A study by RHR International, a global firm of management psychologists and consultants, revealed that more than 50% of surveyed companies anticipated a loss of over half of their current senior leaders within just five years.
This study took place in 2005 in an environment of rapid global economic expansion and a thriving jobs market. However, in today's employee driven market where unemployment is at its lowest for more than a decade (ONS stats, 20th January 2016) the situation is much the same with companies increasingly competing for skills and good leaders able to pick and choose jobs.
There has never been a more critical time to be as strategic about your leadership talent pipeline as you are about your marketing, to ensure you're building a robust pipeline that attracts and retains talent whilst aligns to deliver against the goals of your business.
Take your marketing model, for example, you likely have a different approach for targeting each industry, region or audience sector because of their unique needs. Leaders are the same. First-line leaders, middle-management and senior leaders such as executives and board members, have individual triggers that motivate, engage and inspire.
There has never been a more critical time to be as strategic about your leadership talent pipeline as you are about your marketing
To ensure you're stimulating their particular needs and, therefore your chances of retaining talent, organisations should divide their leadership pipeline and their learning and development efforts into four skill sets and by level of leadership.
The Four Leadership Skills
We've found through more than 40 years of working with business leaders across hundreds of organisations world-wide, that highly effective leaders excel in four areas which we call The Work of Leaders model.
- Personal mastery - is about 'self-knowledge.' Great leaders manage their strengths and weaknesses. They demonstrate strong interpersonal skills and a high degree of emotional intelligence. Moreover, they communicate effectively with a wide range of stakeholders, continuously test and learn from their own assumptions, and have the adaptability and agility to handle the pace and stresses of today's workplace.
- Direction and alignment - effective leaders create confidence in others to follow. They remain at the forefront of change in the business, setting direction and quickly aligning the organisation by being able to constantly adapt.
- Commitment and capability - organisations today compete on knowledge and successful leaders create environments that engage, encourage a sense of ownership, and accelerate learning and development. They are more involved than ever in teaching, coaching, and creating growth opportunities for people, to build a workforce that gives the business a competitive advantage.
- Execution and performance - a leader that executes business plans well is one that communicates the strategy clearly and one that builds unity around what it means for people. This gets people's buy in and commitment.
These four areas form the basis of your leadership development pipeline. However, each skill varies according to different levels of leadership, which is where the tiering process comes in.
To be effective, leaders must expand and deepen their focus in each of the four areas as they advance through the ranks. In order to do this, split your talent pipeline according to level of leader and their ability against each of the four focus areas. That way, you can see where leaders should be and where they're going in terms of their development and align these skills against the business goals.
Tier 1 - Personal Mastery
To help first line leaders build greater self awareness, develop with them a mental model of what a successful leader is and does, which also helps them to understand their own strengths and vulnerabilities.
For mid-level managers who will have some self-awareness, then help them identify gaps in their skills and develop strategies to overcome them. For senior leaders, ensure they are proactively gathering feedback from peers and using this to adjust their behaviour. Also, encourage seniors to question their own assumptions to broaden their perspective on matters.
Tier 2 - Direction and alignment
In order that first-line leaders can give clear direction that is aligned with the business objectives, ensure they have a clear line of sight between their teams' activities and the business strategy.
Mid-level leaders should be influencing business strategy with more senior leaders whilst seniors should show an in-depth understanding of the complexities of the business and its environment, anticipating the future and representing the organisation to a wide variety of stakeholders.
Tier 3 - Commitment and Capability
Teach first-line leaders how to build engagement and commitment by understanding how to develop their teams' capabilities and encouraging team contribution.
For middle-managers, use advanced daily coaching techniques so they know how to capitalise on daily coaching opportunities and on-the-job learning experiences to build a sense of ownership and commitment whilst senior leaders should know how to assess and select future leaders and use development techniques to engage and inspire.
Tier 4 - Execution and Performance
To enhance performance, teach first-line leaders to focus on management priorities, to delegate effectively and to know how to adapt to change.
Middle management should be skilled in executing strategy through others even in times of uncertainty, whilst senior leaders should know the art of managing complex business problems and driving forward organisational innovation even when faced with resistance or ambiguity.
The best organisations take time to design a leadership development process that builds the skills to execute the business plan whilst acting as a magnet for attracting and retaining talent.
There are a variety of ways to create effective development experiences for leaders, so many that an in-depth discussion goes beyond the scope of this article.
However, those companies that do link leadership development to business strategy, know that just as the work of leaders differs in breadth and intensity by level, so does the skills required to maintain a robust and effective pipeline of leadership talent that drives business success.
Russ Becker is president of The Forum Corporation, a global leader in sales performance and leadership development