All organisations, small and big, local, national and global need to develop and retain talent in order to do business in a fast-changing market place and market space. Developing talent is essential not only to win but also to sustain competitive advantage.
In some organisations the strategy of developing talent means identifying key employees (the potential stars) who are destined (assuming that their organisations do not ?let them go' in crisis situations) to become key players. For example, one Indian consulting company, with the help of senior managers, identifies a group of employees who are then gradually groomed to fill in senior rolls such as director or partnership positions.
In other organisations the developing talent strategy applies to all employees so that these employees can achieve new skills in order to enhance their organisational capabilities.
Talent can be categorized functionally as well as generally. For example, some organisations might want to focus on developing marketing talent, or financial talent, or design talent in their organisations while other organisations may want to focus on general talent by encouraging creativity, decision-making or developing leadership skills.
Whether one looks at this subject in a narrow sense or a broader sense, all organisations will agree that developing talent is a must if you want to manage complexity and achieve strategic business objectives.
Why is developing talent important today?
Even though one reads stories of redundancies every day, skills are still relatively in short supply. Multiple skills are needed to do business across different countries and across different cultures. Globalization (the subject matter of chapter five) has had significant impact on the way we do business today. Labor force is becoming internationally mobile. One of the key principles of the European Union is the creation of free movement of goods, persons, services and capital. Mobility is an important factor of the single market. Since business is becoming increasingly international and the market place becoming increasingly complex and more global, organisations need to have people with appropriate skills but, more importantly, develop these skills to keep abreast of market needs.
At the 10th European Human Resources Directors Conference held in Madrid in 2002, Odile Quintin, the Director General of the Commission's employment department, said that in tightening labor markets, there is a risk of companies starting to compete for the most qualified workers.
In addition, in Europe, ageing populations reinforce the importance of not just developing but also retaining talent within organisations. Such a strategy is important not only for commercial for-profit organisations but also for public sector and not-for-profit organisations. The public sector requires talented people to deliver cost-effective and efficient public services. The other reason for developing talent is to become a knowledge-driven organisation. Economies are increasingly based on knowledge. A growing chunk of production in the modern economy is in the form of intangibles, based on the use and exploitation of talent rather than physical things. More and more goods, from Mercedes cars to Nike trainers have increasing amounts of knowledge embedded in them, in the form of design and innovation. Knowledge is beginning to be recognized as a key capability if an organisation is to compete effectively in a global environment. To manage and lever knowledge involves the creation and transfer of knowledge. Such a process necessarily involves the development of individual talent, however, defined.
The third reason for developing talent is to become an innovative organisation. Innovation is related to the creation, use, sharing and integration of knowledge. Finally, doing business in the New Economy demands the recruitment and development of talent.