Talent Management - what is new?
If we travelled in time to the 1970s and brought back an open-minded HR manager and a critical one to show them our present time, we could witness two kinds of reactions. The open-minded manager would be baffled and thrilled by the flood of foreign terms and the progress made in the field – at least by the speed at which things seem to be moving forward today. On the other hand, the critical manager might argue that beautiful, simple Finnish (and Swedish, French, etc.) equivalents for talent management, competence, coaching and other new Anglo-American terms were already used in the 1970s, and nothing truly new has happened in 30 years.
Who is right? Both are partially right, but the critical HR manager is probably closer to the truth. As the title says, we will be dealing with talent management here, although the following applies to the entire field that in the 1970s was referred to as human resources management.
Like several other new terms that have appeared in the HR field, talent management is a fairly fragmentary and ambiguous concept. In the narrower sense, it refers to actions performed by an organisation on external and internal personnel to attract, recognise, recruit, develop and reward high performance potential. The focus is on the special value of high performance potential in the competition for the decreasing personnel resources. The narrower perspective is summed up by the often-mentioned slogan, “war for talent”. The narrower perspective is also right about the special value of high potential; for example, with the increasing significance of sales, special attention must be paid to attracting and rewarding sales personnel. In the more extensive sense, talent management refers to all kinds of actions intended to recruit and develop talent, with a remarkable resemblance to the concept of competence management, which was coined in the early 1990s. The underlying idea in this is the rising of personnel capital as a competitive factor up to the level of productive, financial and technical capital. We can agree on the significance of these factors, too.
An enlightening view of talent management and other new concepts can be opened by looking at the position and development of HR within the organisation family. HR is the youngest child, who mimics its older and stronger brothers and sisters – marketing, sales and IT – in building its characteristic skills. Important skills adopted from marketing and sales include the ability and willingness to come forward and understand customer relations. Talent management represents this ability and willingness to create ambitious headings that promise a lot. Customers – i.e., business units, business management in particular – regard talent management as a very interesting and important HR product. From the IT and finance functions, HR has adopted systematic processes and documentation to replace the mouldy 1970s practices of playing by instinct and utilising ad hoc methods.
On the other hand, it can be claimed that it is not a good idea for HR to imitate the core competence of marketing sales, quick market reactions and swift changes of direction. This style may well impede HR from finding its own competence challenges. Similarly, excessive mimicking of IT and financial administration may be the wrong road, exemplified by the first-generation competence systems built in the early 1990s with great enthusiasm. These multi-slot systems with their heavy manuals, software applications and reporting duties proved unsuccessful experiments, whose chilly aftermath gave birth to the saying “HR always brings trouble”. A recent doctoral study showed very harshly that heavy and expensive personnel information systems are almost no use in the everyday work of supervisors and are considered downright harmful by some users.
But what would HR’s own core competence be? What is the added value that HR can produce towards the organisation’s operational or strategic objectives? First, it is important to understand that HR deals with human processes. Human processes have a characteristic quality, with a human odour and voice that differs quite strongly from, say, logistics or data and money transfer. Thinking in quarters – the core competence of marketing and sales – applies to HR as well, but it cannot constitute HR’s core competence. Correspondingly, if IT is “on information’s side”, HR must be “on people’s side” The management of human processes must be based on lasting, long-term procedures. Whereas the market sheds its skin every quarter, people do it only once or twice in a lifetime. Semi-annually changing “theories” of cerebral, deep, emotional, neurological or other leadership undermine HR’s credibility and eventually also its belief in the worthiness of its own activities.
Talent management, like coaching, certainly has certain market-type momentum, attraction and genuine intent to develop human processes. Instead of standing and admiring a new fruit tree that has appeared in the landscape, the HR professional must shake the tree to see what it really has to offer. When assessing talent management solutions, one should first of all specify whether the procedures affect the above-mentioned high-potential personnel or whether the aim is on more extensive human processes in the organisation. If the objectives are more extensive, it is essential to ensure that the talent management solutions are based on true behavioural scientific theories related to human processes, not on annually changing hype. Also, a theory must not be confused with theorisation. As the classic social psychologist Kurt Lewin pointed out in the 1940s, “nothing is as practical as a good theory”.
Petteri Niitamo
Adjunct Professor of Competencies, Aalto University