Systematically aligning employee strengths and corporate objectives can go straight to the bottom line

"Mind the gap" is a phrase familiar to anyone who has ridden the London Underground or Toronto Subway. It also could serve as a motto for business. Make that the "talent gap" and you have a reminder of a common corporate disorder: the gulf between what you as an employee actually know and what you'd need to know to do your job efficiently.

It's a pervasive issue, says Davis Klaila, senior director of strategy with Ceridian, a leading HR and Payroll services provider. Failure to address it, he adds, can be very costly indeed.

Colin Pearson, senior consultant with Human Synergistics Canada, based in St. Marys, Ont., is in agreement.

He notes that many companies shed their training departments during the economic downturn of the early 90s, yet still face the problems associated with developing talent and evaluating management skills.

Mr. Klaila uses the example of a U.S. transportation company that was spending about $10-million a year on staff development when it retained him - pre-Ceridian - as a management consultant to evaluate the strategy.

"We looked at all the programs they had in place to develop employees, particularly the leaders three levels down from the CEO - sending people to executive MBA programs for one example," Mr. Klaila recalls. "What we found was that less than 10 per cent of those activities were truly aligned with the organization's strategic objectives. So they were inappropriately investing $10-million in their human assets with a result that the talent gap -also frequently called the readiness gap - was greater at the end of the process than it was at the beginning." It's a story repeated all too frequently across the whole range of industries, he says, adding that it's a two-part problem. Few organizations have clearly articulated the requirements of particular positions, and few individuals have development plans of their own. In fact, research shows that people have about 40 to 50 per cent of the skill that they need to optimally perform their jobs relative to the organization's objectives.

It's not so surprising, Mr. Klaila pointed out in a paper on the subject published earlier this year. Employees bring a certain set of skills and competencies to a role, and a position has a certain set of competencies and requirements. Rarely is there a one-to-one match.

However, as Mr. Pearson also pointed out, a concerted effort in the right direction can turn things around. Mr. Klaila draws on the example of a Minneapolis manufacturing company to illustrate the point.

"They looked at the new demands of their business and instituted a grass-roots drive to clearly articulate the core competencies of the company as a whole. In other words, what did the company need to be great at?

"Then they aligned the competency requirements of individual positions with those of the corporation, analyzed the gaps and set about to close them."

The result was startling: a direct impact on the bottom line of about $40-million, according to the CEO.

The example bears out a study conducted by the consulting firm McKinsey & Co., which found that closing the readiness gap - by improving the overall competency of your management by one point on a five-point scale -could typically result in a 30-per-cent improvement in market share. The same study found very few companies actually do successfully invest in their people.

Nonetheless, tools exist for companies to tackle the readiness gap, including those offered by the Minneapolis-based leadership development company Lominger International. Equipped with data that provides position requirements, employee competencies and the strategic goals of your organization, work can begin on closing readiness gaps.

Mr. Klaila cites the case of Ceridian itself, where the Lominger tools are currently being employed. "If you are a payroll company, people don't want you to take a lot of risks. What you have to be is reliable and repeatable."

The next step is to evaluate your executive team in terms of the company's core competencies. "Let's say as a company we need seven competencies, but then you look across your executive team and say we've really got only five," Mr. Klaila says. "To cover off those two that are missing, maybe it's a training and development opportunity for some of the existing executives or maybe it's an indication that you need some additional talent."

Addressing such issues is also the business of Human Synergistics Canada. The company, with clients across Canada and worldwide through its parent company, Human Synergistics International, offers a Management Effectiveness Profile System, which it describes as a "a powerful coaching tool that measures and evaluates the skills that are critical to management success.

The system uses what the company describes as "a unique and statistically valid process to provide managers with reliable, comprehensive feedback about their management skills…" Thus managers can accurately identify development needs and make specific improvements to their performance.

The MEPS assessment package focuses on providing high-quality feedback as the foundation for individual development. To ensure that managers obtain a balanced perspective of their strengths and development opportunities, MEPS measures performance from both the individual's point-of-view and that of five trusted associates.

Mr. Klaila's paper also offers concrete advice for addressing the issue:

Employee training and development should involve not only course work and seminars, but also unique job assignments that ask employees to tackle tasks they don't like.

Dealing with paradox, for example, is a key leadership competency, but one that makes many employees uncomfortable. Paradoxical behavior is the ability to act in ways that may seem contradictory. For example, a leader may need to be tough and compassionate or act in accordance with a certain situation while still maintaining consistency.

To develop a paradoxical competency, leaders need to be flexible, have the ability to take charge and work out difficult situations. In addition to study materials, an effective learning program for this type of competency could include assignments like managing an unpopular project or making peace with a disaffected coworker.

A note of caution, however: During the process, you'll need to watch for signs of any decline in ethics or values, force fitting all situations into one solution that may have worked in the past and over-management or defensiveness.

"It's a matter of going through and saying where am I strong and where do I fail and then developing a program to close that gap. The bottom line is that very few companies actually do that."

Ceridian is determined to be an exception. Its own program with Lominger began about six months ago, Mr. Klaila says. "We did an initial profiling of Ceridian as an organization and our senior executives and now we're profiling our next tier down. Then we'll probably go down one more level.

"The key is to be crystal clear about who we are and what we want to do. Then we can develop the necessary core competencies and make sure they align with company's strategic objectives."