Organizations spend a great deal of time, effort and angst each year developing and revising their Strategic Plan. Unfortunately, it often seems like the task of planning for the next generation of leaders is a somewhat more peripheral priority. We seem to be stuck somehow on how to best evaluate and manage talent within our organisation and yet, with all the brainpower at Harvard, Kellogg, INSEAD and McGill, you would think we should have been able to figure it out by now. Perhaps it is simply a lack of will!

Ironically, it seems that as "leadership" has become a topic of focus, research and teaching, it has, in fact, become even more elusive to define, capture and successfully bottle. All too often, in far too many organisations, there remains a serious lack of depth in the leadership ranks and a serious lack of understanding about what has gone wrong.

The core questions remain the same.

• Why are good leaders so hard to come by?
• Is leadership an art or a science?
• Can you develop leaders or are they born?
• Is it even worth trying to grow your own talent?

The Boomer Bust

A recent article in Profit Magazine noted, yet again, the emerging pressure which organisations face when it comes to the aging 'Baby Boomer' generation. The underlying challenge is certainly stark. Simply put, if you think there is a leadership shortage now, what do you think is going to happen over the next 10 years as the workforce continues to age and the level of retirements climbs to record numbers?

Couple this with the second significant and growing trend, the tendency amongst those from Generation X to choose 'free agency' rather than lifetime employment and that means your organization could very well be vulnerable to a talent shortfall.

Untapped Potential

In the field of Organisational Effectiveness Professor Ram Charan has become one of the true "wise men" of leadership. He has been once again chosen by Business Week as one of their Top 10 thinkers in North America and he has written extensively on the subject of leadership.

Ram Charan ,Stephen Drotter and James Noel have co-authored a book- "The Leadership Pipeline" and in their view, the demand side of the leadership equation has been driven by;

• An increased consciousness about the human side of business
• The rising importance of Emotional Intelligence in leaders
• The fact that new leaders are being forced to move through many levels of the organisation at increasing speed
• An acceptance that horizontal leadership skills have replaced those of vertical leadership as the key ingredients for success
• Pressure stemming from the fact that old economy companies are competing for new economy talent in an already depleted pool.

The Cost of Leadership

Several recent studies have tracked the overall cost of replacing a top executive and have pegged it in the neighbourhood of $500,000. The cost of recruitment, training and on the job development (including offshore assignments to help create the newer and important global leadership competence) is significant. It seems to suggest that developing a steady, reliable stream of quality leaders who progress up the 'ladder' is not only vital to the health of the organization as a whole, but more specifically to the bottom line. A recent survey conducted by The Beacon Group of a cross-section of some of Canada's top executives produced some very interesting and we think rather startling results. Of the Top 10 most pressing and concerning business issues facing them today, it showed that Depth of Leadership Talent was, in fact, tied with Competitive Pressures as their top concern at an 86.6 % "worry level".

This leads us to only one conclusion – organisations of all sizes and across all industry segments are equally worried about the leadership talent shortage. The question remains then, what steps are you taking to address this issue and prevent employers with a more attractive Employee Value Proposition from coming after your talent sooner rather than later.

Strategy for Success

Like anything in life, the first constructive step you can take is to be prepared. However, we live in very uncertain times and in the absence of a good crystal ball, you might very well ask - prepared for what?

It is certainly true we don't know exactly what the demands of tomorrow will bring or how the markets will change or what new skills and leadership competencies will emerge as being important. However, we do know that attitude and character have always been essential to great leadership and that great technical competence without the right mindset and discipline will not produce even moderately acceptable results.

In today's climate, the best strategy is to have a healthy flow of future leaders coursing through your leadership pipeline at all levels. Therefore, a significantly greater amount of time and attention must be placed on the identification, validation, assessment and development of future leaders.

Developing your Talent Pipeline

While there is certainly no one magical solution or lone silver bullet, it seems to us that thinking in terms of the leadership talent development process as a pipeline is a good first step. In so doing, you are forced to recognise that capacity, flow and pressure are all required to ensure the end product is delivered on schedule. Here are some practical steps you can take.

Make a List - Unfortunately, in many organizations, this is often the only part of the talent management process that ever gets completed. While developing a set of clear criteria and formally mapping your talent is crucial, it is still only the first step. Objectively identifying your highest potential officers serves two immediate purposes. First, it provides a quick calibration to show you just how many candidates the organization has in house and secondly, it can help identify the critical gaps which need to be overcome and what skills need to be developed.

Check it Twice - To be effective, Talent Mapping must be a multi-dimensional process. As such, you will need to examine your talent pool in more than one way. In simple terms, you will want to assess both capacity and character on two separate scales of reference. To do this, you will need to develop a set of predictive indicators along side those you currently use to assess performance.

Let them Know - Many organizations feel their High Potential List should be kept secret, locked safely in the vault of the HR Department and only taken out for ceremonial purposes. We disagree. Transparency is critical to the success of any legitimate talent management process.

First of all, the candidates themselves must know if they are part of the pool. This will help anchor accountability and ensure their commitment to the organisation. Secondly, it identifies people the organization feels are high performers, thereby allowing them to act as role models to other employees.

Plan Ahead - Failing to plan far enough ahead is another major mistake with many talent management processes we have seen. They often identify only the next step or maybe two in the process rather than viewing it as a long term "pipeline" that needs to be kept full and flowing. The candidate should know the organization is fully committed to a long-term plan and genuinely looking to develop them. This is not to imply a guarantee but is intended to help frame a contract that both sides must live up to.

Identify the Twists and Turns - Designing a healthy, efficient and robust talent "pipeline" is a good thing to do. The tougher part is figuring out exactly where the pipeline is most likely to become clogged and then doing something about it.

In most cases, the problem within the pipeline occurs at one or more of the many transition points or turns along the way. The bends in the elbow. This means the plan should focus on these critical passages and ensure they are navigated by the high potential officers effectively and efficiently.

Think Broadly - The reality is, the higher up the organizational ladder an individual progresses, the more areas of the organization they must understand. If this is so, a linear progression through just one functional pipeline may not be enough. In order to get from say the Production side of the business to Sales, you might very well want to identify a series of steps that would take the candidate through Finance or Logistics.

The key is to test capacity, develop endurance and expand overall leadership fitness. To do so, you need to focus on both breadth and depth.

Stretch, Stretch, Stretch - Finally, your very top performers should also be your most resilient individuals. The "best of the best" when it comes to leadership talent are not only looking for recognition and promotion, they are looking to be challenged and stretched and tested. This gives you a wonderful opportunity to actually see how the candidate reacts to various pressure situations and serves as a means to proactively help them continually broaden their abilities

Our Monthly Rant
Don't Worry, Be Happy...

We are puzzled.

If the depth of leadership talent really is of legitimate concern to the senior executive of most organizations why then is it not getting fixed? If the foundation of your office building was cracked; if the machinery in your plant was rusted; if your computer system was under attack by a virus would you take bold and decisive action? We think so.

Why then are so many organizations struggling with their talent management process and the identification and development of their future leaders? While we are quite sure there are many, many reasons we also know there is not one really good excuse.