A surprising number of companies leave it to HR departments. But top firms are discovering that talent—acquiring and developing it—must come from a higher authority. Below is an excerpt from a new book, Talent Wins: The New Playbook for Putting People First, by Ram Charan, Dominic Barton, and Dennis Carey. Carey is a vice chairman of Korn Ferry, Barton is the global managing partner of McKinsey & Company, and Charan is a longtime business advisor and speaker.
What is the key to the future of your company? Better yet, who is the key to the future of your company, and what are you doing to unleash his or her potential?
Most executives today recognize the competitive advantage of talent, yet the talent practices their organizations use are vestiges of another era. They were designed for predictable environments, traditional ways of getting work done, and organizations where lines and boxes defined how people were managed. As work and organizations become more fluid—and business strategy comes to mean sensing and seizing new opportunities in a constantly changing environment, rather than planning for several years into a predictable future—companies must deploy talent in new ways. In fact, talent must lead strategy.
That’s a radical departure from the past. Something this big is a job for the CEO. Simply put, reimagining and leading a people-first company cannot be delegated to anyone else in the organization. In the past, some “people initiatives” were viewed as “soft” or “feel-good” efforts that didn’t merit the CEO’s full attention. That won’t suffice. What’s needed now is something altogether different, and far more demanding. In our opinion, putting talent first means a complete transformation of the way most companies have done business for decades.
That’s why the time has come for you—and every CEO who intends to succeed in his or her job—to take charge of talent. You must deploy talent as successfully as you deploy capital. You must know your employees as well as you understand your finances. You must shape an organization that empowers those employees to create as much value as possible.
This is complicated stuff. But companies that manage the transition from strategy-first to people-first will reap enormous rewards.
That’s why the three of us have come together to write this book now. We have spent decades helping top business leaders execute their strategies. Ram has been a confidant to the CEOs of some of the world’s biggest corporations and their boards, advising them on how to create value and helping them execute their most significant strategic shifts. Dominic, as the Global Managing Partner of McKinsey, has hundreds of CEOs who turn to his firm when it comes time to change strategy or transform their business model. Dennis, the Vice Chairman of Korn Ferry, a premier recruiting firm, works closely with boards and CEOs to ensure that their companies have the right directors, chief executives, and top leaders in place.
We have never come across a moment like this, when virtually every CEO we work with is asking a daunting set of questions: Are my company’s talent practices still relevant? How can we recruit, utilize, and develop people to deliver greater value to customers—and do so better than the competition? How can I be sure that I have the right approach to talent—and the right HR—to drive the changes we need to make?
These questions recognize a basic truth of our time: Talent has never been more important to the success of a corporation. Talent is king. Talent, even more than strategy, is what creates value. The implications of this are profound, and are what this book is about.
Our playbook will help you transform your company from a strategy-first business to one that puts people first. In doing this, you will be elevating HR to the same level as finance, a shift that is long overdue but essential now that you must manage human capital with the same rigor you apply to financial capital.
The three of us have been thinking about this monumental shift for some time now. In a way, the genesis of this book occurred in 2014, when Ram wrote an essay for Harvard Business Review called “It’s Time to Split HR,” which simply said it’s time to reinvent the HR function. A year later, the three of us followed up on Ram’s piece with an HBR article called “People Before Strategy,” which outlined a more proactive and strategy-driven role for the head of HR. With this book we expand the lens even further. We are making the case that HR, armed with first-rate business acumen and a keen sense of how the finances and talent of the company can work in sync to rapidly accelerate value creation, must be elevated to the level of finance. This is an absolutely necessary shift for any CEO trying to lead a broad transformation of the company into a talent driven operation, and it is why we say that CEOs need to lead the change.
We are not the first, of course, to write about the challenges associated with managing people and human resources. Our work stands on the shoulders of such giants in the field as USC’s John Boudreau, Wharton’s Peter Cappelli, Harvard’s Paul McKinnon, and the University of Michigan’s Dave Ulrich, who have written excellent books and articles on best practices in the evolving world of human resources.
This book is different. By outlining the CEO playbook, we focus broadly on how you must reimagine your company to successfully manage, organize, hire, track, monitor, and support the people who ultimately are the value creators in this new digital age. The hundreds of executives we have interviewed for this book are at the leading edge of linking talent to value creation. Their stories and our experiences are the source material for this book.
You know that talent is the secret to competitive advantage in the 21st century. Yet most companies—including yours, perhaps—operate by talent practices that are stuck in the 20th century. Talent Wins is the essential guide for you and every other leader who wants to change that, who understands that the time has come to build a new type of company— one that puts talent at the very center of value creation.
Reprinted by permission of Harvard Business Review Press. Excerpted from Talent Wins: The New Playbook for Putting People First by Ram Charan, Dominic Barton, and Dennis Carey. Copyright 2018. All rights reserved.