Where will your future leaders come from?
Here's how to prepare your leadership pipeline now, before you're in a panic to find qualified senior management.
In a recent Gartner survey, “identifying and growing leaders” was chosen as the second highest HR priority for 2019.
“Many companies are struggling with gaps in their leadership pipeline, which can be caused by a variety of factors including difficulty retaining talent, baby boomer retirement, or rapid business growth,” says Arabelle Fedora, Ph.D., vice president & managing principal consultant of talent management for Right Management, an arm of ManpowerGroup.
For a long time, the solution was to look outside of the organization for leaders who could step into such roles. And that can still be very effective in some cases.
However, in today’s talent-starved job market, in which organizations expect more than 40% of their leadership roles to be significantly different within five years, the situation is more complex.
“As companies undergo digital transformation, they need to develop digital-ready leaders dedicated to driving successful transformation,” says Fedora.
So, we’re left with two distinct HR priorities: The need to create a pipeline of leaders with both the digital skills and leadership savvy to take the reins when the time is right. The tricky part? Knowing which of your junior and mid-level people will thrive in modern leadership roles, and giving them the right tools to get them there.
Here are some strategies that organizations are using to keep their leadership pipelines flowing.
Envision each employees’ future
“Unlocking the potential of your people is how you develop internal leaders,” says Shane Metcalf, chief culture officer and co-founder at 15Five, an employee management and feedback platform.
“We have to get good at believing in people and taking calculated risks,” he adds. That requires a shift in thinking, in which you start to view your workforce as potential to be unlocked. Or, put another way: “That you should invest in people for what they will become, and not just who they are today,” says Metcalf.
Look at the data
While there’s always been a demand for senior leaders, data and AI makes it easier to navigate the supply and make connections with people who can be developed, says Michael Ehret, Ph.D., vice president of succession management and assessment strategy at Johnson & Johnson.
“We can look at multiple dimensions to figure out whether they’re interested, and whether they have the competencies, the traits, the experiences, and the drive,” he says.
“Our next CEO might be someone at a junior level in Vietnam right now that we would never have known about before. With greater visibility to that person now, we can make sure that they can have an opportunity to progress.”
Create micro opportunities for people to lead
Metcalf says his company tries to put people into situations they might be a little underprepared for to see how they adapt.
“You want to create opportunities for people to live on their edge, to test new skills, and you can start to see if this person is driven,” he says. “These cool little baby steps can give you a sense of someone’s leadership and managerial potential.”
Don’t try to force leadership
Even if you think someone would be a great leader, they may not want to be. Figuring that out requires companies to do a better job at listening, says Ehret.
“How do you create an environment where it’s OK to not have aspirations to run the company?” he says. Johnson & Johnson uses feedback and survey tools as well as regular manager discussions to ensure that each employee’s aspirations are made clear.
“It’s about allowing people to be themselves,” says Ehret.
Identify the attributes or your current leaders, and look for it in others
Metcalf says in his company, they look for employees who have a “hunger” to grow. “If somebody is ambitious but isn’t humble, then you can’t fill a cup that’s already full,” he says, borrowing from an old proverb.
Instead, they look for those who illustrate that they are willing to learn so they can contribute to the whole, rather than those who are just trying to advance themselves.
Provide a pathway for non-leaders to grow
Not everyone is equipped to be an executive leader or manage others, but that shouldn’t mean they can’t grow with the company, says Metcalf.
Creating a development track for people outside of management positions will help avoid ill-suited employees from taking on such roles just to earn a bigger paycheck.
“Make a progression available for someone who is an excellent individual contributor to become a master, so they can earn the same amount as a manager,” says Metcalf.
Have a healthy balance
In terms of skills and experience and knowledge required, there is a high premium for talent today, which is why it’s important to extract everything you can from your internal workforce, says Ehret.
“The scarcity of talent is what’s driving this. But, there has to be a balance in which you continue to infuse new thinking and diversity into your process,” he says. That may sometimes require bringing in outside talent.
“No matter what the size of your company, having an internal succession management plan is important to be able to thrive,” says Ehret.
Johnson & Johnson is constantly thinking about what’s next, but you don’t have to have a 140,000-person company to think through future talent needs.
“You should be having regular discussions, and doing projections around ‘do we have the talent we need, or are there gaps?’” he adds. And if there are gaps, instead of relying solely on recruiting outside talent, use the strategies above to grow leaders internally.
Beyond overcoming hiring gaps, leaders from within bring numerous advantages, says Fedora. “They already know the industry, the market, the competition, their part of the business, how to navigate the organization, the culture, and the people. There is no time lost while they get up to speed.”