DEFINITION: Talent Risk Management (TRM) is the process of assessing your current technical/professional capacity* compared to the expected three- to thirty-six-month demand, aligning your organization around which risks are a priority, and then taking mitigating action to level workloads or transfer knowledge and skills to reduce the highest risk.
Talent Risk Management uses detailed, targeted data to monitor your talent risk profile and tune the makeup and readiness of your team. It means the financial impact of your risk at any time is known. It means you can say with justifiable confidence that you have enough of the right people with the right skillsets in the right place at the right time to stay productive, innovative, and competitive.
As I mentioned in a previous post, my new book on Managing Talent Risk (release Spring 2017) will showcase my recent work in the young, burgeoning field of talent risk management.
Defining & Solving Talent Risk Management Problems
While we here at The Steve Trautman Co. have solved knowledge transfer problems in the heart of blue-chip companies around the globe for decades, it turns out that having a great knowledge transfer process is only one piece of the talent risk management puzzle. The ability to assess and mitigate talent risk on an ongoing basis is the larger imperative. Through our firm's consulting work, we've found that giving organizations a better way to zero in on relevant talent data so they can talk about their risk and align on priorities is the greatest pain point we can remedy today. So much so that it was time to write a book about it. Here’s a sneak peek at my framework for a better TRM process:
Our 3-Step Talent Risk Management Process
1. Assess the Talent Risk
I’ve made the case in past blog posts that most business leaders find it incredibly challenging to manage talent risk well. I hear this pain point from senior executives at major corporations nearly every day. A key obstacle that has stymied executive efforts to get a handle on some of their most critical talent risk is something I call “the technical fog.” Executives sit on one side of the technical fog and their key technical and professionally skilled people sit on the other.
For example, many executives know their most valuable technical experts by a short label like, Alex is my “security guy” or Riya is my “database whiz.” If you asked the executive to explain much of what Alex or Riya actually do, the fog would come rolling in pretty fast. They just say things like, “Riya just works her magic.…” Managing day to day without a granular view of the technical expertise of each critical employee is not a problem most of the time—but when it is a problem, the fallout can become expensive and disruptive in a flash. Imagine what happens when the only engineer who knows how to run key operation systems in a plant and literally “turns on the lights” retires unexpectedly, halting production (true story). Or, imagine when the lead developer who solely understands the complete big picture architecture of a next-gen application representing about a $50 million revenue opportunity is suddenly poached by the competition (another true story). That is talent risk.
The first step in my talent risk management framework starts off with a better way to lift this technical fog and get at clear, measurable, relevant, and detailed talent data without having to add a fleet of statisticians and spend months data gathering. The tool we use—which I describe in detail in my new book—enables you to see the right talent risk data at the level of enterprise, business unit, and division, then on down to a global job family, and then all the way down to an individual worker—such as a critical technical expert and his or her unique skills that you rely on to do business. An organization can gather this data in hours or days, not weeks or months.
With this simple tool in hand, you can quickly and accurately assess your talent risk. You go beyond common practices that are insufficient like executive succession planning and targeting high potentials and you assess pockets of risk up and down your organization that can derail business—including at the level of the individual technical employee. Risks like critical single points of failure in a workforce, poor load leveling that could lead to burnout, over-reliance on contractors, no one setting the standard for tasks that require consistency, and underutilized or marginalized talent become immediately clear.
2. Aligning on the Talent Risk Priorities
The next phase of managing talent risk is aligning the leadership team in your organization around which talent risks are currently a high priority. Leaders use the detailed information from Step 1 to present their team’s talent risk profile to their peers and get feedback to ensure everyone has a common view of the risks. As a group, they compare their current technical talent landscape to what’s needed to execute the organization’s short and mid-term business strategies. The focus is all about risk and priority.
In practice and as described in my book, our consulting firm shows clients how to run an alignment meeting that is attended by a senior executive such as a VP, Director and/or GM plus all of his or her direct reports, often five to ten managers. Each manager comes to the meeting owning a talent risk profile of their reports (developed in Step 1) that represents a work team or job family of about seven to twenty people per profile, which could include a combination of employees and contractors. Each manager presents his or her matrix of talent risk in no more than five minutes. Since everyone in the room (or on the phone) already reports into the same leadership, it is easy to move that quickly. A manager lays out the risks they’re intending to fix first, so that their boss and peers can agree or disagree on the priorities they’ve set. Any conflicting priorities will surface in the alignment meeting and are resolved through discussion and leadership calling a play.
3. Mitigating the Talent Risk
Step 3 is to take action by mitigating the prioritized talent risks. We’ve found that the best solution for quickly and thoroughly mitigating talent risk is structured knowledge transfer—a system based on the fundamentals of how people move knowledge and learn technical skills on the job. At our company we’ve made it our business for two decades to perfect the process of knowledge transfer—and you’ll find a lot in this blog and on our company website about how to do that.
Yes, there are other ways to effectively mitigate your talent risk—such as true apprenticeship programs and formal certification programs—but these tend to be more costly, time-consuming and aren’t always available. There are also plenty of efforts that are typically confused with talent risk reduction—such as competency models, demographic data profiling, succession planning, and rotational or job shadowing programs—but most of these are designed to solve general talent problems and only go part way to mitigating talent risk for your most complex technical roles.
More To Come...
The new book also includes the biggest talent risk myths that plague executives today, how to talk about the actual costs of not managing your talent risk, scenarios in which I model the new talent risk conversation for people up and down the command chain, other ways beyond knowledge transfer to manage (or fail to manage) talent risk, Fortune 500 case studies that show how my firm’s 3-Step TRM process is being applied in the field, and much more.
*Technical/professional capacity is the number of people who can currently perform specific technical and professional tasks consistent with a set standard.
Topics: Talent Risk Management, knowledge transfer blog, knowledge transfer, managing talent risk, talent risk mangement definition, definition of talent risk management, talent risk management process