Janet N. Ahn, PhD, MindGym’s Chief Behavioural Science Officer, examines the gap between business needs and HR's struggle to meet them, leading to a lack of trust. She offers tips for talent leaders to align their talent development strategies with business goals to gain leadership backing and stronger return on investment (ROI).
I asked the Chief Human Resources Officer (CHRO) of a large, global information technology company how they view the partnership between CEOs and talent leaders.
They responded: “Great CEOs, who recognise and understand that they are the chief talent officers of their organisations, find the greatest value from their HR partners as intellectually-honest business counsel on how to further the talent agenda.”
In other words, HR and talent chiefs should be trusted partners working with CEOs in lockstep. But in practice, is this the case?
The data and trends suggest trust in CHROs and talent leaders is sinking
MindGym's survey of over 200 CHROs highlights major leadership and culture challenges threatening future success. HR and talent leaders are uniquely positioned to tackle these issues, including:
- 95% of CHROs admit their company's leadership capabilities will need to be improved to be ready for the future.
- 75% believe they will also need to change their culture too.
Yet, business leaders are increasingly sceptical that their HR functions are up to the task. According to a Gartner study, four-fifths of HR leaders are under pressure to scale back or reverse their recent innovations and programme investments.
Also, only 43% of CHROs from our study reported that their executive team is confident that the ROI for HR investments is at least as good as that of any other business function.
It's not surprising then that the HR budget has been shrinking.
How can HR and talent leaders regain business trust and investment?
The mounting pressure for HR to perform as a core, strategic business function rather than a 'support' function is made even more salient by their ever-expanding role (e.g., technology and data integration, talent management, hybrid work, leadership pipeline, etc.). This necessitates a reset – for CHROs to gain organisational trust, deliver more bottom-line impact, and provide a competitive advantage for their businesses.
The area in which they can make the biggest compound difference is with their talent development strategy—namely, how organisations help employees upskill, reskill and change their behaviour to perform better at their jobs, deliver outstanding results for the business and ensure their organisation can thrive in the future challenges.
The shift needed is to commercialise the talent development agenda.
If companies want to exist in 18 years, talent development strategies need to be commercialised
It's getting harder for businesses to stay relevant. In 1961, the life expectancy of a firm in the S&P 500 was around 61 years. Now it's less than 18 years.
Why is it so hard for businesses to stay relevant? It's undeniable the modern workplace has increased in its complexity due to unprecedented challenges, and HR have had to pivot hard and fast to:
- Manage a multi-generational workforce
- Traverse through constant, regular upheaval and organisational change
- Optimise a hybrid workforce
- Close the skills gap due to the growing labour shortage
- Increase employee engagement and productivity
- Promote a diverse and inclusive workplace culture while managing the fragility of DEI initiatives
- Adapt to new technologies and lead digital transformations to increase efficiencies
- Address employee burnout, mental health issues and wellbeing
- Prepare leadership pipeline, performance managing, and succession planning
- And more…
Company survival requires CHROs and Chief Talent Officers to align closely with CEO expectations.
The key to talent development is to start delivering more impact to the business by getting back to basics and delivering behavioural change in managers and leaders that matter most to business outcomes.
This means moving from "popular talent management" programs and technology that haven't delivered much impact to "commercial talent management" that impacts business outcomes.
What the shift to a commercially-driven talent development strategy looks like
The critical shifts needed to commercialise your talent development strategy, programmes and initiatives can look like this. Moving the focus from:
- Knowledge acquisition to behaviour change
- Employee course participation to employees adopting new habits
- Adding more and building new things to subtracting and embracing simplicity
- Activity metrics to behaviour change metrics
However, these programmatic shifts are difficult to make due to ‘tensions’
The crux of what makes the programmatic shift hard is that CHROs are behaviorally trapped in tensions.
It's often difficult to refine the focus on critical commercial decisions because there are just so many decisions to make. These decisions are often on competing priorities and tensions, which affect large swathes of the organisation – pulling and pushing constantly at our mental and emotional bandwidth—productivity vs wellbeing, short-term targets vs long-term goals, just a few examples. Even if there's a programmatic desire to make these shifts, existing habits make it difficult to pivot behaviourally.
However, navigating tensions effectively is crucial for unlocking organisational benefits. Research from a global organisation revealed that individuals in high-tension environments—like many talent leaders are experiencing now—who manage these tensions well, perform significantly better in terms of job performance and innovation compared to those who struggle to navigate them.
Learn how to steer tensions to your advantage from our Leadership Development report.
3 mindset shifts needed to sync talent development strategies with business objectives.
1. Configure more than create
Typically, it can take 12 months from initial conception to launch a new programme and the same again, or longer, to roll out. The inherent lag has a significant impact on employees and learners. Not only do learners not receive the necessary training in a timely matter, but they can also get stuck in a vicious cycle of spending too much time on learning programmes.
In contrast, if HR has commercialised its talent development strategy, it considers time savings and efficiency a critical KPI and constantly looks for ways to reduce it while maintaining or increasing impact. This means they configure proven assets that are modular and can be multi-purpose, upgrading and integrating with what already exists, rather than building from scratch all the time.
2. Rely on data, not intuition – but evaluate data like a scientist.
Commercial HR is constantly asking: How do we get 80% of the impact with 20% of the investment? The only way to achieve this is with data. A commercial HR function will have robust analytics to understand what is, and isn’t, having appropriate impact and so how to alter inputs and mass customize the experience.
A caveat to the above: Many times, I hear CHROs say: “I don’t have a problem with being data-driven – there’s just too much of it!” My suggestion is “think like a scientist” and cut through the noise in sense-making and understanding your data.
3. Think outside-in
Commercialising the talent agenda focuses on the end user – the learner. Learning needs to be easy to find, easy to use and guaranteed to help. If a programme isn't being used or shown to deliver value, it is quickly retired and replaced if the need is still great. A spring clean of what already exists will be essential.
And once you're familiar with these, take the next step to ensure your talent development strategy drives commercial growth.
Join our webinar, "Build Belief: It’s time to commercialise the Talent Development agenda," to discover how to advance your talent development strategy, prove the ROI of your programs, and get CEOs and senior leadership on your side. Sign up now
