The Society for the Advancement of Consulting® has asked its global members to comment on the advantages of building talent vs. buying talent. "There is a myriad of beliefs about whether to hire new people or develop existing ones as times chance," reports SAC CEO Alan Weiss, PhD. "Here are some viewpoints."
Gayle Lantz is Founder of WorkMatters, Inc., (www.workmatters.com) a leadership consulting firm based in Birmingham, Alabama. She stated that deciding whether to spend more to hire expertise, or spend less and develop it, depends on the goals of the business and the speed with which you need to reach them.
"In some cases, you should do both. For example, if retaining top talent is a high business priority, an organization can hire an outside consultant or coach to work directly with executives. As these leaders experience coaching, they learn how to develop their own coaching skills which increases their effectiveness—and chances of retaining top talent.
"Successfully developing expertise internally depends on a person's willingness to learn and requires more time. Hiring an outside expert can accelerate your progress when needed.”
"As a global business consultant and former VP of Operations of a mid-market manufacturer, I've found that there is nothing more important than finding, developing and retaining talent,” points out Lisa Anderson of LMA Consulting Group, Inc. in Claremont, CA. (www.lma-consultinggroup.com). "Undoubtedly, a two-prong approach works best— continually build upon your internal skills and supplement them with external expertise. In today's new "normal" business environment, time is essential. There is no time to wait to build it if you want to remain competitive; however, if you don't build internal expertise, you will be left in the dust. Instead, those executives who pursue both paths will succeed.”
Dr. Sally Mounts of Auctus Consulting Group reports: In small businesses where cash flow is a constant concern, the mantra is almost always "save, save, save.” Owners wax lyrical about the benefits of shaving a few dollars off of any and all operating costs, and employees are fastidious to the point of fanaticism with pens and paper clips. In such companies, the onus is always on developing skills in-house so that the business doesn't have to hire outside expertise.
Yet such a philosophy can be damaging if the focus on internal skills development supersedes the focus on external business acquisition. The myriad requirements of running a business successfully take time. In today's fast-changing and competitive environment, innovation takes time as well.
The degree to which a business owner is tied to saving money by building in-house skill is the degree to which he or she is unable to accomplish tasks which directly affect his ability to provide value to clients and customers. Developing value-added intellectual property—articles, webinars, podcasts, ebooks, checklists, surveys, and blogs—all fall by the wayside when someone struggles to figure out how to put a shopping cart on the company website (a task an accomplished web designer can perform quickly and inexpensively). The hours would be far better spent working on intellectual vehicles to showcase expertise, talking to buyers, developing relationships, and moving the business forward.
Dr. Maynard Brusman is a San Francisco Bay Area executive coach and consulting psychologist specializing in leadership development. He is the president of Working Resources, a strategic talent management consulting firm. www.workingresources.com He offers a few insights:
Dr. Brusman notes, "It is axiomatic that company leaders are working in an increasingly global context characterized by volatility, uncertainty, complexity, and ambiguity. Enlightened and agile leaders are becoming more adept at managing paradoxes. Growing companies have to both retain and develop top talent with both high cognitive ability and emotional intelligence, while hiring additional highly motivated and innovative people who also think and act differently.
"How do great leaders of successful companies spend half of their time? They spend it on people: recruiting new talent, picking the right people for positions, grooming young stars, developing global managers, dealing with under-performers, and reviewing the entire talent pool. Even in a slower economy, the war for top managerial talent is persisting. The quality of leadership at every level has a huge impact on everyday operations, and it determines every worker's level of engagement.
That's why companies spend so much money on leadership development and succession planning. When the leadership pipeline is dry companies are forced to turn to outside sources to hire the brightest stars. Hiring gifted people makes sense as a tactic, but not a strategy. This approach fails because highly talented individuals are scarce, and everybody is after them. Talent is a critical driver of corporate performance. A company's ability to attract, develop, coach and retain talent will continue to be a major competitive advantage in the coming years. Great companies like Google and Apple are adept at using paradox to make strategic talent management decisions.
"Our conclusion," says Weiss, "is to look inside first, but don't hesitate for a moment to hire specific talents which constitute a long-term need. Waiting to develop that from within can cost you the competitive race."