! JWI 520
People Management
Week Six | Lecture One
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FINDING THE BEST PLAYERS FOR YOUR STRATEGIC POSITIONS
! You may understand your strategic capabilities inside and out, but
you’ll have a hard time capitalizing on them without placing your A
players in strategy-specific slots, as you saw in the last lecture.
In order to do this, you’ll need to get to know your people with real
nuance—their raw capabilities and carefully honed skill sets; their
performance history and their growth potential; their passion and
their motivation.
In short, you must inventory your talent and figure out where they
will thrive.
CREATING A TALENT INVENTORY Let’s say you’re a manager who’s just been given the job of running
a small business unit at a large company. The unit’s revenue is
modest—in fact, some people at headquarters don’t even know you
exist—but you’ve spotted an emerging customer segment that offers
tremendous growth potential. It could also make your existing line
of products increasingly irrelevant.
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You’re not the only one to see the opportunity, though. A rival
company also seems to have spotted it—and your quiet, unexciting
business is about to become quite competitive. Capturing this
strategic opportunity could cause your career prospects to soar.
You face numerous business strategy questions, of course. But as
you answer these, it’s crucial for you to also be assessing your
workforce. You’ve probably determined that you’re going to have to
take fuller advantage of your people’s capabilities than you have to
date, as well as add another capability or two to your current set.
A good first step is to conduct an honest appraisal of your existing
talent to determine what your current team members can and can’t
do, in comparison to the competencies that are now required. One
way is to use a simple 2×2 matrix to create a snapshot of your
current team, classifying your employees along two dimensions—
how much they are contributing now, and how much you expect
they will be able to contribute in the future as they learn and
mature.
The categories are illustrated graphically in Figure 1.
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Figure 1
! (Fig. 1 reprinted with permission from Great People Decisions: Why
They Matter So Much, Why They Are So Hard, and How You Can
Master Them by C. Fernández-Aráoz, 2007, p. 106. Copyright 2007
by John Wiley & Sons, Inc.)
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Assessing your team members according to these criteria generates
four employee categories. The four quadrants can help you identify
those people who are up to the challenge of bringing your strategy
to life. They also serve as a basis for identifying appropriate
development opportunities for people worth investing in and for
thinking systematically about those who aren’t.
1. High contribution—high potential. Two kinds of employees
fall into this category:
Top Talent. These are the top performers in their current role,
relative both to others in the company and to people in
similar roles at other companies. Rivals frequently try to
poach them. They probably already fill a strategic role in their
function and have the potential to grow diagonally into
strategic roles in other parts of the organization. They’re also
likely to excel in the future, playing key roles in helping your
company meet new strategic challenges. These are your A
players.
Emerging Talent. These employees are also strong current
contributors, but are often not in a strategic role. They
consistently work to improve their skills and seek
opportunities that will prepare them for more challenging
roles. They are highly sought after in the labor market, often
headhunted for promotions to positions with greater
responsibility and compensation. They’re poised to take on
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the responsibility of a strategic position—at least in their
current functional area—and should be given that
opportunity before a rival lures them away. Generally
speaking, these are your A-minus players. With time and
experience, some of these people are likely to develop into
top performers.
2. High contribution—low potential. These are the
unrecognized heroes who work hard and do a good job in
their positions. They are your solid performers—your B
players. In a typical organization, they represent the large
majority of the workforce. Many of these people will be
sought out in the labor market; some will even hold a
strategic position in the company. But they have leveled out in
their careers, and are unlikely to be promoted to more
important roles or to a strategic position elsewhere in the
organization.
3. Low contribution—low potential.These are, at best, your C
players—individuals who are well below the midpoint of
talent available in the labor market for the position they’re in.
Their current performance is disappointing and is bound to
become more so in the increasingly competitive future
environment most companies face. You either have to find
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another job for these people that is a better fit for their
abilities, or ask them to leave the organization.
4. Low contribution—high potential. Typically, there will be
few, if any, employees in this category. Even if a poor
contributor did have the potential to be effective in a higher-
level job, his poor track record would damage his credibility
enough to make it unlikely he would be successful. However,
there are exceptions. For example, an employee’s low
performance may be due to the fact that he is new to the job
or to the company, or because he has been sent to another
division to fix a serious problem and hasn’t yet accomplished
his mission.
USING DIFFERENTIATION AS A MANAGEMENT TOOL
In Winning, Jack Welch describes the advantages of differentiating
the workforce into three groups based on their performance—the
top 20%, the middle 70%, and the bottom 10% (2005). Although
he approaches the topic of differentiation from a slightly different
perspective, his three categories are roughly equivalent to our
categorization of A players, B players, and C players.
Regardless of whether you use Welch’s formula or some other
method of differentiation, the important point to remember is that
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we all know that employees differ considerably in the value of their
contributions to the company. Yet, organizations often fail to reflect
these differences in the way they treat their employees. This is a
mistake.
You need to devote a lot of time, energy, and money to your A
players and A-minus players—your top talent and emerging talent.
They should be singled out for special treatment, including
generous amounts of both financial and nonfinancial rewards.
These people are crucial to your current and future success, and
should be treated that way. (We will go into much greater detail
about rewards in Week 5 of this course.)
More than any other corporation before or since, GE under Jack
Welch would place its highest potential managers into important
leadership positions—and here’s the twist—knowing there was a
good chance they wouldn’t do as well, at least initially, as others
who might have been chosen for that role. The businesses these
people were selected to lead were not, of course, major contributors
to GE’s revenues. In fact, the point of this exercise in leadership
development was that, by the time these high-potential managers
were permitted to assume the leadership of one of GE’s key
businesses, their strengths and weaknesses were well known, and
they had acquired the requisite competencies to be successful in
more important roles.
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Next, you also need to differentiate among your B players—those
solid performers who are strong contributors but are unlikely to
develop much further. This group—which, remember, typically
represents the large majority of a workforce—is tremendously
important to an organization and is too often ignored. They need
training, positive feedback, and thoughtful goal setting.
If individuals in this group have particular promise, they should be
rotated among businesses and functions to increase their
experience and knowledge and, to test their leadership skills. Some
may even develop into A-minus or A performers. But everyone in
this large group needs to be made to feel as if he truly belongs. You
do not want to risk losing your B players—you want to keep and, if
possible, improve them.
And what about your C players (and below)? Well, there is no
sugarcoating this—they have to go. Even if they’re good, nice
people—and without doubt, many are—their talents aren’t suited
to furthering your strategic objectives.
Of course, having underperformers leave is more easily said than
done, and we’ll discuss this more in the next lecture. But if your
organization has clear performance expectations and a candid
performance evaluation process, C players generally know who they
are. When you’re straight with them about how they’re doing and
where they stand, they often leave before you ask them to, and in
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many cases end up having successful careers at companies where
they excel. When a person has been a mediocre performer for a
sustained period of time, his manager should start a humane but
unambiguous conversation about moving on.
USING DIFFERENTIATION STRATEGICALLY
Once you’ve created this talent inventory, you must determine
which of your current job positions are strategically important—
that is, which ones capitalize on or enhance your strategic
capabilities. One way to accomplish this is by listing, for each of the
relevant capabilities, the strategic positions that support each
capability.
Then, for each of these jobs, you should note the total number of
people currently in the position and how many of them qualify as
top talent, emerging talent, solid performers, and underperformers.
Such a process will give you a snapshot of your existing workforce
and permit you to see where it falls short of the workforce you need.
You’re likely to be surprised at the magnitude of the talent gaps that
this simple exercise exposes. For example, you may find that some
of the most important positions are occupied by solid but
unexceptional performers. You may identify needed strategic
positions that don’t even exist in your organization. You may also
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find existing jobs that simply aren’t needed to meet your new
strategic challenges. Consequently, positions—and people—that
were strategic in the past may not be strategic now. The jobs may
have to be eliminated and the people let go.
Finally, for each of the strategic positions, you should sketch out a
simple plan of action. Act quickly to get C players out of strategically
important positions, and replace them with top talent or with
emerging talent who can quickly grow into the job.
The purpose of creating a talent inventory is to permit you to
reconfigure your workforce so that you have the capabilities, jobs,
and people needed to succeed in the new environment. If you can
do that, you’ve taken a major step toward implementing your new
strategy. You’ve also likely taken a major step toward advancing
your own career.
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REFERENCES Welch, J. (2005). Winning (pp. 37-51). New York: Harper Collins.
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