‘Reimagining Talent’: Why companies struggle to define talent and how to bridge the capability gap

While we readily admire talent in musicians, artists and athletes, the idea of it in the corporate space is far more elusive.

In many organizations around the world, talent is often equated with ‘high performers’ and ‘high potentials’. But…performance is fluid—it can fluctuate. This raises an important question: is talent itself a variable? Can a person’s potential really shift so easily with changing performance? If it can, how can organizations track it, especially when potential is hard to measure…?

The interviews for this book reveal that confusion around defining talent is not confined to any one country—it’s a universal challenge. Some companies define all their managerial staff as ‘talent,’ while others struggle to articulate what the term even means. These organizations often default to simply following the established routines of their talent processes. When asked what constitutes talent in their companies, they tend to focus on mechanisms like nine-blocker grids or talent council meetings rather than providing a clear definition….

Carole Tansley, professor of HR Innovation at Nottingham Business School, notes in her 2011 paper, “What Do We Mean by the Term ‘Talent’ in Talent Management?": “There is no single or universal contemporary definition of ‘talent’ in any language; perspectives differ across organizations. Current meanings of talent are often specific to the organization and shaped by the nature of work. A shared organizational language for talent is critical."

In their 2013 paper, “What Is the Meaning of ‘Talent’ in the World of Work?", Gallardo-Gallardo et al. discuss the ambiguity of the definition of talent in organizational contexts. They note that “talent can mean whatever a business leader or writer wants it to mean, since everyone has his or her own idea of what the construct does and does not encompass". This underscores the need for organizations to cultivate a common language and understanding of “talent" to ensure alignment in talent-management practices within their organizations.

Tansley also highlights the paradoxical nature of how organizations define talent. It carries both positive and negative connotations. On the one hand, it recognizes value, strengths and access to resources; on the other, it can marginalize “the brightest", create resentment among coworkers, impacting performance.

First and foremost, it’s essential to realize that talent in the corporate world is not a person or a select group of individuals adorned with prestigious academic credentials or higher intelligence. Nor is it tied to the fleeting notion of outperforming others. Talent in an organization refers to the capabilities—encompassing skills, knowledge, expertise and behaviours—embodied in its employees essential for driving successful business outcomes.

During our discussions for this book, Suresh Narayanan, former managing director and CEO of Nestle India, shared his perspective. He explained, “For me, talent is a multiplicand of resources. You start with a certain amount of capital, a portfolio of brands and a defined infrastructure. The extent to which these resources create value depends on the multiplier—talent. This multiplier can be one, two, three, even zero if you don’t have the right people with right capabilities." He illustrated this with a simple comparison: “Take two individuals—Ramana Murthy and Suresh—performing the same role. Ramana Murthy, however, delivers three times the impact. It’s not necessarily because he has better educational qualifications but because his capabilities enable him to drive higher outcomes. That’s what defines talent—the ability to multiply the value of existing resources."

There is almost always a gap between the required capabilities—what the business needs—and the available capabilities—what currently exists. The purpose of talent management is to bridge this gap.

Among these required capabilities, some are mission-critical because they have a direct impact on the organization’s core objectives. For example, in a logistics company, route optimization and supply chain management capabilities are critical for efficient delivery and cost management.

These capabilities can be found across different levels of the organization—not just among managers. For instance, a frontline customer service team might demonstrate critical problem solving skills that impact customer satisfaction and retention.

By accurately identifying, developing and aligning these capabilities, companies can build a talent-management system that supports long-term business success. Obviously, these organizational capabilities reside within individuals or teams across the organization. As such, identifying the existing and required capabilities within the employees in the organization and putting focus on nurturing them are crucial for the success of the organization.

Building on the earlier point that organizational capabilities reside within individuals or teams, the capabilities in people can be viewed through three distinct classifications:

• Natural abilities (NA): The inherent strengths that individuals are born with, such as creativity, interpersonal skills.

• Acquired capabilities (AC): The knowledge that employees develop over time through education, training and work experience—for instance, financial analysis or coding.

• Unconscious capabilities (UC): The latent, untapped capabilities within individuals that often surface unexpectedly—like an employee demonstrating exceptional abilities.

By understanding and applying these three classifications, organizations can more effectively nurture talent and unlock hidden potential across their workforce. Thus, the corporate talent equation can be expressed as follows: Talent = Natural Abilities (NA) + Acquired Capabilities (AC) × Unconscious Capabilities (UC).

Edited excerpts with permission from HarperCollins India.

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