When does a com­pany build, buy or bor­row tal­ent?

The Star Early Edition - - OPINION & ANALYSIS - Leon Ayo Leon Ayo is the chief ex­ec­u­tive of ex­ec­u­tive search firm Odgers Berndt­son Sub-Sa­ha­ran Africa.

NOT HAV­ING the right peo­ple is a peren­nial is­sue many com­pa­nies face as they try to stay ahead of eco­nomic un­cer­tainty or adapt their busi­nesses to an ever-evolv­ing en­vi­ron­ment. A num­ber of fac­tors are in­flu­enc­ing the way com­pa­nies re­cruit and re­tain their top tal­ent.

PwC’s 2017 edi­tion of The Africa busi­ness agenda iden­ti­fied tech­nol­ogy and tal­ent as key con­cerns on the minds of chief ex­ec­u­tive’s from around the world. Au­to­ma­tion is in­creas­ingly seen as a threat to job se­cu­rity while more than half of African chief ex­ec­u­tives – 52 per­cent – (Global: 53 per­cent) are con­sid­er­ing ex­plor­ing the ben­e­fits of hu­mans and ma­chines work­ing to­gether.

The sur­vey also found 80 per­cent of African chief ex­ec­u­tives (Global: 77 per­cent) view the avail­abil­ity of key skills as the big­gest threat to growth.

So­lu­tions such as em­ploy­ing a wider mix of skills than pre­vi­ously thought and ex­pand­ing searches to dif­fer­ent ge­ogra­phies, in­dus­tries and de­mo­graphic seg­ments are be­ing con­sid­ered. Chief ex­ec­u­tives there­fore must con­sider al­ter­na­tive strate­gies for hu­man tal­ent and whether to buy, build or even bor­row.

When Eth­i­cal Elec­tive Place­ment change is re­quired in an or­gan­i­sa­tion, es­pe­cially dur­ing times of in­creased com­pe­ti­tion, bring­ing in tal­ent from the out­side – es­pe­cially se­nior strate­gic and in­no­va­tive lead­ers – is cru­cial.

There are many South African busi­nesses, in the highly com­pet­i­tive re­tail in­dus­try, for ex­am­ple, which are cur­rently strug­gling with the ques­tion of how to in­tro­duce real in­no­va­tion when hu­man re­sources poli­cies have tra­di­tion­ally fo­cused on tra­di­tional HR de­vel­op­ment strate­gies. The big­gest risk of buy­ing in tal­ent, es­pe­cially at ex­ec­u­tive level, is of course that the tal­ent may be re­jected by the com­pany team mem­bers.

There is a real chance that bring­ing in a “turn­around king/queen” to change the for­tunes of a busi­ness could be so dis­rup­tive that such an in­di­vid­ual is even­tu­ally pushed out by an or­gan­i­sa­tion un­will­ing to ac­com­mo­date the in­no­va­tion re­quired to take it to the next level.

It is cru­cial that deep com­mit­ment to change is not mere lip ser­vice but is an in­te­gral part of an or­gan­i­sa­tion’s cul­ture to en­sure the suc­cess of out­side tal­ent brought in at se­nior level, es­pe­cially in large, com­plex busi­nesses.

Strik­ing a healthy bal­ance

In­fus­ing new tal­ent, even if only into the up­per ech­e­lons of an or­gan­i­sa­tion, can never be an ex­clu­sive strat­egy, how­ever. Part­ner­ing new tal­ent with the ex­ist­ing work­force, and cre­at­ing ro­bust suc­ces­sion plans, are key to sus­tain­able suc­cess over the long term.

Build­ing a strong tal­ent pool for fu­ture growth will ul­ti­mately de­pend on strik­ing a healthy bal­ance be­tween re­cruit­ing tal­ent from out­side a busi­ness, and train­ing for in­no­va­tion from within.

Many large com­pa­nies have this at grad­u­ate level, in­vest­ing heav­ily in re­cruit­ment, search and se­lec­tion to em­ploy in­di­vid­u­als best suited to train­ing within the par­tic­u­lar or­gan­i­sa­tional cul­ture. The chal­lenge is augmenting this tal­ent – group think can eas­ily kick in when em­ploy­ees have all been im­mersed in the same cul­ture and un­der­gone sim­i­lar train­ing pro­grammes. The key is ex­pos­ing up-and-com­ing or­gan­i­sa­tional lead­ers to global mar­kets and de­ploy­ment op­por­tu­ni­ties, in­clud­ing sec­ond­ments, and stud­ies ei­ther lo­cally or abroad such as in­ter­na­tional MBA pro­grammes.

In­ter­nal global mo­bil­ity, es­pe­cially within large multi-na­tion­als, is in fact a key met­ric in the “build or buy” de­bate, since it es­sen­tially gives a com­pany the best of both worlds. Global in­sights and en­vi­ron­men­tal stim­u­lus from out­side the busi­ness speak to the “buy in” ap­proach (while re­duc­ing the risk of cul­tural fit), but ro­tat­ing tal­ent among busi­ness units in­ter­na­tion­ally also serves to build and de­velop di­verse tal­ent pools from within the or­gan­i­sa­tion.

A third op­tion com­pa­nies may wish to pur­sue for par­tic­u­lar busi­ness ob­jec­tives is “bor­row­ing” tal­ent. This in­cludes bring­ing in part-time or free­lance em­ploy­ees and in­terim man­agers to man­age short­term change projects or dig­i­tal ini­tia­tives. Given the chang­ing na­ture of the work­place, a con­tin­gent tal­ent strat­egy is a flex­i­ble re­sourc­ing model with numer­ous ad­van­tages – in­clud­ing min­imis­ing the risk of “or­gan re­jec­tion” by the or­gan­i­sa­tion.

Over an ex­tended pe­riod, “bor­row­ing” is an ex­pen­sive and ul­ti­mately un­sus­tain­able tal­ent man­age­ment op­tion. There is also the risk that con­tin­gent tal­ent will lack the nec­es­sary com­mit­ment to or­gan­i­sa­tional goals. How­ever, it can be very ef­fec­tive if what is re­quired is a per­son to drive deep change and real in­no­va­tion over the short term and then move on once the new strat­egy is in place.

Trans­for­ma­tion

In the South African con­text, the “build or buy” (or in­deed “bor­row”) de­bate is closely linked to the im­per­a­tive of trans­for­ma­tion. It may well be nec­es­sary to buy in eq­uity tal­ent at se­nior lev­els ini­tially, es­pe­cially if an or­gan­i­sa­tion has tra­di­tion­ally lacked such tal­ent. Hav­ing di­verse rep­re­sen­ta­tion at ex­ec­u­tive level will also fa­cil­i­tate build­ing a more sus­tain­able trans­formed work­force by pro­vid­ing as­pi­ra­tional role mod­els to up-and-com­ing eq­uity tal­ent within the busi­ness.

South African busi­ness lead­ers can­not en­gage in a “build or buy” tal­ent de­bate with­out tak­ing into con­sid­er­a­tion the needs of broader so­ci­ety. Build­ing a strong em­ployee tal­ent pool should not be aimed solely at fur­ther­ing the in­ter­ests of in­di­vid­ual or­gan­i­sa­tions.

Busi­ness should ac­cept that in­vest­ing in train­ing of young tal­ent does in­deed carry the risk that em­ploy­ees may seek greener pas­tures else­where. What is needed is a big­ger vi­sion – that of the quan­tum ef­fect of in­vest­ing in grow­ing and nur­tur­ing tal­ent – for the South African econ­omy as a whole and ul­ti­mately for cre­at­ing a bet­ter so­ci­ety.

PHOTO: SUP­PLIED

An MBA de­gree should pre­pare peo­ple for suc­cess in a world of new ideas.

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