As the economy gets better, holding on to your peak-performing employees is going to get harder and harder. You obviously can’t (or may not want to) hold on to all of your workers, but if one of your key players heads out the door, your small business could be in a tough spot.
So how do you keep top-notch employees? One way to learn is from the “talent masters.” The Talent Masters is the title of a recent book by Bill Conaty (formerly head of HR at General Electric) and Ram Charan, a business advisor, speaker and author who has coached some of the world’s most successful CEOs. The Economist recently took a look at some of the lessons from the book, which studied companies known to be “talent factories,” including GE and Procter & Gamble.
What can you learn from how these leading companies groom their stars?
1. Don’t be afraid to single out stars. It may be politically incorrect, but measuring and labeling employees is regularly practiced at all “talent factories.” Top companies do regular reviews and assessments of all employees. At GE, employees get divided into three groups based on their potential. At Hindustan Unilever, people who show leadership potential are put on a list (and referred to as “listers”).
2. Get involved. Even at big corporations, personal involvement between the CEO and high-potential employees is key. According to The Talent Masters, GE CEO Jeff Immelt knows intimate details about his company’s top 600 employees, including their business goals and their family situations. At Hindustan Unilever, managers keep dossiers on “listers.” Of course, getting to know employees is a lot easier at a small company, so there’s no excuse not to. Talk to your key performers and find out their goals and ambitions, but also be aware of what might hold them back—whether those are personal characteristics or gaps in training—and devise plans to get over those humps.
3. Provide feedback. Top executives at talent factories don’t just gather data on their high-potential employees; they give them ongoing feedback about performance. Again, this is simple to do in a small company, so get out there and make sure you’re giving feedback—both good and bad—to employees you want to groom. Don’t think you have time? Think again: Jack Welch and A.G. Lafley, former heads of GE and P&G, claim to have spent 40 percent of their time on personnel issues. That’s how important it is.
4. Invest in offsite training. GE spends $1 billion a year on employee training; Novartis sends top employees to regular off-site training sessions. This may be beyond your budget, obviously, but there are still plenty of ways to provide high-potential employees with additional learning opportunities. Pay for them to join industry associations and have them take advantage of training opportunities, conferences and seminars. If they’re interested in additional education such as professional certification or an MBA, maybe you can’t contribute to their tuition—but you can give them flexible hours, time off when needed to study or otherwise make it easier for them to achieve.
5. Offer in-house training. Match high-potential employees with senior mentors (or take them under your own wing). Hold brown-bag lunches where top performers read the same business book and discuss it, or share books they’ve read that are relevant to the company’s goals. You can also offer cross-training so high-potential employees can learn more about each others’ jobs.
6. Create generalists. It’s easy for top performers to become experts in a certain niche, but “talent factories” focus on creating generalists, not specialists. To get the most from talented employees, they should know how to handle a wide range of functions. (That’s another reason for cross-training, mentioned above.)
7. Set stretch goals. In addition to all the training, development and encouragement, don’t forget real-life learning. Top companies often give high performers “stretch” assignments—also known as “baptisms by fire,” “accelerator experiences” or “crucible roles.” Sound painful? It can be, but throwing a talented employee into the deep end and letting him or her figure it out can be a great learning experience—and it’s a sure way to build management skills.