Claudio Fernandez-Araoz’s scientific contributions

Despite high unemployment, the war for talent rages on. Only 15% of companies in North America and Asia feel they have enough qualified potential successors to fill their top jobs, and the picture is only slightly better in Europe. The best weapon companies can wield are programs that develop their "high potentials"-the people they hope to develop into their future leaders. In a large-scale study of how companies assess and manage their rising stars, the authors have identified some guiding principles for developing high potentials. To begin with, all talent programs should clearly define what "high potential" means to them. Great performance is not enough; you must also envision yourself as a senior executive, have the right motives (the desire for positive impact), and possess leadership attributes such as the ability to derive insight and engage others. Firms also need to align their candidate selection to their strategy: A low-cost company will not need the same kind of talent as an enterprise bent on global expansion. This article describes emerging best practices in executing high-potential programs, including the latest thinking on how to nominate and assess participants, design effective job rotations and stretch assignments, provide thoughtful rewards and incentives, and communicate about the program with the rest of the organization.

Many corporations are failing to obtain the full value from their boards. This lost opportunity occurs not only in dysfunctional organizations but also in companies that perform well and are market leaders. Specifically, from a recent comprehensive study of board reviews, the authors found that many boards are suffering from the following fundamental problems: inadequate competencies, lack of diversity, underutilization of skills, dereliction of duties, and poor selection and assessment processes. To avoid those problems, organizations need to adopt a set of five basic practices: (1) Choose the right directors (four competencies are required: results orientation, strategic orientation, collaboration and independence). (2) Appoint the right chairman (in addition to the four competencies, candidates must be skilled in empowering others to encourage vigorous debate, coaching and mentoring directors, and holding key executives and other board members accountable). (3) Make succession planning the first priority (this starts with graduate recruitment practices at the organization and is complemented by management development programs). (4) Focus on a few key agenda items at a minimum, boards should regularly address the following issues: conformance with governance codes and regulations, review of the CEO's performance and succession planning, discussion of ways in which the company will create and develop long-term value for shareholders, and monitoring of the company's operating and financial performance). (5) Review the board's collective and individual contributions (reviews should go beyond just compliance). Although these practices might seem obvious, the simple fact is that far too many organizations either neglect them or make costly mistakes in implementing them.

In the past, emerging countries like India and China relied on cheap labor to compete at the bottom of the pyramid. Not any longer. Their competitiveness is already reaching the high end, including knowledge-intensive sectors like biotechnology and information sciences. As a result, U.S. and Western European companies are finding it increasingly difficult to attract the best global talent, especially at the senior-executive level. Nevertheless, the author contends that organizations can improve their ability to hire and retain top global talent by doing three fundamental things. First, they need to adopt a new mind-set. Specifically, they need to be aware of the realities of the hottest emerging markets and the aggressive talent practices that are already taking place there. For example, Tata Consultancy Services Ltd. in India has begun to make blanket offers to every individual in the graduating class of certain colleges. Second, companies need to cut the red tape. In the old world of low hiring needs and abundant candidates, businesses used to focus almost exclusively on making sure that they would not hire the wrong person. Now, because the best candidates are in very low supply and the demand for them is extremely high, they need to expedite their hiring processes. Third, companies need to implement best practices, particularly in the area of recruiting. Unfortunately, making people decisions is still one of the weakest of all key organizational processes. Already, a number of multinational corporations like SAP and Nokia have begun to make the transition to competing for talent on a global basis. Given the numerous challenges, the edge will go to those companies that are proactive in mastering their people decisions so they can hire, develop and deploy the best talent on a worldwide basis. In the future, such organizations will be able to adapt faster and not only survive but prosper in this new environment of increased globalization.