Global trends in talent management are reshaping the workplace, the workforce, and work itself. After years of struggling to drive the engagement and retention of high-level professionals, improve leadership and build a meaningful culture, corporations have perceived the need to redesign their organizational models. To help companies and their leaders understand these changes, large consulting firms specializing in managing talent and human capital, such as Deloitte and McKinsey, have dedicated themselves to extensively researching the subject.
Both companies developed studies that focus on talent management challenges and to a large extent arrived at similar diagnoses: the digital world has restructured the foundations of organizational structures, from the traditional functional hierarchy to what Deloitte, for example, called the “team network.” This new model of work is forcing us to:
- change job descriptions;
- rethink careers and internal mobility;
- emphasize skills, and
- redesign how to set goals and reward employees,
This situation has completely changed the role of leaders. Are you interesting in understanding whether your organization is ready for this new paradigm? Keep reading!
The report prepared by Deloitte, named Deloitte Human Capital Trends 2016, was produced based on more than 7,000 responses to a survey that was conducted in more than 130 countries. Some of the report’s findings were astounding. Research has shown that most of the problems faced by companies these days (employee engagement, culture, market time and innovation) are a result of companies’ failure to adapt their practices to this new way of working.
This situation led to the fact that 92% of the companies surveyed affirmed that “redesigning the organizational structure and the way they work” to meet the demands of today’s work and business climate is one of their main challenges, making it the dominant trend of 2016.
Focus on teams, not just leaders!
These days, effective organizations are built around highly skilled teams, driven by a new management model. Research has shown why a focus on teams, not just leaders, is the key to success in running a business. And how organizations must rethink their leadership strategy, focus on culture and commitment, on-demand deliveries, and organizational learning. It also called for new ways to provide data, analysis and digital tools to help people operate, share information and work well together. Deloitte has identified four keys to experiencing success with this new organizational model:
1. Shared values and culture
Because many people work in geographically dispersed teams, they need guidelines and value systems to help them decide what to do and how to arrive at decisions. These attitudes are driven by their mission and values – hence the enormous interest in understanding, measuring, and aligning companies’ cultures (86% of the companies voted this as being the most important trend in business today).
2. Transparent goals and projects
People who work in teams and small groups need to work with other teams, and it’s not possible to accomplish this without the company having goals that are clear, global and well communicated so that people can understand the parallel objectives of other teams.
3. Feedback and the free flow of information
While operations teams and customers interact with the company, information about what is working, what is not working, what is selling, and what problems need to be solved needs to be shared.
While the leaders’ and teams’ local management must take immediate responsibility for any potential failures, additional groups will need to know what problems are occurring so that they can support any team’s eventual needs. Usually, this happens through digital information centers, such as dashboards, analysis panels, and free-flow feedback systems. Deloitte’s research also demonstrates that performance solutions require open and transparent feedback, as well as building an open and inclusive culture. A step beyond even team feedback would be to conduct an organizational climate survey.
4. People are rewarded for their skills and contributions
Finally, a “team network” management model rewards people for their contributions, not the position they occupy on a team. The days of “positional leadership” are coming to an end, to be replaced by growth and career progression based on skills, alignment with values and contributions to the company.
These changes have been going on for years, but are now accelerating because of the widespread use of digital technology, a younger, more demanding workforce, and the need for business innovation.
Artifacts such as organizational charts, job descriptions, performance appraisals, and rigid career plans are being reinvented, reformulated, or even just thrown away.
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The revolution is structural
The survey found that only 26% of large companies (>5,000 employees) are functionally organized (between sales, marketing, finance, engineering, services, etc.), and 82% are in the reorganization phase, have plans to reorganize or have recently been reorganized to be more sensitive to customer needs.
The question of structure is very dynamic, as we all know: among these companies, only 8% believe that their structure is optimized and only 4% have no plans to change. GE, Cleveland Clinic, and most of the other companies interviewed in the project told stories about how their functional structures were obsolete and that this new “core team” used the millennials’ potential, driving innovation in customer service, making it possible to better manage and share information because of digital technology.
The problem that companies face, however, is how to coordinate and align these teams, how to get them to share information and work together, and how to move and reward people in a company that no longer works on the basis of an “ascending mobility” (where only the upper reaches of company hierarchies are rewarded).
Some of you may remember the old-fashioned “matrix organizations” in the 1980s, where employees remained in the same position until the end of their career. Well, today a matrix makes a company look more like the Hollywood film industry, where people take their skills and competencies, work on a “movie” (a project), learning along the way how the project functions, and, as they adapt, they move to the next “movie”, taking with them their increased knowledge. This is what we call human capital; when everyone brings knowledge, skills and personal attributes to perform their tasks with the goal of producing economic value.
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Bio-inspired change management
In its report, The State of Human Capital, McKinsey addressed the need to see the organization as a living organism. The organisms that are the most successful in evolutionary terms are not the strongest, but the ones that are the most adaptable. Companies that wish to continue to exist must show that they can adapt to the demands of an environment that has become increasingly dynamic and competitive. To do this, they must implement structural, strategic, operational and tactical changes. The most significant challenge, though, is engaging people and getting them to cooperate in the execution of new processes.
Therefore, according to the consultancy, the development of leadership is among the leading challenges of talent management. Processes need to be streamlined and ways found to demonstrate that training can boost the company’s bottom line.
The study also emphasizes the importance of evaluating departmental databases through the use of new analytical technologies. “HR has a lot of information. It can be a bottomless database for the company,” the survey suggests. The more a company can measure its impact, the more effective will be in this new scenario. This is the trend known as People Analytics – the process of collecting, organizing, and analyzing employee behavior data with the intent of using that information to contribute to decision making in a company by anticipating trends and enhancing strategies.
McKinsey is also committed to the inclusion of all employees in organizations’ strategic planning. It is a trend that focuses on decreasing hierarchies inside and outside companies while also making them more flexible, in addition to exchange relationships oriented by shared purposes. The socially driven evolution in changing the employer/employee relationship is creating new challenges and potential solutions that are different from those faced by previous generations of leaders. The “new organization” requires independent, mature, globally driven teams, younger leaders, and a new talent management model.
Although there will still be upper-level positions in companies, leadership is now becoming a “team sport,” where leaders must inspire and align teams, but also be good at connecting with other groups. Also, they must share and make the best use of people and their abilities. Companies should invest even more in leadership development and automate transactional and repetitive functions, allowing leaders to be wholly dedicated to nurturing and caring for the evolution of culture and talent.
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Investing in talent management is a trend!
Look at any discussion forum on talent management, and you’ll find some version of this question: how should leadership act to further business success? Well, to lead better, leaders must delegate better, distribute tasks to their teams in an organized way, allowing them to understand what needs to be done, to give them better control of their work. To help with this, we present Runrun.it, a project and task management tool that generates reports on the performance of professionals and the development of projects. Try it out at no cost: https://runrun.it/