Talent as a Strategic Differentiator

Does talent really matter? What is the role of talent as a strategic differentiator? These were some of the questions addressed during the panel discussion organised by the General Management Club. The panel comprised strategists like Nitin Seth, Head and Director, McKinsey Knowledge Centre India, Suman Bose, Country Director and Head, Dassault Systems, M Narasimha Rao, Head – Development Centre, Infosys Technologies and Professor Kavil Ramachandran, Associate Dean, ISB, who talked about the growing divide in India between increasing unemployment and a severe talent crunch.

Nitin Seth, Head and Director, McKinsey Knowledge Centre India initiated the discussion stating that though talent management has direct correlation with corporate performance, companies still did not do much to address the issue. There was a need for a new thought paradigm for extracting extraordinary performance from seemingly ordinary talent. He revealed that an abysmally low proportion of managers, 16% of them, could effectively differentiate between high and low performers. Due to the lack of time to invest in training, companies have resorted to paying high compensation to bring talent who are high performers from day one which is not the right approach.

There is a sea change in the type of people who study Business Management today according to Suman Bose, Country Director and Head, Dassault Systems. The two most important roles in an organisation are Marketing and HR. All the other roles are aligned around these two. At Dassault, when he started off, the founders focussed on a leadership team because this team was the starting point to build the rest of the company. He recruited talent based on their will to perform and succeed. He also said that he believed in a review process that was transparent.

Narasimha Rao, Head – Development Centre, Infosys Technologies posited the view that the reality about non-recognition of talent is not as bad as Nitin had said. He believes that the service industry needs people and good skills. Other resources needed to run a company, such as capital, strategy, technology, and innovation are relatively easily available. Only talent is the crunch! Rao feels that the quality of talent graduating could be better and that the school drop-out rates were alarming. Infosys is backward intergrating with educational institutions to bridge the talent gap. He believes that the cost of attrition is not measured well. In a knowledge based industry, the cost of loss of talent is much much higher.

Professor Ramachandran, Associate Dean, ISB said that talent is very important in a dynamically changing environment. It is also essential to mix and match talent across the organisation, cross-functionally. He gave the example of Amtrex, a manufacturer of air conditioners, who made innovations based on a suggestion from an accountant. He also reiterated the belief that passionate leadership and faith in one’s self was the secret to managerial success.