THE GROWTH EDGE
The Strategy Edge
People Strategy for Organizational Leaders
May 2026 • Issue #2
Last month I sat with a CEO who told me his head of HR had just resigned — nine months after he hired her. “I don’t understand,” he said. “We gave her everything she asked for.” Then he listed it: budget, headcount, a seat at the leadership table, a clear mandate. What he hadn’t given her was a defined role. She was hired to “build the people function,” which in practice meant absorbing every people problem the executive team didn’t want to deal with. Compliance issues, comp negotiations, a reorg, an investigation, three terminations, the engagement survey. By month nine, she was running on fumes and the strategic work she was hired to do hadn’t started.
That’s not a hiring problem. That’s a role design problem. And it’s the same one Gallup just put a number on in its 2026 State of the Global Workplace report: manager engagement has dropped nine points since 2022. The role accumulated everything that had nowhere else to go, and the people doing it are running out of capacity faster than companies can replace them. Senior HR leaders are not exempt. They’re often the canary.
This month’s posts circle a related theme: the structural reasons growing companies hit walls with their people function, and what to do about it before the wall hits back. The May 4th post on performance reviews lays out the redesign most companies need but skip. The May 18th post on what a fractional CPO actually does — and when you need one — is where I’d start if you’re trying to figure out whether the role you’re about to hire even matches the work you need done.
What We Published Last Month
The 5 Signs Your Company Has Outgrown Its People Strategy
If your founder is still running comp decisions, your hiring is reactive, your top performers are getting offers from competitors, and your manager bench feels thin — you’re not alone, and you’re not behind. You’ve outgrown what got you here. This post walks through the five most common signs and what each one signals about what to build next.
Read it: The 5 Signs Your Company Has Outgrown Its People Strategy →
Succession Planning Isn’t Just for Fortune 500 Companies
Every company has succession risk. Most companies under 1,000 employees just don’t see it until a key person leaves. This post makes the case for lightweight, practical succession planning at smaller companies — the kind that takes a few hours per quarter, not a Fortune 500 process — and walks through how to identify your real single points of failure before the market identifies them for you.
Read it: Succession Planning Isn’t Just for Fortune 500 Companies →
Assessments as Mirrors and Maps: A Practical Guide to Leadership Assessments
For organizational buyers, this one matters because it’s the question every HR leader ends up fielding from a CEO at some point: “Which assessment should we use?” This is the practical answer — a side-by-side guide to the six tools we use most across coaching, leadership development, and team programs. What each measures, when to use it, and how to avoid spending money on the wrong instrument for the wrong question.
Read it: Assessments as Mirrors and Maps →
Worth Knowing: What the Research Is Saying
Gallup, 2026 State of the Global Workplace. Manager engagement has dropped nine points since 2022, with the steepest single-year decline (five points) coming between 2024 and 2025 — down to 22%. The “engagement premium” managers historically held over their teams has effectively closed. Gallup attributes the decline to a manager role that has accumulated everything organizations had nowhere else to put: meetings, admin, firefighting, AI rollout responsibility, and the people work that’s always been there.
This is the data point I’d put in front of any executive team before they approve another headcount or another tool. The fix isn’t a wellbeing program. It’s role redesign. In best-practice organizations, manager engagement runs at 79% — nearly four times the global average — and that gap comes from deliberate choices about what managers actually do, not luck. If you’re scaling, the question to answer this quarter is what your managers are accumulating that doesn’t belong on their desks.
SHRM, 2026 Talent Trends Report. Nearly 7 in 10 HR professionals (68%) report difficulty recruiting full-time employees, and over half (53%) say recruiting is harder than it was a year ago. At the same time, 42% report difficulty retaining full-time employees, and 41% are training existing staff for hard-to-fill roles. SHRM’s broader theme: organizations need to move from traditional hiring to skills-based talent strategies and treat recruiters as “talent architects” rather than req-fillers.
The retention number is the one organizational buyers should sit with. Two in five companies are losing people they’d rather keep, and most of them don’t have a structured retention strategy beyond compensation adjustments. This is where engagement diagnostics, stay interviews, and a manager-development plan earn their keep — not as HR programs, but as risk management on the talent you already have.
DDI, January 2026 Change Leadership Analysis. Only 13% of HR leaders believe their organization’s leaders are very capable of anticipating and reacting to change, and just 18% of leaders feel personally prepared to lead through it — down from 25% five years ago. Across more than 100,000 leaders assessed, only 8% of executives are strong at leading change, and only 1% are strong at visibly rewarding the new behaviors they’re asking for.
If your company is reorganizing, integrating an acquisition, or rolling out a new operating model, those numbers should slow you down before you slow down. The change capability gap doesn’t show up in strategy decks; it shows up six months in, when alignment fades and the new process gets quietly worked around. DDI also found that leaders with access to high-quality assessment and development programs are 5.6x more likely to anticipate and respond to change effectively. That’s the leverage point most growing companies underuse.
Resource Spotlight
Talent Management Readiness Guide. Is your organization ready for formal talent reviews and succession planning, or are you still in the “who are our key people?” stage? This self-assessment walks through the four readiness conditions and tells you what to build first if you’re not there yet — a useful companion to last month’s succession planning post.
Get the Talent Management Readiness Guide →
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