What’s more essential for an organization’s long-term health than the selection and nurturing of its future leaders? Many companies understand this and maintain precise lists of candidates who can immediately take up key leadership positions in their companies. Unfortunately, an alarming number of these fresh leaders find themselves ill-prepared to fulfill the roles and end up failing miserably. There are many examples of such leaders, even in well-known and successful multinational companies.
Why do these newly minted leaders fail even though they are accomplished in at least one area of management and have years of experience behind them? This could be because they lacked expertise in the more general competencies, for instance, building consensus, public relations, managing and designing acquisitions, and providing support for multiple constituencies. It is not that their new roles ask for too much; rather, the way traditional success planning is formulated and executed is too hidebound and narrow to detect and fill in the skill gaps that can affect the success of even the most promising executives.
Understanding Succession Planning
Research suggests that companies who succeed in developing successful leaders do this by dealing with succession planning as not just a mechanical process in which the list is updated. They plan and execute this process much more meticulously – including the blending of the practices of leadership development and succession planning – to ensure that they have a reliable system for the management of the talent throughout their companies. While these two practices may exist in separate spheres in many companies, they are natural allies as they share an important and fundamental goal: getting the right talent in the right part of the company. Productive succession planning encompasses more than a replacement-planning process – it includes a comprehensive employee-development system.
The Leadership Funnel
Leadership development and an immediate pay-off in your company’s profit growth or sales are directly linked – but many companies fail to see this. Many of them don’t prepare the candidates for filling in the positions of the current leaders. If they have to make a replacement urgently, they select the next best option that is available. When organizations do not take any significant steps to prepare the next possible leader, it is not realistic to expect that the candidate will exhibit the leadership capabilities that are required in the new role.
This is the reason why a Leadership Funnel should be in place in every company. A Leadership Funnel can be defined as a systemic process that always makes sure an organization has an adequate supply of leaders being nurtured throughout the organization.
The Culture of Change – And the Relevance of The Leadership Funnel
Imagine your industry five years from now – how different will it be? Change is part of every organization and every industry. There are many threats associated with change. Some of the common ones include the introduction of new technologies, industry consolidation, automation, price commoditization, off-shoring, out-sourcing, and the entry of larger adjacent players into the market. A company is a collection of assets and people – people may be considered as the greatest asset. To be able to adjust to change, a company needs to alter the skills, attitudes, and behaviors of its employees. This outcome is only achieved through leadership, and not by lay-offs or changes in the budget.
A Leadership Funnel ensures that there is an abundance of leaders in your company so that you will always have the best leadership for your organizational functions. There are other benefits. It improves the organizational culture by making everyone talk about developing a “complementary team” and “bench strength” in various areas of your business. This helps to prepare the employees at levels below the leaders for assuming the leadership roles one day. A system of shared knowledge and practice such as this helps to promote a positive attitude and motivation be promoting change and growth.
The Need for The Leadership Funnel
Leaders just don’t drop down from the sky when a company needs them; they have to be carefully nurtured over the years to make sure that they have become capable of performing at their optimal level when they are called upon to fulfill the new role. This is why it is imperative for a company to carefully select and install the right people in the right leadership slots and to build a leadership development culture through the Leadership Funnel process.
Successful organizations keep track of their leaders’ strengths and weaknesses so that they can make up for the weaknesses by bringing others in their positions who possess complementary skills. You may be surprised to learn that every organization has a Leadership Funnel, whether they consciously created one or not. Observe your company’s funnel, and if you find that it is empty at the top-most or any other level, take the necessary steps to fix the issues and fill in the gaps so that your company is geared for success in the future.
Here are the best Leadership Funnel practices that you can apply:
- Assess your managers for leadership potential when they hit the 3 to 5-year mark of the tenure.
- Assess the high-potential candidates for their areas of improvement and strengths when they hit the 5 to 7-year mark with your company.
- Involve all the high potential candidates in an intensive two-year developmental program, through which they can cover-off or improve their weak areas.
- Assign internal mentors and coaches to these candidates within your company. Providing training for the internal mentors and coaches is a best practice.
- Keep tracking the high-potential candidates after they complete their program so that you can find ways to develop them further.
- The CEO should support the Leadership Funnel process, promote it, and make the head of HR responsible for carrying it forward and keeping track of its success.
- The head of HR should be given support from the heads of all the divisions and functions so that the process is rolled-out successfully.
- The CEO, the HR head, and other senior executives maintain a regular stream of communication regarding the Leadership funnel process.
If you are looking for useful tools to develop your Leadership Funnel, here are some assessment tools that will be of service to your organization. You may also want to have a look here for some immediate help with your succession planning process.
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