In a previous entry for this blog (The Missing Link ), we addressed the frustration senior management commonly experiences when it comes to achieving its strategic goals. It’s typical to make a strategic plan, communicate it, determine the most important strategic projects, and allocate resources, only to find that the results are not satisfactorily accomplished.
The first “suspect” in this failure is the lack of execution. As Ram Charan made clear in his book “Execution: The Discipline of Getting Things Done”:
“Execution is the missing link between aspirations and results… 70% of strategic failures are due to poor execution. It’s rarely for lack of smarts or vision.”
However, this lack of execution is usually not because of the team’s lack of commitment. There’s an underlying problem: Our talent has the skills we need for the organization to be successful “today,” not for the company to be successful “within five years.” The talent must develop more sophisticated skills to carry us into the desired future.
And how do we “justify” this investment in talent development? It’s not an easy answer, but it involves asking ourselves and senior management the following questions:
- How much would it cost the organization to not execute its strategy? That is, if the team continues to “operate” without evolving to where the company should be in the next five years, will it survive? Will it be profitable?
- Is it feasible to do “more of the same” of what we do today to survive in the future?
- What skills are crucial for our organization to be successful in five years? Who should develop them?
Determining a skill set that the company needs to develop through its employees means making an investment (not an expense), which is sometimes significant. However, this investment generally has a very high return on investment (ROI), as the consequence of not developing these skills is that the company will not survive in the long term.
Here’s an example: Let’s imagine a company from the automotive industry that’s an expert in maintaining internal combustion vehicles, which currently represent over 99% of the fleet nationwide. However, if its strategic objective is to be able to attend to the segment with high purchasing power that will own electric vehicles within the next five years, what skills should it develop?
Obviously, technical matters of batteries, energy consumption, software, self-driving vehicles, and so on come to mind. Yet, in order to move to a market segment with much higher incomes, it should probably also develop a commercial team with very specific skills related to dealing with this segment, such as app-based services, internet diagnoses that don’t require bringing in the vehicle to be checked, etc.
Whether they decide to develop their key staff members or to bring on new team members, it is critical to have the talent that is necessary for evolving the business from a maintenance shop for traditional vehicles to one for electric vehicles. That will be a key part of the investment: having the right talent to achieve the strategic goal.
What is the cost of not making this investment in talent? Losing the opportunity to evolve, that is, that the current business, which is already well-established, could experience drops in its profitability and eventually fail.
What conclusions can we make?
- We cannot evolve an organization if we do not have the talent with the skills we need to “create the future.”
- We need to start creating the future “today.” We can’t wait for the future to catch up to us… It would be too late.
- Talent development is a crucial (and very profitable) investment for attaining the organization’s evolution and sustainability as well as for reaching its strategic goals.
Developing talent is not a luxury. If we want to stay relevant in the market, it’s a need.
About the author:
Homero Villarreal Junco has led multinational teams both in Latin America and on a global level, achieving the transformation of not only organizations but also business philosophies. He holds a Master’s in Science from Georgia Institute of Technology and has been trained in KPIs, business coaching, and enneagrams. He is the Chief Executive Officer of IDESAA, a businessman, and a business consultant.