Developing Leadership Pipeline

Every year we see surveys carried out by HBR, PWC, Deloitte, and Gartner, and major concerns for management as highlighted at the top of the list are factors such as: developing bench strength, leadership pipeline, and leadership readiness. The following quote describes the importance of Leadership. “The first lesson is: To hell with centralized strategic planning. If you don't have a good leader, it's all nothing; it's just a bunch of papers flying around.” - Robert Townsend

Developing Leadership pipeline has always been an important concern for HR Professionals. Moreover, getting a proper candidate for replacement is usually a very demanding task because that results in disturbing smooth flow of business. As Pam Brown says, “Every household has a box of odd keys. None of them will ever be found to fit any lock.” This happens when we are looking for leadership candidate from the internal talent pool. Hence, to maintain the flow of business, HR professionals have to address this issue by creating Leadership Development Program.

Following image outlines the activities for effective implementation of the Leadership Development Program. As suggested by experts and authors, the ownership lies with Management and Line Managers while HR can provide support through collaboration.   

Establish Competency Model:

The competency-based methodology was pioneered in late 1960's by Dr. David McClelland, founder of Hay McBer Company, also Psychologist at Harvard University. Subsequently many others have also contributed for the development of Competency-based HRM. It was primarily focused on assessment of employees, not just on the basis of intelligence, but on the basis of a set of competencies. Competencies are the knowledge, skills, behaviors, and attitudes that lead to high performance. [More details in “Competency-based Interview Assessment”]

For example during the tenure of Lou Gerstner, at IBM, they selected 300 employees for Senior Leadership Group (SLG) and appointed Hay Group for developing eleven "IBM Leadership Competencies." Normally companies select 10 to 15 competencies. Then they carry out the Executive assessment for actual level of each competency. Next, they analyze the gap between actual v/s. expected. The gap is minimized using Learning & Development initiatives along with Coaching and Mentoring.

While designing business strategy, Competency Models become a valuable tool for defining critical skills required for achieving success. Simultaneously it also facilitates the integration of talent Management and other HR processes within an organization. According to Jeffery S. Shippmann, "Competency approach typically include a fairly  substantial effort to understand an organization's business context and competitive strategy and to establish some direct line-of-sight between individual competency requirements and the broader goals of the organization".

Assessment of Employees: 

Once we have established the set of competencies, we have to assess employees, and select them for the ‘Leadership Development Program’. In many organizations, ‘assessment’ is an on-going initiative that goes on throughout the period of employee development. The following image clearly depicts the process developed by Silzer & Church for identifying hi-potential talent.

Most of the companies use a combination of assessments to select employees. [More details - “First who then What”] Using more than one assessment instrument provides us concrete data in terms of their scores, which facilitate decision-making about their selection. The assessment instrument must be used by accredited experts while selecting them based on their validity, reliability and proven track record. Here is the list of assessments compiled by William Bergquist (Assessment Instruments: A Resource List)

Rob Silzer & Allan Church state that, “Some organizations collect these data to help make the high - potential decisions, while other organizations assess individuals only after they have been reviewed and accepted as high - potential talent.” The amount of resources, efforts, and cost involved influence the decision to use these assessments.

Performance Appraisal Data:

The appraisal process is an important source of employee performance data. However, its effectiveness depends on choosing appropriate method and tool. As they say, "When all is said and done, a company, its chief executive, and … (the) whole management team are judged by one criterion alone—performance." - Harold Geneen & Alvin Moscow.

An obvious outcome of this process is a list of ‘high performers’. However, according to CEB – SHL, “Only 1 out of 7 High performers is High Potential.” (The HR Guide to Identifying High-Potentials-2014) Hence, further assessment of these candidates becomes essential before selecting them for Leadership Development Program.

There are several methods and there is different school of thought, suggesting the use of a particular method. However, according to Laszlo Bock, (Head HR – Google) there is no one particular method superior to others which accurately analyze employee performance. He says they have used several scientific methods and tools, and the only thing that has a significant impact on the process is “Goal Setting”. In the book “Work Rules!” (2015) he further suggests that we must split rewards conversations from development conversations, for improving its effectiveness. Once you have sufficient data with trends / past employee history, it would certainly assist in the accurate assessment of employees.  

360 Degree Competency Feedback:

Many organizations now use 360-degree competency feedback surveys, primarily for providing development feedback to individuals. “We use it when coaching individuals, and in helping teams improve their effectiveness. We never use it as a selection tool, as it was designed to help develop people.” – Hay Group. It provides potentially accurate and diverse information on where employees stand in relation to where they should be in terms of skills and behaviors.

Normally it involves assessment by Self, Manager, Direct Reports, & Peers. There are set of questions (i.e. 5 to 7 questions for each competency) and the raters choose a most suitable answer from the scale. (i.e. Consistently, Often, Sometimes, Rarely, Never) Some of them also have an option for providing written comments about behavior and performance. The report for each employee provides us detailed competency scores, by rater group, with competency definitions along with a summary of strengths and areas for improvement.

However, there is one caution as pointed out by Richard E. Boyatzis, “But when we move to a 360 test, we are asking untrained informants – not trained coders – to assess an individual and his or her behavior. And when informants are responding they need more guidance.”

Personality Inventory:

Apart from 360-Degree survey, some organizations use formal personality inventories, such as the California Psychological Inventory and the Hogan Personality Inventory, to measure personality variables. Such tests normally require an applicant to answer 200 or more (yes/no) questions. These questions attempt to get to the core of the personality, values and the things that make one successful.

According to Rob Silzer & Allan Church, “many organizations administer personality inventories after the individuals have been identified as high potential.” Since, there are legal concerns in several countries about using these instruments for selection, many authors suggest using them for development purposes. Silzer & Church further states that the use of personality inventories has tremendously increased over the years for assessment of potential leadership candidates.   

Other Tests:

We can use several other options for assessment of candidates i.e. career background interviews, Cognitive Ability Tests, Personality Tests, Assessment Centers, individual assessments, Job Fit Test, Culture Fit Test, & Job Simulations etc.

Employee Selection for development: 

The next step in this process is preparing a list of potential candidates by using nine-box talent matrix as shown in the following image. By using this tool, we can determine which employees to invest in and the level of investment required.

Once we have identified and designate employees as ‘high potential’ (formally / informally), we have to give them opportunities for accelerated development. Designing formal ‘Individual Development Plan’ [IDP] would facilitate effective implementation of this process. Talent review meetings would be a better option to set expectations around roles and the goals. "The cause of almost all relationship difficulties is rooted in conflicting or ambiguous expectations around roles and goals." - Stephen Covey. The company should provide an opportunity for the boss and the employee to have a conversation to clarify and align their expectations about the development plan. This could be the ‘development discussion’ as mentioned earlier in the appraisal example of Laszlo Bock.

This conversation can include the use of different options for employee development (for achieving expected level of competencies). For example, formal leadership programs (with well-defined curriculum), providing a coach or mentor, in-depth executive assessment, career planning, job rotation, job enrichment, provide experiences, special work assignments (projects, task forces, temporary assignments), or executive education courses. These options play an important part in the development of these high potentials.

As stated by Michael Bergdahl, “Ideas are the easy part of strategic planning; it is the implementation of the tactics that is tough.” Hence, the success of this process hinges on the effective implementation of the Individual Development Plan. According to the study conducted by Corporate Leadership Council (2005) following factors are important drivers for developing employee potential: 1. the quality and skills of the current manager and, 2. a customized and achievable development plan.

Training, Coaching & Mentoring:

We all know the 70-20-10 model normally used as part of Training and Development initiatives. (70% - On the job 20% - Learning from others & 10% - Structured Learning) It is a continuous process, which begins with the identification of high potential employees, and goes on until removing the gap between expected and the actual level of competencies. The focal objective of these initiatives should be capability development and achieving required level of competencies. In fact, it should be reviewed periodically as per organizational requirements. According to Peter Senge, “Over the long run, superior performance depends on superior learning.” 

70% - On the job learning	20% - Learning from others	10% - Structured Learning
Action Learning & Problem Solving Placements, Job rotations Self-directed and incidental learning Projects and special assignments	Subject Matter networks User Generated content Collaboration platforms Coaching, Mentoring Feedback	Workshops, Classroom Webinars Online Learning E-learning M-Learning

Following quote clearly outline the importance of learning and development initiatives. “You can have the best product and store location around but if your staff is weak or poorly trained you will experience mediocre results.” -  Michael Bergdahl, Walmart

Many organizations provide Coaching & Mentoring to facilitate the development of selected employees. Like training, this initiative is also an ongoing process. Due to budgetary constraints, companies are becoming more selective while using external coaches. Normally companies use them for senior level positions.

“External coaches can bring greater objectivity, fresher perspectives, higher levels of confidentiality and experience in many different organizations, industries, and business environments.” – “Coaching: A Global Study of Successful Practices,” AMA, 2008

According to Silzer & Church companies are also training HR professionals and Line managers to coach employees internally. In fact, Dave Ulrich says, "HR professionals can coach business leaders to raise employee and organizational productivity by setting standards, giving feedback, and becoming personal leadership trainers."

With impartial view of the situation, they can advise and support high potentials to:

- achieve their objectives.

- enhance their performance.

- create and support their ‘Individual Development Plan’.

- develop certain competencies and capabilities.

- facilitate progression through different levels of those competencies.

“Leaders cannot succeed on their own; even the most outwardly confident executives need support and advice”. - B. George & P. Sims

Promoting to new position:

After successfully implementing IDP, if the employee is ‘high potential’ and ‘consistently exceeds performance expectations’ (improved assessment results) he/she can be considered for placement in the leadership position. However, the support system must provide backing through continuous ‘Training’, ‘Coaching’ and ‘Mentoring’. According to Michael Watkins, while going through transitions, it takes minimum 6 months for an employee to reach the ‘break-even point’. The focal objective of an onboarding program should be to fasten the speed of employees to reach the break-even point ASAP. The company must provide specific feedback, guidance and needed support to the employee during this period.

Managing their transition into new position becomes crucial for Leadership development program. We may have to focus on five aspects of onboarding process to address this issue. These core aspects are (RECAP) - building Relationships and networks, setting Expectations, Cultural indoctrination, Administrative formalities, and structured Process. [More details - “Onboarding”]

Conclusion:

“In conclusion – the phrase that wakes up the audience.” – Herbert Prochnow. Leadership is a vast subject and here we have tried to focus only on very few activities that we can implement for Leadership Development Program. As correctly said by Peter Drucker, “Leaders are not born; they are grown.” Hence, identification of high potentials and their development become important aspects for the internal development of leaders. Leadership development program should be integrated with the overall talent management strategy of the organization. It should also have backing with appropriate motivation (intrinsic - extrinsic), retention and rewards & recognition. As stated by Jim Collins, “The key is to develop and promote insiders who are highly capable of stimulating healthy change and progress, while preserving the core.”

Competency models facilitate the integration of Leadership development program and business strategy of the organization. Performance management system can provide accurate details of the 'high performing' employees. Whereas, we can get valid data pertaining to their actual potential using appropriate assessment instruments. Then we can select most suitable candidates with maximum scores for Leadership Development Program.

We have to establish an Individual development plan for each selected employee. However, the success of this process largely depends on effective implementation of IDP, using proper development options such as Job Rotation, Job Enrichment, Special Assignment, etc. Training & Development is a huge subject in itself and we are taking only surface view out here. Through using proper training (70-20-10) coupled with Coaching and Mentoring on an on-going basis, we can polish the 'rough diamonds' and turn them into 'consistent stars'. HR has a major responsibility once they have been promoted into new positions by providing them support through proper on-boarding. “Leadership occurs when the organization builds a cadre of future leaders who have the capacity to shape an organization’s culture and create patterns of success.” – Ulrich & Smallwood

Developing leadership pipeline is going to be crucial for the ongoing success of any company and HR has a major part to play in this regard. However, HR must share ownership with Management and Line Managers. Because “The most significant contribution leaders make is not simply to today’s bottom line, (but) to the long-term development of people and institutions, so they can adapt, change, prosper, and grow.” - Barry Z. Posner & James M. Kouzes.