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Профессиональный Документы
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Dave Ulrich
Justin Allen
Abstract
Throughout the last 15 years of economic roller coaster rides, Asian countries
have clearly led the world in economic growth. Success in Asia has been due,
in part, to the transformation many Asian economies have engineered, moving
beyond manufacturing to successfully exporting technology and services. Now
another revolution is afoot. The best performing Asian businesses are gaining
impressive premiums in value creation because they have learned and imple-
mented the secrets of leveraging their companys most essential resource: talent.
To better understand this talent trend and how investment in talent ties to busi-
ness results in top Asian companies, we gathered data from over 570 separate
businesses in Singapore, China and India about 13 talent management processes.
We, then, show the relative impact of these 13 talent management practices on
business performance as moderated by the strategy and growth patterns of the
firm. We found that investments in managing current talent have more impact
on business performance than hiring new talent or retaining existing talent. We
report variances in the impact of talent management depending on country,
strategy and growth pattern. We discuss implications for talent management
for line managers and HR professionals. Ultimately, this work will inform those
charged with managing talent so that they can accelerate the use of talent to
deliver business results.
Keywords
Talent, results, strategy, Asia, leadership, promotions
Dave Ulrich, Rensis Likert Professor, Ross School of Business, University of Michigan;
Partner, The RBL Group. E-mail: dou@umich.edu
Justin Allen, Principal, The RBL Group. E-mail: jallen@rbl.net
2 Dave Ulrich and Justin Allen
Introduction
We know it matters. Some go to war for it. Professional sports teams draft for it.
Actors and musicians audition to show they have it. Others consider it the ultimate
solution and try to manage it. Agents contract for it. Some are innately endowed
with it while others strive diligently to earn it. All try to grow it. Talent. It is evolv-
ing into a science for some HR professionals and a passion for many line manag-
ers. A multitude of programmes and investments have been made to attract, retain
and upgrade talent. In this article, we provide leaders, HR professionals, consult-
ants and scholars a way to accelerate the deployment of talent, particularly in
Asian enterprises (Dowling & Donnelly, 2013; Rowley & Ulrich, 2013).
We begin with an overview of the importance of talent for Asian firms; we then
define talent as a set of 13 processes; we review our research methodology to
study the impact of these talent processes with 570 businesses in China, India and
Singapore; we report our results of how talent affects business performance, con-
sidering the strategy and growth patterns of the firm; and we discuss implications
for talent management for line managers and HR professionals. We want to help
those charged with increasing talent to have the insights and tools to accelerate the
use of talent to deliver business results.
Despite naysayers who argue that fast-paced growth in Asia will soon fall apart
due to over-reliance on foreign consumer markets and opaque banking, look east
remains a common refrain for businesses and investors looking for economic
growth opportunities and capital to fund their growth. Indeed, notwithstanding the
current credit crunch that seems to be mounting, independent economic forecast-
ers1 still project Chinese growth at 7.5 per cent and Indian growth at 5 per cent in
2013 through 2015.
Continued economic growth cannot be sustained without a concurrent renewal
of talent. While Asia is accepted and known for leading the way in economic
recovery, we suggest that Asia can also be at the forefront of talent renewal, which
will sustain business growth now and in the future.
Becoming a world-class producer of talent will require delicate management
of the philosophical and pragmatic differences in how talent is managed between
the East and the West.
Table 1 outlines nine key paradoxes Asian leaders may face when they attempt
to combine both Eastern and Western philosophies (in the dimensions of organi-
zation, employee treatment, success, governance, hierarchy, time, relations, talent
and referent).
These paradoxes are difficult to manage, but one key holds true: without the
right talent, organizations promises are unfulfilled, business growth is short-term,
and societys hopes for improvement of the human condition remain merely opti-
mistic ambitions. Ultimately, as they seek to cross boundaries and drive global
growth, Asian leaders need tools and practices necessary to successfully manage
talent (Ulrich, 2010).
Talent is not an abstraction. By designing, executing and reviewing talent man-
agement plans, top companies realize the tangible and intangible value from
investing in their people by obtaining better financial results, developing an
engaged and adaptable workforce and increasing customer and investor confi-
dence, particularly in emerging markets (Tarique & Schuler, 2010; Ulrich &
Sutton, 2011).
Executives and HR professionals who are willing to invest at least half a day
every quarter reviewing and making specific talent choices bring the rhetoric
about talent to fruition. However, too often battle-seasoned executive teams with
good intentions dedicate half of a day to the improvement of talent in their organi-
zation but do not know where to start or what to focus on. There are so many
frameworks, tools, platitudes, programmes and promises in the talent domain that
it is easy to get lost in the rhetoric.
Consequently, the half day on talent becomes a rather nebulous reaffirmation
that leaders must invest in talent, and executives leave the meeting with a talent
checklist, but without making concrete progress on improving talent. In response
to this dilemma, the results of the research highlighted in this article provide
clarity amidst the conceptual clutter that often swirls around talent rhetoric.
1. Standards: First, leaders must set standards that clearly delineate the
behaviours top talent must employ, experiences they must accumulate and
results they must ensure.
2. Sourcing: Next, leaders must leverage current employees, alumni, technology
and other sources to identify talent who will fit well in the organization.
3. Screening: Then, leaders must evaluate talent to identify the top prospects
given the organizations business needs.
4. Securing: Once candidates are screened and desired candidates are
identified, leaders must have a compelling employee value proposition such
that the best talent will accept positions they are offered.
5. Steering: Finally, once talent is in the door, companies must guide new
talent to help them understand the company strategy and their specific role
in implementing that strategy.
Talent management is about how to bring talent into the organization, how to
manage the flow through the organization and how to ensure the best talent stays
while those who do not fit are removed. By understanding and managing these
13 talent processes, thoughtful and innovative Asian executives and HR leaders
will help their organizations and their region make progress. For each of these
13 processes, we crafted specific questions that would indicate the extent to which
the organization performed on this practice as compared to competitors. Examples
of these questions are in Appendix 1.
Our 2009 research provides a clear mandate: regardless of which way the data
are cut, talent matters. Talent must be a critical area of focus and investment,
especially as Asian leaders aim to move up the value chain. This current research
focuses on where leaders should focus their investments in talent among the
13 processes and how they should make those investments.
Given the scope of work, we followed a standard survey methodology approach
while simultaneously pursuing complimentary qualitative inquiry by means of
interviews. We began by framing the study based on (i) our extensive research and
experience in the fields of global talent management, human resources and leader-
ship development and (ii) our joint understanding of the particular set of talent
dilemmas and opportunities faced by Asian leaders today.
Once framed, we began to build the questionnaire while simultaneously com-
piling a lengthy target list for our sample. As stated above, the intent of the study
was to uncover insights into talent practices employed by all sizes of organiza-
tions in Singapore, China and India. Consequently, given that our aim was to
provide practical solutions for Asian business leaders, our goal in securing the
sample was to reach a large number of small- and medium-sized enterprises that
are not listed publicly. In view of the natural limitations of publicly available
information for practicality reasons, we pursued a non-probability sampling
model, with target companies selected based on proxies such as publicly availa-
ble, recognized lists that have an established selection methodology (based on
financial and growth indicators). The information in Table 2 indicates the source
for each country and company type.
In effect, our combination of judgement and quota sampling matches method-
ology commonly used in effective market research, but ours was on a much
grander scale, with well over 1,500 potential targets in order to achieve the desired
number of data points. That said, given that lists may be ranked according to a
certain metric or even alphabetically, we provided randomness through selecting
every six companies on the combined lists.
With the sample compilation underway, we constructed a skeleton question-
naire that was used as the baseline for both the survey and the interviews. This
questionnaire included a large number of questions that have previously been
used in global human resources and talent research, as well as several unique
questions written specifically to explore the Asian context. We then vetted the
questionnaire with a variety of inputs and finalized the online survey and inter-
view protocol. With our tools in place, we began the exhaustive data collection
process, which spanned four months during the first half of 2013 and resulted in
570 data points from Singapore, China and India (see Table 3).
These respondents belong to 570 separate business units in three distinct geo-
graphic regions. As indicated in Table 4, roughly half of our respondents were
business leaders and the other half HR professionals.
For our qualitative research, we also ensured that approximately half of the
respondents we interviewed in the three regions (Singapore, China and India)
Types of
Company Singapore China India
Domestic SME 1000 2012 Forbes Asia Inc. India 500: Indias
Listed SME 200 Fastest-growing,
Mid-sized Companies
For each of these areas, we asked participants to rate their businesses on a five-
point scale, from low (1) to high (5). While individual responses are subjective,
given that we had 478 survey respondents each from a separate business, we
believe that this multidimensional approach offers a reasonable (if perceptual)
indicator of business performance. Figure 1 shows a fairly normal distribution of
160
140
120
# of Respondents
100
80
60
40
20
0
1 2 3 4 5
Business Performance
Table 6 shows the impact of the 13 talent processes depending on the country
or origin. This goes beyond studies of HR within a particular country, like India
(Budhwar & Khatri, 2001; Singh, 2003) to comparing results across countries.
The fascinating finding from these data is that talent has an extraordinarily signifi-
cant impact on business performance in China (R2 = 0.69). That is, 69 per cent of
business performance in China as defined in this study is explained by these com-
bined talent variables. Ultimately, anyone entering the Chinese markets must be
stellar at implementing these talent domains if they hope to be successful in busi-
ness. The R2 in Singapore and India are still very high (0.39 and 0.45 respec-
tively), corroborating with the findings in our 2009 study as outlined earlier.
Ultimately, talent is imperative for business to succeed in Asia.
In more detail, Table 6 shows that the top 5 talent processes that drive business
performance the most in China are leadership, communication, promotions,
development, screening and evaluating talent; in India the top 5 are communica-
tion, leadership, development, retention and promotion which overlap highly with
China. In China, the practices related to sourcing new employees matter more
than in India; while in India, the practices related to managing current employees
matter more to business results. Evidently China (and Singapore) leaders need to
pay more attention to bringing in new talent as contrasted with leaders in India
who need to pay somewhat more attention to existing employees.
Perhaps the most instructive finding comes when comparing the results as
depicted in Figure 2. In this figure, we show the overall impact of the 13 talent pro-
cesses based on the regression scores (horizontal axis) and the relative effectiveness
4.20
4.10
Steer and orient new
employees, 5.3%, 4.07
4.00
Standards to guide
hiring, 6.3%, 3.98 Motivate employees, 8.7%, 3.94
Secure hire the right
3.90 employees, 4.3%, 3.91
Assess employees, 8.7%, 3.83
3.80
Manage promotions,
Retaining our employees, 10.6%, 3.77
3.70 l
Screen/Evaluate talent to 8.6%, 3.78
determine if candidates d grooming
Identify and
meet standard, 5.2%, 3.74 leaders, 11.3%, 3.70
3.60
Communicating with our
employees, 10.0%, 3.59
3.50 Develop employees,
Remove poor performers,
Source and identify 10.5%, 3.53
5.9%, 3.47
talent, 4.7%, 3.46
3.40
3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0%
of the 13 processes based on the mean scores for each process. Asian leaders are
more proficient at the first domains (standards, screen, steer, motivate) and generally
less proficient in the middle domains that have the most impact on business perfor-
mance. In fact, there is a significant focus gap. It appears that Asian leaders who
spend time on talent have ostensibly failed to become adept at areas that matter most.
For example, although leadership clearly has the highest impact on business perfor-
mance (11.3 per cent overall), respondents indicated that Asian businesses are gener-
ally more proficient at eight other talent domains. On the other hand, steering talent
has much less impact on business performance relative to the other domains, yet it is
an area of high proficiency. This figure also points out where Asian leaders can focus
on talent to have the most improvement: developing others, leadership, promotions
and communication (bottom right in the grid). Each of these talent processes has high
business impact, but has not done as well as others. Clearly, this data suggest that
Asian business leaders need to re-evaluate their priorities in talent investment.
more efficient. Respondents were given the opportunity to allocate weights for
each of the strategies given that some companies attempt to target multiple strate-
gies simultaneously. Our intent was to identify the strategy they emphasized most.
Businesses in our sample represent a fairly even distribution amongst the three
areas of focus (see Table 8).
As a reminder, we defined strategic focus as the general direction of growth a
company chooses: customer centricity, product innovation or cost. We then showed
the impact of the 13 talent processes on business performance by each of the stra-
tegic foci. As observed in Table 9, the overall impact of talent investments on
business performance is about the same regardless of business strategy, yet each
strategic area of focus has its own unique nuances. The first clear cross-emphasis
pattern is that talent domains related to bringing people into the organization
Growth
High: Above Low: Below
Industry Average Industry Average
Talent flow into the Standards to guide hiring 4.7% 4.9%
organization Source and identify talent 2.9% 3.7%
Screen and evaluate talent 7.4% 5.7%
Secure and hire the right 5.4% 2.7%
employees
Steer and orient new 5.3% 3.7%
employees
Talent flow through Motivate employees 9.8% 7.8%
the organization Assess employees 9.1% 5.1%
Develop employees 9.7% 11.3%
Manage promotions 12.4% 13.4%
Communicate with our 10.7% 11.4%
employees
Identify and groom leaders 11.5% 13.3%
Talent flow out of Retain our employees 8.2% 8.5%
the organization Remove poor performers 2.8% 8.6%
Multiple R 2
0.35 0.71
Although this finding is rather intuitive, qualitative data suggest that many organi-
zations find removing poor employees a difficult practice to carry out consist-
ently. We discuss the removal of poor performers in more detail further in this
report.
Comparing the means scores of average performing companies and top per-
forming companies within each growth level yields some interesting findings. In
particular, the spread between average and top companies is the widest in the
medium-growth realm. You may recall that the descriptive statistics above show
that the vast majority of companies in the study identified themselves in the
medium-growth category. Hence, for the majority of organizations, emphasizing
talent is a differentiator (particularly managing promotions, communicating, lead-
ership and talent retention). Meanwhile, there is very little differentiation between
domain means of average and top companies who are currently experiencing low
growth. Additionally, low-growth companies have overall lower mean scores than
medium- or high-growth organizations. Apparently, although Table 11 indicates
that talent is just as important in low-growth as in high-growth organizations,
managers in low-growth organizations fail to invest in talent. This may be a lead-
ing cause for stagnating growth.
Growth
High: Above Low: Below
Industry Average Industry Average
Talent flow into Standards to guide hiring 0.05 0.05
the organization Source and identify talent 0.03 0.04
Screen and evaluate talent 0.07 0.06
Secure and hire the right 0.05 0.03
employees
Steer and orient new 0.05 0.04
employees
Talent flow Motivate employees 0.10 0.08
through the Assess employees 0.09 0.05
organization
Develop employees 0.10 0.11
Manage promotions 0.12 0.13
Communicate with our 0.11 0.11
employees
Identify and groom leaders 0.12 0.13
Talent flow out of Retain our employees 0.08 0.08
the organization Remove poor performers 0.03 0.09
Multiple R2 0.35 0.71
Implications
Our intent in this research is not just to declare that talent matters in Asian firms,
but to show specifically which talent processes have the most impact under spe-
cific business conditions. We confirmed the importance of talent. Investing in
talent has a major impact on business performance. We showed that some talent
processes (e.g., leadership, development, communication) have more impact than
others. We were able to empirically demonstrate that Asia leaders who invest in
talent development will increase their organizations performance. We identified
13 specific talent processes and we found that these processes varied in predicting
performance based on an organizations strategy and growth aspirations. We rec-
ognize the limitations of this research: It focused on small and medium enter-
prises (SMEs) more than large enterprises; it is still a relatively small sample; it
is a self-report data which may have multi-collinearity affects. However, we
believe that these findings have significant impact on general managers and HR
professionals.
General Managers
The research and analysis we report is targeted to line managers in Singapore,
China and India, who increasingly believe that talent is key to their business suc-
cess. They increasingly need thought leadership, insightful recommendations and
practical processes to help them effectively manage talent and talent-related
issues. When they understand the practices of talent management and the data
backing up the practices, they will be more confident that investing in talent will
help them reach their goals.
Based on this research and our experience working with line managers, we
would make the following recommendations. First, line managers become the
owners of talent. Talent decisions can and should not be delegated to HR profes-
sionals. Since talent has such a critical impact on business performance, line manag-
ers should be primarily responsible for making investments. Second, line managers
should spend personal time on talent issues. In our research on top companies for
leaders, we found that the best companies for building leadership have line manag-
ers who spend 2025 per cent of their time building future leaders. We would coach
Asian leaders to spend such significant time. Third, given our findings, we encour-
age Asian leaders to spend less time on bringing new people into the organization
and more time working with existing employees. Leaders who work to build future
leaders, to develop others, to communicate clear messages and to encourage promo-
tion or succession will be spending time on the right talent processes. Finally, we
recommend that talent management becomes part of a leaders scorecard. In addi-
tion to delivering financial, customer and organization results, we believe that lead-
ers should be accountable for talent. Talent indicators might include attraction and
retention of key people, employee engagement or motivation, employee productiv-
ity or employee development. Line managers are owners of talent work.
HR Professionals
The ideas and findings of this research should help HR professionals in Asia
(Farndale, Scullion & Sparrow, 2010). Senior HR executives face increased
accountability to make sure that HR practices and functions align to and drive
business results. While line managers should be accountable for talent initiatives,
HR professionals should be their partners or architects who facilitate, coach,
design and deliver talent initiatives. To fulfil their HR architect role, HR profes-
sionals need to set direction for talent management, make sure it happens, engage
people in the process and make sure it endures. HR professionals should know the
latest research and be able to translate that research into specific actions within
their organization (Budhwar & Debrah, 2009).
We have argued that HR should deliver talent, leadership and culture (Ulrich,
2013a, 2013b). In this research, we have focused which talent practices may have
the most impact on business performance. While the war for talent (Beechler &
Woodward, 2009; Michaels, Handfield-Jones & Axelrod, 2001) has been under-
way for 15 years, it is important to go beyond the general rhetoric to identify
specific talent practices that will improve business performance. In this work, we
found a focus on existing employees is more important than on sourcing new
employees or on removing employees. In particular, we found that leadership,
development, promotion and communication practices had the most impact on
business performance. HR professionals who want to deliver talent should pay
more attention to these practices.
The bar for HR has been raised. HR professionals who continually worry about
having access to business leaders never will gain access. In contrast, HR profes-
sionals who understand the power of effectively leveraging talent as presented
herein will be able to contribute and much more successful in their personal careers.
Organization Scholars
This study fills a significant void by providing practitioner-oriented qualitative and
quantitative data on talent management in Asia. Going forward, more work is
needed to explore the key findings of this report. Academics, consultants and prac-
titioners alike would benefit from a replication of this study, but with a broader
geographic scope and with a much larger sample size. Additionally, it would be
helpful to identify how managers practically implement the talent practices identi-
fied in this research. There is also much to be done to gather data about the talent
domains from the perspective of critical stakeholders (investors, customers, suppli-
ers, government, etc.). That said, we believe that the most important activity that
must flow from this research is the development of simple, accessible tools and
action lists which Asian managers can use on a daily basis to better manage talent.
Conclusion
The way talent is brought into the organization, managed while in the organiza-
tion, and either retained or moved out of the organization clearly affects the per-
formance of the business. The descriptive and predictive statistics about talent in
Asia and business performance tell a story about baseline practices essential for
business leaders and HR professionals. We hope that this type of research begins
to create insights that make Asia not just a manufacturing hub, but also a reposi-
tory for innovative talent management practices.
Acknowledgements
We appreciate the support of the Singapore Ministry of Manpower and our colleagues at
PWC Singapore for sponsoring and collaborating on this research.
Notes
1. The Conference Board, an independent economic forecasting organization, in Joshua
Kurlantzick, China Falling? Not So Fast, Bloomberg Businessweek (28 June 2013;
http://www.businessweek.com/articles/2013-06-28/china-falling-not-so-fast).
2. Some of the differences of East vs. West can be found in: http://www.1000ventures.
com/business_guide/crosscuttings/cultures_east-west-phylosophy.html
3. To provide an additional validity check, we selected a random handful of publicly trad-
ed organizations from among those who responded and compared their responses with
public information. Although they used local geographic figures when responding to
the number of employees and total revenue (therefore not comparable), comparable
information such as percent revenue growth and brand recognition was validated and
matched, suggesting that survey participants were not overly inflating their responses
or inaccurately portraying their business results.
4. Because we have used a survey methodology for both the talent items and performance
items, there is a possibility of an elevated correlation known as the common method
variance problem. In other words, there is a possibility that correlation between two
measures may be due to the common measurement method (respondents who in-
flate their ratings on talent metrics may also inflate their ratings on the performance
metrics).
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