Better talent is worth fighting for. At senior levels of an organization, the ability to adapt, to make decisions quickly in situations of high uncertainty, and to steer through wrenching change is critical. But at a time when the need for superior talent is increasing, big US companies are finding it difficult to attract and retain good people. Executives and experts point to a severe and worsening shortage of the people needed to run divisions and manage critical functions, let alone lead companies. Everyone knows organizations where key jobs go begging, business objectives languish, and compensation packages skyrocket.

In an effort to understand the magnitude of this war for talent, we researched 77 large US companies in a variety of industries (see text panel). We worked with their human resources departments to understand their talent-building philosophies, practices, and challenges. And to gain a line manager perspective, we surveyed nearly 400 corporate officers and 6,000 executives from the "top 200" ranks in these companies. Finally, because numbers never tell the whole story, we conducted case studies of 20 companies widely regarded as being rich in talent.¹ What we found should be a call to arms for corporate...