16 Oct Talent Constellations or Talent Communities – Choosing the Right Talent
Model for High Performance
Today’s business conditions provide a golden opportunity to tune your talent strategy. While the battles for talent might appear to have calmed, the long-term winners will be those firms who move beyond battlefield tactics to long-term winning strategies. Real competitive advantage comes from making a clear choice in your overall talent strategy and fundamentally aligning your talent management practice to that choice, even when the talent battle heats up.
My study of the talent management practices of more than one hundred U.S. and European-based businesses suggests that companies achieving high performance have two things in common:
First, each has a distinctive attitude – a very clear point of view about people and the role people play in competitive advantage.
Second, the most successful companies have “bet the firm” on one of two quite distinct talent management approaches in alignment with their core people attitude. In essence, they are either a Talent Constellation or a Talent Community.
Talent Constellations leverage the individual and group performance of an elite group of the brightest people.
Talent Communities take the opposite approach – recruiting and retaining ordinary people and getting extraordinary performance from them.
Talent Constellations mimic the operation of free markets – individuals acting rationally pursuing their self-interests in ways that increase the greater good.
Talent Communities are like families – individuals members are strongly bonded to the group and further their individual interests by pursuing the collective good of the whole community.
Companies that successfully adopt these models demonstrate a strong point of view about talent. They know what they are after. They feel strongly about who to hire and who to keep and are not afraid to reject high-caliber candidates because they lack the key behaviors or skills that defines their organization.
Who is the Star—the Individual or the Organization?
Talent Constellations are companies built around exceptional individuals. They seek to create environments where these individuals can grow, perform and be rewarded to their fullest potential. This model of talent is oriented toward specialists performing work that requires high degrees of skill, knowledge and expertise. It is predominant in professional fields like investment banking, academia, consulting, law, medicine, and the arts. Examples of successful implementations of this model are General Electric, McKinsey, Microsoft, Intel, the Harvard Business School and PepsiCo.
In the Talent Community, the sum worth of talent is greater than the individual parts. Companies adopting this model feel it is of paramount importance to create an environment, culture and practices that maximize the performance of the organization as a whole, rather than relying disproportionately on the contributions of key individual talent. Talent Communities shine in every industry. Among the companies that excel at this model are Whole Foods, SAS, Men’s Wearhouse, St. Luke’s, and Southwest Airlines.
Choosing the Right Talent Model
Which model is better, the Talent Constellation or Talent Community? It depends upon the nature of your business: an investment bank might thrive on the performance of a relatively small number of deal-making stars, while a distributed service business such as an airline would rely on strong and consistent performance across the organization. The decision also depends on your business priorities, culture, values and beliefs. St. Luke’s highly successful democratic approach to running its business is atypical for the advertising industry where firms built around a small group of creative and management talent are the norm. Kookmin Bank in South Korea has assumed a leadership position in the country’s banking industry by building its business strategy around recruiting, developing and paying individual performance-based compensation to top talent, an approach that breaks with the industry and cultural norm of paying everyone the same wage for the same job.
Can a single organization excel at both of these models, or some hybrid – getting the most out of exceptional talent and achieving extraordinary performance from the workforce at large? The answer is NO. Such an approach dilutes focus and compromises performance, yet many corporations unconsciously pursue this method, vacillating in their priorities and treatment of employees. At best, you get separate and rival camps and cultures competing for attention and resources. At worst, performance-sapping contradictions and conflicts wreak havoc beneath a superficial guise of balance.
As Jeffrey Pfeffer of the Standford Business School has pointed out, “There is not a shortage of good talent, but a shortage of great companies to work for.” Want to become a great company to work for? Then clearly choose between the Talent Constellation and the Talent Community model and fundamentally align your talent management practice to that choice.
Tony DiRomualdo is a business researcher, writer, and advisor with Next Generation Consulting. He works at the intersection of people, business strategy, and information technology to help companies create a committed and high performance workforce. Tony can be reached at email@example.com.