An organization is only as successful as its leadership. Especially as a business grows, a single leader – no matter how competent or charismatic – will not be able to guide it through continued expansion and to sustainable success. That’s why developing your leadership bench is so important.
How can you develop leadership talent within your organization? How can you build a solid foundation for success, both on the departmental and the organizational level? Both of these questions rely on first identifying and then developing individuals who have the potential to grow into senior management roles and guide your business. Unfortunately, that effort often fails.
While global companies spend $31 billion annually on leadership development programs, only 13 percent of executives actually have confidence in the success of these programs in developing new department heads, managers, and executives. Naturally, that is not the type of success rate organizations should aim for.
As a result, even when spending money on developing the next generation of leaders, your pipeline might be lacking. It only makes sense to take the necessary steps to change that situation. But first, you have make sure that you can avoid the errors that led to this situation to begin with. In short, here are 5 mistakes to avoid when developing your leadership bench.
1) Neglecting the Process
Let’s start with the obvious: you cannot build a successful leadership bench without prioritizing the effort to begin with. Too many CEOs still make the mistake of thinking that natural leaders and managers are born and will appear at the right time when needed, not made. This assumption leads to the conclusion that leaders don’t need to be developed; they simply exist already.
Under this philosophy, no strategic effort would be needed. Hire the right people, and the process takes care of itself. Unfortunately, it’s not true. In a new book, Harvard Business School historian Nancy Koehn highlights leaders from Frederick Douglass to Dietrich Bonhoeffer in proving that leaders can come from every background. Meanwhile, studies have shown that up to 60 percent of leadership skills are developed over time.
The process of developing leaders within your company requires ongoing prioritization and care, ensuring that high potential employees are encouraged to hone their talents in managing and leading others.
2) Identifying the Wrong Prospects
The second ingredient you need to build your leadership pipeline are prospects who actually have the potential you are looking for. Even the best process, well prioritized, will fail if the individuals going through it have little desire or talent to become managers, department heads, and executives.
Within an organization, it’s easy for talent selection to become political. A CTO likes a data analyst, so she nominates and supports him through the leadership development program. That decision may be based on a hunch that is not necessarily wrong. But losing objectivity also increases the chances that personal preferences, rather than actual potential, ultimately dictates who becomes your next generation of leaders.
Another mistake that CEOs commonly make is evaluating a potential leader solely on the basis of his technical knowledge or performance in his current job. A great digital marketing specialist may know the ins and outs of Facebook marketing and search engine optimization, but does not necessarily have the people leadership skills or desire to develop and implement big picture initiatives that a CMO position would require.
Going back to the study quoted above – 40 percent of leadership traits may be innate and therefore are not easily learned. The Harvard Business Review identifies emotional intelligence as one such trait. Identifying leadership prospects who possess high degrees of self-awareness, self-regulation, motivation, empathy, and social intelligence in addition to technical skills is key to successfully building your leadership bench.
3) Ineffective Evaluation Benchmarks
How are you measuring your employees’ performance? Depending on the goal of that evaluation, the answer probably differs significantly. For individual contributors, productivity and technical skills may matter most. As you move up the leadership (and potential leadership) ranks, more qualitative performance benchmarks increase in importance.
Internal performance benchmarks, when focusing on the right aspects, can help you identify employees that might be ready for the leadership development program. These prospects can be encouraged to learn new skills that enable them to take on increasing responsibilities at the company, continuing to be evaluated in the process.
Benchmarks, of course, also matter on the other end of the spectrum. At Dow, for instance, the success of the leadership development program is judged by how many management positions are hired internally. An internal hire rate between 75 and 80 percent is considered a success. That, in turn, has led to lower attrition rates for individuals qualified to fill leadership roles in the company globally.
Neither having a process in place nor finding the right prospects matters if you don’t know how to evaluate their potential for success. Instead, know what qualities to look for to find people with leadership potential within your organization, and develop benchmarks that allow you to test your success rate in building your bench.
4) Assumptions of ‘One Best Style’
If there was such a thing as a perfect leader, developing your organization’s bench would be a lot simpler. Hire the best people, put them through a world class development program, and voila: mission accomplished. Unfortunately, that’s far from the case in the real world.
Instead, the success of any individual in leadership depends largely on the organizational context in which they are leading. While some success factors for individual leaders can be generalized others are more specific and situationally driven.
Examples of different leadership style archetypes that tend to succeed in distinct contexts are:
- The strategist
- The change-catalyst
- The transactor
- The builder
- The innovator
- The processor
- The coach
- The communicator
For example, builders are great for growing startups, while processors work best in more structured environments associated with mature organizations. If you have a tendency to view one leadership style as the “best” style, this may cause you to overlook potential leaders who don’t fit that particular mold.
Being acutely aware of your own biases, and taking proactive steps to counteract them in your leadership talent selection process, is critically important. Remember that we tend to rate people higher who look, speak and act like we do. Successful leadership is not merely an individual endeavor, but also a team effort, and study after study validates that diverse teams tend to outperform homogenous ones.
5) Failure to Consider Future Context
Individual leadership style can also be more or less successful based on the future contexts in which they will be applied. Failure to consider future context can lead to developing a leadership bench that might succeed today, but will fail tomorrow. In a landmark article on why leadership development programs fail, McKinsey offers an explanation of this phenomenon and common mistake:
In the earliest stages of planning a leadership initiative, companies should ask themselves a simple question: what, precisely, is this program for? If the answer is to support an acquisition-led growth strategy, for example, the company will probably need leaders brimming with ideas and capable of devising winning strategies for new or newly expanded business units. If the answer is to grow by capturing organic opportunities, the company will probably want people at the top who are good at nurturing internal talent.
Context matters in successful leadership. A highly successful leader for Company A might not be nearly as successful working for Company B. Rather than focusing on leadership skills and preferences in a vacuum, consider the range of situations your organization is most likely to face 5- 10 years from now and develop your bench accordingly. Otherwise, you may overpopulate your leadership bench with a certain “type” of leader at the expense of diversifying your leadership portfolio to cover future business contingencies – such as an anticipated shift in the competitive or regulatory environment.
Building a Better Leadership Bench
According to McKinsey & Co., 90 percent of CEOs are currently investing or planning to invest in leadership development because they see it as the single most important human-capital issue their organizations face. Developing future leaders who will guide your company well takes time, commitment and sustained effort from all members of the organization’s top leadership team. If you’d like to learn more about developing your leadership bench, please visit our website, www.sjleadershipcoach.com.