Talent Matters Even More than People Think


Here is an excerpt from an article written by Tomas Chamorro-Premuzic for Harvard Business Review and the HBR Blog Network. To read the complete article, check out the wealth of free resources, obtain subscription information, and receive HBR email alerts, please click here.

Illustration credit: Marion Barraud for HBR

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Why are some people more successful than others?

Leaving aside luck, which equates to confessing that we don’t really know, there are really just two explanations: talent and effort. Talent concerns the abilities, skills, and expertise that determine what a person can do. Effort concerns the degree to which the person deploys their talents.

Clearly, some people are both talented and hard-working, but there is often a tension between the two. Talent can make people lazy because they need to rely less on hard work to achieve the same goal. Hard work helps people compensate for lower levels of talent, which is why it’s quite helpful to be aware of one’s limitations. (Of course, it is possible to lack both talent and effort, but then success will require a great deal of luck!)

How talent management is changing.

But how much does talent actually matter? Nearly 20 years have passed since McKinsey introduced the idea of a war for talent, yet most organizations seem to struggle with their talent management practices. For example, a recent industry report by Deloitte based on over 2,500 leaders from 90 countries showed that most employers are ill-prepared to tackle key talent identification challenges.

Furthermore, scholars have recently argued for a more collectivistic approach to talent management, suggesting that individual stars are less important than previously thought, and that overpaying them could harm team performance. In fact, many people assume that a team of stars is especially hard to manage and more likely to lack “synergy,” resulting instead in a collection of entitled and expensive prima donnas.

So should companies stop focusing on talent? Is talent overrated?

Not quite. Consider the following facts:

A few talented people make a huge difference. This is one of the most replicated findings in management research. In any organization or group, a few people will make a disproportionate contribution to the collective output. Around 20% of individuals are responsible for 80% of the output and vice-versa. This Pareto Effect has been found in virtually any domain of performance. As academic reviews have highlighted, a Pareto effect illustrates the distribution of scientific discoveries, publications, and citations; entrepreneurial success and innovation; and productivity rates. In all these areas 20% of individuals (or less) tend to account for between 80 and 98% of performance.

Thus talented people – the vital few – are the main driver of a company’s success, and companies will see much higher returns on their investment if they devote more resources to the few people who are making a big difference, as opposed to trying to make the “trivial many” more productive.

Talent is easy to measure and predict. The science of talent identification is at least 100 years old, and there are many reliable and legally defensible methods for identifying potential and predicting future displays of talent. Although most companies waste an enormous amount of time coming up with their own models of talent – a camel is a horse designed by a committee – they are overcomplicating things. They would be better off consulting the vast body of scientific evidence in this field.

For instance, meta-analytic studies show that there are consistent personality attributes associated with top performers across all fields and industries. Most notably, the star organizational players tend to have higher levels of ability, likability, and drive. Ability is in part domain-specific as it involves the technical expertise and knowledge that people have acquired in a field

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Here is a direct link to the complete article.

Tomas Chamorro-Premuzic is the CEO of Hogan Assessment Systems, a Professor of Business Psychology at University College London, and a faculty member at Columbia University.

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