Hidden Talent

Peter Cheese has over 27 years’ experience in HR consultancy. Here, he tells Matt Buttell why HR’s role in talent management operations has never been so important.

“We haven't suddenly solved all of the skill shortfalls or reversed globalization or whatever, but the issues around talent today are a little more focused around other things”
-Peter Cheese, Accenture

In recent years the corporate environment has seen a coming together of a number of very significant trends, which have driven the focus around talent management and pushed HR to the top of the corporate agenda. Or so Peter Cheese, Managing Director of Accenture’s Global Talent and Organizational Performance practice, would argue. “You can see that the issues of attracting and retaining talent and building high-performance cultures have really have moved up amongst the top issues that CEOs have been worried about in recent years,” he says. “This is because it’s very hard to globalize your business and be competitive if you can’t attract and retain the right talent, and at the same time, because of the shortfall of skills and the rapid phases of growth that we’ve seen in the last five years, that applies a lot of pressure and perpetuates something of a buyer’s market for skilled people.”

Cheese offers an interesting perspective into the area of talent management. Looking back, his academic background is in the human and organizational psychology area, an interest in which he has maintained throughout his professional career. And, in addition to his current role at Accenture, he is also a well-known speaker and author. In 2007, in fact, he was the lead author of the critically-acclaimed book The Talent-Powered Organization, which explored the challenges around global talent management, and the strategies and responses to those. “My current role,” he explains, in reference to his role at Accenture, “which I have had for the last six years or so, allows me to work all over the world and across every industry sector.

“It has been a really interesting time,” he continues, “and we have seen a big growth in the appreciation and importance of thinking about talent in a very broad sense, not just for high performers but for all of the workforce skills and capabilities, as well as the improvement of the HR function and its ability to act in a more businesslike and strategic fashion.”

An interesting time indeed. In many ways, argues Cheese, the spotlight is really on the HR function and its ability to respond to the current market on a strategic business level. “HR really needs to engage with business leadership on understanding the business direction and linking that to these issues of human capital, strategies and putting in place the right sorts of HR capabilities – particularly around integrated talent management – to address these kinds of issues.”

Problem solving
Another huge issue for the whole talent management space is related to the recession and the way the war for talent is operating in today’s markets. “The context hasn’t changed as such,” says Cheese, “it’s not like we have suddenly solved the talent supply issue, but what has happened in this recession is that people have slowed down on their recruiting efforts and there is much less mobility of people in the workspace.”

But what this actually means is that, although people may be staying put during the bad times, it is not necessarily because they feel more engaged or are feeling better about the way (or where) they are working. Instead, HR leaders need to realize that the tough times actually offer an opportunity to really think about the skills and capabilities that they already have at their organization: “It’s an opportunity to think about how you are organized, and think about corporate culture,” agrees Cheese. “People are really starting to think much more critically about their workforce, about what they need, what skill gaps they’ve got and what they are going to do to retain the right people going forward.”

But where does the responsibility lie within an organization? Should HR departments be taking on a stronger sense of leadership? “My answer to that is absolutely they can and they should,” says Cheese. “It’s always been interesting to me, if you go back five, six or seven years, that so many of the conversations amongst HR people tended to be, ‘We want to be more strategic. We want a seat at the table’ – and my message in the more recent years has been, quite frankly, that the seat is there.” The only question HR professionals need to ask themselves, Cheese believes, is whether they are capable of filling that seat. Business leadership is increasingly recognizing that having the right people and the right corporate culture is not just an HR issue, but is a strategic business issue from the CEO down. “And if the CEO is asking those questions and is turning to HR leadership for the answer, the only question you have to ask is are in a position to respond?”

And because of this, Cheese says there’s never been a more exciting time to have been in HR. “I know in the current recession that can sound like a somewhat contrary statement because there’s a lot of HR people under immense pressure as organizations try to right size and so on, but more broadly, thinking through the recession and what’s been going on in recent years, HR genuinely has go to take its seat at the table, be strategic, be a credible business function alongside any other, and play its part in the strategy and execution of the business.” Cheese goes on to say that he can think of many good examples of HR leaders and HR functions stepping up to the plate, and top HR professionals being, not just a seat at the table, but part of the in ‘inner sanctum’ of the organization, though he fails to give us any specific names.

“There’s no doubt that there is a cohort of senior HR people in that sort of space,” explains Cheese, “and interestingly some of those HR people – not just the head of HR but at other levels, in particular in business partner roles – have come from inside the business.” In the past, there has often been a problem with HR where there were not enough people with real business appreciation and basic business skills, such as good finance skills, the ability to understand and articulate business strategy and what that means in terms of the organization and the people, but Cheese says this is all changing.

“If you look at two of the most important skills in HR today, one of them is financial skills, because the cost of labor in most organizations is one of their single largest costs. It is also the source of greatest value, and if you look at market value companies the largest part of market value is intangible value, and the largest part of that is people. So having that insight and ability to understand the financial levers that are very much in the hands of HR is a critical skill set, and is something that has not been a strong skill set of HR in the past. The other skill is marketing, and that’s important because when we think about talent management and where that’s going, it really is embracing marketing ideas and marketing skills so that you can really understand the workforce.”

The crazy thing is, argues Cheese, that many organizations across America actually understand their customers far better than they understand their workforces. “Isn’t it ironic that we have all these marketing tools and analytics that enable us to understand every marketing segment and what each different segment buys and what motivates them and so on, yet we can’t say the same thing about our workforce?” He argues that that is exactly what we need to be able to do: “We need to be able to understand the skills and capabilities of the workforce, understand the motivations of the workforce and recognize the diversity of the workforce. We are experiencing more and more diverse workforces and we need to be able to direct employee value propositions and talent management practices in a much more targeted way to those different workforce segments. That’s classic marketing stuff.

“It also speaks to, of course, the maturity of the HR function in that it is able to deliver consistent HR practice and services by tailoring them to different segments of the workforce based on good information and good analytics,” adds Cheese. “So advances in how we are viewing talent management are truly professionalizing the HR function so that it’s not just a transactional or administrative function but is a truly value-adding function in the ways that it absolutely can be, and in today’s world and going forward, needs to be.”

Booking up
Working across the globe, Cheese has been provided with the opportunity to meet organizations in literally every market around the world and talk to business leaders and heads of HR about all these issues. He was also able to work with other business schools and universal organizations to get a clearer view of the incredible growing pressures around talent and skills that Cheese has previously mentioned. “I wasn’t alone in describing this perfect storm of a shift in the demographics, new generational values, shortfalls of skills, globalization, rapid change, rapid need for up-skilling and re-skilling and all those things coming together,” he explains. “And this proved that true business understanding, finance understanding and being able to add the value that was needed in helping organizations understand the impact of these bigger trends, were critical global issues.”

The result of these findings became the basis for Cheese’s 2007 book. In it, Cheese explains how we have now shifted from the old idea of the war for talent, which was fundamentally about how you attract and retain the very best, to a world where it’s about every kind of talent that you need in the organization – every skill at every level that you needed for the organization to be successful.

“The old paradigm of talent management being about high potentials and recruiting the best has changed,” Cheese explains. “The war for talent has gone global, and it is now about every kind of skill and really making organizations think strategically about what the options are to source the talent that could be very different from the places I’ve recruited from before.

“So I’d seen all of that going on, and in essence what the book was about was to try to draw some of those experiences together, talk about the context, about the practices and the responses. It wasn’t good enough to just say, ‘Aren’t there a lot of issues?’ we had to ask, ‘What can we do about it? What is good practice?’”

The book also attempts to look all the way from the most strategic positioning and understanding of human capital to the need for better measurement and analytics across all industries, so that HR professionals can have a better insight into the art of human resources. “By building the capability around talent management to what truly integrated talent management looks like, we are able to understand what that means for an HR function,” notes Cheese. “It’s about taking that very broad context and trying to pull it in and asking, ‘how do I respond as an organization all the way from strategy down to the execution of elements of operational HR?’

“I mean, we haven’t suddenly solved all of the skill shortfalls or reversed globalization or whatever,” he continues, “ but the issues around talent today are a little more focused around other things. What I have observed is all of the things that we talk about in terms of the response – having a clear strategic context, building the right talent management capabilities, and so on – are absolutely relevant today.”

Cheese adds that sometimes these issues need to become even more urgent, because, as he says, if we don’t force some of these things out and we’re not clear about what we’ve got in terms of our workforces and we’re not using the opportunity to improve our current management practices, then we’re going to suffer even harder when the upturn comes. “People will leave,” he offers, philosophically, “the availability of skilled people will be no better than it was when we went into the recession, and that will prove to be very challenging.”

In closing, Cheese talks about the current acceleration among our workforces to think about how companies can get more out of what they’ve got, create more synergy across their businesses, manage their people better, get them to connect better, to innovate more, and, fundamentally, to get more out of their talent. He puts this acceleration down the to impact of the recessionary climate we are currently experiencing. “I think many people point to the recession of the early 1990s as having accelerated workforce mobility, and we’re certainly going to see that again,” he comments, “I also think we are going to see an acceleration in how we create more adaptive and more agile workforces and organizations, because we’re seeing a lot of radical change.”

And as certain industry trends are suggesting that the way in which people will use their talent and the way in which organizations can access talent will change, Cheese believes that organizations are starting to more openly use Web 2.0 technologies and the phenomenon of the internet to really collaborate, share and get involved. “That creates a very exciting opportunity for organizations to find new ways in which they think about not only connecting and accessing talent in their own organization, but reaching way beyond organizational boundaries and moving into a more collaborative world, both with their own customers and suppliers, and also with different organizations. And I for one think that’s good and very exciting.”

A global initiative
Peter Cheese offers more insight on the global trends in talent management
These trends that we are seeing in talent management have been going increasingly global. In my role I am able to travel a lot of the world – just recently I have been to Asia, Africa, and South America – and I can see these same trends in the emerging markets as an issue that they face as well.

And then of course, in many countries like India and Southeast Asia, where there’s been a lot of influx of clever multinationals coming up and hoovering up local talent, it’s created real issues for more local companies, which often do not have the good HR practices in place, nor systems to run them on. Suddenly these companies are finding themselves competing in a market with sophisticated global companies and that is creating other very specific local market dynamics.

What’s really interesting is to observe what is happening in places like China, which is a place where every company is trying to grow. The economies in these sorts of countries are growing fast, and there’s been immense competition for talent because there’s a general shortfall of the kind of employable skills that large companies need. Just like in other parts of the world this has created immense pressure, both for the global multinationals to be relevant in those markets through career people, but also for local companies to up their game in terms of the sophistication of their HR and talent management practices.

Leading by example
A look into Accenture’s award cabinet reveals that the global management consulting company already knows a thing a too about talent management.

In DiversityInc’s Top 50 Companies for Diversity, Accenture ranked No. 23 in 2009, up from No. 38 last year. Accenture was also named on two of DiversityInc’s Top 10 specialty lists: Recruitment & Retention and Global Diversity.

The company was also named among Fortune’s Top 50 World's Most Admired Companies this year, along side its inclusion in Fortune’s Most Admired Companies list. Fortune magazine also included Accenture in its 2009 100 Best Companies to Work For List.

Also this year, Accenture also ranked No. 18 among the Best Employers in India by Hewitt and Outlook Business magazine; ranked No. 1 among the Best Workplaces in Sweden by the Great Place to Work Institute; and ranked No. 11 among the Best Workplaces in Portugal, again compiled by the Great Place to Work Institute.

Lastly, DiversityMBA ranked Accenture No. 4 on its 50 Out Front list, honoring the best companies for diverse managers, both for diversity representation, retention and accountability, as well as programs that benefit female and diverse employees.