Talent is an urgent concern for many Minnesota manufacturers. Our State of Manufacturing® survey reveals that “attracting and retaining qualified workers” and “future leadership within the company” are both top 10 concerns of Minnesota’s manufacturing executives. “Qualified workers” was named by 32 percent, up from 19 percent in 2010. These findings explain in part why Enterprise Minnesota places such a high priority on talent.
We consider talent to be one of four puzzle pieces that holistically help a company to compete and grow profitably. The others are:
• Successful Strategy combines core values, mission and vision with a focus on growth and revenue generation.
• Continuous improvement principally deploys lean concepts to continually improve your organization.
• ISO management systems provide the single most effective way to create and streamline optimal processes for your company.
I focus on talent, the “people” part of the puzzle. I encourage organizations to consider their own definition for talent. The definition I use for talent has two parts. The first part is a basic definition, “An aptitude or a skill.” This provides the base of what talent is, but I want to take this definition deeper, and reference Gallup Organization’s definition of talent, “A reoccurring pattern of thought, feeling or behavior that can be productively applied.” For me, the concept of productively applying employees’ aptitudes and skills is how we can leverage our people to add value to our organizations. This creates a foundation to develop from.
Once we have determined a definition for talent we want to define how we are going to manage that talent. Each organization is going to have its own definition of talent management, and I encourage companies to consider this. I define talent management as “having the correct number of people with the proper skills and in the right position at the right time.” Manufacturers that focus on managing their talent, and are able to do it well, absolutely create a competitive advantage and outpace competitors. Continuously developing the skill set of employees helps you meet your current needs, while building for the future, and this ongoing focus is your competitive edge.
My clients understand that the effective use of its talent is the only way a company can strategically market and grow; lean up its operation; and conceive and implement an ISO management system. In other words, talent is the reflection of the skills within your company.
We want to help you figure out where that future leadership is going to come within your organization.
A company’s Talent Management Life Cycle consists of four phases.
• Recruitment: How you attract employees into your organization. Most employers can describe the brand they use to sell products, but not nearly as many can describe their “employment” brand. Think about it. Many companies struggle to attract quality employees, but how many think about the brand they’ve created to bring employees in? Organizations that manage talent well consider who they are targeting to work for their organization, how they are messaging to this audience. They do an excellent job of telling their employment story, by providing insight to their culture, work environment and expectations. Recruitment is happening all of the time, not just when positions are available.
• Development begins with how you “onboard” new hires, and never ends. The longer an employee stays with the company, the more his or her skills need to be continuously refreshed in anticipation of future needs. We call this the Productivity Zone because it is where employees contribute their greatest value to the company. You want employees to stay in this zone as long as possible.
• The Retention phase aligns with development. The more development we provide the more likely we are to retain our employees, and the longer they work for us the more development we want to provide to keep their skills up and fresh. Another component of retention ties back to the recruitment phase. Retention is a method of measuring if we are being consistent in delivering on whether our culture and work environment are what we indicated it would be like.
• Employees enter the Transition phase when they leave the company. Employers can sometimes plan for this, such as with retirements, but mostly they can’t. The strategic challenge of the Transition phase is to capture that employee’s relevant knowledge before they walk out the door. This is frequently complicated by the fact that knowledge can be “tribal,” not necessarily related to technical skills as much as to the context of how it gets done.
Successful talent management efforts have four core elements. They are: align to strategy, leadership involvement, employee involvement and analysis and monitoring.
Talent management must align to strategy. Even companies that don’t have a formal business strategy have an intrinsic sense of their company’s goals. When considering a new initiative or organizational goal it is critical to consider if your employees have the skill sets they need to successfully implement these. Consider this: I once worked with a company that rolled out a new software system. I asked, “How did it go?” She said, “Horrible. We forgot to train the people to use a computer.” The company was so focused on using new software to improve their processes, that they forgot that many employees lacked the necessary computer skills. When asked to log in to run a job, they didn’t know how. They’d never done it before. The employer had neglected to align talent with strategy. It happens, and when it does, it negatively impacts morale and your ability to achieve your goals.
Talent management strategies will rarely succeed without the involvement of senior managers, beginning with the highest levels. I once worked for a large company in which the CEO’s belief in talent management was so strong that he personally kicked off every single development event, always testifying to how important it was to achieve his company’s overall business results. His involvement left an unambiguous imprint on employees. It said: “This is important. Pay attention. They’re developing you because your role is to help this organization be successful.”
This level of buy-in must devolve to every leader in the company. HR might organize and manage the overall talent management program, but its ultimate success depends directly on the involvement of every single leader within your organization. They are the people who are actually developing the employees. We want them to understand their roles and have the resources they need to implement the programs.
Employee engagement, the third component, isn’t as obvious as it may seem. Many employers target a high performer for a particular path without first considering whether that employee may want to travel along a different one. Successful employers identify where their company’s needs intersect with the needs of their individual employees. The organization knows what it needs to achieve to be successful: its values, strategies, goals, mission, and vision. This success depends on employees who develop competencies to support these; therefore, management creates positions and opportunities, and recruits people to fill them.
Employees, on the other hand, receive annual goals from the company, but they also have their own vision of what they want to accomplish in their careers. Successful companies create an individual performance development plan that marries the employees’ strengths, development needs and career desires with the organization’s needs. Doing this in partnership with the employee creates a win-win that positively impacts both.
The Analysis and Monitoring component is the “rubber hits the road” of talent management. The first three components set up the organization for a strong foundation, the fourth component is where talent management happens. When considering analysis and monitoring, organizations will want to look at both their current and future needs to allow them to have a proactive approach in their development efforts. The largest part of this component is developing a tool or method to track your employees’ development. Many organizations utilize a Skills Matrix to do this. A skills matrix allows you to identify the competencies needed, evaluate employees’ capacity to perform these competencies, conduct an analysis of need and performance to determine gaps, develop a plan to fill the gaps and monitor progress.
Another factor to consider under analysis and monitoring is the concept of essential skills; essential skills have been called a number of names over the years “soft skills, critical skills….” I like the term essential skills, these are the skills that are the foundation to an organization’s culture and what you expect from each and every employee. Examples of essential skills are Respect, Teamwork and Communication. Organizations who determine their essential skills and monitor and track performance develop strong cultures.
Business guru Peter Drucker once said in the Harvard Business Review that “leaders are not born; they are grown.” I believe every organization can successfully grow its leaders merely by putting a little focus and a little energy into the process.
There are six steps you can take to develop leaders within your organization, some of which align with what we covered under talent management.
Align to business strategy and talent management.
You want to develop leaders in ways that will help you achieve your overall goals and strategies. We want to ensure that the investment you are putting into your employees will add value and is aligned to your strategy to assist in moving the organization in the direction intended.
Identify your leadership competencies.
It is important that you identify the competencies we want in our leaders. Owners sometimes mistakenly equate leadership competencies with the competencies of their current leadership team. I want you to put aside your current leaders and think about the overall competencies you need to be successful. Think about the foundational competencies you want to see among all your leaders. Then think about competencies at different levels. Consider your frontline leaders and your line supervisors. What about middle managers or senior managers? They’re all going to be slightly different.
It’s fairly simple to identify your current leaders. But think also about your potential leaders. How many people in your organization exhibit good technical skills and might get promoted to leadership? This requires some thought. Experienced manufacturers have learned that the best technical performer is not necessarily the best potential manager. This is the key piece: By creating your own separate skill sets for your leaders, you can evaluate if that individual is ready to move into that leadership position. You then want to review their competencies and their performance. We want to look at their competencies of both our current and our potential leaders, and we want to review their performance. How are they doing?
Identify skills gaps.
Then we want to look at how we analyze and monitor present and future skills gaps. I encourage organizations to use a skills matrix for their leadership team as well. This allows you to evaluate and monitor leaders’ skills, clearly identify gaps and determine methods of closing those gaps. In addition to the skills matrix, the utilization of an individual development plan is an excellent way to discuss current skills and the goals you have for future development with current or potential leaders.
Implementation of development.
At this point, you know what competencies you need to work on. There are probably a lot of them. It’s time to prioritize. Think about which competencies will have the greatest impact on your organization. That’s where you want to start, I encourage organizations to have no more than five leadership competency development areas.
Once you have prioritized your competencies it is time to determine how you are going to assist your employees in gaining these skills. There are a number of methods to go about leadership development. Here are a few methods that are popular:
• Applied learning – many organizations use this method by assigning a stretch project or job assignment to allow that individual to develop new skills and trial a role. This gives them the opportunity to grow and learn within the organization.
• Mentoring – there are a number of benefits that come from mentoring programs within an organization. Pairing a senior leader with an emerging leader creates a strong culture, grows leaders’ skills and allows for a strong relationship to be developed that can benefit the organization as a whole. When talking with individuals who had a chance to be a mentor, they share how surprised they were with the amount they learned and grew from the experience, in addition to the growth that occurred in the mentee.
• Peer Groups – having an opportunity to share ideas with others at similar levels is an excellent way to develop leadership skills. Peer group members learn from each other, and when they are comfortable enough to provide feedback—both positive and constructive—there is a large amount of learning and development that occurs.
• Courses – there are a number of formal leadership development programs that are available to leaders at all levels. These programs are designed to provide knowledge based on theory-based and research-based best practices. Participants can learn from both instruction and other participants.
There are a number of ways to develop leaders, it’s also important to be creative, not all development has to be on the job. I worked with one organization that provided leadership experience by putting them on a community committee. It created a positive image for the organization because they were active in the community, and two, they allowed that individual the time to go out, sit on that committee and participate. That individual grew in their leadership by serving on that committee and gained some leadership roles that they were then able to bring back within the organization. As a new position came open, they were more skilled for the roll.
Sometimes we can be really innovative and come up with some creative options grow our employee’s leadership skills.. It’s easier to identify a course or class that you can go to, but how do we get them to bring those skill sets back into the organization? How do we get them to actually have and apply experiential learning? That’s sometimes the hard piece. Having some creativity around that, and thinking a little bit differently can help us find some solutions.
Measure and evaluate.
This may be our last step, but it is something you definitely want to consider up front. Creating metrics around your development efforts allows you to measure the value you are receiving from the investment you are making in your employees. The best way to go about measuring development efforts is to consider looking at pre and post assessments. Consider what areas you want to create metrics around. The number one measure that I look at is retention rates, strong leaders directly impact your ability to retain employees. I encourage organizations to look at metrics they use on a regular basis and measure the impact leadership development has on these as well.
I’ll end with another nod to competitive advantage. Your business strategy should be the foundation for how you look at talent management, which ensures that people have the skills they need to deliver your strategic outcomes. If you focus on the impact that leaders have on your company, and invest in the development of growing those leaders, and each leader is committed to individually developing each person within the organization, this absolutely leads to this competitive advantage. Competitors can replicate your products, we protect our products, correct? Competitors can’t replicate your people, they can’t replicate the talent you have throughout your organization. As we continuously grow and improve our employees’ knowledge, skills and abilities, that leads us to this competitive advantage. If we invest in our employees and we invest in their development, this builds and fosters retention. When we’re able to retain them, we create a magnetic culture. We create this attraction where people want to come and work for us.
I once had a client approach me, absolutely at his wits end. “I can’t find people for the life of me, and I am not able to meet my customer demands because I just don’t have the right skill sets, my crews are short. I don’t know what I’m going to do.” I introduced him to talent management, about how he could meet his needs by developing people within his organization.
He started with an onboarding program. “I’m going to start with orientation,” he said. “I’m not currently doing an orientation. Maybe that’s part of the problem.” He had success with that, so he started to focus on building the skill sets of his leaders. He discovered that his leaders wanted to develop the people who worked for them. He actually created his own academy. He started his own training program. Those leaders became the trainers, and the relationship that they built with each other has given him an advantage over his competitors. His business grew. Today he is known for quality and excellence and his ability to get the job done. The concept of talent and talent management truly lives through this individual and throughout his company. So, I truly encourage you to consider how you build talent within your organization.
Abbey Hellickson is a business growth consultant who helps Minnesota’s manufacturers engage their workforce, maximize productivity, improve company culture, and strengthen their leadership teams. Drawing on a wealth of experience in talent and leadership development, Abbey enables companies to drive performance at all levels of their organizations and develop the effective leaders they need to build and sustain profitable growth. Prior to joining Enterprise Minnesota, Abbey served as the director of business and workforce education at Rochester Community and Technical College and as a corporate training instructor for Fastenal.