Filling the leadership pipeline

Employers need to look ahead and understand demand for future roles

It only took Jack Welch, the legendary chief executive officer of General Electric, about a minute-and-a-half to size up an employee who was giving a presentation.

In that 90 seconds — for better or for worse — Welch would form an opinion about whether the presenter was destined for greatness or doomed to failure, according to Bill Lane, Welch’s speechwriter and author of Jacked Up: The Inside Story of How Jack Welch Talked GE into Becoming the World’s Greatest Company. And he was often right.

But when it comes to identifying leadership potential in junior employees, most organizations don’t have a Welch on board. And even those that are good at marking future leaders need to go back to the drawing board when it comes to identifying management potentials, according to some experts.

“Employers know there is a looming talent shortage and organizations are spending more time on the supply side,” said Rick Lash, North American director for leadership and talent practice at the Hay Group in Toronto. “They’ve identified their pool of highly talented individuals. But they’re spending much less time on the demand side.”

Organizations seeking out future leaders need to be asking questions such as: “What is the demand for future roles in the organization?” and “Who will be best suited to lead those roles?”

“The high-potential talent identified for today may be the wrong people needed three years in the future,” said Lash. “Leadership roles are changing.”

‘Type A’ not necessarily ideal

The kind of attributes traditionally associated with potential management material — such as the Type A personality — aren’t ideal for every management role.

“We’re finding out there is a problem with Type A leaders, for example, because they tend to cause stress. They react to situations rather than deal with them calmly,” said Scott MacMillan, professor in the department of management at Saint Mary’s University in Halifax.

The whole world of leadership is changing, said Rosie Steeves, co-principal at Refinery Leadership Partners in Vancouver.

“Leaders today are facing new challenges, the kind never seen before,” she said. “Rapid technological advancements, the blurring of boundaries, the pace of business. For these reasons the work of leaders today is about mobilizing, adapting to problems.”

Leaders can’t be expected to have all the answers, and leadership is more about getting work done through others, said Steeves.

4 attributes for leaders

There are four main attributes for leaders that emerged in discussions with Steeves, Lash and Dan Stewart, management consultant at Hewitt Associates in Calgary.

Not every candidate needs to exhibit all four attributes to be targeted because others can be developed with training, said Lash.

Conceptual/systemic thinking: This aptitude involves the ability to select innovative strategies and ideas by challenging assumptions, said Stewart.

“Folks who are good leaders, in their minds, tend to be more strategic,” he said. “They are not caught up in the tactics of getting the work done and moving things around. But they are receptive to how certain parts of the business are impacted by work process.”

Trust influencer: Future managers show signs of effectively influencing others and placing trust in their abilities. Helping others reach higher levels of performance through delegation, participation and coaching are examples. Being able to collaborate is key, said Stewart.

“Being a strong communicator is one thing,” he said. “But command and control are not good enough. You need to be able to sit down with a team and inspire everyone to come to an agreement on a given topic.”

Emotional intelligence: Management potentials should show a mastery of their emotions, which inspires confidence in others. This is why personality tests, such as the Myers-Briggs Type Indicator, can be quite useful in identifying future leaders, said MacMillan.

Resilience: Resilience means a real capacity to maintain focus and be a realistic optimist in the face of adversity, said Lash.

“You’ll find high potentials don’t often see failure as defeat but rather as a learning opportunity,” he said.

MacMillan said there are two more unexpected leadership attributes that are becoming important — authenticity and humility.

“Companies don’t want someone who has all the answers,” he said. “And they want someone who can admit they are wrong.”

One of the first places to look for these attributes is through performance reviews. It’s also a good idea to hold regular, senior-level discussions about existing talent in the organization, said Steeves.

Mentorship programs work

One of the best ways to groom future managers is through internal mentorship programs.

“It’s where the rubber hits the road,” said Stewart. “It’s the most direct observation of their abilities.”

3 kinds of leadership roles

Employers often test leadership talent in trial-by-fire scenarios, said Lash, such as challenging job assignments.

“However, we know that not all leadership roles are the same,” he said, adding that there are three main types of leadership roles.

Operational: Where an individual manages profit and loss, staff and a budget.

Matrix: Where an individual doesn’t have control over people but has to pull together teams on a project-by-project basis.

Planning: Where an individual doesn’t manage groups of people directly but focuses on the bigger picture, such as the role of a chief financial officer.

Organizations tend to burn out talent too quickly by moving them across these streams rather than up the streams, which is sometimes easier, said Lash.

“People need time, experience and training before they can make any transition,” he said.

Lesley Young is a Newmarket, Ont.-based freelance writer.

Developing talent
Top global companies focus on leadership

The best global companies have a true, strategic commitment to leadership, according to Top Companies for Leaders 2007, research conducted by Hewitt Associates in association with Fortune and the RBL Group.

The research found many top global companies know there is a lack of senior leadership talent to sustain double-digit growth in an era of intensified competition, tightening demographics and a truly global business arena. Top companies have come to realize the only way to ensure a strong pipeline of talent is to find it and develop it internally — a task that is becoming increasingly challenging, the research found.

Percentage of time spent directly on leadership development

The amount of time spent directly on leadership issues — by boards of directors, CEOs and senior management — is significantly greater at the top global companies compared to other companies. Here’s a look at how much time CEOs at top global companies spend on leadership development:

Time spentTop global companiesAll other companies
10% or less0%24%
11% to 20%16%27%
21% to 30%25%25%
31% to 40%35%13%
41% to 50%15%7%
51% or more10%5%

Best of the best
Top global companies for leaders

In Hewitt’s Top Companies for Leaders 2007 research, no Canadian-based firms made the list but the study did recognize Montreal-based Business Development Bank of Canada as a top small- to mid-sized company for leaders.

Company and rankingHeadquarters
1. General ElectricUnited States
2. Procter & GambleUnited States
3. NokiaFinland
4. Hindustan UnileverIndia
5. Capital One FinancialUnited States
6. General MillsUnited States
7. McKinsey & CompanyUnited States
8. IBMUnited States
9. BBVASpain
10. Infosys TechnologiesIndia
11. InditexSpain
12. MedtronicUnited States
13. Eli Lilly and CompanyUnited States
14. McDonald’sUnited States
15. WhirlpoolUnited States
16. Natura CosméticosBrazil
17. GlaxoSmithKlineUnited Kingdom
18. Australia and New Zealand Banking GroupAustralia
19. ICICI BankIndia
20. WiproIndia

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