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Wayne F. Cascio, John W. Boudreau and Allan H. Church

The chapter applies a risk optimisation lens and reframes talent management systems in ways that hedge risk and uncertainty. It uses the notion of human capital risk – uncertainty arising from changes in a wide variety of workforce and people-management issues that affect a company’s ability to meet its strategic and operating objectives. It examines the use of future scenarios to alleviate risks, and the concept of potential. It highlights two implications for practice: what this means for measuring candidate “potential”; and what the implications are for the ownership rights and decision accountability for talent development. It uses a Leadership Potential framework to demonstrate how organisations might take a more comprehensive and holistic view to framing the identification and prediction of future leadership success. It calls for four developments: improved HR information/talent management systems, databases, and managerial tools for planning different staffing scenarios and downstream implications; changes in the mindsets of leaders, the culture of organisations, reward systems, accountability; changes in our concepts of what talent management and succession planning are supposed to be about; and changes in the capabilities of HR professionals.

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John Church and Wendy Armstrong