Nearly 40 percent of high potential internal job moves end in failure. Reasons why vary and include anything from not letting go of traits that hinder performance at higher levels, to not being adequately prepared or supported.
Transitioning high-potential talent to pivotal positions can be challenging, confusing and stressful. When leaders take on additional responsibilities, their impact cascades throughout the organization. If they do well, their organizations do well, and vice versa.
The 40 percent failure statistic, which comes from business advisory company the Corporate Leadership Council, is rooted in a common issue. Traditionally, organizations focus on a single practice, such as identifying or developing high potentials.
They may not connect all the practices together and link them to larger strategic management practices, such as succession management. The outcome is often an inability to create a solid pipeline of leaders for high-impact roles, the key areas in the value chain that produce or lose millions of dollars if not managed properly.
The right development can help prepare leaders for the demands of their next management roles. Successful preparation for leadership roles provides a roadmap to ensure a steady pipeline of ready leaders and a clear connection to broader business objectives.
High-potential talent development programs should prepare talent for critical leadership roles. Today’s leaders also need to be agile. They need vision, influence and courage, and these traits must be cultivated and nurtured.
Identify high-potential talent: An organization must identify its current and future business needs, and then plan leadership development accordingly.
The first step in this process is properly identifying the right quantity and quality of high-potential talent to support a critical leadership pipeline. This establishes a pool of talent from which to draw. Identifying high-potential talent requires an organization to look for something that, by definition, does not yet exist. Many organizations use performance to help identify potential, but it is not always a perfect indicator of readiness to perform at the next level.
While nominations from bosses and performance data reviews are important, organizations should use metrics to establish common criteria to identify high-potential candidates.
Today, many organizations supplement identification with outside assessments that look for characteristics that are hard for managers to identify: leadership potential based on interest in higher-level responsibilities, experience handling a variety of challenges, and a number of psychological traits associated with leadership and conceptual reasoning abilities. They also account for possible derailing behaviors that could negatively impact performance.
For example, HON Co. has more than 500 salaried employees and is the largest operating company within HNI Corp., a 10,000-employee global manufacturer of office furniture and fireplace products. In 2010, HON established a calibrated process with clear criteria and objective data to measure talent potential and support talent review discussions.
HON implemented a standardized process for leadership assessment and talent review that systematically evaluated and differentiated the company’s salaried employees.
The data-driven assessment process collects employees’ leadership potential and combines it with performance evaluation information. HON assembles the information into a 9-Box grid, a starting point for line managers to discuss performance and potential in the people in their departments.During these discussions, managers may adjust the 9-Box to create a final profile of their department’s members.
Managers now use the process to help them make talent decisions and develop staff more strategically, and it has since been adopted by other parts of HNI — including Hearth & Home Technologies, among other brands — with more than 1,000 members from both organizations participating.
“This new process takes the guesswork out of evaluating potential by establishing an objective foundation that serves as a concrete starting point for free-flowing dialogue and conversation,” said Barney Olson, director, talent management systems, Hearth & Home Technologies.
Develop and prepare talent. The process has just begun once an organization identifies its high-potential talent. Future success largely depends on growing the potential of the identified talent, but a common pitfall is overlooking the complete development and preparation of high-potential candidates. They need nurturing and development to be ready when the time comes to fill leadership roles.
High-potential talent development should include stretching the identified talent with challenge- and action-based learning opportunities they will likely encounter in broader leadership roles.
These opportunities, which prompt participants to think in new ways, should occur in a safe environment, where they can tackle issues and learn from their experiences without any negative impact on an organization. It is also important these challenges include group elements to help develop leaders’ abilities to understand and manage through group dynamics.
Supplementing these learning opportunities with multi-rater assessments that provide developmental feedback also can be beneficial. Organizations can use this information to conduct development planning meetings with high-potential talent to discuss personal goals that align with organizational objectives. Global electronics distribution company Arrow Electronics exemplifies how a comprehensive development process can benefit both talent and the organization.
To ensure long-term development and accelerate talent readiness, programs provide development across critical leadership transition points, from first- and mid-level leaders to senior executives. Arrow uses a development toolkit that combines elements from self-driven development offerings with targeted coaching, training and assessments, online learning tools and simulation-based exercises, executed via webcam.
Accelerate talent readiness: Following the identification and development stages, the next step prepares for a defined role. Many organizations fail in this step by not linking talent development with succession planning. Organizations should populate their succession pipelines with identified talent, and then use a comprehensive assessment process to identify and close near-term readiness gaps for pivotal roles.
Many organizations are using rigorous assessments that include not only tests and interviews, but business simulations that reflect the critical challenges that can make or break leaders in pivotal roles. It’s like putting leaders in a flight simulator to see if they can “fly the plane,” so to speak.
By evaluating what leaders do in these situations and how well they handle challenges, organizations can obtain actionable insight into whether their leaders are ready, and what gaps they need to close.
Organizations can then use this information to support data-driven talent review discussions for succession decisions, as well as development efforts to prepare candidates for specific roles such as mentoring, stretch assignments such as managing through a difficult change, and development progress reviews.
The First 100 Days
Preparation for leadership transitions doesn’t end with filling a role. The leader’s first 100 days are a danger zone where failures occur. During these 100 days, talented employees need a lot of support; if they don’t get off to the right start, implications can linger for years. Organizations should take steps to energize talent through this transition, providing the resources and feedback to successfully carry them through.
Organizations also can help with this transition by defining a consistent and actionable on-boarding and performance program. This should include on-boarding development and coaching for leaders within the first few months in the new role to help them ramp up quickly, followed by additional targeted development after the first 90 to 100 days.
To maximize the probability of success, organizations should support leaders in identifying and acting on priorities in five key areas: business, relationships, team, learning and personal agendas (Figure 1). These priorities become the leaders’ on-boarding agendas that align with their new team and other stakeholders.
Business agenda: Align with broader business objectives by defining strategic priorities, and understanding and leveraging key business drivers in line with these priorities.
Leadership agenda: Identify the core values and principles of the organization to ensure leadership actions are always in line; demonstrate organizational savvy, and engage and inspire others.
Personal agenda: Clarify life goals and values, and balance work with family, health and fitness, and other key priorities for personal fulfillment and happiness outside of work.
Relationship agenda: Make connections, network and build relationships, including those with key stakeholders to ensure long-term success.
Learning agenda: Always improve and gain additional knowledge, working in line with the belief that leaders must continue to grow not only as they’re transitioning, but long after they have settled into a new position.
Leadership transitions can mark a precarious time for organizations and individual leaders based on the shifts in responsibilities and expectations that accompany a new role, as well as the unique challenges and pressures that come with it. A general framework and approach can help achieve a smooth management transition.
Stu Crandell is senior vice president at leadership consultancy PDI Ninth House. He can be reached at editor@CLOmedia.com.