Back in the day, the saying was: People are an organization’s most important asset. Also quoted around the same time, “People are #7 on a list of most organization priorities.” ~ Peter Block, leadership consultant. Now it’s 2022 and once again, in a world dealing with Covid and labor shortages, it’ quite possible people may have moved up to #3, or might it be higher than that?
As you consider your workforce talent today, are you using a Talent Constellation or a Talent Community approach? There are very clear differences in the path an organization takes as it recruits, develops, and endeavors to retain its talent. This post was updated in 2022 from the original in 2009 taking into account today’s workforce realities.
Author Tony DiRomualdo has researched the talent management practices of more than one hundred U.S. and European-based businesses and offers that companies that achieve high performance choose from either a Talent Constellation or Community approach, one or the other only. There is no blended approach.
Talent Constellations, or a “stars” approach leverages the individual and group performance of the brightest people.
A Talent Constellations, or a “stars” approach leverages the individual and group performance of the brightest people. Tony suggests that Talent Constellations mimic the operation of free markets – individuals acting rationally pursuing their self-interests in ways that increase the greater good.
This talent model is oriented toward specialists performing work that requires high degrees of skill, knowledge and expertise. It is predominant in professional fields like academia, consulting, investment banking, law, medicine, and the arts. General Electric, McKinsey, Microsoft, Intel, various business schools such as Harvard’s, and PepsiCo are good examples of this approach.
Talent Communities [focus on] recruiting and retaining ordinary people and [how to get] extraordinary performance from them.
Talent Communities take the opposite approach based on recruiting and retaining ordinary people and getting extraordinary performance from them. Tony suggests that a community approach is like a family – individual members are strongly bonded to the group and further their individual interests by pursuing the collective good of the whole community. The community approach features the sum of its talent as greater than the individual parts. Culture, environment and practices support high performance of all of its members.
Jeffrey Pfeffer of the Stanford Business School discusses Southwest Airlines corporate behavior featuring a community approach. “Lots of companies say their people are important. Southwest actually acts as if this statement is true.”
He writes of Southwest’s practices that feature community-oriented approaches such as their focus on developmental training, peer recruiting, muted hierarchical roles, and even a catastrophe fund for employees that fall on hard times.
Southwest hires for attitude, believing skills can be learned and seeks to provide stable employment for everyone. Training is extensive and fully internal.
Choosing a stars path features organizations like PepsiCo that conducts research to define what a high potential at PepsiCo looks like and how to spot them sooner and/or deeper in the organization. PepsiCo uses a slate of assessments and follow-up feedback sessions, successive years of 360 feedback data, and performance management ratings (on both business and people results) to develop profiles of high potentials. It then links assessment results to a formal leadership development agenda supported by extensive follow-up coaching engagements (e.g., 6–12 months in length).
There is no middle ground. …Any attempts to blend the two philosophies sacrifices the effectiveness in the people investments in stars or the community approach.
PepsiCo is also selective with how its array of development tools is used including its performance management process:
- 360 degree feedback,
- competency models, and
- an organizational health survey.
PepsiCo chooses to whom certain combinations of tools will be applied such as with a select group of high-potential talent hand picked by the CEO of the international business. PepsiCo also uses a cadre of external executive coaches to drive development planning and accountability.
Finally, the company leverages assessment and coaching during major developmental transitions or when onboarding strategic new hires. Tony states there is no middle ground. Organizational practices, programs, and systems are developed effectively based on making one choice. Any attempts to blend the two philosophies sacrifices the effectiveness in the people investments in stars or community approach.
Choices: Choosing one approach over the other can be insightful for testing the validity of your organizational values as well as the organization competencies you desire in all your staff. If your hiring practices are up to date, your decisions of who to welcome aboard will be based on those key behaviors or skills that defines your organization, as well as your chosen or default talent management approach. In 2009, economic stress and layoffs temporarily buffered organizations from some the effects of the boomer wave of retirements. In 2022, having a solid talent management approach in place may mean the difference of thriving or failing as the labor market contracts.
in 2008, there was hand-wringing over a “War for Talent” that did not materialize due to economic stress from the global financial crisis. By March 9, 2009, the Dow had fallen a percentage decline exceeding the pace of the market’s fall during the Great Depression and to a level which the index had last seen in 1996. Now, with the arrival of the Covid pandemic in 2020, it changed everything in the labor market once again. Vacancies in your organization today will spotlight the talent approach choices you are making. In considering the path of your organization moving forward, consider these questions:
- How is the mission and purpose of your organization carried about most successfully by those in your organization? Is the distinguishing factor the few, or the many?
- Do various forms of recognition collectively focus more on the stars or more on the strong and consistent groups of performers across the organization?
- What philosophy and values in action define your organization? Do they align with a stars or community approach?
- What aspects of your organization’s identity, values and workforce characteristics most correspond to the needs for of the near future as well as your organization’s’ long term forecasts?
The key to a solid talent management approach is integration – integrating all parts of your organization’s people-focused initiatives and systems including anything and everything having to do with recruitment, retention, professional development, leadership, high potential development, performance management, feedback and measurement, workforce planning, and culture
Those who define their path, stars or community, and clarify their people systems to align with this decision may prove to be the winners in talent market through attracting and retaining staff who best fit their organizations and are not only happy to help produce solid and successful business and people performance results, but are fully engaged, even passionate about it. They may also help recruit new talent that helps the organization grow. And that is a win-win for everyone.
* Models for a post Covid workforce: The top five (5) work arrangement models collected by the Harvard Business Review
* Becoming Anti-Fragile, How to Adapt to Change (updated with Covid-era references).
Author: Deb Nystrom is an organization development consultant with a specialties in change & transition, facilitation, leadership development, leadership coaching and process facilitation. She can be reached at: DebNystrom@Reveln.com or contact her here.
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• Talent Constellations or Talent Communities – Choosing the Right Talent, Tony DiRomualdo, business researcher, writer, and advisor with Next Generation Consulting, Updated reference September 2020: https://wtnnews.com/2003/10/16/295/
• Reuters. March 10, 2009: 45 percent of world’s wealth destroyed: Blackstone CEO.
• Hidden Value: How Great Companies Achieve Extraordinary Results with Ordinary People; Charles A. O’Reilly, Jeffrey Pfeffer, 2000, Harvard Business School Press