The CEO’s Role in Talent

As many top executives continue the fight for talent, they’re realizing strong talent management leads to greater workforce productivity, and they cannot be successful without a talent development strategy. Given its importance, talent management strategy is increasingly driven from the top. CEOs and their peers oversee talent management strategy rather than delegating it to HR departments. HR, in turn, is responsible for supporting the strategy and executing it.

“At the beginning and at the end of the day, what you do in any business is rely on the people who work for you and work in the different, disparate parts of the company to accomplish things in an effective manner,” said Philip Martens, CEO of Novelis, an aluminum rolling and recycling company. “To rise up in a company you have to learn and appreciate the value and contribution of the people that work for you, you work with and work around you. CEOs can’t monitor that work, but they can make strategic decisions to ensure the company has the right people in the right jobs with the right capabilities to do what is required ahead.”

Martens said if CEOs and their talent managers create that culture, they’re not only creating capability and potential for the organization, they’re creating an opportunity for every individual to grow.

Get Directly Involved

Prior to Martens joining Novelis in spring 2009, there was no focused investment in leadership development and management training within the $10 billion company, which has more than 10,000 employees on four continents. At the time, the corporate HR function was limited and small in scale. Martens said he immediately began to recruit HR leaders to strengthen the function and address areas of need. The HR team built a strategy, establishing foundational infrastructure to help transform the business, build the organizational capability to strengthen the business and foster employee engagement to sustain it.

The HR strategy was closely matched to the company’s strategy to target incremental expansions in specific areas of the world, increase capital investments in growing market areas and transform the business by improving a number of processes that serve as the backbone of company operations.

The corporate HR function grew from three to 25 people, and to address the foundational HR infrastructure, the team established two centers of excellence: one for compensation, benefits and systems, and another for talent management. These global functions were established to build programs that would serve all four company regions.

“Talent management is probably the most important thing I do,” Martens said. “It’s a comprehensive subject. One aspect is the individual themselves and internal capabilities and personal desire. Another is the process through which you develop them — how you bring them up in the organization and give them feedback — and another is how you compensate people, and how you ensure they have the right equation for the time they work for you — that they get the right return on their invested efforts.”

Martens said he annually talks about almost 500 people at some point and intimately about the top 150 employees in the company. Once a year the C-suite — eight executives — spends three days at an executive offsite meeting to go through the top 70 people person by person. Once a month Martens updates a document on the top 70. Then the executive global talent committee, which he chairs with the company’s chief people officer, Leslie Joyce, talks about personnel policies, promotional opportunities, performance issues and performance opportunities as they relate particularly to the top 70 but also to the rest of the organization.

“It’s important that as boards and committees take a look at organizational strategies and CEO succession, they recognize that the dynamic nature of a company requires a people-intensive CEO,” Martens said. “You can look at successful companies that have long-standing CEOs in their tenure, and you’re going to find they have very active and effective talent development organizations within them.”

People Prove Value

Similar to Martens, whenever Bob Munroe, president and CEO of whiteboard paint provider IdeaPaint, is not meeting customers and business partners, his focus is on talent. The former president of Reebok USA believes people and teams are what go into making a successful organization, especially a start-up.

Munroe joined IdeaPaint in 2009 to help the entrepreneurial company evolve into a successful small business. In that time, it has grown from a handful of workers to 31 employees — with plans to hire 10 more by the end of 2012. Munroe said he believes for a small company, every hire is important and should be highly strategic. That’s why he works hand-in-hand with the company’s head of HR to ensure current employees feel fulfilled and embrace the company culture, and that potential candidates fit the mold necessary to help IdeaPaint flourish. As the company continues to grow — moving from the start-up “generalist” mode where everybody wears multiple hats to a company of specialists — Munroe said talent management is top-of-mind for him and his team.

“We have a responsibility to our shareholders to maximize the return on every dollar invested,” he said. “A bad hire or ineffective hire is detrimental to that goal. It not only wastes that headcount and squanders that resource, it can negatively impact other people in the company as well. It is critical every hire be a good one and everyone bring a full complement of value-added skills to the team.”

No one is hired within IdeaPaint until he or she has spent time with Munroe, and Munroe has discussed the candidate’s potential with the company’s hiring manager. While Munroe sees much value in this process, he acknowledges this is much easier in start-up organizations and perceives it as one of perks of not working in big business anymore. He said being directly involved in day-to-day decisions and knowing all of his employees has made employees feel closer to the top, closer to the strategy and an important part of the business. His involvement in talent management will help move IdeaPaint forward.

“If you make the right hires, the return on that investment will pay for itself many times over,” he said. “Unfortunately, the converse is true as well. If you don’t have the right people on your teams, you’re not only wasting resources, you’re ultimately going to fall short of your goals.”

Ladan Nikravan is associate editor of Talent Management magazine. She can be reached at