While it is very difficult to predict exactly what will happen, I believe the future will place even more demands on human capital, and on an organisation’s ability to harness the potential of their people through effective recruiting and talent management practices.
The amount of time and management focus most organisations dedicate to their financial capital is considerably higher than the time and energy they put into their human capital. However, survey after survey shows that people are consistently among the top challenges for business leaders around the world, as noted in annual CEO surveys by PwC, Fortune 500 and KPMG. When asked about their greatest regrets, a great majority of retired CEOs mention their inability to make quicker and bolder decisions on people matters. This needs to change.
At the same time, most Human Resources departments are ill-equipped to support the organisation of today, let alone tomorrow, across all people-related matters. They were conceived to operate within predictable environments, established ways of working and a much less competitive and global talent market. We all recognise the challenges, yet only a handful of organisations have cracked the talent juggernaut and can pride themselves to be ‘talent first’ companies.
This, of course, is much easier said than done. Let’s take the matter of hiring the best talent as one example. The top 1% of workers are 10 times more productive than the average worker, according to a 2012 report by Ernest O’Boyle and Herman Aguinis, which analyses human performance across various fields, from academia and business to sports.
Identifying the top 5% of employees – through people analytics and well-developed 360-degree feedback grounded in tailored leadership models – is a challenging, yet critical endeavour. Assuming we know who they are, mapping such “stars” to the opportunities that will drive the highest value creation in the organisation is not only important, but often is what creates the most enduring source of competitive advantage.
Yet, until now, most talent management has been much more of an art than a science.
This is one of the reasons I was excited to learn about the imminent launch of Talent Wins, a book by Dominic Barton, Global Managing Partner of McKinsey; Ram Charan, world- renowned business adviser, author and speaker; and Dennis Carey, Vice Chairman of Korn Ferry. It offers a playbook that CEOs can refer to, with real-world practices that make a difference to the way in which we recruit, develop and retain our best people. It includes learnings from various companies: such as Blackstone on the way talent is linked to value creation; Johnson & Johnson on the automation of HR processes; and Haier on how they redesigned their entire operating model to speed up decision-making.
The book reinforces my firm belief in the need to propel human capital practices into a future where most challenges are adaptive in nature and even organisations, in relatively stable industries, experience tremendous change and fluidity.
One of the first decisions I made after being appointed CEO of Majid Al Futtaim, was to prioritise the people agenda, beginning with changing the name and mindset of Human Resources to Human Capital. It was a small move, but one that puts “talent” on an equal footing with financial capital, signalling my priorities.
Our biggest challenge in future-proofing our business is ‘learning to learn’. Learning that is no longer driven by the specific requirements of a job, but by the imperative to remain productive and relevant in a world that is changing faster than our own capability to adapt.
How? By instilling an agile mindset into our team members and a willingness to learn, adapt and reinvent oneself, to give our organisation a greater chance not simply to survive, but thrive, in the long-term. Now more than ever, Darwin’s theory that “it is not the strongest of the species that survive, nor the most intelligent, but rather the one most adaptable to change” holds true.
The proliferation of technology and knowledge as well as the thrust towards globalization have created the fastest changing business environment ever seen. Human Capital practices have simply not kept up with what will be required to win in tomorrow’s world and those practices are ripe for transformation.
It is only by unleashing the full potential of their most critical asset, people, will organisations continue to thrive and earn the right to shape the future. Bottom line, all companies must be obsessed with making sure we have the right talent, we embrace change and we are constantly reinventing for tomorrow.