Telecom company cuts recruiting time by half and hires 100 high-impact specialists within three years.
A few years after its privatization, a major European telecom company sought to compete with global media and IT players by embracing the internet telephony revolution and building businesses in both mobile networks and digital television. But the company recognized it would have to recruit and develop large numbers of highly skilled managers and specialists to deliver on this vision. The HR director therefore asked McKinsey to help shape a comprehensive talent and leadership strategy.
The work began with a detailed diagnostic, which revealed that the company faced a serious shortage of both leaders and technical talent such as IT specialists. Further, silo thinking hampered the cross-division collaboration needed to foster growth and develop talent. Finally, line managers doubted the HR function’s credibility and were likely to resist any talent initiative it proposed.
McKinsey worked with the HR director to create a three-year program to turn the telecom company into a people leader. The program refocused the company’s recruitment process to hire better people more quickly and at lower cost; deployed the best talent to the most critical positions; made people a key focus of board meetings and business reviews; and introduced a "successor key performance indicator (KPI)" by which line managers were evaluated for their effectiveness in mentoring future leaders.
To close the leadership gap identified in the diagnostic, McKinsey helped the company shape an "action-learning intervention" rooted in the business (proven to be a much more effective approach than traditional training). This approach was built around intensive forums to develop the skills managers needed to drive growth, and fieldwork where they put this learning into practice through real projects to shape strategy, tap cross-division synergies, and grow revenue. McKinsey also guided the board in mentoring high-potential managers to build future leadership capabilities.
Finally, the program built the effectiveness of the HR function by focusing it on achieving business impact as a strategic advisor to the board and the line. Solutions to key talent issues were co-developed by HR and managers of particular divisions, thus overcoming historic mistrust between the line and HR.
The program's impact was dramatic. Recruiting time was halved—and in the critical area of IT talent, 100 new recruits were signed on during the three years of the program. With the completion of the program, the company’s talent and leadership pipeline was sufficient to fuel growth for the following five years.
The action-learning intervention had a marked impact on top managers' effectiveness. As one participant reported: "The program has helped me to become a better leader of people, rather than just a manager of results." The program also helped HR boost its impact: in its customer satisfaction score relative to peers, the function moved from the last to the first quartile.
The talent and leadership strategy made a significant contribution to the company’s overall success, with its share price doubling in five years—even against the backdrop of the economic downturn.