Managing talent for maximum value: organizations that successfully manage the three people equity factors - alignment, capabilities, and engagement - outpoint competitors by a wide margin.

• Author: Schiemann, William A.
• Position: Business & Finance

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WHY DO SOME organization succeed even during downturns, while others falter and stumble, unable to complete and deliver the type of performance that makes investors cheerleaders and employees motivated to stay put? Why do winners win?

The Metrus Institute has investigated this question for more than a decade. In the process, we have discovered three core success factors--taken together, we refer to them as "people equity"--that significantly impact the value contribution of human resources and, in turn, the ability of organizations to survive and thrive regardless of the vagaries of economic cycles.

It has become a cliche of annual reports and stockholders meetings that "people are our most important asset." In a survey of over 2,000 organizations that we conducted with the American Society for Quality, we found that organizations that managed the three people equity factors--alignment, capabilities, and engagement (ACE)--outpointed competitors by a wide margin.

As we move ahead into the next decade of the new century, the challenges talent management pose are significant, given the likely future that lies ahead for our organizations. Let us take a look at 10 trends that will reshape the talent landscape and make the proper management of people equity an imperative for business success:

Global competition. It is an economic truism that the pattern of supply and demand has a decisive effect on the destiny of nations, markets, and companies. With global barriers coming down and technological reach expanding, there are far more suppliers offering more products than customers can consume. While this is Economics 101, the scope of the change is far greater than most are ready for; many businesses (large and small) are about to be jolted by new and varied competitive faces. Survival of most organizations will depend on their ability to deliver unique value they can provide and sustain in a marketplace characterized by competition and a far greater number of competitors.

A change in labor supply and demand. In 2005, the U.S. passed a watershed moment: For the first time in modern history, its labor supply and demand curves crossed. In aggregate, there was an insufficient number of people to fill the number of jobs that are required to fuel current needs--and future growth. According to demographers and futurists, among the major talent pools, only India will continue to be a net exporter of talent through 2020.

Talent...