Thursday, July 3, 2008

P&G and HSBC - Talent Factories - Some Observations

Make Your Company a TALENT FACTORY.
By: Ready, Douglas A., Conger, Jay A.,
Harvard Business Review,
June 2007, Vol. 85, Issue 6

Some companies face the future with confidence because they don't just manage talent, they build what we call "talent factories." In other words, they marry functionality, rigorous talent processes that support strategic and cultural objectives, and vitality, emotional commitment by management that is reflected in daily actions. This allows them to develop and retain key employees and fill positions quickly to meet evolving business needs.

In this article, we look at the people processes in two talent factories: Procter & Gamble and financial services giant HSBC Group. We selected these companies because even though they approach talent management from slightly different directions, both illustrate the power of a twin focus on functionality and vitality. P&G has established a plethora of elaborate systems and processes to deploy talent; HSBC has worked mightily to incorporate talent processes into the firm's DNA. Both companies can claim a free flowing pipeline of current and future leaders.

P&G offers formal training and development programs and sometimes sends managers to external executive education programs. The lion's share of development, however, takes place on the job, with the immediate manager's support and help from mentors and teammates. A typical marketing manager, for example, will have worked with a number of different brands over a period of time. A finance manager will have gone through various assignments, ranging from financial analysis to treasury to auditing to accounting. Most managers are also placed on important multifunctional task forces or project teams from time to time. New postings and task force participation are expected to challenge employees, and they signal to managers that P&G will always offer new opportunities.

The company also pays close attention to the effectiveness of its recruiting processes. P&G interviewers record detailed assessments of each candidate and assign them a quantitative score, using uniform criteria. The company then regularly assesses performance against the baseline set during the interviews. P&G also evaluates the success rate of its key promotions, using quantitative and qualitative measures that cover a three-year period. Managers who improve the business and its capabilities are deemed "successful"; the company has a success rate that exceeds 90%. When derailments occur, P&G conducts a thorough "lessons learned" review.

Douglas A. Ready ( is a visiting professor of organizational behavior at London Business School and the founder and president of ICEDR, a global talent management research center in Lexington, Massachusetts. He is the author or coauthor of several HBR articles, including "How to Grow Great Leaders" (December 2004).

Jay A. Conger ( is the Henry R. Kravis Research Chair in Leadership Studies at Claremont McKenna College, in California, and a visiting professor of organizational behavior at London Business School. He conducts human resources research with the Center for Effective Organizations at the University of Southern California's Marshall School of Business, in Los Angeles. His most recent article for HBR is "Developing Your Leadership Pipeline," with Robert M. Fulmer (December 2003).

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