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Since McKinsey & Company introduced the notion of a war for talent nearly 20 years ago, there has been unprecedented interest in the development, validation, and application of tools for quantifying human potential. Like other forms of warfare, the talent war has spurred a great deal of innovation and competition. In line, a significant amount of venture capital has been fuelling HR technology startups dedicated to the identification of new talent signals. Here we will address key advances in this area, highlighting the dialectic between the old and new worlds.
If It Ain't Broke, Don't Fix It
There are really just two key questions in talent identification: What should be assessed and how? The "what" question concerns the definition of talent and its elementary components. This question is important. If you don't know what to measure, there is no point in measuring it well. The "how" question concerns the methods used to quantify those components, for example, the weapons used by consultants, recruiters, and coaches to help organizations win the war for talent. The effectiveness of these tools is gauged by how well they predict future performance and improve organizations' ability to understand people.
Although definitions of talent vary, there are four basic heuristics to distinguish between more and less talented employees. The first is the 80/20 rule based on Vilfredo Pareto's observation that a disproportionate amount of the collective output of any group can be attributed to a minority of individuals, such that 20 percent of people account for 80 percent of productivity, and vice versa. Talented individuals constitute the vital few (20 percent if not less) delivering most of the output. The second heuristic concerns the principle of maximal performance, which equates talent to the best a person can do. Accordingly, people are as talented as their best possible performance.
The third heuristic equates talent to effortless performance, emphasizing its relation to innate ability or potential. Since performance is typically seen as a combination of talent and effort, then talent can be defined as performance minus effort. In line, when two individuals are equally motivated the more talented person will outperform the other. The fourth heuristic equates talent to personality in the right place: when someone's skills, dispositions, and abilities are matched to...