Managing Talent at Your Organization – Need Tools?

by Feb 6, 2024Culture, Delegation, Entrepreneur, Growth, HR, Talent

In previous blog posts, I have delved deeply into individual-level talent management. This includes strategies for identifying A-, B-, and C-level performers and methods for appropriately rewarding their performance through raises and bonuses.

But another level of talent management at the macro level is critical for you, as the business leader, to consider. We can call this talent management at the organizational level.

You and your executive team can use three tools and practices once or twice a year to assess the overall level of talent in your organization and help ensure that you are staffed up to grow into the future.

Let me explain what I mean.

Rate the Team

Every business leader and your executive team should first rank the talent in your organization. But you must use a stack ranking basis rather than assessing people individually.

When you ask leaders to assess their people individually by giving them an A, B, or C grade, you can get biased results. Some people are easy graders–everyone gets an A–while others are harsher, and everyone is a B player or worse.

So, how can you assess who truly deserves a pay raise or a more significant share of the bonus pool?

The answer is to rank your employees from top to bottom. You’ll find that by including your executive team in this process, you’ll have productive debates about who your actual A players are and how many you have on the team. When a cross-section of your executive team thinks someone is a high performer, they usually are. Conversely, if most of the team feels a team member is a low performer, they are also generally correct. Normalizing the rankings through this process can help eliminate the “easy grader” phenomenon.

Identifying High Performers and High Potentials

The second exercise you and your team can undertake is creating a simple grid listing performance along one axis and potential along the other.

Then, you rate each player according to whether they score high or low on both measurements.

How someone scores on both measurements will tell you a lot about them.

For example, someone may be a high performer but not score well on potential. That means they have value to the organization, but they likely don’t warrant significant further investment in developing them as a future leader.

Conversely, someone who may not rate highly as a current performer but who scores exceptionally well on potential might warrant development investments. Growth investments might include being sent to finance, marketing, or communication classes or assigning a mentor to cultivate their talents and increase performance. It will all depend on what they need to achieve their potential.

Most people will likely sit in the middle, with good performance and moderate potential. That group is critical as they do the work every day and can be with the firm for the long term. As you increase the capacity of the organization to execute, you will want to invest appropriately in this cadre.

Part of this analysis is looking at what each individual needs to reach the next level.

Now, you don’t have to perform this analysis on every employee in the organization. For a typical 400-person organization, you might include 20 to 40 people in this exercise.

Succession Planning

The third exercise you can employ to build a more uniform lens into the talent in your organization is to create a succession planning chart.

That means assessing the same people you ran through your performance/potential chart and labeling them with a promotability rating. An A-player might receive a rating of ready now, or R(0), which means they are ready to be promoted now. Someone with an R(1) means they need another year, while anyone who rates as an R(n) will never be ready for a promotion.

This is a critical exercise because it will give you a more accurate sense of how well you can weather losing a critical executive by having a ready replacement inside the organization. To that point, this exercise can help you identify gaps inside the organization when you have no one you can promote. You can use this red flag to determine the need to remedy the situation by bringing in more outside talent or shifting talent into the gap.

Building a good succession plan is also critical for you as the CEO because you need to be thinking ahead for the day you might want to sell the business or retire and want to ensure the company remains in good hands after you’re gone.

The Organization Owns the Talent

One key aspect of running through these three exercises with your executive team is that everyone needs to remember that the organization owns the talent–not individual managers. That can sometimes lead to difficult conversations, especially when promoting people to new positions on different teams.

Suppose part of the development of a high-potential employee involves learning new skills by working in a different department. In that case, their current manager must be willing to let them move–even if it makes the manager’s life harder for a while–if it’s in the organization’s best interests.

This dynamic can lead to difficult conversations you must navigate as the CEO. But it’s a critical part of using these three exercises to assess the talent inside your organization accurately and build a healthy pipeline that will sustain the company well into the future.