A detailed examination of leaders helps create value

With all the talk about “The Great Resignation”, concerns about how organizations will be able persuade workers to return to their offices after pandemic restrictions ease, and general issues about younger people’s expectations of work, executives often use the term “talent” to describe the ability to attract the people needed to grow their businesses. This discussion focuses on junior staff members or those at the middle of the hierarchy, and how to best attract and retain them. It is evident that senior executives can find it just as difficult to find the right talent.

Many organizations seem to be ignoring the importance of developing employees, particularly in the highest-ranking positions. While they talk about talent pipelines and such things, how often do they lose a leader without knowing who their successor will be? They end up relying on executive search firms to find the right person who will fit the culture and have the skills to move the organization forward. It’s not scientific. It is also not very efficient. There must be a better way.

This week’s book is from Anish, of private equity company General Atlantic, and veteran business advisor and author Ram Charan. In talent: The market cap multiplier (Ideapress Publishing), they argue “identifying and nurturing high-performing executive talents should not be an isolated corporate function outside the core leadership structure. It should be a key partner in creating business success.” Batlaw, he says, shares “an understanding, borne out of years of experience”, that agile, collaborative talent is more important than strategy in the chaotic drama of business success.

Private equity firms are known for their rigorous approach to evaluating the strengths, weaknesses, and prospects of the businesses they plan to invest in. Charan says that Batlaw developed a method that matches this diligence in examining executives, whether they are already in the job or are being considered. This system replaces the outdated practices of gut instinct and speculation that led to many inappropriate executive appointments over the years. It is based on the simple idea that the individual or group being considered will increase the company’s value. It expects a different approach from the chief HR officer. He will be expected to take a more active role in the company’s life and not live in a separate place. They will welcome this change. Others could be overlooked and rendered insignificant at a time where human resources departments are being re-examined from many directions.

The methodology is illustrated through case studies that examine companies from different industries and locations around the globe. Some operate only within their own country, while others cross international borders. Others are run by women and men, while others are in high growth. Each employs a “talent playbook” in order to speed up the process of creating value.

These examples show that there is no denying the meticulousness and discipline that go into the evaluation of management. Batlaw and Charan advocate a people-first approach, but that does not mean they are not focused on the core business. Everything is guided by the best interests of the business. One of the most compelling stories is the one about how General Atlantic supported the executive chairman of a company when there was a disagreement over strategy. “The final decision about which executive would stay or go was made by keeping in mind the need to choose the leader who could create long-term value. This paid off well.

HEY! Could we ask you for a favor? Would you share this article with your friends? It costs you nothing and it takes just a second, but means the world to us. Thanks a lot!