Chapter 1
The War for Talent

In the modern-day business environment, competition in the marketplace has intensified from the basis of product and price, to the core of a business organization-what many human resources (HR) professionals describe as "The War For Talent."

A business organization is by definition a group of people assembled to accomplish common objectives or goals, such as maximizing the profits of investors, catering to new lifestyles and trends, or performing a particular service for customers or society for a fee. The key element no doubt is people. People set out the structure, business model, and governing modus operandi of an organization. People also bring various functions of the organization together and produce synergy. Particularly in the service sector, employees are an organization's most important asset.

It is therefore logical to conclude that any top-performing company, whether a multinational or local small and midsize enterprise (SME), must have an effective approach and framework for attracting and selecting talent. The result of the "War for Talent" is that businesses must be competitive in attracting and selecting the necessary people, and must ferret out the rare individuals who can eventually take up leadership positions and drive the company forward.

What we present here is a step-by-step framework for talent management and leadership development. We will refer to a few study surveys to illustrate the latest broad trends, and use the example of the Lafarge Cement Company Chinese joint venture to show successful HR in practice. In all of this, we hope to provide some unique and helpful insights into the practice of talent management in Asia.

What is "talent"?

We all want talent, whether it is as individuals looking to make our mark on the world or as companies wanting to hire a body of capable workers. But just what is "talent"? A dictionary definition offers a few clues: 1: A special natural ability or aptitude, 2: a capacity for achievement or success, 3: A talented person, 4: A group of persons with special ability, 5: A power of mind or body considered as given to a person for use and improvement (www.dictionary.com). But in truth talent is something more complex than that. It is partly innate, partly learned, and it can be subject to other dynamic forces. For example, having talent without accompanying moral standards is the equivalent of a walking time bomb because that talent could be deployed, in the worst case, in a way that is harmful to society and the business community.

Attributes of talent

Intelligence is essential to talent and it helps to be aware of its different forms. For instance, IQ (intelligence quotient) measures cognitive capacities, while EQ (emotional quotient) measures our ability to recognize our own feelings and those of others, motivate ourselves and manage emotions well internally and in our relationships.1 The abilities ascribed to emotional intelligence are distinct from, but complementary to, academic intelligence, that is, IQ.

Talent, we would argue, is similarly differentiated by hard and soft qualities. The former (hard) is usually related to learned sciences, such as mathematics, engineering, and physics, while the latter (soft) deals with the softer expressive skills that are harder to learn and relate more to personality, such as painting, music, emotional control, or sociability. The good news is leadership, management, and technical skills can be developed and learned through experience and education, though social skills are more related to personality and a person's mindset.

In business, the standard approach in developing talent has been to acquire more technical abilities, but current trends show a drift toward endowing our leaders with softer skills, such as being able to adapt to a diversified environment.

Ethical values and talent

Talent is also distinguished by ethical values. Talented managers may be great at management and analytical skills, but this doesn't necessarily relate to their moral values. For instance, Enron Chairman Kenneth Lay and CEO Jeffrey Skilling are both sophisticated and brilliant businesspeople, yet their unethical business practices overshadowed their talents. Is it desirable to have talent without business ethics, like these Enron executives or those at WorldCom (Nanda 2003)?2 The growing emphasis on business ethics for today's leaders means that personal integrity has become a major consideration in selecting corporate leaders.

Ethics is the steering wheel, while talent is the vehicle being driven. It really depends on how the leader implements his or her talents and in what direction. With the introduction of the Sarbanes-Oxley Act in 2002 to govern corporate accounting and auditing compliance, the integrity of corporate leaders becomes a significant factor when selecting talent. Findingtherightpeoplewhoalsohavethecorrectpersonal values to fit the company's culture and mission has become very important.

Attracting talent in Asia

Attracting talent is difficult all over the world, but the situation is even more complicated when the battlefield turns to Asia. This broad geographical region is rich with many distinct histories, cultures, languages, value systems, and people. Furthermore, countries at different stages of economic development are juxtaposed, and external failure issues such as spillover, exploitation, and wage differentials are all a common part of daily operational conflicts that organizations need to resolve. Bribery and reliance on personal relationships to move business forward are prevalent in Asia, particularly in newly developing countries.

Political economy also comes into play, such as the various rules and factors that restrain the mobility of talent across borders. What we can observe today in rapidly growing Asia as a whole is a unique interaction of all these socioeconomic factors, sometimes co-existing perfectly, sometimes clashing with each other. In summary, Asia is nothing like the Western analytical framework that traditional theories have been based on.

Although it is rather risky to make generalized claims about attracting talent in Asia as a whole, there are some commonalities that can be derived from the complex situations that abound. These can help to provide business enterprises in the region with insights into and practical ideas for finding talent.

An interesting place to start is with prospective talents themselves. What qualities in a company attract MBA graduates? This is an interesting question because MBA training provides graduates with sophisticated analytical approaches and tools that can be useful to corporations worldwide.

A survey of MBA graduates from leading international schools was conducted by public relations consulting firm Hill & Knowlton in 2007. It found that "company reputation" was the most important factor for choosing which company to join. Furthermore, the respondents identified the five top drivers defining company reputation-things like the quality of management, the quality of products and services, employee talent, financial performance and investment value, and innovation (see table 1.1). In particular, Asian MBA students ranked corporate social responsibility (CSR) highly, significantly more so than their counterparts in North America and Europe.3

Table 1.1: Hill & Knowlton survey of MBA graduates (2007)

Further insights into what defines "company reputation" can be drawn from another survey on "The Best Employer in Asia," carried out by international leading personnel consulting firm Hewitt & Associates and the Wall Street Journal Asia.4 It surveyed employees of 750 companies across the region and came up with the rankings in table 1.2. The top-ranked companies had in common a humane and friendly working environment and an effective personnel management policy. These employers were credited with promoting self-motivation and they had the full trust and high regard of their employees. They also enjoyed an edge over their competitors, with a comparatively lower turnover rate of an average 10 percent per year.

When comparing the two studies, it is no surprise to find that the factors that make these companies tops among employees are also the ones that MBA graduates consider desirable. Management quality, product and service quality, and employee talent can only be produced and developed in a working environment that encourages self-motivation and drive, and provides a clear track and goal for its employees. The Hewitt survey further indicated that respecting the organization and the leadership in the organization is a universal element affecting employee loyalty across Asian cultures.

Table 1.2:...