Organization Practice

Matching talent to value

The roles that create the most value in your organization may not
be at the top. Getting the right people in these critical seats can
turbocharge performance.

© Cecilie_Arcurs/Getty Images

June 2019
 In this episode of the McKinsey Podcast, Simon Talent to value flips all of that around and says, let’s
London speaks with McKinsey partners Carla start with how you’re going to create value in the
Arellano and Mike Barriere about systematically organization. Then let’s figure out what’s the work
assessing which roles in a company deliver the bulk that needs to happen to get there. Then let’s figure
of value, then defining the work that needs to be out who needs to deliver that work. And finally, who
done in those roles, and, finally, finding the right are the people that we would put in those roles to
talent to get it done. deliver that work?

Podcast transcript Mike Barriere: Carla, I love those points, and it’s
almost as if current state or where HR is coming
Simon London: Hello, and welcome to this episode from, it’s fuzzy logic. It’s a bit fuzzy about the
of the McKinsey Podcast, with me, Simon London. roles and what’s required. It’s a bit fuzzy about the
Our topic today sounds beguilingly simple: getting talent. It’s who are the usual suspects? Who are the
the right people into the critical roles that drive favorites? Because a lot of that’s being identified
value for your company—in other words, matching with more subjective processes.
talent to value. The snag is, many companies
don’t have a really crisp perspective on how value While the goal isn’t that different: get the best talent
is going to be created, let alone the roles that in the most critical roles, it’s how we do it that’s
will be critical to making it happen. Even if they fundamentally different, and it has to be. So how do
know the roles, they may not have taken a really you determine which rules are most critical? And is
dispassionate look at whether the people in the there some science you can apply? Like, when you
roles today have the skills and support they need think about value drivers and modeling, where do
to get the job done. To discuss the discipline of those drivers show up? Therefore, if you think about
talent to value, I caught up with McKinsey partners the roles that are going to contribute on the front
Carla Arellano and Mike Barriere. Prior to joining end, you have more of a fact base in terms of why
McKinsey, Mike was chief talent officer at Walmart certain roles are more critical than others.
and, before that, head of HR at Alcoa. Carla and
Mike, thanks so much for doing this, and welcome And it’s because they have a disproportionate
to the podcast. contribution to the value you’re trying to create. On
the other side of it, if you’re not clear about what is
Carla Arellano: Thanks, Simon. Really excited to success in the role, and whether we know our talent
be here. well enough to put the best in the role, you’re also
not clear.
Mike Barriere: Great to be talking to you today,
Simon, thanks. So you’re making decisions without knowing which
roles are critical and which talent is really the best
Simon London: What about this issue of mapping fit. But what we’re saying is that you’re putting the
talent to value? What does it mean in practice? company and the future value in jeopardy by not
doing this.
Carla Arellano: Talent to value flips many of the
usual approaches to talent decisions on their Simon London: And it all starts with the value
head. When I say usual approaches, I say that agenda: How are we going to make money? How
most decisions and energy around talent are are we going to create value over the next X years?
hierarchically driven. They tend to be driven by And then what are the critical roles to delivering?
gut instinct and judgment, by the sense that And by the way, those critical roles may not be the
somebody’s been at the organization for a while most senior roles in the org.
and has achieved X, Y, or Z level.

2 Matching talent to value

Mike Barriere: And the talent that’s best fit for becomes an active list that you manage. I find that
them may not be currently on your radar. You have it’s hard to manage more than a line of sight that’s
to find them. 50 roles deep in the organization. If those 50 roles
are capturing 80 percent of the value, it’s important
Simon London: When we do this analysis with to prioritize and actively manage them.
companies, and we help them map the critical
roles to deliver value, how many roles, percentage- But the other part of this and the work that we’ve
wise, do we typically find we’re talking about? been getting into lately is there’s no reason why you
can’t take this down into levels in the organization.
Carla Arellano: We’ve recently run some neat The fact that there’s a G3 at the top, that’s the
research across the 50 or 60-plus efforts that enterprise view, and that’s where you look at 50
we’ve achieved recently. We’re finding some very roles. Let’s say you’re a function or a business-unit
strong similarities across these. Usually, there are leader; you might have five of those 50 in your area,
between 30 and 50 roles that make up somewhere but you might also have another ten that you really
between 70 percent and 80 percent of the value care about. You start to cascade the method down.
agenda. That tends to be regardless of company You want every business leader to be thinking this
size, in terms of market cap and employee number. way and thinking about what is the value we’re
creating in the function. But we start at the top in
More interestingly, we’ve also found that terms of getting alignment, particularly through the
it’s usually about 15 roles that are delivering CEO, CFO, and CHRO, to take the hard look, and
somewhere between 40 percent and 50 percent where do those 50 show up?
of the value. So there tends to be quite a bit of
concentration in value. Simon London: Can I just push a bit on this
notion of assigning value to roles? Particularly
Sometimes what happens, as Mike described, is roles that are not in the commercial front line?
roles have been built around super humans or super If I think about big, functional roles, something
roles. Those roles are picking up a lot of value, like cybersecurity. Those roles are absolutely
potentially disproportionately from where you’d like critical. If good people are not in those roles,
them to be. If you think about the implications for the enterprise could grind to a halt. How do you
a CEO or a leadership team, you don’t necessarily assign value to roles like that?
need to spread all your efforts and keep track of
several hundred people. Carla Arellano: A core part of this starts by getting
underneath what work needs to happen, and what
Mike Barriere: I’m amazed at how many times, needs to be done to create that value. Then we go
having gone through this, we see the beauty when into who needs to contribute to that value. Who
you take a value driver, you know the value, you needs to do that work to get there?
know what functions contribute. Assigning value to
roles is really important in this work, and so it could We have a series of heuristics across what we’ve
actually start growing. And then you start to go called value creators. To your example, commercial
down the list, and by the time you get to 50 roles, leaders tend to be the most straightforward, or
you’ve captured more than 80 percent of the value. P&L [profits and losses] owners. Value enablers. So
think of this as your enabling functions, HR, IT, et
And again, I cringe a little about what’s the cetera. And then what we call value protectors. This
percentage. Is it 2 percent or 5 percent or is where your cybersecurity, legal, et cetera would
1 percent—it’s more about, what can a CEO in come in. As we go through each value pool, we’re
particular do, though we like to think of the G3, the trying to get underneath what’s the work, who’s
CEO, CFO, CHRO [chief HR officer], as the body doing it, and how are they driving it?
in the organization that does this work—but this

Matching talent to value 3

 We’re really testing for, where is the hard-core distribute that value across those roles. There
work and strategic decision making and leadership are some heuristics that we work with, some
happening? In the cybersecurity example, one of percentages, whether you’re a creator or enabler
the things that we look for frequently and have type of role. But the beauty of putting this into a
discussions about is, how much value is at risk? model is that then you can do sensitivity analysis.
And how much do we want to assign in terms of So maybe it’s 60 percent on the front end and only
protecting risk? That’s where cybersecurity roles 20 percent on the product side, or vice versa. You
come in rather frequently. can quickly see the impact on the kind of roles that
pop up.
Mike Barriere: One thing I would emphasize is the
front end of this. When you think of value drivers, Simon London: So we’ve had a robust conversation
let’s say you think of some that might be around as a management team about what our value
organic growth, let’s say revenue growth as an agenda is. We’ve hammered out some areas of
example. You start to look across the organization. ambiguity. We’ve done the hard work of then
Let’s say you want to grow a billion dollars on the identifying the roles that are really going to matter
top line. You look at your commercial groups, sales, over the next few years. What happens next?
and marketing. You look at product or operations,
depending on your business, and then you look at Mike Barriere: The fun stuff. First is, if these are
those enabling functions. the roles, what does success look like? I come
from HR, so I can pick on myself. Usually, HR
You could literally take a billion dollars of top-line doesn’t have up-to-date, nimble, and dynamic role
revenue growth and say, OK, 30 percent of that has descriptions that capture what a role needs to
to come from sales and marketing. They have to go do today.
out and create the demand. But obviously, that’s
not all of it. We have to deliver the product. Maybe This is part of the issue, Simon, where a lot of our
there’s an R&D contribution, or maybe there’s a HR processes are dated and not designed for this
real operations component. These are the creator period of exponential change and disruption. The
roles, because they’re so important to generate first thing, when you say this is a critical role, we all
the demand for, in this case, the top-line revenue agree it’s one of the top 50, is to define, and Carla
growth, as well as the delivery. mentioned it, a role card.

So maybe 30 percent is in sales and marketing, A role card consists of the mission for the job, and
another 30 percent in operations. Now you still then in language of jobs to be done, what are the
have 40 percent of that value, which could come five to seven things that are most important that
from these enabling functions like technology or this role has to accomplish to be successful? You
HR to provide the talent to the sales teams or the also know the value that the role should capture.
operations teams. You start to build this mapping— It should be written in a language that’s clear,
and we have a great way to model this—of the concise, and tied to those value drivers that we
value driver. What functions are contributing what talked about.
percentage of that value? Then that’s where you
get into the valuation of the role. Some roles might hit two or three or even four
value drivers, and you want to be clear that this
Let’s say you take 30 percent of a billion [dollars] is exactly what needs to be done in the role to
into sales and marketing, there’s a value there, and capture that. That’s half the role card. The other
you say, OK, well, there’s seven roles in marketing half is, how are you going to assess somebody
that are absolutely essential to grow top-line against those requirements?
revenue. They’re those key account managers
that we’ve been using as an example. You then

4 Matching talent to value

Role descriptions were designed to stand the test Mike Barriere: Now we’re going into the third
of time. A lot of them are old, static, they’ve been step, which is the matching. We defined the value
around. Compensation teams use them to price agenda, the drivers, we know where the critical
jobs relative to market. Search firms use them. roles are in the organization, we write the role cards,
and now it’s time to assess and match the talent.
We’re talking about something different. We need a
much more nimble, concise way to think about jobs A lot of times you’ll find that you don’t have your
and design jobs, so you don’t get this phenomenon best talent in a good percentage of the critical
of double-, triple-hatting somebody, or having roles and your best talent is somewhere else and
them do 60 percent non–value-add work. not even on the radar for these kind of roles. That’s
why the matching is really important.
We want to be really crisp, and that’s why we
even changed the language to role card, not a job Simon London: What’s the percentage of
description, because you want to be clear about, mismatch? When you do this for the first time,
this is what this role needs to do over, like, a three- do you find that organizations are 70 percent
year time horizon, and this is the value that you can mismatched? Or in most organizations is it more
measure success in the role against. like 10 percent of the roles cause some serious
head-scratching and conversations once these
Simon London: It’s a hybrid between a role cards are laid out?
description and your annual objectives, somewhere
in the middle there. It’s a different critter. Mike Barriere: What comes to mind is a recent
experience where we found 45 percent of the roles
Carla Arellano: Yes, very much so. When we’ve were a great match. The incumbent was the best
developed these baseball cards or role cards for fit. Twenty percent to 30 percent typically have
leaders, one of the first things that happens is gaps, but they’re addressable. They do have some
the reaction that, oh, we have the person in this gaps, but they are the best talent you have, and if
role doing 50 other things that are not on that list, you have clarity about how to help them address
usually followed by, how would we expect them to their gaps—which we can get to in a minute, the
actually deliver this, when we have them doing all techniques for that—typically, it could be in the
these other things. And are they best placed for ballpark of 20 to 30 percent that are mismatched.
everything else? It doesn’t mean you fire them. It means that there’s
probably a better role for them, or you’ve got to
The other thing, where Mike was going with this look either internally or maybe go external.
notion of the knowledge, skills, attributes, and
experiences, is that most organizations have These are not the roles you want to give somebody
moved people into roles based on the fact that they a stretch assignment for. These are your critical
were successful in this other role, or somebody roles that are going to deliver value, so you really
likes them and knows them, and they’ve worked want to put your best players in these roles.
well together for a very long time.
Carla Arellano: I think the other thing alongside
But the focus should instead be on, do we want that, Simon, that I’ve seen frequently is looking at
somebody who can build a team of very diverse the team around a role or looking at the team of
profiles to go do something different or hard? roles. Because you might find that there’s a gap
Or do we want somebody who can be a strategic of an incumbent to a role. You might also find that
negotiator with customers? Those are very across a team, there’s a core missing experience
different requirements for a role. Getting specific or capability set that you need to complement in
on those and how you might measure it can be some way.
hard. But the rewards are very high.

Matching talent to value 5

 I have an organization that’s been going through Mike Barriere: Exactly, because that happens a
a restructuring for quite a while. None of the lot. You take a team approach or you do something
individuals in critical roles had actual restructuring broad strokes without really having that person
experience, which was a little bit of a flag. It wasn’t who you look at and say, that’s their role, the
that every single one of those roles needed to have value is tied to them in that role. But the way they
it, but it was important that at least one or two of succeed involves not only the team, it involves
them did to get there. There’s that individual view, the workforce. And does the workforce have the
and then there’s a little bit of a team view as well. capabilities? What about the culture, how they
run the place. Do they take out organizational
Simon London: This goes back to my slight bureaucracy, so they can move with speed and
skepticism about how easy it is to assign value to agility? A lot of the organizational things light up
roles, because I think we’re acknowledging that so here, but this is the front end to prioritize the role.
much of what goes on in an organization is a matter Then how do you make a leader successful in that
of team production. There are teams delivering role vis-à-vis the top team and the organization and
value, not individuals. the capabilities and the culture to run the place?

If you say you need to reinforce a role by Simon London: Do you get pushback from
bringing in somebody else as a wingman—it’s organizations at that cultural level? That doing this
a gendered phrase—but a wingman effectively in this way just feels kind of countercultural?
who compensates for one element. Aren’t you
immediately beginning to undermine this idea that Carla Arellano: Definitely. Maybe more than
it’s that role and that role alone that’s delivering pushback, there tends to be a very deep-seated
the value? philosophical question for organizations. One,
about what’s the difference between critical and
Mike Barriere: No, I have a very strong view on that. important, and how do we make sure that we’re not
A critical role leader needs to absolutely leverage creating a stratification of our workforce and making
the team—and it might not even be their own team. some people feel more important than others?
There could be an important collaboration across
function or function to a business unit or across a A lot of organizations—this is going to sound a little
business unit. bit harsh—confuse fairness with, everybody has
to get everything the same no matter what. They
Now we’re getting into, how do you optimize value end up struggling to feel comfortable doing the
capture for that critical role leader? They’re on approach, and then figuring out what they would do
the hook. You need somebody responsible. If you differently for that group of critical roles than they
just try to tackle it from the team dynamic, you’re might do for other roles in the organization.
going to miss something. We like to think that
there’s a critical role leader that’s on the hook, but There’s also this sense of what’s the urgency?
part of their success is going to be driven by how And where Mike was going about the culture
well they build the team around them and how well and the agility that you create in an organization,
they can build cross-functionally or collaborate to make sure that those critical roles are able
horizontally in the organization. It doesn’t put teams to be successful and deliver on the value. That
aside and say it’s only the role that’s important. likely will require a shift from the way things are
To be successful in the role, team competency is normally done to drive forward a different sense
absolutely essential. of urgency than you might have had in terms of
certain things.
Simon London: Ultimately somebody has to be
on the hook, though. I think that’s the message. Mike Barriere: I have two principles related to
Somebody has to own the delivery of that value. this, Carla. It’s that development matters for

6 Matching talent to value

everybody. Every employee in an organization company that’s going to do all this well, what are
should have the opportunity to reach his or her full the gaps that we often see?
potential, and you want to provide that, especially
as leaders. Mike Barriere: The first part is guts. The CHRO
has to have the moxie to push up against the
While that’s important, it’s also important to CEO and the CFO, the exec team, and call out if
think about the future of the company. Therefore, the value agenda is not clear. If it’s ambiguous
who are those talents that you absolutely want or fluffy or ownership is not quite there, this is
to get into the most critical roles? You need to the moment that a CHRO can really say, “Hey, if
do both, but many times, we only do the broader we want to leverage our human assets, we need
set. Because there’s a culture that it’s one team, much more clarity about drivers and where in
rather than there being a specific set of certain the organization is the most critical, because we
people. That’s why we really put the emphasis on want to deploy our talent just like you would think
the roles that matter, and then not only looking for about deploying the financial capital.” The role
the 50 people, but what’s the succession pipeline of the CHRO, particularly with the G3, is to
behind them? increase awareness and to lead. We need to take
our value agenda and our value drivers into
There could be a couple hundred people that you’re the organization.
also developing to be ready to take those roles in
the future. From there, the CHRO does need a good sense
of the business and the industry and what are the
Simon London: It’s true, every organization treats trends. To Carla’s point, the CHRO is an officer first,
people differently. It’s just that we’re used to doing and you happen to have an HR talent tool kit, but
it based on hierarchy. The difference here is, we’re the role is about understanding the business, the
focusing on value first and role first, and that can business dynamics, the ways that the company can
feel a little unusual. But it’s not like everybody in achieve value in the future.
an organization gets the same treatment today
anyway. Hierarchy takes care of that. Carla Arellano: Mike, one of the things that you
said really jumps out at me. CHROs are probably
Mike Barriere: I’d add that it is hierarchy, but it’s most comfortable, but I think if you get into some of
also the definition of top talent, or when you use their teams, there tends to be less comfort. And it’s
the nine box to try to find out who are our highest this concept of really knowing the business and the
potentials. Companies segment already, but they industry and how it makes money.
segment the talent, not the roles. Then you need
more of a fact base of who has the potential? And What I tend to find is, it might be that an HR leader
potential for what? understands it but might feel uncomfortable
engaging a business leader on where value is going
We’re saying it’s potential to be successful in to come from, and why they think they’re going
critical roles. To leverage the fact that most to achieve a certain margin, or what is the plan to
companies are already segmenting talent, we’re capture that digital growth?
saying, segment the roles first, and then match
the talent and get that right, and then broaden There’s something about what you said earlier
it. Broaden development and leadership and on, having the moxie but also enabling that in
opportunity and tackle it that way. your team and giving them the comfort level
that they have just as much right, as well as
Simon London: If you think about what a CHRO the demand on them to really understand what
needs and what a good HR function needs in a needs to happen and by whom, so that they can
engage productively.

Matching talent to value 7

 Simon London: So, I think we’re out of time for Simon London: And thank you as always, to
today. Carla and Mike, thank you so much for our listeners, for tuning into this episode of the
doing this. McKinsey Podcast. To learn more about our work
on talent, talent management, and talent to value,
Carla Arellano: Thank you, Simon, it was a pleasure. please visit McKinsey.com.

Mike Barriere: Simon, thanks.

Carla Arellano and Mike Barriere are partners in McKinsey’s New York office. Simon London, a member of McKinsey
Publishing, is based in the Silicon Valley office.

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8 Matching talent to value