The people process is more important than either the strategy or operations processes; if you don’t get the people process right, you will never fulfill the potential of your business. A robust people process does three essential things:
● Evaluates individuals accurately and in depth.
● Provides a framework for identifying and developing the leadership talent the organization will need to execute its strategies in the future.
● Fills the leadership pipeline that is the basis of a strong succession plan.
A robust people process provides a powerful framework for determining the organization’s talent needs over time, and for planning actions that will meet those needs. It is based on four building blocks: 1) linkage of people to strategy and operations; 2) development of the leadership pipeline; 3) dealing with nonperformers; and 4) linking human resources to business results.
Linkage of People to Strategy and Operations
The first building block of the people process is its linkage to the strategic milestones (see example at right) over the near (0-2 years), medium (2-5 years) and long terms, as well as the operating plan targets. Business leaders create this linkage by making sure they have the right kinds and numbers of people to execute the strategy. Be prepared to make tough decisions. The strategic milestones you set might necessitate a reevaluation of your leadership team, should you determine that the skill sets required to meet your near-, medium- and long-term goals will be beyond the reach of your current staff. This is a difficult social process — no one wants to tell good people they aren’t capable of moving to the next level — but it must be done.
 
Development of the Leadership Pipeline
Meeting medium- and long-term milestones depends largely on having a pipeline of promising and promotable leaders. To determine the ability of current staff to take on larger responsibilities, you must conduct an assessment of their skills. This will reveal the adequacy of your leadership pipeline in terms of quantity and quality.
Analyzing succession depth and retention risk analysis is the essence of talent planning and building a leadership pipeline of high-potential people. The retention risk analysis looks at a person’s potential marketability, as well as the risk a business faces if he or she leaves. Succession depth analysis determines whether the company has enough high-potential people to fill key positions. It also looks at whether there are high-potential people in the wrong jobs and whether key people will be lost if a job is not unblocked for them. Such analysis helps an organization avoid two dangers: organizational inertia (keeping people in the same job too long) and moving people up too quickly.
Dealing with Nonperformers
Even the best people process doesn’t get the right people in the right jobs 100 percent of the time; likewise, it can’t make everybody into a good performer. The final test of a people process is how well it distinguishes between those who have been promoted beyond their capabilities and need to be moved to other positions, and those who simply must be moved out.
Linking Human Resources to Business Results
Human Resources has to be integrated into the business process. It must be linked to strategy and operations, and to the employee assessments, across the enterprise. This is a different approach than many companies have taken in the past. At one time, managers might assign HR personnel to recruit or execute specific elements of a strategic plan, such as negotiating with a union if a plant would need to be shut down.
In today’s execution-minded companies, HR is different. Personnel within the department are expected to have a point of view about how one achieves a business objective or strategic plan, just like any other participant in the management process. HR people must not only be well trained in how to develop and retain people — they must also possess the business acumen, critical thinking skills, and ability to link strategy and execution. In other words, they must have the same tactical skills as any business leader.

GE’s Talent Domino Effect
In the mid-1990s, when it had become clear that GE was the world’s best producer of leadership talent, its division presidents were all retention risks, targeted by top headhunters to take their experience and expertise to other companies. GE’s people process provided a forum for how to retain these valuable people by both garnering data and providing financial rewards, such as stock grants that could not be cashed until retirement.
When a key person does leave, however, the process almost always provides a needed replacement within 24 hours. For example, when Larry Johnson, the president of GE’s appliance division, announced in spring 2001 that he was leaving to become CEO of another company, GE named his successor on the same day. The organization was also able to announce — on that same day — who would fill all the positions created by the domino effect of related promotions.