8 June 2015Obstacles for Building World Class Leadership Capability
1 The former head of executive development-and now SVPHR for GE, Susan Peters once told me– without a touch of arrogance: “We will share what we do around talent and leadership with anyone — including our competitors — because we don’t believe it is replicatable.”
Yet, what GE does is not all that complicated: It hires great people. It sells careers, not jobs. It identifies, rewards and develops great talent. That’s it.
But if the answers are so straightforward, why don’t more companies get it right?
Eight Obstacles to Success
- Complex programs and practices vs. simple ones: The best talent management processes aren’t overly engineered or sophisticated. Complex and rigid models do not work well in this era of speed, uncertainty and volatility. While technology can enable processes, talent leaders should be able to do many things on the back of the proverbial envelope. Just provide practical tools for managers; design programs for scalability to grow with the organization; and drive for honest conversations about performance, potential and capabilities. Here is a simple test: walk through your hiring processes as if you were a candidate. Would you want to be hired by you?
- Do as I say, not as I do: If the CEO and senior executives won’t spend the time to make talent and leadership a priority, neither will anyone else. The magic is not around the programs and practices. The underlying values and behaviors of leaders is what make the difference. Leadership isn’t just about what leaders do. It’s something they are, which then drives what they do. Genuine leadership comes from within. Programs and practices are the manifestation of these beliefs and values. And if they don’t have that mindset, the ‘program’ won’t make a difference [see my previous Blogs on developing a talent mindset].
- Indifference to Top Talent: Research—and our intuition—tells us the importance of paying attention to top talent, but many organizations simply do not. They say they do but their actions don’t support that claim. I recently did focus groups with top talent for two different clients. In one I was told of a ‘merit increase’ that would amount to $116 per month before taxes for a hi-po that earns six figures. The company has provided 16 hours of external ‘development’ for this top talent over the last 2 years. In another company, a high-po was told he would not receive a pay increase for 18 months. No external development is being offered. Seriously? Executives worry about alienating or disengaging others in the organization by focusing too much attention on top talent. Or conversely, they over-reward average performance in a misplaced effort to acknowledge everyone’s contributions. These both send wrong messages. Under-recognition of high potentials is one of the single biggest issues companies face. But making sure top talent feels special doesn’t have to supplant making solid performers feel successful.
- Start at the Beginning: This need not be complicated — just start somewhere. Think human capital supply chain. First, talent managers have to get the hiring right. Then focus on the most critical talent: high potentials, high performers and those with key skills. Get the right leaders in place to grow the business and future talent. Make an honest assessment of talent capabilities and gaps through robust performance management and talent reviews. Finally, get succession management right. Don’t tackle everything all at once.
- Close the Gaps: Many companies have some kind of discussion about talent capabilities and needed skills. But that often is where it stops. Or action steps are assigned without accountability. Taking the time to identify development needs and then failing to build those capabilities is a waste of time. The best companies take the extra steps to hold individuals responsible for developmental action steps, monitor follow-up actions and assess progress.
- Alignment: I have come to hate that word but generally, we all have a pretty good understanding of what it means. Disjointed is what characterizes many company practices rather than alignment. I recently did an informal talent management ‘audit’ for a client and asked each of the talent and leadership professionals to bring me descriptions of their programs. That simple exercise was eye opening. Language was inconsistent. Talent management models and frameworks were different. The ‘look and brand imaging looked like they were from different companies.
- Confidence without capability: Many leaders talk about the importance of leadership and talent. Many of those leaders wrongly believe they are doing the right things to create a talent engine. This is one of the most difficult hurdles to overcome. Some organizations think they are better at leadership than they actually are. Often, these companies may do one process fairly well, but they don’t address the bigger picture. Or they are missing some of the basic elements of good leadership. Others have not evolved good programs over time. These companies often are weakest around executive ownership and passion. A third group does all the right things, but only on paper. All the boxes are checked, but they are not effectively executing these practices in a meaningful way.
- Just-in-time talent: During the past several decades, many companies formed bad habits by buying what they needed, when they needed it. This was possible due to the ready supply of available talent. The consequences of that strategy are becoming clearer. Too many companies bought talent on the open market—a time consuming and increasingly cost-prohibitive practice. Evidence inside and outside of company’s shows overinflated talent often underperforms, and has undesirable financial and cultural impacts.
Most CEOs will admit they do not have enough senior leadership talent to sustain significant growth demands. And given market conditions for the most talented leaders, many now realize the best way to ensure a strong pipeline of talent is to find and develop it themselves.
Four Guidelines for Action
To avoid these obstacles follow these four guidelines for action:
- Start at the top and stay on the top team. The first key to building leadership quality and depth is active ownership and accountability by senior executives. Everything starts at the top of the house, with senior leaders and board members who provide inspiration and vision for leadership and drive the success of practices. These top leaders must passionately believe in their roles to grow talent. Without this commitment, talent managers can only do so much. This is an enduring priority, not a once-a-year obligation.
- Focus on a few critical processes; don’t boil the ocean. People pay attention to what gets attention; so don’t try to do everything at once. Begin by identifying critical areas that can best support the business strategy.
- Become maniacal around talent. The best companies have an intense focus on talent that permeates every level of the organization. It begins before someone walks through the door with selection and hiring practices. Once they are on-board, think about how to identify the most critical talent. This group should be more actively managed and developed, and provided differentiated compensation, development and exposure to senior leadership. The use of experiences — special projects, work teams, action learning and position changes — to grow the capabilities of the best talent is both effective and incredibly engaging. This type of learning has the added benefit of paying forward the passion around talent development. Leaders who have experienced stretch opportunities and guidance from senior leaders are much more likely to give back to the next generation of future leaders below them.
- Measure progress. The final key is to never be satisfied. Metrics help weave the talent mindset into the operating fabric of the business. They keep programs relevant and aligned to a fluid business strategy. Measures clarify expectations, create a framework for tracking results and provide the ability to communicate with business leaders in a language they understand. Measuring progress also is about holding leaders accountable. That can start with performance management objectives around managing people and behavioral competencies for growing talent. But the best companies use scorecards to track leaders’ progress on a variety of talent metrics. They tie these scorecards to rewards mechanisms such as annual incentives and track progress over time.
The best companies get it right by holding leaders accountable for desired behaviors and actions, integrating all of the practices and programs that touch leaders and, above all, executing flawlessly. Following the four simple guidelines above can create significant strides toward the kind of leadership depth that will be a key element to achieving future business success.
- 1 – I worked on an earlier version of this piece with Michelle Salob Frieberg who now works in Executive development at McKesson ↩