Consider a recent newspaper headline: “Most companies lose top talent.” Fully 75 percent of employers in a Manpower Group survey reported that they voluntarily lost at least some of their most high-performing employees between 2010 and 2011. Is this a cause for concern? Certainly. The risk of losing key talent, especially members of talent pools in which investments in the quantity or quality of people can have a major impact on an organization’s ability to achieve sustainable strategic success, is one of the highest-ranked HR risks. These are known as pivotal talent pools.

A critically important question that senior leaders must address with respect to strategy is “How will we compete and defend?” This implies two things, symbolized by the Chinese characters for the word “risk”: crisis and opportunity (as we noted in Chapter 4). Just to refresh your memory, “risk” refers to an undesirable outcome and its consequences, while “opportunity” refers to a desirable outcome and its consequences. A danger is that firms focus their HR strategies only on “defending” against undesirable outcomes, such as the loss of key talent, regulatory/compliance issues, or shortages of critical talent within an organization’s workforce. Do not allow this perspective to dominate the way that leaders approach human resource strategy! Doing so might blindside the organization to important opportunities. Taking advantage of opportunity, in turn, means placing your organization in a position to benefit from an uncertain future event. In this chapter, we present examples of firms that attempted to focus on both of these two faces of risk: crisis and opportunity.