by Tom Casey, Managing Principal Discussion Partner Collaborative
On behalf of my colleagues at Discussion Partner Collaborative and our Alliance Companies, we want to wish you and your families a terrific holiday season and a sensational 2018!
Below is an update to a Blog we posted in August of this year on the topic of “building the leadership bench”.
One of my nieces whom is the Executive Director of a Community Market in the Mid-West has a signature on her enterprise logo “Eat as if your life depended on it”. The logic of this assertion is overt and inescapable.
Borrowing unabashedly from her insight, DPC based upon our research, and that of others would stipulate the same logic applies to all organizations in respect to Leadership Development.
The emerging trend on the forcefulness of “Building The Bench” has only intensified since the creation of our original recommendations.
The most recent edition of The Harvard Business Review (November-December 2017) highlighted the fact that strategic positioning of Leadership Effectiveness programs is deteriorating based upon a study conducted by The Corporate Executive Board.
- 34% of companies surveyed have no High Potential program relying upon enterprise wide training supported primarily by behavior modification coaching
- For the balance (66%) only 24% deemed their HiPo programs to be a success
- Only 13% (down from 17% in 2015) of the surveyed executives have confidence in the emerging population of future leaders
- At present 30% of the largest global companies are compelled to fill CEO positions from the outside
The HBR article Turning Potential To Success reinforced via an Egon Zehnder study an element of the discourse surrounding enterprise success. Specifically the foundational threshold for success in any transformative effort is “finding the right motivation”; by critical constituency without presuming it is economic driver.
The study reinforces 4 additional proficiencies that are underrepresented in Leadership Effectiveness efforts.
- Curiosity- insatiable desire to understand/appreciate contributing factors to the status quo and avenues for improvement
- Insight- channeled moments of inspiration in context of reality orientation
- Engagement- non-distracted alignment with enterprise, mission, associates, and customer interests
- Determination- appreciation of and ownership to execute against targets and accountabilities
As we approach the end of 2017, the criticality of this strategic intent will only increase.
DPC would suggest as a not so gentle reminder, that attentiveness to this matter is a priority.
Blog-The Priority of Building The Bench (August 2017)
It’s hard to believe that 2017 is more than halfway over! Given the geo-political dynamics before us, we can expect that, for better or for worse, the rest of the year will be just as turbulent as the first half.
It’s been a roller coaster, and unfortunately there’s not much the average though engaged executive can do but exert influence where one can.
Perhaps it’s the feeling of lacking control that has made succession planning—the continuity and transitional aspects of this effort in particular— such a hot topic these days. After all, it’s human nature to want to contain the uncertainties in life while maximizing the opportunities—as contradictory as that may seem!
“Urgency” would be a fair characterization of the feeling our clients have expressed towards the holistic succession planning process recently, and in response to that, today we’re sharing a slightly revised version of a blog we posted in January. We have made updates to reflect the latest data from DPC Research and client experience. The data continues to support our original thesis that, your organization’s future will benefit from a deep-dive review of its Succession and Continuity planning processes!
Notwithstanding pre-existing protocols, we are suggesting this review encompass the most generous interpretation of processes concomitant with experimental and disruptive solution sets.
Our recommendation is driven by results of a recent study DPC conducted with as of June over 2000 C-Suite participants. The survey was on the topic of envisioned enterprise challenges. 94% of those surveyed indicated “the ability to attract, motivate, and retain top talent” as their #1 concern in January and now 95%!
Discussion Partner’s has been conducting this ongoing Pulse survey since our founding in 2007. The intensity of the above concern while always “on the list” was never #1. In addition the rationales expressed in the anecdotal justifications were compelling inclusive of envisioned shifting demographics, new worker expectations, disruption of organization models, competitive pressures, globalization, and ineffective human capital practices.
Our recommendation is further reinforced by a review of the recent literature on this topic.
- The strategic imperative for Talent depth to be an asset vs. liability referenced in consolidated research on Leadership Succession/Continuity most recently 2016 and 2017 series of articles in HBR, McKinsey Insights and Sloan Management Review
- The Point of View that has emerged from our Advisory work that 2017 represents an opportunity to use a “Disruptive Organization Model” for Talent processes overall and Leadership matters in particular
As further justification for this Recommendation the following foundation is provided.
- Noel Tichy in his recent book Succession asserts that without proactive planning on how to fill, and inventory of talent well in advance of leadership, and/or key role “vacancies”, the chance of success is below 50% for replacement personnel
- Ram Charan in his book The Attackers Advantage and December 2016 HBR articles offers the following (paraphrased) –Leaders (Directors, Owners, CEO’s) who excel at selection are willing to expand the lens in how they look at the capabilities of reporting levels beyond performance track record to the 2 to 3 interwoven predictive behaviors that will be necessary for success
- The following compelling data points are from various sources (Booz Allen, McKinsey, Hedrick & Struggles, Korn Ferry and Saratoga Institute)
- Team Building and Empathy are as important as Performance for promoting enterprise success (often stated infrequently realized)
- 55% of the Fortune 500 Boards of Directors have expressed dissatisfaction with the Succession Planning processes of their enterprises including the CEO replacement approach
- A study of the 2500 largest companies on the planet indicate that inefficient Succession Planning on average results in $1.8B losses during transition
- Underperformance does not incent change 45% below peer group by sector correlates to only 7% probability in change of leadership
- 39% of the Fortune 1000 Boards indicate “no viable candidate” to replace the CEO compelling a similar % undertaking external hires which Charan stipulates as “highly unlikely to be successful”
In the context of the recent HBR assertion “Succession Planning takes years not months” DPC would recommend the following steps:
- Senior level stakeholder interviews focused on “beyond task proficiency” what are the essential differentiating qualities that will be needed for success
- Comparative Inventory of Leaders (broad based) and high potentials in relationship to these attributes
- Embed into developmental and hiring strategies the lessons learned from this exercise
- Creation of a Critical Constituency Depth Chart whereby the following is highlighted
- Identification of 1 ready now replacement
- Identification of 2 possible replacements
- Identification of external Search capabilities to be deployed in emergencies and/or lack of “ready now” sense of urgency
- Assignment of non-senior leaders a “personal growth and development task” similar to the GE “popcorn stand” to provide additional evaluative foundation
The New England Patriots have a mantra of “do your job” five Superbowls (including the most recent heart stopper) indicates the validity of this philosophy. However, DPC would argue in the commercial sector this would be limiting for the medium to long term for any existing organization. Our impetus is that the above suggestions represent process steps that should be presently underway and if not, a sense of urgency should exist. DPC would substitute the words “do the job you should have been doing all along”!
Additionally we would embed the following questions:
- What skills sets will we need beyond domain proficiency to have a sustainable growth oriented enterprise?
- How does our current population of Leaders and Future Leaders compare to these desired attributes?
- How can we develop and/or hire sufficient numbers of people to address deficiencies in the above?
- What is the true nature of our Leadership bench in respect to Readiness?
- What is our contingency plan to be deployed if necessary?
From whatever vantage point you situate, this year will continue to be dynamic. As a suggestion, borrowing a title from a previous book by Dr. Tichy on the topic of leadership Control Your Destiny-Or Somebody Else Will!