Managing Talent

according to Jack Welch, it’s a best practice to devote a lot of time, energy, and money to your A and A-minus players, and to let your C players go. However, Bock argues that management can improve the capabilities of their C players significantly through coaching and training.

What approach do managers in your organization take to talent management? What are the results

! JWI 520

People Management

Week Six | Lecture One

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! You may understand your strategic capabilities inside and out, but

you’ll have a hard time capitalizing on them without placing your A

players in strategy-specific slots, as you saw in the last lecture.

In order to do this, you’ll need to get to know your people with real

nuance—their raw capabilities and carefully honed skill sets; their

performance history and their growth potential; their passion and

their motivation.

In short, you must inventory your talent and figure out where they

will thrive.

CREATING A TALENT INVENTORY Let’s say you’re a manager who’s just been given the job of running

a small business unit at a large company. The unit’s revenue is

modest—in fact, some people at headquarters don’t even know you

exist—but you’ve spotted an emerging customer segment that offers

tremendous growth potential. It could also make your existing line

of products increasingly irrelevant.

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You’re not the only one to see the opportunity, though. A rival

company also seems to have spotted it—and your quiet, unexciting

business is about to become quite competitive. Capturing this

strategic opportunity could cause your career prospects to soar.

You face numerous business strategy questions, of course. But as

you answer these, it’s crucial for you to also be assessing your

workforce. You’ve probably determined that you’re going to have to

take fuller advantage of your people’s capabilities than you have to

date, as well as add another capability or two to your current set.

A good first step is to conduct an honest appraisal of your existing

talent to determine what your current team members can and can’t

do, in comparison to the competencies that are now required. One

way is to use a simple 2×2 matrix to create a snapshot of your

current team, classifying your employees along two dimensions—

how much they are contributing now, and how much you expect

they will be able to contribute in the future as they learn and


The categories are illustrated graphically in Figure 1.


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Figure 1

! (Fig. 1 reprinted with permission from Great People Decisions: Why

They Matter So Much, Why They Are So Hard, and How You Can

Master Them by C. Fernández-Aráoz, 2007, p. 106. Copyright 2007

by John Wiley & Sons, Inc.)

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Assessing your team members according to these criteria generates

four employee categories. The four quadrants can help you identify

those people who are up to the challenge of bringing your strategy

to life. They also serve as a basis for identifying appropriate

development opportunities for people worth investing in and for

thinking systematically about those who aren’t.

1. High contribution—high potential. Two kinds of employees

fall into this category:
 Top Talent. These are the top performers in their current role,

relative both to others in the company and to people in

similar roles at other companies. Rivals frequently try to

poach them. They probably already fill a strategic role in their

function and have the potential to grow diagonally into

strategic roles in other parts of the organization. They’re also

likely to excel in the future, playing key roles in helping your

company meet new strategic challenges. These are your A

 Emerging Talent. These employees are also strong current

contributors, but are often not in a strategic role. They

consistently work to improve their skills and seek

opportunities that will prepare them for more challenging

roles. They are highly sought after in the labor market, often

headhunted for promotions to positions with greater

responsibility and compensation. They’re poised to take on

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the responsibility of a strategic position—at least in their

current functional area—and should be given that

opportunity before a rival lures them away. Generally

speaking, these are your A-minus players. With time and

experience, some of these people are likely to develop into

top performers.

2. High contribution—low potential. These are the

unrecognized heroes who work hard and do a good job in

their positions. They are your solid performers—your B

players. In a typical organization, they represent the large

majority of the workforce. Many of these people will be

sought out in the labor market; some will even hold a

strategic position in the company. But they have leveled out in

their careers, and are unlikely to be promoted to more

important roles or to a strategic position elsewhere in the


3. Low contribution—low potential.These are, at best, your C

players—individuals who are well below the midpoint of

talent available in the labor market for the position they’re in.

Their current performance is disappointing and is bound to

become more so in the increasingly competitive future

environment most companies face. You either have to find

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another job for these people that is a better fit for their

abilities, or ask them to leave the organization.

4. Low contribution—high potential. Typically, there will be

few, if any, employees in this category. Even if a poor

contributor did have the potential to be effective in a higher-

level job, his poor track record would damage his credibility

enough to make it unlikely he would be successful. However,

there are exceptions. For example, an employee’s low

performance may be due to the fact that he is new to the job

or to the company, or because he has been sent to another

division to fix a serious problem and hasn’t yet accomplished

his mission.


In Winning, Jack Welch describes the advantages of differentiating

the workforce into three groups based on their performance—the

top 20%, the middle 70%, and the bottom 10% (2005). Although

he approaches the topic of differentiation from a slightly different

perspective, his three categories are roughly equivalent to our

categorization of A players, B players, and C players.

Regardless of whether you use Welch’s formula or some other

method of differentiation, the important point to remember is that

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we all know that employees differ considerably in the value of their

contributions to the company. Yet, organizations often fail to reflect

these differences in the way they treat their employees. This is a


You need to devote a lot of time, energy, and money to your A

players and A-minus players—your top talent and emerging talent.

They should be singled out for special treatment, including

generous amounts of both financial and nonfinancial rewards.

These people are crucial to your current and future success, and

should be treated that way. (We will go into much greater detail

about rewards in Week 5 of this course.)

More than any other corporation before or since, GE under Jack

Welch would place its highest potential managers into important

leadership positions—and here’s the twist—knowing there was a

good chance they wouldn’t do as well, at least initially, as others

who might have been chosen for that role. The businesses these

people were selected to lead were not, of course, major contributors

to GE’s revenues. In fact, the point of this exercise in leadership

development was that, by the time these high-potential managers

were permitted to assume the leadership of one of GE’s key

businesses, their strengths and weaknesses were well known, and

they had acquired the requisite competencies to be successful in

more important roles.

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Next, you also need to differentiate among your B players—those

solid performers who are strong contributors but are unlikely to

develop much further. This group—which, remember, typically

represents the large majority of a workforce—is tremendously

important to an organization and is too often ignored. They need

training, positive feedback, and thoughtful goal setting.

If individuals in this group have particular promise, they should be

rotated among businesses and functions to increase their

experience and knowledge and, to test their leadership skills. Some

may even develop into A-minus or A performers. But everyone in

this large group needs to be made to feel as if he truly belongs. You

do not want to risk losing your B players—you want to keep and, if

possible, improve them.

And what about your C players (and below)? Well, there is no

sugarcoating this—they have to go. Even if they’re good, nice

people—and without doubt, many are—their talents aren’t suited

to furthering your strategic objectives.

Of course, having underperformers leave is more easily said than

done, and we’ll discuss this more in the next lecture. But if your

organization has clear performance expectations and a candid

performance evaluation process, C players generally know who they

are. When you’re straight with them about how they’re doing and

where they stand, they often leave before you ask them to, and in

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many cases end up having successful careers at companies where

they excel. When a person has been a mediocre performer for a

sustained period of time, his manager should start a humane but

unambiguous conversation about moving on.


Once you’ve created this talent inventory, you must determine

which of your current job positions are strategically important—

that is, which ones capitalize on or enhance your strategic

capabilities. One way to accomplish this is by listing, for each of the

relevant capabilities, the strategic positions that support each


Then, for each of these jobs, you should note the total number of

people currently in the position and how many of them qualify as

top talent, emerging talent, solid performers, and underperformers.

Such a process will give you a snapshot of your existing workforce

and permit you to see where it falls short of the workforce you need.

You’re likely to be surprised at the magnitude of the talent gaps that

this simple exercise exposes. For example, you may find that some

of the most important positions are occupied by solid but

unexceptional performers. You may identify needed strategic

positions that don’t even exist in your organization. You may also

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find existing jobs that simply aren’t needed to meet your new

strategic challenges. Consequently, positions—and people—that

were strategic in the past may not be strategic now. The jobs may

have to be eliminated and the people let go.

Finally, for each of the strategic positions, you should sketch out a

simple plan of action. Act quickly to get C players out of strategically

important positions, and replace them with top talent or with

emerging talent who can quickly grow into the job.

The purpose of creating a talent inventory is to permit you to

reconfigure your workforce so that you have the capabilities, jobs,

and people needed to succeed in the new environment. If you can

do that, you’ve taken a major step toward implementing your new

strategy. You’ve also likely taken a major step toward advancing

your own career.


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REFERENCES Welch, J. (2005). Winning (pp. 37-51). New York: Harper Collins.

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