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Talent Management Column

The Great Circle of Talent Management

In the theory that what's old is new again, think talent management. So many leader-development practices being advanced today or in the recent past have their beginnings in the Great Depression or World War II era.

Monday, August 20, 2007
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There is a great deal of interest these days in talent management, especially in programs for developing managers and executives. I came across the following interesting examples of developmental programs where the explicit goal is to meet the shortage of talent in the general manager level by trying to grow it from within, straight out of college:

Lehn and Fink Products, makers of Lysol and other cleaners, set up a program to develop general managers from college recruits that innovated in the process of selection by focusing on predictors of general leadership ability through extracurricular activities, especially athletics, as opposed to grades and coursework.

The new recruits begin in low-level jobs in different areas of the business, including front-line jobs, moving them about every six months, before moving into more traditional developmental assignments.

The Curtis Lighting in Chicago has a development program where newly hired college grads not only rotate through each of the company's 10 departments, but along the way, they receive a modular program of 100 classes led by the department heads on aspects of their business. The goal of the sessions is not only to learn about the functions of the company but specifically to focus on integration and cross-functional issues. 

The Public Service Company of Northern Illinois has an innovative high-potential program to identify the employees within the company who have demonstrated the aptitude for more senior-management positions. This program is open not only to newly hired college graduates but to every employee, including front-line workers. The criteria for selection among the current employees are performance in one's current job and evidence of leadership behavior on the job. 

It's hard to talk about development without mentioning GE. Here, the innovations are in the use of peer feedback. After extensive classroom training and three-month rotational job assignments, newly hired candidates in management development receive constant peer feedback in a formal process where the goal is to develop emotional-intelligence skills. These feedback scores also feed into the rating of their potential for higher management positions.

Oh, I forgot to mention what year these programs occurred. It was 1926.

The Great Depression and then World War II put a big damper on development efforts, but after that, things really began to take off. Here are some examples: 

* The Studebaker Company became one of the biggest proponents of testing to select management trainees. After on-campus interviews, candidates were brought to the company where they were then given medical exams; IQ, vocabulary recognition and math tests along with vocational interest/aptitude batteries; and finally, standardized interviews. The medical tests were justified on the basis that it only made sense to commit to substantial investments in employee development for candidates likely to survive into middle age.

* The McCormick spices company created a "junior" board of directors composed of 17 promising junior executives -- to give these young executives the opportunity to wrestle with the same kinds of business problems the real board of directors was addressing. Their recommendations were then considered by the company board. Sixteen of the 20 members of the company board of directors in 1949 had been members of this junior board. This technique, which became known as "multiple management," was adopted by a number of prominent companies. McCormick also pioneered performance ratings by one's peers on this junior board.

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Everything cool that is being done now in talent management was developed in the late 1940s and 1950s. Don't think so? How about this list:

* Forced-ranking systems were invented by the U.S. Army at the beginning of WWII to try to identify those among the enlisted ranks who should be promoted to officer level. They found that traditional appraisals failed to differentiate candidates but that forced rankings did a surprisingly good job. Sound familiar? Forced rankings became a common practice in the 1950s.

* 360-feedback systems were invented by the U.S. Navy during WWII. They found that the officers on the ground had little sense of which pilots had the skills and abilities to advance in training. Their peers flying with them did know, and their assessments proved to be pretty accurate.

* Assessment centers were created by the precursor to the CIA, with in-basket tests designed to simulate intelligence tasks. It took a little while for this to make it to industry, but there were examples in the 1950s.

* Executive coaching was a common part of development programs for managers in the 1950s. Virtually every large company had rotational-development assignments, work projects that looked like action learning, and assessments of managerial potential.

* Ninety percent of large companies had a dedicated manpower planning department in this period.

Given that all these practices were so common a generation ago, why do they all seem new now? We'll take up that question next month.

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