Filling the Leadership Pipeline - Robert B. Kaiser

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67% • A core set of leadership values that the individual lives by 67% • Broad, comprehensive knowledge of the business 65% • Decisiveness 60% • Ability to identify and develop talent 57% • Superior intellectual abilities 45% • Other 12%

      Identifying future leaders. Nearly two-thirds (62 percent) of companies reported that they tell individuals they are perceived to have high potential, but many respondents qualified this statement by adding that the conversations happen informally and inconsistently. Of the many issues companies are grappling with in this area, how to communicate to the organization that certain individuals have been targeted as future leaders is apparently one of the most daunting. Some companies fear they will inflate the expectations of talented managers and then disappoint them. Others are concerned about anointing heirs apparent, who then may grow complacent and lose their drive to succeed. Still others are concerned about demoralizing solid performers who are not identified. These concerns are often exacerbated when the company culture is highly egalitarian (so no one is “special”) or where employees do not often get direct performance feedback. Managers of future leaders are key to this feedback process, but our early investigation suggests that companies do not prepare their managers adequately to communicate the right, balanced message to future leaders and also to engage in real dialogue with them about their career interests, family and personal needs, and all of the other issues related to advancement and assuming more significant responsibilities. (See also chapter 2 for reasons that organizations tend to be naive about what it means for individuals to climb the corporate ladder.)

      Developing future leaders. In developing future leaders, companies rely heavily on internal resources, particularly the managers of those future leaders. An actively involved boss was the most important development resource, cited by 84 percent of companies. The second most important experience was stretch assignments (endorsed by 71 percent of companies), followed by mentoring and internal coaching with senior executives. Peer contact and feedback, in contrast, were endorsed by less than half of the companies, both of which are experiences that the Voice of the Leader research (Corporate Leadership Council, 2001) suggested up-and-coming leaders value and would like to have more of. Stretch assignments and actively involved bosses were also the experiences rated as being most effective in developing future leaders. Development assessments by outside consultants ranked third in effectiveness, even though only half of the companies reported using such assessments as part of the development process.

      Larger companies, on average, tend to use a greater variety of development experiences to grow future leaders (Spearman’s rho = .315, p < .01). Thus, while larger companies have a more diversified portfolio of development interventions, there is not a great deal of difference in the kinds of experiences smaller and larger companies rely upon. In terms of what does distinguish these two, our early interviews suggested that larger companies rely on internal executive education and formal action-learning projects more frequently than do smaller companies. Companies that use a greater variety of experiences in developing their leaders are also more confident that these leaders will meet their future growth needs (see exhibit 1.5; Spearman’s rho = .205, p < .05). Providing a greater diversity of experiences to future leaders may prove effective on two fronts: First, it suggests that companies are tailoring the experiences to the individuals (that is, there is no boilerplate plan that is being applied to all future leaders). Second, it suggests that individual future leaders are being developed through a variety of methods in order to develop a greater breadth of skills, perspectives, and abilities.

       Exhibit 1.4. Experiences That Companies Rely on to Develop Future Leaders

      (Percentage of companies that endorsed each activity, N = 105)

• Actively involved boss 84%
• New, significant roles that stretch individual 71%
• Mentoring relationships with senior executives 70%
• Coaching relationships within company 67%
• External executive education programs 67%
• Formal development planning 67%
• In-house executive education programs 54%
• Use of outside-the-company coaches 52%
• Development assessments by outside consultants 51%
• Peer contact and feedback 48%
• Rigorous monitoring of progress against development goals 41%
• Other 4%

       Measuring Impact and Value

      As noted in chapter 4, the question of impact or return on investment is important to those responsible for leadership development. Respondents generally reported having difficulty in measuring the effectiveness of development experiences. Only 41 percent of companies, for example, relied on rigorous monitoring of development goals. And our preliminary interviews of HR professionals suggest that rigorous follow-up to assess whether development plans are being executed is not currently a common component of future-leader programs. Nor do companies systematically track how their leaders change or progress as a result of development experiences.

      (Average rated effectiveness of each activity where 1 = ineffective and 5 = extremely effective)

• Developmental, stretch assignments within company 3.9
• Involved boss 3.7
• Development assessments by outside consultants 3.5
• In-house executive education programs 3.4
• Formal development planning 3.4
• Mentoring relationships with senior executives 3.4
• Use of outside-the-company coaches 3.3
• Coaching relationships within company 3.3
• Rigorous monitoring of progress against development goals 3.2
• External executive education programs 3.1
• Peer contact and feedback 3.1

      Any analysis of ROI has to begin with measuring the actual impact of the development intervention. When asked in the survey, “How should

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