Talent Wins
Summary
Charan, with Dominic Barton and Dennis Carey, argues that talent should be managed with the same rigour and the same board-level attention as capital, and that the human resources function as currently constituted cannot do it.
Their central proposal is the G3, a core group consisting of the chief executive, the chief financial officer and the chief human resources officer, meeting regularly to make talent and capital allocation decisions together. Their argument is that these decisions are inseparable, since a strategy is executed by specific people and moving money without moving people accomplishes nothing, and that separating them into different processes and different meetings is why strategies fail in execution.
They argue for identifying what they call the critical two percent, meaning the roles rather than the individuals that create disproportionate value, which are frequently not the most senior positions and which most organisations have never identified. Talent should be deployed to those roles and measured there.
The operational content covers redesigning the chief human resources officer role from an administrative function to a strategic one, restructuring the annual talent review to be as rigorous as the capital budget, building an organisation of small teams that can be reconfigured, and changing what boards examine.
The book has no empirical base and rests on consulting experience with large corporations. The G3 proposal is specific and testable, and the identification of high-leverage roles rather than high-performing individuals is the most useful idea in it.
Key takeaways 7
- Talent and capital allocation decisions are inseparable, and separating them into different processes is why strategies fail in execution.
- A core group of chief executive, chief financial officer and chief human resources officer should make talent and capital decisions together and regularly.
- A small number of roles rather than individuals create disproportionate value, and most organisations have never identified which ones.
- The critical roles are frequently not the most senior positions, which means seniority-based deployment misallocates the best people.
- The annual talent review should be as rigorous and as data-driven as the capital budget, and in most companies it is not.
- The chief human resources officer role must be redesigned from administration to strategy, or the function cannot participate in the decisions that matter.
- Boards should examine the talent pipeline for critical roles with the same attention they give to financial results.
Who should read it
Chief executives and boards who want to raise talent decisions to the level of capital allocation and identify their highest-leverage roles.
Where it sits in the reference 2
Who recommended it 1
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