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Make Yours A Talent Agency: The biggest issue facing our business is lack of talent. Put lip service aside. It's time to make talent your priority.
Leader's Edge, May 2008
Fast Focus
- The best-run agencies use talent management as a competitive advantage.
- Focusing on growing talent is a necessity since most brokerage owners are in their mid-50s, and many have no perpetuation plan.
Recently the coffee powerhouse Starbucks took a drastic step toward
quality. The company that started and rode the coffee craze for years
had seen its stock price and its cachet slipping. So founder Howard
Schultz retook the helm and shortly decided to retrain all of the firm's
135,000 employees. In one night. By closing every one of the store's
7,100 outlets on the same Tuesday evening in February. Did it work? It
certainly got a lot of PR. Whether or not it resulted in better coffee,
I hope it accomplished two things for the company: a refocus on the
fundamentals and an enhancement of company culture among employees. If
so, Starbucks will be better for it.
Why am I so concerned about a coffee company? Am I that hooked? No. I
can quit at any time. (Really. No need for an intervention.)
My point: I've been recently discussing culture being a key
differentiator between firms and talking about collaboration being an
essential tool to add energy to your team's efforts. The third leg of
this stool is talent management, and doing this effectively requires
doing the spadework around those other two areas—culture and
collaboration. Then you can turn people management into your competitive
advantage.
In my consultations with agencies, I see amazing differences in the
level of talent, and it's not always a function of agency size. Some
firms just seem to have pulled all their people from a mold, while at
others I meet dynamic individuals at every position in the firm. The
depth of talent runs the gamut from deep bench to no bench. (And what's
a bench?) Enthusiasm and engagement are visible traits and especially
necessary when tackling new markets or strategic alliances or long-range
planning.
In the March 2008 issue of Leader's Edge, I wrote about an agency that
uses the principles of The Collaborative Way to distinguish itself and
its employees and to keep them focused on the fundamentals. That's one
approach, and other great firms do it differently. I've seen
commonalities, however, and one similar theme is that the best-run
agencies use talent management as their key competitive advantage. As a
matter of fact, one consulting firm, Development Dimensions
International (DDI), exclusively sells talent-management services. Its
business model calls for helping a client develop, identify and execute
appropriate talent strategies. DDI helps companies review their talent
readiness, optimize management talent and fast-track employees with high
potential.
If you take this approach, you'll be putting talent management out there
as a key strategic initiative. It will become ingrained in your firm as
part of the daily business and culture, and it will become an essential
part of your competitive advantage and long-term success.
Show Me the Talent
The term "talent management" is certainly not new. Performers have been
called "the talent" by backstage people for years. So why not identify
your "performers" in that way as well? Need I remind you that the
insurance business is, at its core, a people business? It's our
strongest, perhaps our only, asset. When we put our people out on stage
in front of prospective clients, we'd do well to ensure they are well
rehearsed pros.
Talent management should simply encompass your entire approach toward
fielding a team: recruitment, development, promotion and retention. It
should be a well-thought-out element of your strategic plan and tied to
both short- and long-term goals. Unfortunately, many owners and CEOs
view recruiting and hiring as short-term solutions. While that's
certainly a part of the equation, true talent management focuses on
developing leadership depth for both current needs and future
challenges.
Consulting firm DDI believes that successful talent management is much
broader than succession planning. It encompasses a range of activities
that will aid your competitive advantage, including:
- Connecting your corporate strategy with the quality and quantity of
leadership required to execute it;
- Driving leadership accountability for the cultural strategies that
support business goals (essentially covering the "fundamentals");
- Identifying employees with the highest leadership potential early in
their careers;
- Assessing high performers through the lens of current and future
leadership needs and skills;
- Accelerating the development of high performers;
- Improving the quality of leadership; and
- Enhancing the focus on developing strong leaders at all levels of
the organization.
Making It a Priority
I hope I've convinced you that talent management is worth taking a look
at, but how far up the list will you push it? Why is it important to
make this a priority? Well, you've heard me say it almost as often as I
say "double-tall latte": the biggest issue facing the insurance
brokerage and agency system is lack of talent. We have a shortage of
producers, account managers and other skilled employees. We have
recruitment problems. We have succession planning problems. That's my
mantra. Why? Because the majority of brokerage and agency owners are in
their mid-50s, and many of them have not developed a perpetuation plan
for their firms.
I don't really need to belabor this point about our aging insurance
workforce; most of us read about it every week, and all of you live with
it every day. We all know about the situation, and yet I am astounded
that so few firms, large or small, make this a priority. Or if it is
part of operations, it hasn't been elevated to the level of being a
strategic planning initiative.
Developing a Strategy
Over many years assisting companies achieve superior results through
selecting, developing and retaining talent, DDI has devised a process
that incorporates best practices and serves as the foundation for a
robust talent-management system. Here are seven key steps of that
process:
- Start with the end in mind. To be most effective, business and
talent-management processes must be developed together. Talent
management can deliver real competitive advantage when your agency's
strategies and goals are the starting point for determining the quality
and quantity of talent you need. In the process of developing your
plans, ask who will execute each initiative and what skills are
currently on staff or are needed to attain those goals.
- Ask what kind of talent the agency needs. Your unique requirements
then must be translated into concrete descriptions of the type and
quantity of talent needed at your office. This means determining the
"success profile" for key leadership roles. These profiles can be linked
to four categories of capability: organizational knowledge (what I
know); experiences and job challenges (what I have done in the past);
competencies (what I am capable of); and personal attributes (who I am).
This process will eliminate the mistake of trying to define one
consistent leadership profile for all leaders, when in reality the
profile for each leader will be different based on the specific
role.
- Identify the gaps. The process of reviewing your current staff and
the type of talent needed will help you identify your business' current
deficiencies. Typically, when a firm asks the question of how much
talent it will need for the future, the answer is usually more than it
has right now. This forces a number of further questions:
- What are the most significant challenges?
- Do you have the talent pipeline to address these challenges?
- What will change three to five years from now that could affect the
number and type of leaders needed?
- Where are your most significant leadership gaps?
By the time you've dug this deeply into your strategic plan and your
personnel files, you will have a solid idea of your business' strengths
and deficiencies. It will then be time to consider how you can develop
the people already on staff to "be all that they can be."
- Identify the "high potentials." Look beyond the basics of who has
risen to the top of your organization already. Rather, consider where
you'll find the hidden gems. This is a combination of evaluating current
performance, recognizing potential (another key management skill that
you and your top managers must develop in yourselves) and creating an
"accelerating pool" that will take these staffers with high potential
and help them build their skills and talents as quickly as
possible.
- Assess readiness for leadership transitions. This part is tricky
because you will be taking a leap and putting people into untried roles
with new responsibilities. This type of promotion certainly carries a
risk, but it can be minimized with accurate assessment, which is only
possible when you have complete information on hand. Assessments
include:
- Individual readiness. Various assessment tools are available that
measure past performance, but you could also employ behavioral
assessments that test candidates on how they would interact in a variety
of scenarios and thus learn more about their decision-making abilities
under pressure.
- Organizational readiness. The "talent audit" forces you to make a
thorough analysis of your current "human resources" and how far they're
likely to take you. Furthermore, in an industry like insurance where
mergers and acquisitions bring many diverse people together, a talent
audit allows you to identify some gems in your agency that you may have
acquired but are yet unknowns.
- Accelerate development. The identification phase will just get you
started. Once completed, your talent audit must be married to
developmental priorities that focus your people on growth areas or
company strengths that match business needs. Your development process
must also encompass the requirements of each staff member's role, as
well as their personal goals and objectives. Keys to this process are
determining measurable performance improvement in the employee and
obtaining employee buy-in regarding the process.
- Focus and drive performance. The bottom line is still and always
will be performance. If talent management becomes part of the core
culture of an organization—which means it will consume significant
amounts of time—then there must be a clear link to accountability,
performance and rewards. All participants, from CEO to managers to
employees, should have true accountability and financial incentives to
support processes that develop people and deliver leaders. Businesses
that are effective in talent management reward talent advocates and
impose sanctions on those who block the process.
Mistakes in Talent Management
Again and again, I hear the words "our people are key." Just as often, I
see mistakes in how owners and CEOs manage their most important asset.
Borrowing again from DDI's experience, the following are some key
talent-management mistakes:
- Paying lip service to talent management as a key strategy but not
following through. This "all-talk, no-action" strategy at best
demoralizes and at worst sinks firms.
- Failing to define leadership. The need to specifically identify the
knowledge, experience, skills and personal attributes of your leaders is
critical not just for today's operations but for the future challenges
of your business.
- Confusing talent management with succession planning. No, it's not a
get-out-of-the-rat-race-free card. Talent management is about building a
pipeline of leaders to fill a variety of roles versus trying to match
one person with one position.
- Waiting for the cream to rise to the top. Talent management is not a
"sink or swim" situation. Talent management means constantly being on
the lookout for the future leaders who are early in their career. The
smartest cats just start drinking the milk that's put in front of
them.
- Using subjective data to make crucial decisions. Just as critical
business decisions are based on in-depth information and analysis, so
should identification and training processes be relied upon when making
key talent decisions. Basically, while your "gut reaction" is still
important, use objective assessment tools to make or support your
evaluation of talent.
- Ignoring the team mosaic. Just as in team sports, one person alone
rarely wins the game. It is about the team, not the individual talent.
Too often talent is identified based solely on their individual skills
versus how they would fit with the team. In the end, the best team wins,
not the team with the best player.
Building a Legacy
Talent management is as far beyond recruitment and hiring as a Starbucks
grande skinny mocha no whip is from a cup 'a joe. It's more a
presidential nomination than a job application process. It's taking out
a mortgage rather than pulling a 20 from an ATM. So you and your top
management would be wise to take a very measured approach to it,
considering how the process will work at your firm, how to implement it,
how to gain employee engagement, and how to ensure through
accountability that it will achieve the desired results.
Michael Wilkins, CEO of Australia's Promina Group, described it pretty
well: "Talent management is about making sure that you have the right
people in the right places for both themselves and the organization, and
needing to make sure that you as chief executive are taking
responsibility for the development of your leadership talent. It's one
of the best legacies that you can leave any organization."
What he's saying is that it is not just about the present and it's not
just about you. By enacting a talent-management program, you're
delivering a great gift to your organization and all the people whose
livelihoods rely on it. You are building a world-class organization, and
that's how you beat the competition.
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