McKinsey on how Strategic Growth is ultimately a Talent Business.
McKinsey research shows that the management team is always the single most important driver of performance. However, firms still assume the risk of changing management is greater than the risk of keeping an under-performing manager. The common perception is once talent has been hired and is in place, it should simply be maintained. Not changed or improved. Because the risk of an empty seat is greater than the risk of a filled seat, even when filled by a non-performing manager.
“Why should there be an empty seat?” Aly Jeddy, McKinsey Senior Partner, asks. “The reason there is an empty seat is because firms have systematically underinvested in building stables of talents which can be quickly deployed” he says.
Private Equity is the fastest-growing and probably the most profitable ownership category in the world. However, as Aly Jeddy points out “We have not seen an investment in talent that would justify the value associated with each talent”. As a key takeaway the focus should be on the nature and quality of talents. On high-quality recruitment and executive search to acquire the right talent. Then start building stables of talents to deploy when the most important drivers of performance fail to perform.