Performance Based Government: The Talent Age Challenge for the Private Sector

By: Jon Desenberg

Jon Desenberg is the policy director for
The Performance Institute.

Talent is the Only Sustainable Edge
The talent age really is the product of the information revolution and the flattening of the world. What that means simply is that when the world is just flat—when you can access human talent anywhere—whether it’s for services or manufacturing, what kind of human talent your country or community or institution can aggregate and offer is really what John Seeley Brown and John Hagel, who are two management consultants, called, “the only sustainable edge.”
Thomas Friedman
The New York Times Columnist and Author
(Footnote: Interview in Business Strategies Magazine, May 2006)

Evolution to the Talent Age

Talent Drives Performance

Agency leaders have instinctively known that top talent drives superior performance—whether that realization is evident in an outstanding sales representative who consistently exceeds quotas or a brilliant engineer who develops the next product innovation.

Over the past half a decade, the way the government’s career leadership thinks about talent has evolved. Now, talent is a top of mind issue in the board room and the C-suite. Accordingly, these leaders are looking to HR to provide processes, policies, and technology to acquire, retain, and optimize talent in the organization. In fact, one study of executives found:
• 82 percent believe that human capital has an impact on profitability.
• 92 percent think that human capital has a significant effect on customer satisfaction.
• 72 percent believe that human capital has an impact on innovation and new product development.

Government leaders acknowledge that talent drives performance in the form of better customer service, higher sales performance, product and service innovation, organizational process improvement, as well as strong management and leadership. CEOs are cognizant of the significance and impact of aggregated work force talent. For example, in the IBM 2006 CEO Study, 41 percent of CEOs indicated that employees are the best source of innovation within an organization.

Increasingly, executive teams are looking at the assembled work force and even their external talent pools as corporate assets that can be effectively leveraged to create more taxpayer value.

Yet, the current work force climate is the most turbulent and challenging environment in the history of commerce.

The Government’s Talent Age Challenge
Top talent has never been more valuable, nor the competition for it more fierce.
– Fortune Magazine, January 30, 2006

In a survey polling more than 700 public and private sector executives, the number one challenge related to controlling costs and the other four related to meeting their mission requirements.

These top five organizational challenges are:
1. Financial Pressures to Cut Costs
2. Rapid Mission Expansion
3. Increased accountability and Transparency
4. Adapting New Delivery Mechanisms
5. Aging Work force

The current global work force environment may be the most challenging in history. A Senior HR Executive at the 2006 IBM Human Resources Summit said it this way, “Right now, globalization has created an absolutely screwed up, crazy world for any HR person—nothing has been more challenging.”

Consider this:

• 73 percent of managers claim that competition for talent has increased since 2005. (DDI-Selection Forecast 2006–2007 Report)

• New Zealand, Australia and South Africa lead the list of countries where work force skill shortages is seen to be the biggest constraint on expansion—60 percent, 59 percent and 58 percent respectively. (Grant Thornton International Business Report 2007)

• Increasing industrialization in Southeast Asia has led to rising levels of migration of skilled talent. Additional pressure is being generated by rising economies such as China and India.

• The U.S. will have a 10 million worker shortfall by 2010. (Bureau of Labor Statistics)

• The majority of workers in many countries is open to offers, actively job hunting, or plans to retire including in the U.S. (63 percent), France (69 percent), UK (70 percent). (Towers Perrin)

• Only 14 percent of workers are actively engaged in their jobs. 24 percent of workers are actively disengaged. (Towers Perrin Global Workforce Study)

• 500 largest companies in the U.S. expect to lose 50 percent of their senior management in the next five years. (Business Week, October 2005)

• 51 percent of executives cite lack of potential leaders as their first or second top talent challenge. (Bersin & Associates, 2007)

This dynamic global business environment is at the root of an unprecedented set of talent challenges. I’d like to use or time together today on the AGA Blog to discuss Talent Management. What is your organization doing to address these challenges?

TUESDAY: AGA Past National President Sam McCall, CGFM, City Auditor, City of Tallahassee, FL, "Compliance with IIA and GAO Peer Review Standards"

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Comments

[Michael Tracht, CPA]

The government and industry has to focus more on developing talent. I think that is a dramatic change from the past where the attitude was that the talent and experience will just show up. For example, as we see from all the problems there has been in the financial services industry as the result of the sub prime mortgage crisis that leaders of companies should work more on looking for employees that have more than the abiltiy to make a profit but have qualities that include honesty and loyalty. Also, I see very talented people that do not get attention or consideration because management does not have good human capital management skills to recognize their potential. I can see the difference in performance between companies and agencies that emphasize serious human capital management versus those that view everything only from the top.