Winning the War for Leadership Talent
“A common organizational mindset is to view jobs as ‘work
to be done’ and not as developmental assignments.” – Ram
Charan, Stephen Drotter and James Noel in The Leadership Pipeline,
for leadership talent greatly exceeds supply. Few firms are prepared
for what the McKinsey consulting firm has called the “war
growth continues at a modest 2 percent for the next 15 years,
there would be a need for one-third more senior leaders than
there are today. The supply of
35- to 44-year-old managers—who
have traditionally been channeled into the executive ranks—is
declining in the United States and will have dropped by 15 percent
between 2000 and 2015.
have already started to retire. Most
large companies will have to scramble to meet gaps in senior
leadership talent. Not only are the numbers in the talent pool
shrinking, but the quality of talent required to meet tomorrow’s
leadership demands is changing.
Leaders and Complexity
The global and more dynamic economy of the 21st century requires
executive talent with a more complex skill set than ever before.
Leaders for the future will need:
• Greater technological literacy
• A sophisticated understanding of global marketplaces
• Multicultural fluency
• Relationship savvy, with extensive networks of alliances and stakeholders
• Leadership skills over a de-layered, disaggregated and virtual
Every day, The Wall Street Journal reports news about major corporations
recruiting executive talent from other companies. Executive search
firms are flourishing because of the demand for strong talent.
The Internet has also facilitated company-hopping, making it easier
for people to contact other organizations that may offer better
positions. The average executive has worked in five organizations,
and that number is expected to increase to seven by 2010.
There is a scramble to hire “stars,” a phenomenon
that offers enormous compensation to entice the best and brightest,
but a longer learning curve when an outsider joins a company. These “stars” also
tend to jump ship quickly when a better offer comes along.
Succession Planning in the 21st Century
In response to these challenges, organizations
have a renewed interest in succession planning systems. While
these systems functioned merely as replacement charts in the
past and were HR executives’ function,
there are two critical differences today, emphasizing:
development at all levels (not just senior executives)
and involvement for leadership development within the work
group, with the person’s manager and team members (and
no longer an HR function)
Internal training, mentoring and other
developmental programs aren’t keeping the talent pool adequately full. What’s
needed is an approach that develops people at all levels. Organizations
must promote people from within the organization to successive
levels of leadership responsibility.
Distinct Leadership Levels
Most development models fail to consider leadership requirements
at all levels. As a person is promoted from line manager to business
manager to functional manager, skills and requirements change.
Contributors to success at one level may be ineffective at another.
A skilled leader has to unlearn and relearn at each succeeding
In most companies, a rather simplistic
definition of leadership governs development. There
is little acknowledgment that different leadership levels exist
or that people need to make skill and value transitions as they’re
promoted. Few organizations actually define the core competencies
and experiences necessary to succeed at each level.
Instead, companies focus on leadership
traits, styles and technical competence. Few
programs recognize that the leadership development needs of a
first-time manager are different from those of a functional manager.
Companies commit a major error when promoting successful individuals
without acknowledging required skill sets—and
expecting them to perform well at the next level.
The Leadership Pipeline
It’s not surprising that the leadership pipeline is dry,
forcing companies to turn to outside sources to hire the brightest
stars. Hiring gifted people makes
sense as a tactic, but not a strategy. This approach fails because
highly talented individuals are scarce, and everybody is after
them. They won’t stay
in place long enough to learn from mistakes, master the right skills
or gain the experience needed for sustainable performance.
Today’s companies need effective
leaders at every level and location. Because of the information
technology revolution and globalization, leadership is a requirement
up and down the line. This means we must find a method that ensures
more managers will be prepared for, and placed at, the right
Tapping Leadership Potential
Companies need to build leaders, not buy them. Research and experience
demonstrate that potential is not fixed.
“We believe in human beings’ ability to grow; society
cannot achieve economic as well as cultural progress without it,” write
Charan, Drotter and Noel in their book, The Leadership Pipeline:
How to Build the Leadership-Powered Company. “Too
often, however, executives view potential as an abstract concept
that defies definition.”
Potential is the kind of work someone
can perform in the future, and it’s a dynamic concept.
Future work potential is based on accumulated skills and experience,
as evidenced by past achievement, ability to learn new skills
and willingness to tackle bigger, more complex or higher-quality
The more people achieve, the more they learn. Their willingness
to tackle new challenges increases.
“Fueled by the rapidly changing nature of work, global opportunities,
and on-line learning via the Internet, people’s potential
changes several times over the course of a career. They can and
do reinvent themselves.” – Charan, Drotter and Noel,
The Leadership Pipeline
To capitalize on potential, companies
must define the true work requirements at each key leadership
level. Succession planning systems
must spell out what’s needed to make a successful
transition from one layer of leadership responsibility to the next.
Matching an individual’s potential with a series of requirements
is how leadership pipelines are built.
The starting point is in understanding the natural hierarchy of
work that exists in most organizations. This focus is on managerial-leadership
work rather than technical or professional contributions. In most
large, decentralized business organizations, this hierarchy consists
of six career passages or pipeline turns. The model resembles a
pipeline that bends in six places, with each passage representing
• Starting Point: Managing self
• Passage 1: Managing others
• Passage 2: Managing managers
• Passage 3: Functional manager
• Passage 4: Business manager
• Passage 5: Group manager
• Passage 6: Enterprise manager
(Walter Mahler created this model, which he called the Critical
Career Crossroads. It was expanded by Charan, Drotter and Noel.)
Recognizing the requirements and pitfalls associated with each
leadership passage is crucial for both leaders and their bosses,
who can then provide better coaching and differentiated accountability.
This leads to a more supportive environment.
The Pipeline Perspective
As you become familiar with each leadership
find yourself thinking about careers and succession planning development
with a fresh perspective. This
will provide insights into how to fill your leadership pipeline.
You can structure a process to develop leaders on all levels and
ensure they’re working at the right
Each passage requires people to acquire a new way of managing
and leading, which emphasizes:
1. Skill requirements – new capabilities required to execute
2. Time applications – new time frames that govern how one
3. Work values – what people believe is important; the focus
of their efforts
Organizations are therefore challenged to place people in leadership
positions that are appropriate to their skills, time applications
In some companies, at least 50 percent
of leaders are operating far below their assigned layer. Either
they’ve skipped a
level and never learned what they need to know, or they’re
clinging to an old mode of managing that was successful for them
in the past. They have the potential to be leaders, but it remains
The Leadership Pipeline and Succession Planning
Replacement planning is still the norm
in organizations, but it doesn’t address the leadership
issues these companies face. Most jobs must change to keep pace
with newly evolving markets, products, business structures and
Organizations that attempt to designate a replacement now for
a job that may open in three years will end up basing decisions
on obsolete specifications. In addition, mergers, acquisitions,
downsizing, de-layering, globalization and the Internet have a
profound impact, with some jobs disappearing altogether.
The concept of a talent inventory drives
some succession planning, but it is a flawed concept from a pipeline
perspective. Talent does not
necessarily equate with performance. Charan, Drotter and Noel
offer a new definition for succession planning: “perpetuating
the enterprise by filling the pipeline with high-performing people
to assure that every leadership level has an abundance of these
performers to draw from, both now and in the future.”
To increase your succession planning effectiveness, follow these
performance. High performance is the admission price for future
growth and development. Full performance across all leadership
levels is the succession planning objective.
||The pipeline demands
a continuous flow. Succession planning must include all leadership
||Pipeline turns (passages)
must be fully understood. People need to work at the right
level. This cannot be determined until skills, time applications
and work values for each level are clearly communicated and
||Consider short- and
long-term simultaneously. Both are critical.
Test your succession planning by addressing these questions:
• Does it help you understand how an
employee can move from an entry-level position to CEO?
• Does it enable you to focus on short- and long-term performance,
including skills, time applications and values?
• Does it force you to work at succession continuously—not
just once a year?
Succession Planning to Fill the Pipeline
The following five-step plan will facilitate succession planning:
the leadership pipeline model to
fit your organization’s
succession needs. Substitute your company’s titles for
the leadership passage terms used here. The six leadership
passages may accurately be only five (or more) at your company.
standards for performance and potential into your own language.
Clear, detailed, unambiguous standards greatly enhance succession
and development planning, offering managers better ways to
communicate with subordinates who under perform or believe
they should be on a faster track.
and communicate these standards throughout the organization.
When people understand the standards for judging potential
and performance, they know what they must do to advance.
succession candidates through
a combined potential-performance matrix. This enables senior
managers to consider all direct reports during their succession
planning—not just the
plans and progress of the entire pipeline frequently and seriously.
Ideally, your organization will have at least one annual succession
meeting that revolves around this performance-potential evaluation,
as well as quarterly reviews and monthly action reporting.
Incorporating this plan will allow your organization to achieve
its goal of placing the right people in the right jobs with the
right preparation, while producing targeted results both now and
in the future.
Resources is a Leadership Consulting, Training and Executive Coaching
Firm Helping Companies Assess, Select, Coach and Retain Emotionally
Intelligent People; Emotional Intelligence-Based Interviewing and
Selection; Multi-Rater 360-Degree Feedback; Career Coaching; Change
Management; Corporate Culture Surveys and Executive Coaching.
Dr. Maynard Brusman
Consulting Psychologist and Executive Coach
Trusted Advisor to Senior Leadership Teams
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