IT StrategyRaj Sheelvant’s blog on harnessing Information Technology to create and sustain competitive advantage for the businesses

‘Just in Time’ Talent Management

“Managing supply chain is about managing uncertainty and variability. This same uncertainty exists inside companies with regard to talent development. Companies rarely know what they will be building five years out and what skills they will need to make that happen; they also don’t know if the people they have in their pipelines are going to be around.” Thus, Wharton management professor Peter Cappelli draws a compelling parallel between Supply Chain Management and Talent Management in his book titled Talent on Demand. Also read a good overview of this book is at Knowledge@Wharton.

Cappelli has defined the term “Talent Management” which simply means “trying to forecast what we are going to need, and then planning to meet that need,” and according to the author, the definition of supply chain management is essentially the same: “We think that demand for our products next year is going to be ‘X’. How do we organize internally to meet that demand?” Organizations have made phenomenal progress in Supply Chain Management over the past couple of decades. Using IT, companies like Dell, Wall Mart, and UPS have streamlined Supply Chain. But for some reason Talent Management has not gotten the same level of attention by any organization. According to the author, part of the problem is that many companies are locked into an older paradigm based on the assumption that they can accurately meet their talent needs through static forecasting and planning models, even though the global marketplace is an increasingly unpredictable. Thus, companies can now exploit their understanding of Supply Chain management and apply it to its Talent Management. One of the Supply Chain practices that Cappelli relates to Talent Development is shortening the forecasting cycle. It’s well documented fact in Supply Chain Planning, that shorter forecasting cycle leads to diminished ‘Bullwhip effect’ – a major problem with inventory management. Shorter and more frequent dynamic forecasting will lead to ‘just in time’ need for talent. Thus the propensity to mismatch between supply and demand for talent can be mitigated.  Mismatched supply and demand for Talent is the biggest challenge faced by organizations according to McKinsey study titled “Making Talent a Strategic Priority”. (Also read my blog War for Talent?).

Both Cappelli and the McKinsey study point that companies are still lagging behind when it comes to adopting more efficient talent management techniques. A new approach to talent management is needed for two key reasons, according to Cappelli: On the public policy side, companies are not developing the talent the U.S. needs to stay competitive. On the employer side, most of the companies aren’t doing talent planning, or their planning is wrong, even as their ability to hire on a just-in-time basis is eroding.

It’s surprising to find that in study after study results show that, firms are poorly managing their talent. Why is it so difficult? Is it because of organization structure in which HR is not involved in setting up Business Strategy for the firm and are thus unaware of the talent need? Organizations cannot afford to continue traditional talent management.  Hypercompetitive global environment calls for ‘Just in Time’ Talent Management.

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Wednesday, March 19th, 2008 at 6:58 pm and is filed under Talent Management, Human Resource, Globalization, Business Strategy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.