CEOs must inspire and lead while setting strategic direction. A critical factor for achieving growth and profit objectives lives in the weeds. Talent assessment, powered by the marriage of culture, retention, and the future of HR (aka people analytics), is a promising frontier for high-level growth that many CEOs miss.
People Analytics and Talent Assessment: The Rundown
People analytics can be broken down into two components: metrics and people (aka talent), both of which are an integral part of a CEOs’ strategy.
Metrics: The job of the CEO is metrics-driven. The buck literally stops on her desk and the ability to use data to support and evaluate strategic decision-making is essential. Analytics and feedback are becoming fundamental tools for running a business effectively.
People: CEOs realize the value of talent to achieving their mission. The general consensus, though, is that they are unprepared to meet the talent-challenges that will define the success of their businesses. Recent surveys of more than 500 business leaders identify major gaps between the perceived value of talent and the readiness of organizations to manage it. Additionally, at a recent conference, CEOs were asked what topics, aside from their Board of Directors, Revenue Growth, or Data Protection Laws, “keep them up at night.” The top answers, which may surprise you, were: Values and Behaviors, Culture, and Retaining Employees.
Since CEOs are increasingly focusing on both people and metrics, they need tools and systems in place to synthesize and streamline these factors. Enter talent assessment: the science of measuring people in order to predict their ability to drive business results.
Talent assessment represents the intersection of people and metrics. It’s a no-brainer that it should be a critical part of any CEO’s game plan. Yet it’s generally an afterthought. It’s often bolted on at the tail end of bigger concerns related to HR technology systems – if it’s even used at all. It’s almost never seen as a strategic tool that can help drive measured impact, which is a missed opportunity.
CEOs should have talent assessment top-of-mind and any CEO who says she is concerned about talent in her organization but doesn’t use talent assessments is not putting her money where her mouth is. This is an epic fail.
CEOs already know enough about talent assessment to be dangerous, but that does not mean they will they have used them properly, or even at all. Talent assessment is actually in perfect interlock with a CEO’s priorities. Here’s why you need to take action and be the difference maker in your organization:
Investing in Talent Assessment = Investing in Profits And Organizational Culture
CEOs know that getting the right talent in the right place is critical to all business outcomes. Talent assessment has a proven track record of doing exactly this. Here are two important trends that are helping CEOs gain a line-of-sight to profits.
1. Talent assessments are used to understand profit, and they typically focus on
a. Cost reduction
Most companies stop here. That is the mistake.
2. The growing trend and emerging best practice, leverages talent assessments to impact beyond the focus above and include:
c. Team Performance
When CEOs invest in people analytics and talent assessment, they cultivate a strong culture, which ultimately drives profits.
Everyone is talking about culture, but what does it really mean in relation to identifying the right talent? How is it that an A-Player in one organization can be a C-Player in another? The short answer is that business cultures aren’t cookie-cutter or one-size-fits-all entities. The metrics of success in one organization can widely differ from the metrics of success in another. This is where talent assessment becomes essential.
In order to build a robust culture that supports your goals and growth, you need to evaluate the metrics that are most meaningful for your organization. The best and most accurate way to do so is via people analytics and talent assessment.
Most CEOs make a tremendous blunder in this area. When their HR team conducts a talent assessment, they use a standard off-the-shelf set of questions or assessments, that aren’t tailored to the organization. In reality, the assessment needs to use specific metrics that are customized to the organization’s talent and culture. Different elements in the assessment should carry greater weight or credibility, depending on the organization’s needs. This kind of assessment, centered in people analytics and metrics, will ensure that the organization acquires A-Player talent and that it retains this talent.
Talent Assessment Increases Valuation
Talent is continuing to define the valuation of companies via its impact as an intangible asset. When presenting their firms to investors, CEOs should have a detailed knowledge of each executive’s strengths, challenges, and fit for his/her role. Measuring and understanding the collective skills of an organization’s talent provides a framework for viewing key metrics of organizational success. Hello talent assessment!
Where the Rubber Meets the Road
Ask any CEO about talent and they will definitely tell you that it’s critical to their company’s success. But how many CEOs are truly raising the bar for how their organizations attract, hire, and develop talent?
Data suggests that most B2B companies today—particularly in technology, software and telecommunications—are lagging. They tend to rank lower on a maturity scale.
If you’re worried that you fall into this camp, there are action steps you can take right now to remedy your situation:
1. Determine if your team can get the job done by performing an objective assessment of your team against an A-Player Profile for each critical role in your organizational chart. Then dig deeper. Each company has their own set of criteria that separates the A-Player from the rest of the pack. Empower yourself with these specific metrics as well.
2. Measure Your Maturity. You can do so in four simple steps:
1. Know the metrics on which to focus for your organization.
2. Automate the collection and review of those metrics.
3. Embed those metrics into decisions in all areas of the organization.
4. Ensure culture and engagement levels are positioned for peak performance and an alignment of diversity to drive better productivity.
Most importantly, it all starts with knowing where you stand. Download the People Analytics Metrics Tool to understand if some of these basic metrics are being collected to improve your people analytics and feed our talent assessments.
People analytics and talent assessments are fundamental tools for smart leadership and strategy in today’s market. While CEOs may be unfamiliar with the specifics of talent assessment, they know the importance of metrics, acquiring the right talent, and ensuring their tools are tailored to their company’s needs/industry. If they fail to hit these marks, they’ll lose candidates and customers to their competition, and ultimately, miss their numbers.
If you would like to participate in a custom workshop focused on leveraging people analytics, bring your team to engage with a hand-picked team of experts in Dallas at , SBI’s executive briefing center.