Does your organization possess the skills necessary to successfully implement your strategic plan?
Strategic Planning Is Not Enough
Organizations invest a lot of time, talent and money in a strategic planning process. They carefully consider market segments, opportunities, trends and competition. Then they develop strategic initiatives and projects. They examine assets, products, pricing, costs, headcount, revenue projections and develop detailed 3 -5 year projections. Sometimes shareholder value and market value models are created.
I have spent considerable time with organizations on strategy, planning and process as strategy officer, as interim CEO for several companies and as a consultant. I am surprised how often the entire process misses a key element of strategy: a strategic talent assessment.
If the organization does not actually possess the key skills to execute the strategy, what skills are needed and how can they be obtained? No matter what process is used for strategy development, a strategic talent assessment is needed before “dropping the flag” on execution.
What is a Talent Assessment?
Simply stated, a strategic talent assessment examines the organizational skills needed to execute the strategy. It should include:
- Necessary skills to assess the market needs, attractiveness, competition and size
- The know-how to define, plan and price the product
- Type of talent to actually develop the product
- Competence needed to market, sell and deliver the product
- Skills to provide customer readiness and adoption
- Expertise needed to provide service to customers for products
- Leadership talent to actually execute and deliver the strategic initiative
- Certain cultural elements of the organization: decisiveness, accountability, delegation, results, etc.
Performing a Talent Assessment
Ideally, the assessment should be performed when key strategic initiatives are identified. It is especially important to assure that the talent is available to assess the market and opportunity at the next level of detail before committing major resources.
The assessment should be performed at a sufficient level of detail to enable successful execution. Avoid a tendency to categorize talent at high, abstract levels. A good test for the level of detail is to imagine that you are trying to hire a person with these skills — how would you identify that the person possesses the skills? For example, do not just indicate “technology skills” but specify the exact technology skills. Likewise, do not indicate “sales” but what type of sales skills – consumer, consultative, B2B, etc.
One often-overlooked aspect of a talent assessment is leadership. Even if all the necessary talent resides in the organization, execution will fail if leadership is absent. We have all seen a sports team with an abundance of individual talent but with no leadership to get the talented individuals to perform and deliver as a team.
The result of the talent assessment should be a “skills gap” matrix that lists the skills currently resident in the organization and the skills needed to execute the strategy. They can even be ranked critical, important, necessary, etc. The “skills gap” matrix should be used as a guide to acquire the necessary talent.
One gap that often occurs in current strategies is when organizations want to utilize “big data analytics” in products, marketing or sales but actually have no resident skills in analytics, statistics, large database technology or modeling.
Another example is when organizations want to capitalize on “social media” but have scarce skills in the organization that actually understand how to best use social media to reach their goals.
How to Remedy the Strategic Talent Gap
Once a rigorous assessment is completed and the skills gap identified, the organization must decide how to acquire the necessary talent and skills. There is not one best way to do it, but there are a number of possible methods to use. It is often a combination of methods that will create results.
Alternatives to acquire the missing talent:
- Develop or Train Existing Staff: Identify those in the organization that have the ability to develop the skill through training and establish a formal process. The process can include formal training, mentoring, stretch assignments and special projects.
- Hire New Staff: If it is possible to increase staff, that is an easy way to acquire necessary skills. However, if there can be no increase in staff, then a rigorous personnel change process must be implemented at the individual level by management and HR. Another effective method to develop new talent is to selectively hire new staff as “seed crystals” at strategic places in the organization to demonstrate the skills and develop others as role models.
- Make an Acquisition or Partnership: If the strategic opportunity is large enough and the gap significant, an acquisition is a possible way to add skills, product or market strength. A partnership is also a possibility if two organizations have complementary skills needed to execute the strategy. For example, one organization may be good at development and the other good at marketing, sales and service.
- Start a New Unit: At times it may be necessary to start a new organizational unit to obtain skills. These take the form of advanced technology, R&D, data analytics, application engineering, etc. A new unit can sometimes attract talent that the core organization cannot, or it can operate with different processes. A new unit may even be necessary to tap into talent in another geographic location.
- Use Consultants: Consultants can help achieve results faster and, if used correctly, can help train or develop the skills in the organization. Rather than just “farming out” the project, form mixed teams of internal staff with the consultants so skills are transferred while work is accomplished.
One organization I assisted had a rather undifferentiated product line of electrical measurement components used in high-value applications. The company wanted to differentiate their product line with higher-level product functionality and broader customer application integration but realized they did not have the engineering talent to do so.
The company started an advanced application engineering group in another geographic location rich in the necessary talent. The new group developed the system integration capability for the use of their product in the customer’s application. The company also added key sales skills in the target market segments and replaced key manufacturing talent to improve delivery and quality.
As these changes started to deliver results, the company was acquired at a premium to the industry norm returning attractive gains for the investors.
A strategic planning process without a thorough talent assessment is incomplete and contains unknown risks. When key skills are identified and acquired, the probability of successful execution can be increased and risk to the strategy reduced.
After a serious talent assessment, there are a few critical decisions that the organization must make from the talent gap matrix:
- Can the necessary talent be acquired or not? If not, the strategy is flawed and needs to be re-assessed or abandoned.
- What is the absolute minimum skill set needed to begin execution of the strategic initiative? Execution before the proper skills are in place can waste time, resources and damage credibility.
- Who is accountable to acquire which skills? HR can be of great value in the talent acquisition, but line management needs accountability too.
- Who will lead the execution of initiatives?
For a successful strategy, it is not only necessary to assess talent but also to coordinate the timing of the execution when the talent is in place.