To achieve long-term business success and achieve a stronger market position, organizations must become better at building a leadership pipeline for the future—leadership that can take them to the next level of performance, with an understanding of the future requirements related to organizational culture, evolving workforce, technology evolution, compliance issues, and the performance changes dictated by stiffer and stiffer global competition. The leadership competencies and skills required three, five, ten years from now will be very different from those of today.
In considering future leadership pipeline, start by asking company-specific questions: What parts of the business will future leaders need to understand in order to lead the organization, and how can you develop leaders through those functions? How well do your leaders understand innovation and the culture required to achieve it?
Then determine other important qualities and skills. These should align with your company’s strategic goals and include:
- Strategic thinking
- The ability to see multiple perspectives, including their managers
- Decision-making under uncertainty
- Ability to see the “bigger picture” and impacts through the organization
- Capability for anticipating the unexpected
- The ability to forge relationships to influence or negotiate with stakeholders
- Innovation and problem-solving
- People management, courage, and empathy
- Financial and operational acumen
Identifying the qualities of future leaders is vitally important because research shows that companies are notoriously bad at identifying “high potential employees.” In fact, the well-known research of Jack Zenger indicates that as many as 40% of employees identified as high potential (for development as future leaders) don’t belong there. One reason may be that organizations use outmoded or inaccurate systems to identify high potential employees. They focus on past historical measures, such as consistently getting results, honoring commitments, possessing initiative, technical expertise, and cultural fit. They may also utilize peer and manager recommendations and 360-degree feedback. This is not necessarily negative; however, a key question to ask is: what are peers and managers using as criteria, and are these criteria true predictors of strong leadership? And there are other risks as well; the characteristics for effective leadership in organizations change drastically based on evolving business climate, technology, and expected organizational cultural norms. (Most organizations make mistakes in identifying their “fast-track” high potential employees, selecting employees who don’t rock the boat, or who know how to play the political game in the organization, rather than those with leadership “mettle.”)
Building your leadership pipeline goes beyond a succession plan. It is a well-planned-out, company-specific structure for developing leaders by moving them across and up the organization so that they are well groomed to understand the entire business and suit the organization’s future needs. It also includes training or development plans that build understanding of future, projected global trends and best practices related to technologies, organizational culture, structure, processes, leadership, and organizational performance.
Once you identify potential leaders, invest in structured development programs, to include:
- Pair high-potential employees with senior leaders.
- Develop a structured plan and roadmap to expose future leaders to different functions and roles to understand the whole organization.
- Provide opportunities to build relationships with key stakeholders across the organization.
- Recognize and reward strategic thinking.
- Offer courses on strategic leadership, decision-making, and change management.
- Provide challenging projects that push employees outside their comfort zones.
To achieve or maintain a strong market position, an organization must develop strong leadership. Are your current and future leaders being developed related to the best-practice areas listed above? Do you have the pipeline structured and budgeted? Many organizations have defined leader training, education, and hiring practices, but not through the lens of the different competencies and skills required in the future, high-performance organization.
An effective leadership pipeline is vital.
- Without it, the organization will struggle to execute its strategy.
- Without it, there will not be a clear roadmap for leadership transitions, nor will there be a talent pool of skilled leaders to fill it.
- A failure to correctly identify and develop your most talented leaders causes them to leave the organization prematurely, and you may be losing the very leaders you need to keep. Losing talented employees causes a brain drain that is very damaging to the organization
- Without a leadership pipeline, the organization is destined to seek leaders from outside the organization – leaders who may be missing vital institutional knowledge.
To schedule a complimentary 60-minute session on developing a resilient leadership pipeline, please email me or message me in LinkedIn.