I am giving two weeks’ notice! As a business leader, these are some of the worst words I’ve had to hear—especially when they come as a total surprise. How could I not have known a team member was that dissatisfied?
When business leaders are reactive to people issues, they can only sit back and wait to experience the cost and the drag of an unfulfilled or underperforming team member in organization. You can expect to have these issues when you don’t put a proactive talent management system in place to prevent team members’ dissatisfaction or departure. I was always a strategy guy. When I was running a 5-million-dollar manufacturing company, my leadership team was glowing with excitement over the differentiated strategy we were rolling out, and expected massive profits to start rolling in. And yet, our initial growth stagnated, not taking off like we planned. Why? We didn’t have the right people in the right places in our organization, and it was costing us dearly.
We needed an absolute change of mindset. If we have an issue costing us six figures off our bottom line.
- Why haven’t we put a plan around it?
- Why aren’t we being proactive?
- Why aren’t we investing in something so important to our success?
- How humbling it was for me to recognize this blind spot?
- Why wasn’t I treating people issues with the same seriousness?
- Would I apply to any other issue slowing our company’s growth?
In spite of all the time and money I proactively invested into planning virtually all other aspects of the company, it never dawned on me to make a plan for our talent.
Thinking back on it now, it’s hard to imagine being stuck in that old, reactive mindset. I shudder to think back to the days when our leadership team would simply ignore people issues, while carrying on without a clear, decisive talent plan in place. Beyond humbling, what an expensive oversight! People issues may look slightly different from company to company, but they are painfully costly across all organizations.
Whether it’s a matter of talent deficiency or disengagement, people issues are the number one factor limiting SMB growth. Talent management, or even better yet, talent planning is how we can keep our talent engaged with and excited about their work. According to Gallup’s State of the Workplace Report, employee engagement ranks at only 34% in the U.S. and Canada, while the financial costs of disengagement are ravaging companies. Per the Gallup report: Lost productivity of unengaged and actively disengaged employees is equal to 18% of their annual salary Replacing workers requires one-half to two times the employee’s annual salary. So, if the team member makes 50,000 per year, it would cost 9,000 a year to keep each disengaged worker and between 25,000 and 100,000 to replace them.
Those numbers, however, only tell part of the story. Disengagement can be a symptom of talent misplaced within an organization—when people are working in positions that aren’t a strong fit for their natural behavioral style and personal motivators. Getting your people in the best position to succeed is a core outcome of the Talent Management and Planning process, ensuring they’ll be engaged in their role and growing personally, while also helping drive company growth. Talent Management and Planning represents an investment in your people that yields numerous returns, including retaining your rock star employees, improving hiring and development practices, and further attracting new talent—particularly from other businesses who neglect to make talent plans.
The Process to Implement a Talent Management System
Calculating the costs of a reactive approach to talent will shock any company into a change. If you are ready to make that change, you can create a great place to work by following the 7 steps of the Talent Planning Process to implement a Talent Management System in your company.
Step 1: Process prep
First, identify the leadership team members who will make up this planning team. Decide who will lead the process— oftentimes this is the company leader—but not always. Get this team informed and up to speed on the Talent Planning process. Various roles and responsibilities are assigned here as well. Then, everyone will complete behavioral science assessments designed to increase self-awareness of natural behavioral styles, sources of personal motivation, and communication preferences. Everyone will prepare to present their life story, along with their behavioral style, using a questionnaire during the team development session.
Step 2: Team development session
Creating a brilliant strategy & talent plan requires a candid, transparent environment for discussion, where everyone is comfortable throwing our cards on the table. To understand the direction a team wants to take its company, they must first understand where they’re coming from. In this step, each individual team members get to know one another more deeply than ever through their story and behavioral style. The goal of this session is to get everyone comfortably brainstorming in a mutually open environment, enabling the team to have the difficult conversations that are necessary to solve the toughest issues and develop the best plan. With apologies to my friends in human resources, many have fondly referred to this exercise as “getting the team in their underwear.”
Step 3: Strategy session
To implement a Talent Plan and Management System we first must know where we are going. Here the team will create the bullseye for what the organization should look like in three years. This strategy will account for components uniquely subjective (such as differentiation, target market, product, services) and objective (such as quantifiable financial goals) documents, which are your strategic vision and financial vision. These two documents—collectively referred to as your strategy—will guide all decisions, including the talent plan and your talent management system.
Step 4: Talent vision & sprint goals session
This step leads to the functional organizational structure that needs to be in place to achieve the three-year strategic vision and financial vision. For example, if you are a 10-million company today and want to be a 20-million company by the end of your vision, what will your functional structure need to look like to support a 20 million company? After completing this future functional structure, the leadership team will define company goals for the first three- or four-month sprint. Then, action plans are defined to work on the business to achieve each goal.
Step 5: Leadership team talent plan
With the future functional structure established, the company leader develops a three-year talent plan for the leadership team, based on the information accrued thus far, as well as individual meetings with direct reports. This talent plan includes all the strategies and action plans that you will carry out as part of your Talent Management System.
Step 6: Department plans
Now the leadership team will present the strategy & talent plan to all team members, which in turn kicks off department planning. Department plans include: the financial vision, current organizational structure, talent plan, and action plans, with owners and due dates to achieve company sprint goals.
Step 7: Meeting cadence
With the Talent Planning process completed, it’s time to develop an execution cadence of meetings to ensure continued growth for your company, but more importantly, for your people. The execution cadence is an essential part of your talent management system.
With talent plans in place for all teams and team members, the foundation for your Talent Management System is now in place. As you hold consistent 1:1 meetings to update and implement their talent plans you will eliminate people surprises, especially those two-week notices. But most importantly, your talent plans, and talent management system will resolve the #1 issue limiting your growth. Whoever wins at talent, wins in their industry.
