Talent Wins

Some Impressionistic takes from the book
of Ram Charan, Dominic Barton & Dennis Carey
“Talent Wins“
by Ramki
ramaddster@gmail.com

About Authors
Dominic is the global managing partner of McKinsey & Company. Since joining the firm in
1986, he has advised clients in a range of industries, including banking, consumer goods, high
tech, and industrial. Before becoming global managing director, he was McKinsey’s chairman
in Asia from 2004 to 2009, based in Shanghai, and led McKinsey’s office in Korea from 2000
to 2004. Dominic leads McKinsey’s work on the future of capitalism, long-term value creation,
and the role of business leadership in society. He has authored more than 80 articles on
capitalism, leadership, financial-market development, Asia, history, and the issues and
opportunities facing global and Asian markets, and is the coauthor of three books
including Reimagining Capitalism.
Ram is a world-renowned business adviser, author, teacher, and speaker who has spent the
past 35 years working with CEOs, boards, and executives of the world’s top companies.
Formerly on the faculties of Harvard Business School and Northwestern University, he is the
author of 25 books that have sold over 2 million copies and have been published in over a
dozen languages, including the best-selling Execution, Confronting Reality, and The
Attacker’s Advantage. In addition to advising and coaching leaders, Ram serves on a number
of boards.
Dennis is Vice Chairman of Korn Ferry, where he recruits board directors, CEOs, and their
direct reports. He has placed and assessed some of the most successful CEOs and directors
for over 75 leading companies in the Fortune 500. He founded several forums for chairmen,
CEOs and c-suite executives including The Prium, the CEO Academy, and Academies for
CFOs and CHROs of Americas best-managed enterprises. He has published four books and
over 50 refereed journal articles. His most recent book, Boards That Lead, coauthored with
Ram Charan and Mike Useem, was cited as book of the year by Directors & Boards
Magazine. Dennis also teaches corporate governance at the Wharton School of the
University of Pennsylvania. He has served on both public and private technology boards.

Talent management, or the Management of a company’s human capital,
has traditionally been delineated with multilevel organization charts that
assign levels of authority with lines of responsibility.
In their new book, Talent Wins: The New Playbook for Putting People
First, Ram Charan ( World renowned Business Consultant) Dominic
Barton (Global Managing Partner of McKinsey and Co.) and Dennis Carey
(Vice Chairman of Korn Ferry) argue that such an approach should be left
back in the 20th century.
HR processes and development plans that assume predictable
environments for years ahead now have the potential to seriously
undermine the future growth of an organization.
To survive in today’s “agile, digital, analytical, techno- logically driven
strategic environment,” the authors argue, requires a completely different
playbook. The acquisition, management and deployment of human capital
must be approached with the same rigor as is the management of financial
capital.
Prelude

The New Definition of TSR
 The board of directors of any commercial venture is usually
focused on one primary goal — total shareholder return
(TSR).
 That commitment typically includes an acknowledgment of
the importance of people in achieving that goal.
 In order to successfully manage the transformation to a
talent-first organization, a new definition of that TSR goal is
needed: Talent, Strategy and Risk.
 This may seem, at first glance, nothing more than
wordsmithing to use an existing acronym, but the reality, it is
argued, “entails a profound, company-wide shift in mindset,
attention, energy and the content of work.”
 The Transformation process down into seven actionable
steps:

The New Playbook for Putting People First
You, The LeaderAlignment at the
Top
Individual TalentThe
Organizations
 Forge the tools
of
Transformation
 Energize the
Board
 Design &
redesign the
work of Org.
 Reinvent HR
 Scale up
Individual talent
 Create an M&A
A Strategy for
Talent
 Drive the
Talent
Playbook

1. Forge the Tools of Transformation
 The time has come for every CEO who wants to succeed in his
job to take charge of talent.
 Talent has never been more important to the success of the
corporation.
 Talent is king. Talent, even more than strategy is what creates
value.
 A people first company relies on the work of small cross functional
teams that come together. Flattening the organization will stimulate
creativity and personal growth. It creates speed.
 First, build a core executive group — the “G3” -— of the
CEO, CFO and a CHRO.
 Second, identify the “critical 2 percent” of your talent in the
organization (who may not necessarily be your top-tier
people).
 Third, invest in the best “talent technology” (software-
applications examples are provided).

 By putting finance and Human capital on equal footing, the G3
will change the way and sequence in which these critical
matters are discussed.
 You need the support of the critical 2 pc in the organization to
succeed, the very best.
 Transforming your company into a people first organization is
an arduous., time consuming job.

 The First step- CFO & CHRO must be star performers who
can learn from each others language & dive into the business.
Talent sync with capital.
 The Second step -G3 meets regularly with an agenda of
meaningful, actionable items on human capital.
 Identification & understanding of the superior value creators of
the company- the critical 2 %.
 Map unlikely people creating unlikely value in unlikely places.
 The Third step – Technology to support talent driven
transformation.
 Working with CIO who truly understands the business.
Getting Started

2. Energize the Board
 According to a 2014 survey of the national association of
Corporate Directors, two thirds of companies have no formal
succession plan
 The role of the board is often underplayed in discussions around
talent. A committed board can help you recruit, maintain and retain
your critical 2 pc.
 Energize the board through reorganization and
reprioritization to embrace the new TSR.
 One example: Refocus the “compensation committee,” which is
traditionally focused on Senior executive compensation, as a
“Talent committee” that manages & Leads the compensation of
the “Critical 2 percent.”
 Many forward thinking companies have a people committee.

A talent driven value company will design the
organization for agility, it will think platform ,
not structure, will make work meaningful and it
will understand the social architecture.

 The First step
 Reintroduce the board your CHRO.
 Do they know him/her only as “ People Person” or a critical
strategic partner of yours ?
 Let the board know you are leading the transition via G3 in
which CHRO is full and equal partner with you & CFO.
 CHRO invests full time with the board to demonstrate his or her
understanding of the business.
 The Second step
 Rename the compensation committee and refocused as the
talent & rewards committee.
 This aligns directors with your effort.
 The Third Step
 Insist on reviews of critical 2 %.
 CEO’s succession and diversity become agenda of the board.
 The Fourth Step
 Encourage the board for support .
 Investors wants to hear great results- this assures investors.
Getting Started

3. Design & Redesign
 Design and redesign the work of the organization to “create
a more horizontal, flexible structure that connects &
multiplies talent.”
 A company’s talent story is not about stars, in a turbulent world, it
can signal stability.
 When strategy was paramount, organizations were designed for
control with little attention to velocity of decision making.
 In an unpredictable world, reorganization is a way of life. All
leading companies must have three elements – they must be
organized for agility, for platforms and networks and for meaning.
 Agility is often seen as the opposite of stability. True agility will
make your company stable than a traditional hierarchical
organization
 Talent-first organizations have no room for fiefdoms or power-
grabs.

Haier CEO
 Haier CEO Zhang Ruimin says that today’s CEOs must learn how “to
lose control, step by step.”
 That’s a challenge for anyone comfortable with top-down leadership. But
note the second half of Zhang’s quote: “step by step.”
 Leading a talent-first organization is something that must be managed
incrementally.
 The steps it requires—alignment at the top; continual development of
talent; a commitment to link talent and strategy; an agile, flexible
corporate structure; and others that we discuss in our book—are each
important.
 But built one upon the other, they trigger a multiplier effect that can
exponentially increase the value that talent delivers to the organization.
 The great promise of leading a talent-first organization: seeing new ideas
lead to even better new ideas, watching the creative thinking that’s been
enabled amplify itself across divisions and varying levels of seniority and
expertise, and reaping the benefits of explosive value that arises from
expected, and unexpected, parts of the company.

 The First Step
 Design your organization for Agility.
 Ability to adapt swiftly to the unpredictable trends that disrupt
and reshape your industry.
 Backbone- Structure, Processes & Governance supporting
dynamic teams
 The Second Step
 Think platforms & not structure.
 What structure will spark the ingenuity of your group of talented
people ?
 The Third Step
 Make work meaningful
 A sterile workplace will never capture the full potential of any
truly creative person.
 The Fourth Step
 Understand your company’s social architecture, measure &
monitor.
 Designing & redesigning is ongoing process
Getting Started

4. Make HR a Source of Competitive Advantage
 Reinventing HR begins at the top. The CEO must work hand in
hand with a CHRO he fully trusts.
 This involves more than just giving HR “a seat at the table.
 ” Managing human capital as effectively as financial capital
demands a CHRO “who is as committed, talented and empowered
as the CFO.
 ” If HR is to be the new creator of value, the traditional
administrative tasks , workflow and challenges must be automated
or outsourced.
 If your CHRO is not a first rate Business leader whom you can trust
, your company’s HR department will never become more than
source of an administrative support.

Make HR a Source of Competitive Advantage
 A good Leading CHRO of Talent driven Organization
1. Excellence in judging people and matching top performers to the
jobs they most value.
2. A sixth sense for diagnosing how an organization is functioning.
3. The intellectual curiosity to search for external talent.
4. Leadership through development in line roles.
5. The capacity to be part of the G 3 on capital decisions in which
talent can be the difference between success & failure .
6. No desire to accumulate power for prestige or ego.
7. The courage to promote young talent over the veterans, to
sustain and motivate an organization in perpetual change, to
speak with candor, and to disagree heartily with you. the
sensitivity to work with the CFO and CEO.
8. The acuity & sensitivity to work in sync with your CFO,
transforming that two-person relationship into your most
powerful tool.

Most of HR data is backward looking, reporting
on the past performance of talent. We may be
in the era of predictive analytics now.
CHROs of the new generation see that HR is a
field where creative leaders can have a real
impact o the business.

HR has two components, one that focusses on strategy,
spending its time on leveraging talent and the second that
spends its time and resources focusing on operational and
transactional HR functions.
CHROs of the new generation see that HR is a field where
creative leaders can have a real impact o the business.
Many companies, the obligatory transactional work drains,
time, energy and resources from strategic work.

Streamlining the transactional part of HR without investing in
the strategic side is a recipe for disaster.
In a talent driven company, the advisory business partner
role should be replaced by one which someone can drive
strategic talent decisions, we call him/her a talent value
leader.
CHROs typically get paid about 60 % of the CFO salary.
So, if we want to up HR, we need to get good CHROs and
pay them well.

 Reinventing HR begins at the Top.
 You and CHRO should answer two questions
 Does your HR function have the technological firepower it
needs?
 Does your HR function has the intellectual strength to add
insight to the date that HR software puts at your fingertips.
 HR should be equipped with predictive capabilities to manage and
lead the top performers and shape their career paths.
 HR people are hired & promoted for their ability to execute important
administrative challenges professionally.
 This is not enough. CHRO should make HR function as valuable as
any other business function in the company.
Getting Started

5. Unleash Individual Talent
 Skill obsolescence is a nerve-racking reality for employees and
executives alike.
 Talent development must be more reflective of the individual needs
of the employee to maximize value creation, rather than following
training roadmaps for established boxes on the organization chart.
 Training cannot be a sideline enterprise at a talent driven company.
 You need a culture across the entire spectrum that understands
digital.
 When companies hire from outside, they do so without considering
how the outsider will disrupt current culture and how the current
culture will accept or reject the new person.

 A few years ago, Facebook CEO Mark Zuckerberg decided that
his company had to make a dramatic shift from a desktop
business model to a mobile one.
 Zuckerberg’s vision was clear: He told product teams, “Come in
with mobile.
 If you come in and try to show me a desktop product, I’m going to
kick you out.” That clear vision, of course, guaranteed nothing: the
CEO graveyard is full of visionaries who fell back to earth when
their teams couldn’t deliver.
 But Facebook did deliver.
 Every product team got a mobile developer.
 Desktop products in development were simply dropped. The
teams delivered a slew of mobile offerings.
 Not all were hits, but enough made the cut—by the end of 2016,
mobile accounted for 84 percent of the company’s ad revenue.

Agile organizations built around empowered
teams are the best way to constantly and nimbly
match the right talent to the right strategic
initiatives.

6. Create an M & A strategy for Talent
 Pursue new talent with the same efficacy with which you would
pursue a potential business acquisition.
 CHRO as central to M & A similar to CFO .
 As your eyes onto the outside world, the CHRO can point you
toward the talent you need. CHRO should advocate the M & A .
See trends of hiring and steer the organization towards startups
that have the best talent in developing fields.
 CHRO should lead a talent audit of the company during
acquisitions. CFO is involved in financial audit and in the same
token CHRO should lead the talent audit. G3 should draw a
blueprint of what the combined company will look like.

6. Create an M & A strategy for Talent
 CHRO should lead the battle to retain the new 2 %. Talent
retention is critical in any take over or merger. CHRO should
assuage everyone’s worries.
 CHRO should direct the armies that are going to make the
merger work.
 CHRO will neutralize the snippers. Identify the snippers and
either change their behavior or remove them. Flip side of
managing critical 2 %.

7. Drive the Talent Agenda
 Mindset
 The central premise of talent-driven organizations is that talent drives
strategy, as opposed to strategy being dictated to talent.
 The wrong talent inevitably produces the wrong strategy & fails to
deliver.
 As we plan next two to three years , looking at what numbers we will
deliver, what funding we will need, and what capital structure makes
sense, the CFO will be at your side.
 It is important to bring the CHRO into that loop at the start not as an
after thought.
 Bring talent into quarterly business reviews, and review your top
employees at least that often.

Drive the Talent Agenda
 Questions to consider
 Looking two or three years ahead, will your 2 percenters have
the critical skills you need ?
 If not, do your competitors have 2 percenters have those skills ?
 If your top people are in something of a slump , Why ?
 Has the new technology lessened the importance of their
existing abilities ?
 Is organizational structure in getting in their way ?
 These questions and decisions must drive your thinking and
actions.

Masahiko Uotani-CEO –Shiseido
 Masahiko has been transforming the 150 year old –Japanese
Cosmetics company . Worked earlier in Coca-Cola.
 His first priority was recruiting- Believes People lead strategy.
 He looks are 3 thinks
 Subject expertise
 The ability teach others
 Develop new leaders.
 Kokorozashi- Willingness to share the company’s commitment .
 If personal determination is missing in the leaders even if he or she
is great strategist or technical person we will not take him/her on
board.

Consumer tastes are changing faster than ever.
Competitors are sharper and more efficient
than ever.
Technology threats arise faster than ever.
Talent, armed with skills of the future is in
demand more than ever.

Peripheral vision is a deeply misunderstood
skill that has never been more important.
Technology breakthrough can come from
anywhere, industry boundaries are blurring,
recruiting is a global endeavor now.

Great peripheral visions requires two things –
great data and great intuition.

The central premise of a talent driven company
is that talent drives strategy as opposed to
strategy being dictated to talent.

A talent driven company built around small
teams does away with the command and
control structure of hierarchical organizations.

The CEO is the best talent scout for a
company. He has to play that role given the
high visibility with customers, investors and
partners.

 Hold weekly meetings with the G3 to steer the company.
 Stay constantly involved with those in your critical 2
percent. CEO should personally know them. CEO should
personally sponsor many of them. And CEO should
constantly be looking outside the organization to add to
their ranks.
 Put talent at the center of the board agenda, right up there
with strategy and risk and compliance issues.
 When making any strategic move, start with the talent
implications—you must know which leaders will drive value.
 Pay as much attention to developing and executing the
talent strategy as you do to product strategy or competitive
strategy.
CEOs Agenda:

Three key questions to ask continuously are:
1. Are our company’s talent practices still relevant?
2. How can we utilize, develop, and recruit to deliver greater
value to our customers, and do so better than our
competitors?
3. Do we have the right approach to talent – and the right
HR – to drive the changes we need to make?

Mail your comments to ramaddster@gmail.com

Talent Wins

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