Identifying and developing your future leaders

As a CEO, what keeps you up at night? For many, the most disturbing issue is finding tomorrow's leaders.
By Dr. Brian Davis
Tue 01 Jan 2008 04:00 AM

As a CEO, what keeps you up at night? For many, the most disturbing issue is finding tomorrow's leaders. Smart companies are being proactive in this area and turning to HR to identify tomorrow's leaders today.

Access to leaders comes from one of two places - existing employees or the external labour pool at large. Which one of these areas is the right one to focus on? While the answer may well depend on the position in question, consider that the demand for leaders worldwide is growing exponentially. The number of executive positions is projected to increase 10-20% over the next five years. Meanwhile, the supply of leaders is shrinking - the number of workers in the 35-44 age range is projected to decline by eight percent over the next few years and in the USA, 50% of the senior management ranks of Fortune 500 organisations are eligible to retire over the next five to seven years.

Many key HR leaders feel their organisations are not doing a good job in tracking, measuring and developing leadership qualities in existing employees. When called to fill a transitioning critical leadership role, organisations often find they lack the necessary skill sets among eligible individuals. This isn't always because the talent they have within the company is inadequate; rather, it is usually a result of insufficient succession planning.

Proper succession planning involves strategic and long-term "talent mapping" - that is, integrating leadership skill sets and competencies into high-potential employee development and tracking the results. Organisations that can map the relevant leadership talents against those exhibited by high-potential employees can create a detailed roadmap for continuing success.

Assessing potential

By definition, leadership potential is the capacity for developing into a leader. Potential consists of a broad array of traits, experiences and other characteristics that create the capacity for this development. This means that different people will come to the same level of potential from very different paths.

My company has been assessing leaders for more than 40 years, and over that time we've gained many interesting insights. For example, the job of a leader changes as one transitions from first-level to mid-level leadership, and then to business unit leader, senior executive, and ultimately, chief executive roles. Within this changing dynamic, however, there are some consistent predispositions that leaders need at all levels: self-confidence, emotional control, consideration and responsibility, and the ability to solve problems in a creative manner, to name a few. The more of these traits an individual has, the more likely they will develop into an effective leader.

With leadership roles of higher responsibility come more complex challenges, a greater freedom to act and decisions that carry increasing significance. The more senior the leadership role, the more difficult and less well defined the challenges. Leaders need the ability to analyse and detect patterns or themes, especially in ambiguous or quickly changing situations - and they need the confidence to make decisions. Individuals with the characteristics that make these transitions easier, faster or smoother will progress farther and faster.

Translating potential into performance

Without training and preparation, employees with leadership potential will not become effective leaders. How training and preparation are best accomplished?

For employees early in their careers, companies can provide training that is broad, inclusive and low cost. Even at this level, however, training should be specifically tailored to and focused on the skills needed to execute specific business objectives and goals. By looking at the skills that are most useful to the company at the broad level, a baseline talent map can be created.

To be most effective, companies should look for or develop three things in these young employees:

• The insight to understand what leadership skills they need to develop.

• The motivation, capacity and opportunity to develop these skills.

• The willingness to be held accountable to translate their high potential into high performance.

Companies should support those who take initiative, promote a learning culture that encourages development for everyone and talk frequently and candidly about performance. As careers move forward, relevant training and candid feedback need to continue. If an employee's performance is poor, focus on diagnosing and remedying performance problems. For those who are strong performers, recognise and reward that performance, work on a plan to sustain and strengthen that performance and talk to these individuals about their next role. And finally, map each individual's specific strengths and abilities against the talent roadmap you'll need to rely on when succession in critical leadership positions becomes an issue.

Competition for talent in the Middle East, especially executive talent, is fierce and expected to get fiercer - and that means talented leaders will command higher and higher compensation. Organisations that lack their own internal source of leaders will find it especially difficult and increasingly costly to attract and develop leaders from the outside. By mapping existing talent against key business needs, smart companies can create a real competitive advantage over the competition.

Dr. Brian Davis, Ph.D., Executive Vice President, Personnel Decisions International. Dr. Davis is an executive vice president at Personnel Decisions International (PDI), a global human resources consulting firm, with offices in Abu Dhabi. For nearly a decade, PDI has served a portfolio of leading organisations in the Middle East, helping them to identify, develop and deploy superior leaders.

The road ahead

Effectively translating existing potential into future performance requires keeping your eye on the ball and keeping your HR team accountable by focusing your oversight in the following areas:

• What are we doing to increase our overall corporate capabilities, competencies and capacity to beat our competitors?

• Do we have a sufficient talent pool of future leaders to support our growth strategies or should we be recruiting staff in different areas?

• In promoting people into leadership roles, how do we determine that they have the competencies and skills to gain or retain a competitive advantage?

• Are we deploying our best leaders to the areas of highest return for the company?

• Are we retaining our leaders at a higher rate than our best competitors, and is our talent inflow (including internal talent development) at least matching our talent outflow?

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