Find, Grow, and Retain Top Talent: A 5-Step Plan

Assembling a roster of all-stars isn’t easy—and keeping your squad together is even harder. Steal these five strategies and your team will be a perennial contender.

By Robert Hogan, Ph.D., and Joan Jacobsen

Succeeding in business is a lot like succeeding in sports: The team with the most talent and best coach will almost always come out on top. But as any struggling squad will tell you, finding top talent isn’t exactly easy.

Let’s say, however, that you draft some homegrown stars and supplement your roster with a few big free agents. Even then you may not beat your competitors, because finding talent is one thing. Using it efficiently is something entirely different.

But don’t throw in the towel. Here are five simple strategies you can use to sign franchise players, create a winning formula, and execute flawlessly.

Step 1: Don’t Cheat Your Way to the Top

Well-run organizations have always engaged in the systematic search for talent. For example, in China, the Ming Dynasty established an objective multistage assessment process to find talented civil servants to serve the empire. After World War I, the German Army invented the modern assessment center as an objective method for identifying leadership talent.

Today, objective (and proven) assessment methods for talent identification are well known and commercially available; so are fraudulent methods for identifying talent. One of the biggest issues with today’s assessments is that most organizations have trouble distinguishing between valid and fraudulent methods. Make sure you learn the difference.

Step 2: Understand Your Players’ Real Contributions

Talent has serious financial consequences. The Vilfredo Pareto Rule tells us that performance is essentially a fractal distribution: 20 percent of the players on any team will account for 80 percent of the performance, while 80 percent of the players will account for 20 percent of the performance. 

What’s true in team sports is also valid in sales, where 20 percent of the salespeople will account for 80 percent of the revenue. Along the same lines, 20 percent of employees will account for 80 percent of an organization’s personnel problems, and vice versa.

Step 3: Steer Clear of Team Killers

How should we define talent? The answer isn’t as straightforward as you think. Talent can (and should) be defined in terms of actual and measurable performance. However, in most organizations, it’s in the eyes of the beholders. Specifically, talent is almost always defined by supervisors’ ratings for performance.

In our experience, supervisors don’t know which employees are doing a good job. They think they do, but in reality, they only know which employees they like. And those employees may or may not be high performers.

Think back to your days in middle or high school. There were probably two groups of smart kids: The students whom the teachers thought were smart, and the students whom all the other kids knew were smart.

Unfortunately, the same process applies in the adult world of work. Inside many organizations, it’s all politics—all the time—and success depends on whom you know, not what you do.

In addition, supremely gifted athletes aren’t always good team players. Sports history is littered with examples of great athletes who fought with their coaches and teammates, so much so that we label these stars “team killers.” They generate mind-boggling statistics for themselves while their teams underperform.

The same is true for law firms, healthcare providers, and research groups: Highly talented people who can’t share or collaborate often create more problems than they solve. 

In our view, being willing and able to work well with others should be a key part of the definition of talent. All significant human achievements, from building the pyramids to landing on the moon to building a world-class company, require coordinated team efforts as well as stellar individual contributions.

Step 4: Protect Your People from Incompetence

Once any organization has successfully identified and recruited a talented player, it will have difficulty retaining that new team member because he or she has a 60 to 70 percent chance of working for an incompetent boss. 

The stats are stark: In the industrialized world, 70 percent of employees hate their bosses. Bad managers destroy employee engagement, but most employees have no choice but to put up with their horrible bosses.

Talented employees have more options than average employees; they can easily move onto better jobs internally and externally. A major key to retaining talented employees, then, is to shield them from incompetent managers.

Step 5: Don’t Be Fooled by Emergent Leaders

So how do organizations find talented managers who won’t alienate their new recruits? In the corporate world, this is known as high-potential (hi-po) identification.

Many organizations identify the next generation of leaders, the hi-po talent, using nominations. Bosses handpick junior people who ooze with talent and potential for future leadership. But remember: Bosses know who they like, but not necessarily who’s doing a good job.

Here’s where an important leadership study comes into play. Back in the 1980s, management guru Fred Luthans followed more than 400 young managers for a year and recorded their behavior daily. At the end of the year he found they naturally fell into two groups based on their performance.

The first group, which he called “emergent leaders,” received rapid promotions and pay raises. The second group, the “effective leaders,” managed high-performing teams.

The two groups only overlapped about 10 percent as managers; emergent leaders spent much of their time networking and tending to office politics, while effective leaders worked with their subordinates and provided coaching and performance feedback.

The takeaway? Organizations tend to systematically overlook their most effective managers when trying to identify high-potential leadership. Instead, they choose as high-potentials those managers who are visible and self-promote, and tend to overlook those who are busy doing a good job.

Is it any wonder why there are so many incompetent bosses today?

The good news: While emergent and effective leaders have very different psychological profiles, it’s possible to distinguish between the two groups quickly and efficiently using modern assessment methods.

In other words, stop guessing and start testing. The future of your business depends on it.

Robert Hogan, Ph.D., is the founder and president of Hogan Assessments. He’s the first psychologist to determine the link between personality and organizational effectiveness, and today remains the leading authority on personality assessment and leadership.

Joan Jakobsen is the founder and managing director of A&D Resources, and is responsible for developing and introducing the Danish adaptation of Hogan Assessments. She founded A&D in 2002 after more than a decade of management consulting experience, including positions with HP and PA Consulting Group.