Listen to "Ram Charan ("Talent Wins") Interview" on Spreaker.

Ram Charan is both a bestselling author and a world-renowned business advisor to global companies and CEOs. Charan’s new book, Talent Wins: The New Playbook for Putting People First (co-authored with Dominic Barton and Dennis Carey), describes why and how companies need to manage their talent with the same laser-like focus they manage their finances.

Charan’s previous bestsellers include “Execution: The Discipline of Getting Things Done” and “The Attacker’s Advantage.” He’s also been advising companies like GE and Bank of America for more than forty years. The NCMM recently caught up with Ram Charan to discuss how middle market companies might apply the insights from “Talent Wins.”

What are the trends that have made accessing and deploying talent so important for middle market companies today?

 Charan: Talent has always been important, but the financials have dominated in the past, eclipsing the focus on human capital. In today’s digital world, talent is as important as capital. It’s your talent that conceives of business opportunities. Talent conceives of strategies. Your talent is going to drive innovation, say by digitizing your logistics. Talent has also become a dominant factor because talent attracts money and investment to companies. Talent also allocates money in strategic ways. Nearly all CEOs are now asking a key question, “How can we recruit, utilize, and develop our people to deliver greater value to customers, and do that better than our competitors?”

How are the talent practices that many middle market companies use “vestiges of another era,” as you say in “Talent Wins”?

Charan: These traditional talent practices were designed for predictable environments, traditional ways of getting work done, and for companies where people were put into boxes and onto reporting lines. In today’s more fluid, fast-changing landscape, where business strategy is about quickly sensing and seizing emerging opportunities, plans and structures that assume a predictable future just won’t work. They are vestiges of the past that must be removed. Companies must deploy talent in new ways, and talent must lead strategy.

How can the CEO, the CFO, and the CHRO (Chief Human Resource Officer/HR leader)  form a strategic partnership to drive the changes that “Talent Wins” calls for?

Charan: In the book, we call this partnership the G3. As the CEO, you need to understand your two key resources -- money and people. Getting the two people who manage these two resources in the same room is the only effective way companies can link their financials with the talent who produce the numbers. One simple way for most companies to make the G3 work is to have operational reviews monthly: the CEO, CFO, and CHRO get together, get each other’s diagnosis of what’s going right, what’s not going right, and how they can do things better, really drilling down into the details and uncovering root causes in order to move the organization forward.

How can the CHRO and HR Department move away from administrative functions (like timekeeping and payroll) to become true strategic partners in the G3?

Charan: The book shows multiple examples of CHROs that have done a fantastic job of automating these administrative functions, while finding ways to provide useful information for strategic decision-making around both the business and its people. The CEO needs to make it clear that the CHRO is every bit as important and strategic as the CFO. The critical business questions are almost always questions related to talent. Of course, the strategic CHRO needs to become well versed in the financials and all other aspects of the business, especially in how all of these strategic areas connect to talent. It takes a cross-functional, strategic mindset from the CHRO.

How can middle market companies that focus on talent improve the way they assemble their teams -- cross functional teams, teams blending full time employees, independent workers and/or remote workers, etc.?

Charan: In the internet age, data and software matter when it comes to assembling teams. Companies must have data on each individual, then use algorithm to form the teams and have these teams work productively. The matching of needed skills and people can now happen through software and algorithms. More companies are also using digital platforms to find external talent, like gig-economy specialists or outside experts and bring them into their teams. It takes platforms. It takes providing meaning. It takes teamwork. You need to have a good “social architecture,” a set of organizational norms that guides how work happens, how people collaborate and communicate.

How is the growing supply of on demand workers, or “gig economy” workers impacting the talent landscape for companies?

Charan: Talent can be “rented” today, and used as needed. In the new workplace, you may have teams of full-time employees, part-timers, contractors/on demand talent, gig workers and even robots/AI. Companies are seeing an acute shortage of talent in some areas where demand for talent is growing, such as artificial intelligence. They can bring in outside specialists here from the gig economy, which can support a company’s talent agility. Companies need the capacity to reallocate and assemble resources quickly when priorities and directions change.

What else would you like to say about how middle market companies should re-imagine their talent practices?

Charan: The key factor each company should think about is their customer’s experience, from beginning to end. If they don’t know that experience really well, then the rest doesn’t matter. Second, companies have to organize themselves internally, putting this knowledge of end to end customer experience at the center, using it as a guide. Then they’ve got to get the talent they need to drive great customer experiences. If they can’t get talent from outside, they’ll have to develop their existing talent. Finally, they’ll need to be ready to move and adapt their resources faster in order to be more successful. “Talent Wins” provides a road map organizations can use to leverage people and money in order to thrive.

This post is part of a larger research project by the National Center for the Middle Market. Get the full picture through the resources below: