Short-term thinking within companies and pressure from shareholders detracts from the effectiveness of long-term talent management strategies and their associated business benefits, according to Lynda Gratton, professor of management practice at London Business School.
“Talent management is incredibly difficult, because of all the things that a company does, talent management actually has the longest timeframe in most cases,” she said.
“So you might bring in people at the age of 22 and they won’t really make a significant contribution for 10, maybe 15 or 20 years.
“Many companies generally struggle with this kind of long-term thinking because they’ve got so much short-term pressure from shareholders, and as a result they don’t invest in talent management.”
The second reason companies struggle with this is because they struggle to define talent in the context of the future of their business, she said.
“It’s sometimes confusing for an executive team to think about what they want for the future and how that is going to be different to today, especially when it comes to people.
“So you might bring in people at the age of 22 and they won’t really make a significant contribution for 10, maybe 15 or 20 years”
“So I think companies which make the biggest investment in talent are often the ones who have come to some conclusion about that.”
The third reason why companies struggle with talent management is because methods of talent development are changing so considerably, said Gratton.
“There was a time when companies would just send their highest potential people to a program at Harvard or Stanford or London Business School,” she said.
“While that is still important, what they’re realising is that on-the-job mentoring, coaching and stretch assignments are really important.
“Those high touch development activities are much more difficult to deliver than simply sending somebody on a business school program. So a combination of these means that talent management is not a high priority for some organisations.”
For the full interview with Gratton see the next issue of Inside HR magazine.