A new weapon in the war for talent: decisions
Leadership supply, a/k/a the “war for talent,” is a perennial item on every executive’s agenda. CEOs and other leaders devote considerable time and resources to finding, developing and deploying the people they need in critical jobs throughout the organization. But the conventional tools—recruitment and retention efforts, training programs and the like—often do no more than keep a company in the game. Essential as they are, they rarely help an organization pull away from the competition. And they’re woefully inadequate for acute challenges such as expanding rapidly in a new market. A more fruitful approach, we have found, is to attack the talent issue from a different viewpoint entirely—that of decisions.
Ultimately, any organization’s performance depends on its decision effectiveness. Consistently high performers make good decisions, make them quickly and execute them well. They know which decisions are most important to creating value, and they make sure that those decisions get the attention they deserve. Research shows that decision effectiveness correlates tightly with financial results.
A focus on decisions allows executives to look at people issues differently. Rather than asking whether their company is winning the war for talent—a question that can be addressed only over a period of years—leaders can pose questions that are immediately actionable. Which jobs have the greatest impact on the organization’s critical decisions? Who are our best people, as measured by their ability to make and execute key decisions? How do we ensure that those top performers have the greatest impact on the important decisions? Actions based on these questions allow leaders to address talent challenges quickly and effectively.
Let’s look at how to go about it
Identify the positions with the biggest impact on decisions
An organization’s leaders must first determine which positions have the greatest impact on critical decisions. That depends, of course, on how the company creates value and on how it plans to grow in the future. A position as head of global IT, for example, will be more important in a company that relies on IT as a competitive advantage than in a company whose priorities lie elsewhere. The role of marketing director for Europe will be particularly critical for a company launching new products in the region. Often, however, the key positions are not high-level jobs at all, because the critical decisions must be made and executed farther down in the organization.
But who are those “best people”? Every company has a performance-assessment process, of course, but not every company assesses all the right traits. A decision orientation shows that one essential competency for leadership is the ability to make critical decisions quickly and well, and to see them executed effectively. If an organization doesn’t assess this skill directly, it won’t know who its best people are no matter how well it gauges them on other capabilities. Assessing decision attributes is especially important now, as today’s organizations often require a different set of skills than those needed in the past. Work is more collaborative. Decision accountabilities are distributed more widely.
Some companies find not only that they must focus their evaluation on decision skills, but also that they need to tighten up the entire performance-management process.
It is fashionable to rotate leaders to a new position every couple of years, on the assumption that this will broaden their experience. But once you put the right people in roles that have the biggest impact on key decisions, you’re likely to want to keep them there, because the jobs play to their strengths.
Matching individuals with jobs— and reducing the demand for talent
Once you know your critical positions and your top performers, you can assess the degree of overlap. But some companies may find that they are facing a talent shortage even when they have carefully identified key jobs and top performers. That’s when organizations typically step up long-term efforts aimed at boosting recruitment and retention. In the meantime, companies can redesign their organization and operations with decisions in mind, thereby making the best use of the talent they have right now.
While most companies understand the importance of leadership supply, they still find themselves struggling with practical ways to put the issue squarely on the table. A decision focus gives them a means to do so. It also sends two powerful messages: Decisions are what matter in this organization, and both people and processes will be evaluated on the extent to which they contribute to good, speedy decision making and execution. That kind of clarity frees everyone up to concentrate on getting things decided and done—and in the process, to improve the organization’s performance.