We recently solicited feedback from senior business and human resources (HR) leaders on the quality of strategic initiatives proposed by their HR teams. Based on their responses, three areas of improvement emerged:

  • Tighter business alignment.
  • Greater clarity of the proposed solutions.
  • Robust targets and measures.

Managing talent is one of the most strategic activities in organizations. A company’s ability to ensure sustainable supply and flow of talent in alignment with business goals and individual needs is key to success. And learning and development (L&D) has never been more central to those needs. Perhaps for this reason, expectations of HR and L&D have been increasing, including the frequent request to support colleagues develop their expertise in strategic planning.

Knowing how to set a powerful talent strategy for your organization will give you an edge.

How to Align Your Talent Strategy With Business Outcomes

There are five steps toward any successful talent strategy:

  1. Contextualize: Diagnose the environment to identify opportunities and issues.
  2. Strategize: Create options without judgment.
  3. Prioritize: Make strategic choices based on clear criteria.
  4. Evangelize: Build awareness and commitment in stakeholders.
  5. Realize: Deliver on this strategic intention.

5 steps of talent strategy

1. Contextualize

You can’t solve a problem or seize an opportunity you haven’t defined. Doing this requires a deep appreciation of the context. The most important aspect of that context is the business. Training leaders need to ask, “What talent conditions must exist if we are to deliver the business strategy?” The answer to this question may be very direct (e.g., a specific capability), or it could be indirect, such as the need to deliver a work environment that is most conducive to performance (e.g., a “highly engaged workforce”).

Good HR strategy responds to business strategy first, but also to the labor market. Not only must HR respond to factors like the demand and supply of labor, but also to the regulatory, social, and community considerations that impact that market. Contextualizing means asking, “What talent conditions must exist for us to meet this market?”

There is a third aspect to context: foundational needs.   Your talent strategy is likely to include foundational problems, such as low engagement or poor labor relations, or foundational opportunities, such as onboarding new hires or supporting new people leaders. While not responding to any specific business or external market factor, addressing the foundation is a prerequisite for higher performance practices that ultimately facilitate strategy implementation.

Generating the list may require significant time and energy as you consult with others, review external sources, and analyze business and/or HR and L&D data. However, without understanding the context, you’ll fail to build a strategy that adds value.

2. Strategize

Now, it’s time to generate multiple possibilities to accomplish the goals you set in step one.

Firstly, for each business or other contextual issue identified, you must identify the talent problem (or opportunity).  The business issue may be revenue growth.  The talent strategy addresses this by asking what long term talent goal must be achieved to advance the business context. The emphasis is on the goal, and the answer may be to deliver an agile, high performing commercial organization.

Goals work best when they are focused, so we suggest focusing on just three to five goals. To limit the number of goals, consolidate similar aspirations to identify that truly impactful goal which, if achieved, would significantly advance the business strategy.

With your plan in place, you can then identify potential tactics for achieving your strategic goal.

3. Prioritize

At this stage, you should have clear, strategic goals. You are likely to have a range of tactics identified in support of those goals, and it will be necessary to prioritize potential actions. Make prioritization a rational process rather than an intuitive one. This step involves reviewing your methods to assess their relative potential impact and the likelihood of successful implementation.

As it relates to a talent strategy, we assess impact (high, medium or low) by looking at how directly the action supports or addresses a business issue, responds to a labor market or external imperative, or recognizes an internal foundational need. The impact of any one tactic will be considered greater when it tackles more of these simultaneously.

After developing a strategic talent plan, it’s time to execute it. Putting your plan into action depends on two key factors: your capability (competencies and resources needed to ensure delivery) and your capacity (the time needed to deliver the work and the time of our audience to absorb the impact). We consider capability and capacity together when assessing ease of implementation. This further segmentation of tactical choices brings clarity of how realistic these strategies are.

4. Evangelize

Congratulations! You know what you want to do. Now you need to communicate it in a way that gets the support and commitment of stakeholders.

The best strategy is focused on the goal you will deliver, not just the action or activity you’ll undertake. These are your tactics, the inputs required to deliver on your output, that is, your strategic goal.

Our tried and proven formula ensures that we keep the business front and center as we communicate what we’ll deliver. Complete this sentence:

“We will support _____ (the business objective) by delivering _____ (the solution or strategic goal to the human capital problem) through _____ (the tactic(s) you’ll implement).”

For example, “We’ll support internet sales revenue growth by reducing turnover of software engineers through developing their leaders as coaches, capable of growing and retaining team members.” With this foundation, you can modify the verbiage, challenging yourself to find the most inspiring, clear, declarative and evoking language.

5. Realize

We fully realize our strategic plan when it delivers the goal we committed to produce. How will you know? By ensuring action is taken, monitoring progress and measuring results.

Monitoring means putting in place appropriate governance to help everyone stay on track. Governance around progress not only secures delivery but proves you to be an accountable partner to the business, committed to solving business problems through talent strategy. We encourage learning leaders to provide regular updates to business leaders on progress toward the plan.

To demonstrate progress – convincingly and credibly – you also need measures. Measures of your inputs (or actions) tell you how likely you are to reach your destination, providing you with a view of progress “en route.”  These are leading indicators. Leading indicators, such as the number of software engineers attending leadership development, are helpful, but be clear that this is a means to an end, not the end itself.

Some outcomes are easily measured, like turnover or labor cost. Other talent outcomes, like improvement in a key skill, are harder to objectively quantify. In our view, a less than perfect measure still beats no measure at all. It’s OK to be imprecise if a measure tells you whether you are progressing toward your goal.

Integrated Talent Strategy

Our five-step approach helps artfully bring together diverse, relevant inputs into a coherent whole. You’ll know why you do the things you do. You’ll make good decisions about how much time you dedicate to business related problem solving. Most importantly, you will build a differentiated strategy that is specific to your business and the labor markets you compete in.

Register for the next virtual Training Industry Conference & Expo (TICE), happening October 12-13, to hear Angela Lane and Sergey Gorbatov’s session, “Vision to Action: 5 Steps to a Powerful Talent Strategy.”