Companies like General Electric, PepsiCo, and Colgate-Palmolive are justly recognized for their ability to turn out top-notch business executives in a predictable way. Over the years, scores of companies have tried to benchmark and emulate these companies’ success in executive development — but often become disillusioned by how hard it is to instill the “talent mindset” culture these firms have achieved. And in the course of their benchmarking efforts, talent management professionals are often surprised to learn that the GEs, PepsiCos (speaking Sept. 8 at ERE), and Colgates of the world are as committed to external recruiting as they are to talent development. They shouldn’t be.
The success of such companies indicates that talent acquisition and development are two levers that must be fully integrated in order for a company to maximize its leadership capability.
Some organizations assume that going outside to bring in talent is a negative signal that internal development efforts have failed. That’s not typically the case. The best-practice companies view external recruiting as an opportunity to calibrate the strength of their current managers and upgrade the company’s leadership “gene pool” for the future.
What really separates the practices of what I’ll call “talent mindset companies” from other organizations is how seamlessly they integrate talent acquisition and development. Most companies recruit externally with the goal of filling a position, and thus focus on the candidate’s job-specific experience. By contrast, talent mindset companies — although interested in the person’s job experience — focus their attention on the individual’s leadership capability and potential for career growth. They assess external candidates based on the same competencies used to promote internal managers to higher levels, and are particularly interested in the following:
Managers in talent mindset companies are expected to 1) devote significant time to identifying and attracting future leadership talent; and 2) withstand the temptation to “plug a hole” by hiring an acceptable candidate who lacks future growth potential. That’s not surprising since senior executives in such companies have been successful in communicating that attracting, developing, and retaining leadership talent are core expectations of all managers — not simply because it’s a good thing to do, but because it’s an important factor in the manager’s own career advancement.
Compared to other companies’ managers, executives in talent mindset firms are no less results-oriented, and in some cases they may lack certain people-management skills. However, they display the proverbial eye for talent and take risks on their best people, including putting them in new stretch assignments where they may not be the best-qualified candidate, with the goal of accelerating their career development progress. What is not acceptable in such companies is “standing pat”: simply attempting to develop the staff the manager inherited or working around performance problems in the interest of short-term results or in a misguided attempt to maintain group morale.
Executives in talent-mindset companies truly believe that having stronger leaders with better skills and a broader perspective on the business will lead to marketplace success. That’s why they challenge their managers to grow their leadership talent year-over-year since they know that treading water in terms of leadership capability inevitably means falling behind the competition.