“Talent Balance Sheet” is What We Need

Senior executives look at financial balance-Sheet with keenness as it reflects the standing of a business. Though these statements are useful they don’t reflect the true standing of a business and its future potential.

Today large part of global economy comprises of services where human competence (read talent) is the biggest contributor in creating business output (read revenue, profit and value). Unfortunately human assets have no place in these books and gross assets that they capture are so insignificant in the perspective of evaluating the business potential. Are we really interested in knowing gross value of executive work stations or PCs particularly for services economy? No, we rather need to know potential business output-revenue & profit- from our current and future talent. Therefore we need to have a rather more important balance-sheet: Talent balance-sheet.

How do we go about it? Some ideas-

Gross talent in an organisation should be captured by segregating “People- as- assets” (PAA) and “People-as-Liabilities” (PAL).

How do we identify PAA and PAL? PAA is the ones whose competencies are completely aligned to their job roles while PAL are the ones whose competencies are completely misaligned to their job roles.

It is not important whether someone is under competent or extra competent, important for business result point is that the person’s competencies should be exactly aligned to his/her job role. It is possible that someone with certain competencies is a complete misfit for a job role whereas the same person is completely fit for the some other job role. Talent Balance sheet should have a few categories to capture the PAA- PAL continuum (people with partial alignments).  To explain this idea of misalignment here I go with a small story……

In the City of Ancient Rome there lived a skilled Cobbler. He was popular for his finer skills in mending and designing products with animal skins. He used to impress the royals with his creations-articles such as shoes, purses, decorative items etc.  He had acquired and honed his talent over years of hard work. There was no parallel to his level of dexterity as far as animal skin is concerned.

One day in the court of king someone had met with an accident, and there were internal injuries all over his body. Unfortunately there was no good surgeon available to operate the injured man. Cobbler heard this and approached the king to offer his services (again to impress in the hope of earning a reward!). Cobbler was very confident of his skill and ability and thought that he can work upon the diseased person. So he expressed his interest in operating upon the person. Seeing the confidence of the cobbler and his reputation in doing a similar job no one disagreed and the person was handed over to the Cobbler for surgery.

Cobbler did a wonderful job in neatly cutting and stitching the skinned flesh of the person.

Unfortunately, despite all the finesse in conducting the cutting and stitching, cobbler could not save the person and the person died sooner then he would have.

The moral of the story is that though visibly required competencies for conducting a job may look very similar there can be finer significant differences. Lack of understanding of nuances of competencies certainly proves fatal. Referring to this story though Cobbler did a perfect job (a perfect Cobbling Job on the body of the diseased) he still failed to achieve the goal of saving the person.

Trusting a cobbler to do a Surgeon’s job is a Syndrome called “Cobbler-Surgeon Syndrome”! I call it a syndrome because it is not a one of case; it’s a phenomenon and a trap for potential mistakes. For example if someone is outspoken, he is considered as a good candidate for sales, if someone is suave he can be taken up for senior leadership.  Judging a person on these visible qualities may prove completely wrong- competencies require much more than these visible aspects –out spoken and suave- for sales and senior leadership roles respectively. Cobbler is dexterous in turning the dead skin into attractive and useful articles not operating a Living body.

Unfortunately in our industry many cobblers are hired to do surgeons job.  I hope your organisation is not hiring cobblers for the job of a surgeon or a vice a versa.

With this small story I wanted to convey that aligning a set of competencies to the required job is very important achieving effective goal in a job.  It is the responsibility of recruitment to define the job role and competency for each role and screen talent accordingly.

There is a possibility that some cobblers pass the screening criteria and enter the organisations gates in surgeons’ skin.

In my views having a mandatory requirement for including Talent Balance-sheet in financial reporting will have very positive impact on business value of a corporation. I expect the following positive changes over a period of time:-

1. It will make the role of Chief Learning Officer strategically at par with CFO (isn’t that a big jump!).
2. It will make recruitment personnel more accountable to have a perfect screening system and hire right people
3. It will make T&D more accountable to fulfil the competency gaps and make them proactive to impart new desirable skills in shorter period
4. It will require an optimum mix of class room, eLearning and blended trainings to achieve competency goals of globally dispersed people within very short time.
5. It will create requirement for new roles within HR to assess and categorize people in PAA-PAL categories

Overall the fallout benefits can be really huge. I am keen to know your views on these ideas.

Image Source – Monster.com advertisement available on World Wide Web

(Ankit Jain is Head – HR & Strategy at G-Cube)