Latest Article on "Winning the Art of War 2.0 in Sri Lanka" by Prof Sattar Bawany, CEO of Centre of Executive Education (CEE), Managing Director of EDA Asia Pacific and Strategic Advisor of Ipma Asia Pacific for Daily FT (Financial Times) on Friday, 6 September 2013. Visit: http://www.ft.lk/2013/09/06/winning-the-war-for-talent-2-0-in-sri-lanka/

1. www.ft.lk
FRIDAY SEPTEMBER 06, 2013
13
Opinion
Introduction
In 1997, a groundbreaking McKinsey study
exposed the “war for talent” as a strategic
business challenge and a critical driver of
corporate performance. Then, when the dot-
com bubble burst and the economy cooled,
many assumed the war for talent was over.
It’s not.
Subsequently in 2001, the authors of the
original study revealed that, because of
enduring economic and social forces, the
war for talent will persist for the next two
decades. McKinsey & Company consultants
Ed Michaels, Helen Handfield-Jones, and
Beth Axelrod argued that winning the war
for leadership talent is all about much more
than frenzied recruiting tactics. It’s about
the timeless principles of attracting, devel-
oping, and retaining highly talented man-
agers – applied in bold new ways. And it’s
about recognising the strategic importance
of human capital because of the enormous
value that better talent creates
The outcome of the study is applicable to
Sri Lanka companies as it was fortified by
five years of in-depth research on how com-
panies manage leadership talent - including
surveys of 13,000 executives at more than
120 companies and case studies of 27 lead-
ing companies – the authors propose a fun-
damentally new approach to talent manage-
ment.
They describe how to: create
a winning EVP (employee value
proposition) that will make your
company uniquely attractive
to talent; move beyond recruit-
ing hype to build a long-term
recruiting strategy; use job
experiences, coaching, and men-
toring to cultivate the potential
in managers; and, strengthen
your talent pool by investing in
A players, developing B players,
and acting decisively on C play-
ers.
Central to this approach is
a pervasive talent mindset – a
deep conviction shared by lead-
ers throughout the company that
competitive advantage comes
from having better talent at all levels. Using
practical examples from companies such as
GE, The Home Depot, PerkinElmer, Amgen,
and Enron, the authors outline five impera-
tives that every leader - from CEO to unit
manager – must act on to build a stronger
talent pool. Written by recognised authori-
ties on the topic, this is the definitive strate-
gic guide on how to win the war for talent.
The Sri Lankan context
In today’s tight labour market in Sri
Lanka, companies are facing intense com-
petition for talent – and are giving increased
attention to ways to retain talent rather
than rely on costly replacement and retrain-
ing. Retention of talent with
critical skill sets is vital for
achievement of business growth
and to build organisational
competencies, which represent
a competitive advantage. The
loss of needed talent is costly
because of the resultant bidding
up of market salaries for experi-
enced hires to replace them, the
costs of recruiting and assimi-
lating new talent, the lost invest-
ment in talent development, and
the hidden costs of lost produc-
tivity, lost sales opportunities,
and strained customer relation-
ships.
Can companies win the “war
for talent”? Will we be able to
define and implement a reten-
tion strategy that will give us the stable,
committed, capable workforce required to
achieve a competitive business advantage?
Consulting firm and research organisation
reports, published books and articles, and
internal company retention studies suggest
that everyone is following the same overall
plan. How will this approach give a compa-
ny an edge?
Few, if any, organisations today have an
adequate supply of talent. Gaps exist at
the top of the organisation, in the first- to
midlevel leadership ranks, and at the front
lines.
Talent is an increasingly scarce resource,
so it must be managed to the fullest effect.
During the current economic downturn
we may experience a short ceasefire in the
war for talent, but we’re all seeing new pres-
sures put on the talent running our organi-
sations.
Are today’s leaders able to do more with
less? The A-players can, and there should
be a strategic emphasis on keeping those
leaders — and developing their successors.
Many organisations are reducing their
workforces, but let’s be careful not to cut so
deep that talent is scarce when the economy
rebounds.
The supply of leadership talent is criti-
cal to any organisation’s prosperity and is,
therefore, a central element of talent man-
agement. The increasing trend of growing
leaders from within is based on a dawning
realisation that a popular alternative for
acquiring talent — poaching key people
from competitors — ultimately leads to
frustration. Outstanding leaders who can
‘ramp up’ quickly are hard to find, increas-
ingly expensive, and even when successful-
ly recruited, tend to move from company to
company. So the best approach, usually, is
to develop systems and processes to identify
available leadership talent.
Many studies have shown that an impor-
tant factor for commitment and retention
is the effectiveness of immediate manage-
ment. Employees say it is an important ele-
ment of the work environment; research
shows it highly correlated with commit-
ment and retention scores, and employees
cite poor management as a key reason for
leaving a company. Accordingly, there have
been many books focused on manager effec-
tiveness. One big seller was ‘First, Break
all the Rules,’ reporting on the Gallup
Organisation’s findings and recommenda-
tions for better management of people.
Integrated Talent Management System
So, what do we mean by talent manage-
ment? In the broadest possible terms, it
is the strategic and tactical management
of the flow of talent through an organisa-
tion. Its purpose is to assure that the sup-
ply of talent is available to align the right
people with the right jobs at the right time
based on strategic business objectives. The
term “talent management” is often used to
denote e-recruitment and automated appli-
cant tracking systems. This emphasis on
staffing and recruiting is more appropriate-
ly called the talent acquisition phase of the
talent management cycle (see Figure 1), an
important but preliminary step in the over-
all process.
The Talent Management Cycle includes
the proactive analysis and planning to
assure long-term strategic development
and deployment of critical leadership and
other resources through systematic identi-
fication, assessment, planning, and devel-
opmental action.
The Talent Management Cycle is com-
posed of several essential elements:
1.Talent Acquisition: Proactively
recruiting world-class, diverse leadership
talent and providing on-boarding support
for them to accelerate their assimilation
into their roles.
2.Talent Development: Developing and
executing learning and development pro-
grams, processes and assessment tools to
grow current and future leaders
3.Performance Management: The
process of creating a work environment
in which people can perform to the best of
their abilities.
4.Succession Planning: This is critical
towards developing a leadership pipeline
or assuring near-term leadership conti-
nuity by thoughtful consideration of the
availability, readiness, and development of
internal talent (including High Potentials)
to assume critical “priority” leadership
roles.
5.Organisational Results: Achieving
favourable and desired results is obviously
the ultimate outcome expected out of any
effective integrated talent management
system. However it is a lagging indicator
and business leaders will have to focus on
the organisational climate which will have
an impact on the other elements of Talent
Management Cycle as explained earlier.
The flow of effective communication and
the systems of recognition and rewards
are integral part of the climate which
influences the talent’s performance effect-
ing productivity, creativity and in driving
results with the right impact. The climate
is impacted by a values-driven leadership
team.
Conclusion
Your organisation can create a new prod-
uct and it is easily copied. Lower your
prices and competitors will follow. Go
after a lucrative market and someone is
there right after you, careful to avoid mak-
ing your initial mistakes. But replicating
a high-quality, highly engaged workforce
is nearly impossible. The ability to effec-
tively hire, retain, deploy, and engage tal-
ent — at all levels — is really the only true
competitive advantage an organisation
possesses.
[The writer is the CEO of Centre for Executive
Education (CEE) and Strategic Advisor of IPMA Asia
Pacific. CEE is the executive development division
of IPMA and offers executive coaching and leader-
ship development programs that help profession-
als develop the skills and knowledge to embrace
change and catalyse success in their industries.
Website: www.ipma.com.sg/cee.php Email: cee.
singapore@ipma.com.sg.]
Winning the war for
talent 2.0 in Sri Lanka
Sri Lanka faces challenges to ramp
up its higher education system to
staff its rapidly expanding economy.
This creates major changes in the
demand for knowledge workers and
the skills they posses.
Emerging countries
that are building their
exports need to prepare
a large number of people
to work in the industry.
However, maximising
their value requires us to
know our talent, upcom-
ing skills shortages and
understand the impact of
the social media infusion.
Therefore the investments
we make now in education
will contribute significant-
ly to economic growth and
will be key to our current
and future competitive-
ness.
Indeed, if the private
returns are so high on
these investments, most house-
holds on their own accord are like-
ly to make adequate investments
in human capital development.
However, the difficulty of borrowing
to send children to school affects espe-
cially the poor.
Creditors cannot easily stake a
future claim on embodied human
capital as they can for other types
of collateral and therefore many
low-income families are forced to
invest less in their children’s school-
ing. These free market failures in
principle suggest making conces-
sionary loans available via the state.
A more common, alternative is for
the Government to reduce the direct
costs for schooling by making quality
public schooling available free or at
subsidised rates.
Most interventions gen-
erally consist of making
schooling available free
and sometimes even com-
pulsory. Research suggests
the difference between
social and economic
returns from education at
a macro level is probably
higher at the primary and
secondary levels than at
the university level.
Many positive spillo-
vers come from literacy
acquired at lower levels
of schooling, while the
returns from training at
the university level are
almost fully captured by
the higher income of university grad-
uates. Vocational training also has
high economic payoffs, if it improves
worker productivity. More important-
ly, evidence suggests that vocational
training is most cost-effective if the
trainees have a solid base of primary
and secondary education. All of this
argues for primary and broad based
secondary education as a means to
improve a nation’s productivity and
income distribution.
Human capital formation
Interestingly, higher shares of
national income devoted to education
cannot only explain the larger accu-
mulation of human capital in some
of the East Asian economies. In the
’80s, public expenditure on education
as a percentage of GDP was not much
higher in East Asia than elsewhere.
In 1960s the share was 2.2 % for all
developing economies, 2.4 % for Sub-
Saharan Africa, and 2.5 % for East
Asia.
During the decades that followed,
the governments of East Asia mark-
edly increased the share of national
output they invested in formal educa-
tion, but so did governments in other
developing countries. In the late 80s
the share in Sub-Saharan Africa was
around 4.1%, and was higher than the
East Asian share, 3.7%, which barely
exceeded the average share for all
developing economies, 3.6%.
Research suggests that allocation
of public expenditure between basic
and higher education is perhaps one
of the top public policy factor’s that
accounted for East Asia’s extraor-
dinary performance in the area of
providing basic education. Low pub-
lic funding of secondary education
results in poorly qualified children
from low-income backgrounds being
forced into the private sector or
entirely out of the education system.
Research suggests that the share
of public expenditure on education
allocated to basic education has been
consistently higher in East Asia than
most other regions. By giving prior-
ity to expanding the primary and
secondary bases of the education
infrastructure, East Asian govern-
ments have stimulated the demand
for higher education, while relying
to a large extent on the private sector
to satisfy the demand at the skills for-
mation level.
In most developing regions, gov-
ernments have subsidised university
education which has
also benefited families
with relatively high
incomes that could
afford to pay fees clos-
er to the actual cost of
the university educa-
tion.
Vocational training
For most success-
ful export economies
the training provided
jointly to upgrade the
skills of their work
force has been crucial
since high-level skills
are essential for man-
ufacturing related
activities. But while
vocational training is
widely recognised as
important, such train-
ing is rarely cost-effi-
cient when provided
by the State systems.
Most firms there-
fore prefer to do their
own training, partly because many
skills are company specific. There
is ample research to show that the
return on the training investment is
higher in industries that engage well-
educated workers and also in envi-
ronments where there is rapid tech-
nological change.
Singapore’s use of training to pro-
mote the information technology
sector through a concerted program
that involved educational institu-
tions, providing training subsidies
to schools and office
workers, and dig-
itising of the civil
service, helped the
country to achieve
leadership in tech-
nology related ser-
vices. This success
illustrates the impor-
tance of a govern-
ment’s ability to fore-
see a major oppor-
tunity and then pro-
mote public-private
partnership to invest
in human capital for-
mation.
However, to make
it a success, busi-
nesses must also
stand ready to
take advantages
of the support the
Government is will-
ing to provide to pro-
mote human capital
formation. In addi-
tion, the State should ensure that
they maintain the per student share,
in real terms, of Government fund-
ing education.
(The writer is a Senior Company Director.)
SLneedstopreparealargenumberofpeopletoworkintheindustry
Many positive spillovers come from literacy acquired at lower levels of school-
ing, while the returns from training at the university level are almost fully cap-
tured by the higher income of university graduates
Emerging countries
that are building their
exports need to prepare
a large number of people
to work in the industry.
However, maximising their
value requires us to know
our talent, upcoming skills
shortages and understand
the impact of the social
media infusion. Therefore
the investments we make
now in education will
contribute significantly to
economic growth and will
be key to our current and
future competitiveness
Guest
Column
By Dinesh
Weerakkody
Guest
Column
By Prof. Sattar
Bawany