Building your leadership pipeline
When it comes to succession planning, many organisations still argue that “they will cross that bridge when they come to it.” But identifying and grooming successors is critical. The most successful global organisations, such as General Electric, 3M and P & G, engage in systematic succession planning to ensure a seamless transition. These organisations believe in having a slate of high-potential leaders.
But it appears that many organisations are just now getting the message. A new research study, “The Leadership Benchstrength Challenge: Building Integrated Talent Management Systems” by Executive Development Associates found that 82 percent of companies expect future talent challenges, and 63 percent say that talent shortages are impacting their bottom lines right now.
Talent shortages mean more than a lack of productivity and innovation. The lack of good people has serious bottom-line impact. It drives up costs, inhibits organisational growth since companies don’t have the wherewithal to branch into new markets, and leads to leadership problems. Companies scramble to recover from bad decision-making caused by unqualified candidates who have assumed leadership positions they were not equipped or trained to handle.
Eileen J. Antonucci, Ph.D, vice president of talent management for Executive Development Associates, calls the current and future talent shortages “the perfect storm.” “The perfect storm is a combination of factors that have come together to create this situation,” Antonucci said. “One of them has been a lack of investment in talent in recent years. The companies that are not suffering as much have really invested in their senior and high-potential talent both in good times and in bad.
The second factor is a lack of skills needed to be in a leadership role today. The demands are increasing with globalisation and virtually dispersed organisations. The constant change and pressure for higher performance need a different type of leader than in the past, and people are not getting the right skills and development, or systems are not in place to even identify what these things would be, to get people to a leadership position. In addition, there’s been a growth surge in markets like China and India, which is causing stress for talent shortages. There’s another major factor coming into play, and that is the demographic shift. The baby boomers are getting near retirement, and they’re going to be leaving senior management. At the same time, you have a decline in the 35-year-olds who would normally be in the high-potential pool for leadership positions.”
Not only is next-generation leadership declining in numbers, it also seems that they lack the inclination to follow in their elders’ footsteps. “This group is not like the baby boomer group that came before it,” Antonucci said. “They don’t necessarily want a leadership position. For instance, we know that an international assignment is a great way to develop leaders. It used to be if you said, ‘You’re going to go to Europe for a year to work,’ the boomers would say, ‘What time? What plane?’ This generation says, ‘Nah, I kind of like my life right now, and I’m not going.’ We have a complexity of skills needed, a growth surge, a lack of investment and demographic factors coming to play to create this perfect storm.”
The skills these new leaders need and don’t have centre around the increasing level of globalisation in today’s businesses. Leaders need the savvy to operate effectively in many cultures and exercise a solid understanding of global markets. In other words, they need to see and understand the big picture. Executives also need to be strategic, which is nothing new, but Antonucci said the different angle is you need to know how to execute strategy on the fly. “They need to be able to see the big picture and at the same time deal with diverse products, services and processes, which takes much broader experience,” she said. “There’s constant change, and they need to know how to manage change, and more than ever, they themselves need to have a critical eye for talent: how to assess it, how to develop their own talent and how to retain it.”
Companies that are dealing with the talent-shortage issue in an aggressive way put someone like a chief learning officer or a chief talent officer in a very visible and critical position, Antonucci said. “A lot of the implications for the chief learning officer are not the different skills that have to be developed, that have to be done quicker and better,” she explained. “It’s that the younger generation just doesn’t learn in the same way. The technology involved - how do you get people into these experiences to develop them? It’s taking a lot more creativity than executives have historically gone through in a developmental experience.”
Source: Great Lakes HR Now