Making a market in talent

McKinsey Quarterly put out a great article about two years ago called "Making a Market in Talent."  Before the Oracles, SAPs, and Taleos of the world were heavily marketing the link between recruiting and succession, McKinsey was somewhat esoterically talking about the need to create internal talent markets to "pull" rather than "push" talent around the organization.

Reading Slywotzky's timeless book, Value Migration, I have been reminded of the McKinsey article. 

Slywotzky spends a chapter of the book talking about Merck in the 1980s and the way in which they focused development resources and accelerated time to market through internal competition. Increased government regulation was skyrocketing R&D costs while also shortening product lifecycles, and so Merck's abililty to be first to market with blockbuster drugs gave them a huge competitive advantage.

In Slywotzky's words...

"Vagelos created cross-functional teams around the most promising and important products... As an incentive, teams had to "compete" for resources (both people and dollars) throughout the organization, forcing project managers to "sell" and functional managers to "buy" into the hottest projects...

This free market allocated resources in a way that normal budgeting couldn't.  Focus was automatic.  People wanted to be part of a blockbuster team." (page 142)

So what if your organization broke down any and all barriers to internal movement and empowered employees and managers to seek each other out through well executed internal talent marketplaces?

What might happen to the hard-nosed, streamrolling manager who scoffs at employee development plans and consistently de-motivates his (or her) people? And if he is held accountable for performance, how might the talent drain from his department accelerate the process of ushering him out of the company?

And on the other end of the continuum, what might become of the entrepreneurial, inspiring, and people focused leader and her (or his) promising new start-up unit, once employees started to catch wind of the fact that she was looking for more talented people?

If people and talent are what drive our organizations and economies this day in age, I can't help but think that true internal talent markets would have a massive impact on performance, while also giving disillusioned and disengaged employees mobility options that don't involve leaving the organization.