Chances are that you have been trying to develop leaders within your company, but it's difficult to find the talent or the time. Succession planning takes more than identifying the most likely person to take over--it takes years of grooming, development, and training.
According a recent Deloitte survey, almost 90 percent of business leaders recognize the success of their company depends on effective leadership succession, but only 13 percent are confident with the succession plans they have made. The survey also found 54 percent of those leaders said lack of talent has done damage to their companies.
Harrison Monarth, an executive coach and the author of The Confident Speaker, writes in Harvard Business Review about how to build effective leadership pipelines for succession. You may not want to think about your company in the context of your death or absence, but if it's your baby, you should plan for its life after you.
"Organizations that fail to develop strong future leaders will inevitably see that high-potential talent--already in short supply--head elsewhere. By then, expensive executive searches may need to be repeated, there may be a loss of strategic momentum and investor confidence, and the company may flounder with a CEO who is out of step," Monarth writes. "It's time to protect your company from inadequate leaders, who, at best, hurt a company's bottom line, and at worst, threaten its legacy."
Below, find out how to develop your company's next leaders.
Outline ideal leadership characteristics
The first step is to precisely define what type of leader your company needs. What type of skills and behaviors, specifically, does it take to run it? "Too often, companies demand a laundry list of vague qualities, such as creativity and innovation, which fail to align with organizational needs. Or they rely on subjective metrics, such as likability, loyalty, whether someone is 'due for promotion,'" Monarth writes. "This puts you at risk of missing out on true top talent and promoting the wrong people. And it confuses young, promising managers about what skills and behaviors they need to develop to advance their careers."
Define what actions your new CEO needs to take
When thinking of skills, tailor them to specific actions the new CEO will have to accomplish. Monarth says you should think about what will happen after you're gone. Will the new leader need to oversee a merger, penetrate new markets, or flatten out the executive structure? "Aside from the skills needed to execute on specific strategy initiatives, research has noted that high-potential leadership talent generally demonstrates a drive to excel, a 'catalytic learning capability,' and an enterprising spirit, coupled with the ability to sense real risk," he writes. "Focus your leadership development program on strengthening employees' ability to deliver strong and credible results, to master new types of expertise, and to uphold behavioral standards that reflect the company culture and values."
Identify mentors to assist the new leader
If you're not around to show a new leader the ropes, you'll need an effective mentor who knows the inner workings of your company, its stakeholders, and its customers. "Pair potential leaders with mentors and executive coaches to aid in their development. Give challenging job-specific assignments that tie in to the overall business strategy, and then provide more frequent feedback so adjustments can be made in real time," Monarth writes. "The key for these interventions is to keep the momentum going. These aren't one-off initiatives or stand-alone workshops without follow-up. You want to sustain and expand your development program to address business challenges in real time."
Outline the fast-track process
How will a new leader know he is going to take the reins? Monarth says that you need to define how leadership talent is fast-tracked in your company. He says that leadership development is most effective when "high-potential employees are formally identified as such." Make sure your organization is clear about who will be going to the top and how they will get there, by providing those worthy candidates with training exercises, incentives, and added authority.
Build performance metrics
Once you have identified the skills and competencies that make a good a leader for your company, it's time to find out how to track the development of those skills. Figure out ways to measure candidates' problem-solving and decision-making skills, Monarth writes. You should also be able to measure a candidate's emotional intelligence and his or her ability to negotiate and navigate problems with employees. Monarth says companies like IBM and GE are known for their standardized methods of leadership development, so take their methods of heavy investment and training and make them work within your company.