleSoft system to generate workforce planning models for each business unit. Their models included such factors as attrition rates, employee morale, and promotion rates but they also used simulations to factor uncertainty into their workforce planning.

Role: enabling comprehensive talent development by managing assignments and experiences that support growth and by creating systems that help employees self-manage their careers through feedback, skill assessments, and opportunities to develop. These and other steps toward increased self-management of learning and development add efficiency to the talent management function.

Example: Employees with promise at PNC Financial Services may volunteer for projects being done by the senior leaders in the company. Some of these projects may be outside the person’s usual functional area. The employees gain hands-on experience and exposure to company leaders. The company gains efficiency in developing leaders.

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Section 5An Action Plan for Leading Talent Management

Comprehensive talent management has a long way to go. Research shows that seven out of 10 companies do not believe

they are managing talent to a high degree of effectiveness. An examination of current approaches to talent management shows most still focused primarily on succession planning and executive development. Many processes that contribute to talent management take place in silos throughout the organization and do not add up to a strategic approach. Many organizations do not know what capabilities they need to be successful or which ones exist in their workforces. They lack the technical capacity to measure, monitor, and manage capability and performance. And there is no single leader responsible for enterprise-wide talent management. In short, their talent management is not maximized because it is piecemeal, uncoordinated, and often directed at the wrong kinds of employees.

Lawler notes that human-capital-centric organizations do things differently. They align all the systems and processes that identify, attract, and support talent. The characteristics of such organizations are

• business strategy is determined with talent considerations that drive human capital management practices

• every aspect of the organization is obsessed with talent and talent management

• performance management is one of the organization’s most important activities

• the organization gives the same amount of attention and rigor to measures of talent costs, performance, and condition as it does to measures of equipment, materials, buildings, supplies, and financial assets

• the corporate board has the information and expertise to understand and advise on talent issues

• managers are highly skilled in talent management

• the talent management function is one of the most important in the organization.

To manage talent successfully calls for a high level of integration of all the functions and processes that contribute to putting the right people with the right skills in the right jobs at the right time. Talent management professionals, in partnership with business leaders throughout the organization, should use the following action plan to identify, address, and take charge of talent management.

Action PlanUnderstand the organization’s key strategies and key metrics

Determine and prioritize the human capabilities needed to support key strategies and key metrics

Define talent management throughout the life cycle of employees from recruitment to retirement and identify the key processes that comprise talent management for your organization

Create an integrated model for managing talent across the whole organization Align all the relevant systems and processes

Enlist key stakeholders in implementing an action plan

Measure results and communicate their impact

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Section 6

Examples of Companies Taking New Approaches to Talent Management

Darden Restaurants Darden Restaurants, Inc., (NYSE: DRI) headquartered in Orlando, Fla., is the world’s largest company-owned and operated full-service restaurant company with almost $6.7 billion in annual sales and approximately 180,000 employees. The company owns and operates more than 1,700 restaurants including Red Lobster, Olive Garden, LongHorn Steakhouse, The Capital Grille, Bahama Breeze, and Seasons 52.

Integrated Talent Management It is critical for an organization to have an established definition of talent management around which everyone is aligned. At Darden, talent management is an integrated process focused on three themes that enable company growth: capability, capacity, and engagement.

The company’s founder, Bill Darden, believes that the restaurant business is a people business and that employees are Darden’s “best competitive edge.” The first unit he created to support his early restaurants was the training department because he wanted to ensure that employees had the knowledge and tools needed to succeed. Recently, company leaders decided that there would be a greater benefit from a talent-building structure that was more focused on the whole enterprise.

At the time, there were four restaurant operating companies within Darden, and each of them had been doing work to engage and build talent. But to enable Darden to grow and achieve its goals, there was a need for talent sharing among and across the operating companies, which in turn, would give employees more opportunities to progress. For example, a general manager in a Red Lobster restaurant might not want to relocate from his hometown, but under the new structure he would have advancement opportunities at other Darden restaurants in his area.

Building talent internallyDarden has about 180,000 employees and 90 percent work in the company’s restaurants. A belief at Darden is that the best way to build the talent pool is to enable strong performance among those closest to the action—the restaurant employees and managers. The company aspires to have 100 percent internal promotions for jobs in operations. Nearly 50 percent of Darden restaurant managers have been promoted from jobs as hourly workers—jobs in which they prepared food and served guests. Nearly all of the general managers and managing partners have been promoted from restaurant manager positions, and 95 percent of the directors of operations and regional managers have been promoted from general manager and managing partner. For example, the president of Olive Garden, who has been with Darden for 35 years, started as a line cook in a Red Lobster restaurant.

Darden employs about 1,400 people at the corporate headquarters in Orlando, Florida. When filling positions there, the aspiration is to fill 75 percent through internal promotions. To remain best in class in functions such as supply chain, marketing, HR, and finance, Darden benefits from the diversity of thought, background, and experience that external hires bring to the company.

Daisy Ng, senior vice president of talent management, must assure that Darden’s talent management efforts align with the company’s business strategies.

“Our ultimate goal at Darden is to be a great company. To achieve that, we focus on two primary objectives: to be a winning organization financially and to be a special place. We have multiple, distinct brands that provide both physical and emotional nourishment to really delight our guests. But to be a multi-brand company that achieves the growth potential we see in our industry, we need common operating

practices that leverage our scale and resources along with a strong, unified culture.”

Part of Darden’s new talent management strategy is to ask: How can we create tools and processes that can build talent for multiple brands? To make Darden a special place, the company puts great emphasis on obtaining employees’ insights and responding to their needs, including creating new learning and growth opportunities.

Darden uses specific metrics to gauge the success of its talent management efforts. Some of those metrics center on culture and bench strength. “We want to make sure that we have candidates ready for (key) positions,” says Ng. “For instance, I am measured on the readiness of replacement candidates for our senior executive roles.”

Leadership candidates go through an assessment process to determine if they are ready to take on more or different responsibilities. Other metrics show how quickly the company can fill a role—either internally or with an external candidate.

A key indicator for measuring the culture at Darden is an employee engagement survey. They also benchmark other restaurant companies to see how well Darden compares to the restaurant industry as a whole.

Expanded roleThe recent acquisition by Darden of RARE Hospitality, which included about 300 LongHorn Steakhouse and 30 Capital Grille restaurants, required integrating not just cultures but systems. That included new processes for employee management, selection, and assessment. Ng’s role in talent management includes the integration of culture and responsibility for those processes. Her expanded role is typical of the new way companies approach the leadership of talent management.

The next major talent management task facing Darden is to standardize the performance management system for all six of its restaurant operating companies.

Steelcase (NYSE: SCS)Steelcase is an international company with approximately 13,000 employees worldwide and more than 600 dealer locations around the world. Steelcase, the global leader in the office furniture industry, designs and manufactures architecture, furniture, and technology products.

Talent Management Integrated into One Global Center of ExpertiseFor several years, competency management, assessments, employee development, and the grooming of high-potential employees were the responsibility of Steelcase University. Other aspects of talent management, such as recruitment, staffing, performance management, succession planning, and rewards and compensation were managed by HR. Efforts to integrate these processes fell short of having a positive impact on meeting the company’s human capital business needs.

But Steelcase still wanted these processes to be smoothly integrated and accessible to all employees. After an audit conducted by The Hackett Group, Steelcase began a three-year transformation project, in part, to make talent management processes in HR and at Steelcase University more global, more centralized, and more seamless to users.

The company now has an expanded set of integrated talent management processes under the label of global workforce strategy, with the goal of making them a center of expertise

“As we go global, we determined which talent management processes fit best into a center of excellence within Steelcase, which could be configured into a shared service (inside or outside of Steelcase), and which can be offered to managers and employees on a self-service basis,” explains George A. Wolfe, vice president of Steelcase University. With continuous support from global teams representing HR, IT, and Steelcase University, the global workforce strategy represents one of a series of future centers of excellence within the realm of HR.

“Two driving forces for these process integrations are the need to be transparent to the user and to have a global human capital data bank that can gather and share information from a single data base system,” says Wolfe. “One of our aspirations is to leverage our talent globally and identify, select, and develop the right people for the right positions around the world and fill them with the most qualified people.”

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CSC Computer Sciences Corporation (NYSE: CSC)

A global consulting, systems integration, and outsourcing company, based in Falls Church, Virginia, with 91,000 employees worldwide

Widening the Talent PoolCSC brings learning together with the organization’s strategic mission in many ways, including an enterprise-wide cultural change initiative to support CEO Michael W. Laphen’s new business strategy. CSC’s leadership development programs blend learning technology and communication, and are aimed at helping leaders coach and develop their virtual teams in a global and matrixed environment.

CSC’s approach to building a talent pool is noteworthy because it is intentionally evolving from process that took place in silos within the organization into a true enterprise-wide activity that identifies future leaders early in their careers.

A first step toward this goal was to institutionalize a common succession planning framework across the company. Everyone involved in succession planning uses a standardized process and methodology, standard criteria, and a standard competency model. Now all of the CEO’s direct reports use a common process, language, and criteria when they do succession planning.

The process begins with a validation and vetting session where the executive team comes together to agree on the top-tier candidates for future leadership positions. CSC’s Global Chief Learning Officer, Holly Huntley, describes how her group designed the workshop to ensure full transparency. “We asked the senior team to take shared accountability for developing and grooming the entire slate of candidates,” she says.

“This team-based approach is a big shift for us because our past practice was based on independent silos,” she adds. The shift to talent pooling requires the executive team to identify emerging leaders earlier in their careers, and facilitates greater internal mobility and opportunities for rotational assignment.

CSC provides a range of developmental experiences for the candidates, such as sending them to external programs and offering them a variety of coaching options. There is also a special track for women in leadership, as well as a diversity council.

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References and ResourcesASTD Public Policy Council, “Bridging the Skills Gap: How the Skills Shortage Threatens Growth and Competitiveness…and What to Do About It”, Alexandria: ASTD Press, 2006

Bernthal, et.al, ASTD Competency Study: Mapping the Future, Alexandria, ASTD Press, 2004

Bingham, A., “The Talent Factor,” Public Manager, Fall 2008 — Volume 37, Number 3

Cappelli, P. Talent on Demand: Managing Talent in an Age of Uncertainty, Boston: Harvard Business Press, 2008

Cappelli, P. “Talent Management for the Twenty-First Century”, Harvard Business Review, March 2008

Carr, D. “Jettisoning Top Talent to Cut Costs”, The New York Times, November 17, 2008

Galagan, P. “Talent Management: What Is It, Who Owns It, and Why Should You Care?” T+D magazine, May 2008

Gladwell, M. “The Talent Myth,” The New Yorker, July 22, 2002, p 28

Lawler, E.E., Talent: Making People Your Competitive Advantage, San Francisco: Jossey-Bass, 2008

“Talent on Demand: Applying Supply Chain Management to People”, Knowledge@Wharton, February 20, 2008

Oakes, K. “Preaching to the Choir: The Future of Integrated Talent Management.” In E. Biech (ed), ASTD Handbook for Workplace Learning Professionals, Alexandria, VA: ASTD Press, 2008

ASTD StaffPat Galagan, author

Paula Ketter, editor

Katherine Warminsky, designer and production manager

Ann Pace, editorial assistant

Mike Czarnowsky, Jennifer Homer, and Andrew Paradise, content consultants

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