Talent is THE Competitive Advantage in the Modern Economy
Two confessions to start – I’m a big fan of Ram Charan, the principal author of Talent Wins (Harvard Business Review, 2018) and it’s a book about people, the foundational principle of the Flawless Execution℠ model. Those are my biases. So, the reader should expect my review to be positive. I will not disappoint.
Talent Wins is a short book about a big topic. Its fundamental assumption is that talent – the people or employees of a company – are the competitive advantage in the modern economy. Talent even trumps strategy. That’s a bold claim, but one I agree with. The book also makes the claim that CEO’s must deploy talent as successfully as they deploy capital which provides the logic for creating what the authors call the “G3” – a teaming of the CEO with the CFO and the CHRO to create a guiding triumvirate to meet the demands of a VUCA (volatile, uncertain, complex and ambiguous) environment. “Talent,” write the authors, “is king. Talent, even more than strategy, is what creates value.” To underscore this point, the authors continue by making a clear statement about talent that should stand as the mantra of 21st-century business: “. . . people, not companies, generate value.” There you have it.
The authors of Talent Wins ought to know. Ram Charan is a world-famous author and consultant to many CEOs. His co-authors, Dominic Barton and Dennis Carey, are the Global Managing Partner of McKinsey and the Vice Chairman of Korn Ferry, respectively. They are the talent in the talent game, so to speak.
Categorized as a ‘playbook,’ Talent Wins is written for CEOs. It’s an appeal to CEOs to recognize what really generates value for a company. Furthermore, it implies rather than forthrightly states that strategy follows from having and developing the right talent. If I have a criticism of Talent Wins, it’s that it doesn’t clearly layout that it’s the talent that collaboratively identifies how vision is achieved. Grand strategy is no longer the purview of a single brilliant mind, the CEO. Instead, direction is teased out of a corps of the best talent – what the authors identify as the ‘critical 2 percent.’
The authors come close to laying out what to me is a clear and direct relationship between strategy and talent. “A talent-driven organization,” they write, “fosters continuous learning and innovation, and allows breakthroughs to come from unusual places.”
There are several important points made by Talent Wins that CEOs, boards, and other C-Suite executives should take as wise counsel. The first is that talent requires continuous training. I was particularly pleased with that emphasis because the Flawless Execution model has always made that direct connection as a prominent part of the foundational tier of the model. “Training,” the authors write, “can’t be a sideline enterprise at a talent-driven company. . . The pace of technological change is so furious that the process of upgrading the capability of your people needs to be built into the daily fabric of your organization.” VUCA requires a perpetual commitment to training.
The second is the need to have ‘peripheral vision’ to both spot talent and consider sources of talent from industries that seemingly have no relationship to your own. The authors relay the value of peripheral vision in stories of Steve Jobs and Volvo who sought talent outside otherwise siloed industries to develop their brands and competitive position. The VUCA world requires new vision for how technology and customer demands evolve together to shape the market.
I’ve written a lot in the past about VUCA, as have many others. Like it or not (and some do like it), it’s the way of our world. The authors of Talent Wins get that essential fact and provide a playbook for leading talent in this VUCA world. It’s time for forward-thinking, progressive organizations to adapt to the new normal and cast aside the old HR hierarchies and processes. Those processes, write the authors, “. . . were designed for predictable environments, traditional ways of getting work done, and organizations where lines and boxes defined how people were managed.” In the VUCA world, talent must be developed rather than warehoused.