In today’s competitive market, demonstrating a serious investment in talented employees is critical to the recruitment and retention of an organization’s most critical employees. While it may seem like a routine human resource management maneuver, creating and maintaining a succession ladder is as much an art as it is a science, and is an essential part of organizational talent strategies and the long-term success and growth. The valuation of enacted company priorities versus sustained job performance is as important as determining the likelihood of an ambitious rising star to stay vs a veteran formally on the fast track. Acknowledging the notion that most high performers are not necessarily high potential, people management is anything but intuitive. Research and industry executives tend to align with the outlook that talent management discussions often get ahead of themselves, and an underlying question must be determined first: How should organizations select the best leaders to invest in for their leadership pipeline?

Planning For Future Success

Leadership succession planning, aka creating a leadership pipeline, is a deliberate practice of selecting personnel to manage and develop to fill future critical leadership positions. Assessing the essential roles of an organization, and the competencies and capabilities required to fulfill those roles, enables the creation of a pipeline of future leaders. Noted Kellie Teal-Guess, Executive Vice President & Chief Human Resources Officer at Rackspace Technology, it is important to remember, however, that “succession plans are not open tickets to promotion.” Rather, they “are the beginning of long-term processes that weave in learning, development, and stretch opportunities for employees to grow into and prove they can do more.”

Studies have indicated that, for a succession plan to work, it is essential to have a clear vision and process to develop the competencies of high performing future leaders. These plans build skills that contribute to future organizational success, “ideally by presenting opportunities to take on roles across different disciplines, team sizes, and sub-cultures to flex and cultivate new competencies,” clarified Jeri Herman, former Chief People Officer and now a Leadership Coach. Coordinated efforts like these require total company buy-in to the labor and time-intensive process.

While many organizations recognize the need identify and develop those who will guide the organization of the future, only 35 percent have formal plans to identify critical organizational positions and skills for developing future leaders. Other research has concluded that, after obtaining advanced promotions, at least 74% of leaders indicate that they felt unprepared for the required responsibilities they had acquired. Studies have also indicated that it is essential to have a clear understanding of talent management, high performing future leaders, and how to develop and build the skills of those identified to ensure retention and contribute to future organizational success. Deliberate efforts are required to cultivate not only a group of high-potential talent, but also specifically develop those individuals who will lead the company.

Critical to establishing a leadership pipeline is the selection and development of employees for future roles. Rather than a one-time identification and designated “right person for this job right now” mentality, true succession plans ensure there is a strategy for organizational leaders who show potential for more. “If you are looking at a list of ten people who are high potential, but they are not yet strategically important to the organization, then you are not there yet. Anyone who is going to be identified as a true future leader [on the pipeline] needs to be able to do work that aligns with and advances the company’s strategic vision” added Teal-Guess. Often, in the most senior roles, this includes a broader skillset than what may have been required for previous, specialist positions, such as the shift from a specialist to a strategically operational level of the organization.

Earning Distinction

Which employees should be selected for leadership pipelines? This commonly manifests itself in one of several ways, such as through defined methods, individual selection, mentoring teams, or others.

One of the most widely used method of leadership pipeline identification utilizes a “9-box” model to assess talent against. 9-box connote both the model and the practice of assessing potential and performance. While one axis will almost always relate to job performance, the other will have a more qualitative definition such as “values enactment” or “organizational potential.”

When using a 9-box approach “the performance (quantitative elements like average ratings from performance reviews, sales figures, and retention numbers) is the science, the potential is the art” said Herman. 9-box “identify competencies that do not depend on the subject or the work being done, but rather what is what needs to be seen and is valued among leaders. Once this is documented, it can be evaluated consistently.” On top of this, Marc Effron, President, Talent Strategy Group, posits the definitions for each box is not evergreen, rather this method’s approaches “anticipate what an organization will need beyond a specific point in time and include skills and competencies that are a fit for a what-happens-next strategy.”

Companies that use tools like the 9-box usually also make a significant investment of time, people, and resources to the effort. Any / every level of the organization that is tapped to participate in talent evaluations must plot their employees against companywide leadership criteria, and where placement must be justified and defended. “To make it to the 7, 8, 9 blocks you need to see glimmer in even more potential. Just because you have historically strong performance does not mean that if the context or the role is different, you will be successful going forward” said Herman. Added Teal-Guess “Anyone in these blocks has to demonstrate not only performance against their goals, but performance adding value to the market or growth goals of the company

As a result of this exercise, those individuals in the top boxes will be offered premium opportunities, training, and exposure; they are deemed critical talent to retain. At the same time, those who are given new roles will also move down as they master new challenges, “it is a fungible list” clarified Teal-Guess.

The use of the 9-box evaluation for talent is somewhat contested. A recent Gallup survey of Chief Human Resource Officers indicated only 9% of those organizations using this method felt it was effective at establishing a succession plan. Some contend that this method does not suit modern work practices, while other organization themselves do not align with this type of job and advancement process. Further, it requires extensive evaluation of the required competencies by which to evaluate senior executives, and for that evaluation process to be iterative and adaptable over time. Like any other evaluation method, it is only valuable in differentiating employees if the organization itself understands and applies requirement consistently. If you’re going to use a 9-box approach, you have to invest in the whole process.

There are other methods to identify and promote organizational leaders. Some companies use a simple job-ladder strategy which moves managers from one title/position to another along a path of leadership. As a title-oriented process, individuals will be moved into more advanced roles, but leader readiness may not be proven or cultivated along the way. In other words, progressing up a ladder will ensure there is someone ready to fill a role, however, “fitting the title” is very different than possessing the knowledge, skills, and competencies “fit for the role.”

Unfortunately, it is also common for many organizations to not have a pipeline strategy at all. In many cases, those that are perceived as star performers are given choice roles and titles to persuade them to remain with the organization, even if they are not ready for the requirements of the position.

Selecting the Leaders to Invest In

Regardless of the specific tool employed to evaluate talent readiness, the question remains: how can organizations select the right talent to develop into potential future leaders?

Evaluate Individual Qualities and Attributes

Individual performance is one of the first factors generally considered in identifying leaders to develop. In terms of observable performance, employees can be assessed either through supervisor observation and interactions, or in conjunction with assessment tools such as performance evaluations, performance on key projects, or other more data-driven evaluative tools. To use these tools, however, it is critical that the skills and abilities evaluated are consistent with those identified as important for company leaders to espouse and enact.

Effron suggests that a “baseline of raw material” should be present when identifying leaders to invest in. “There should be a high intellectual capacity, an openness to welcome new ideas and changes, and the right balance of drive (someone who wants to win but won’t tip the scale with unethical or grossly competitive behaviors.” Beyond having a skill set that fits with the company’s unique set of challenges, Effron also stresses leadership pipeline candidates should have the personality factors that fit the culture; “the right level of extroversion to may mean not being overly bold but able to get along with people.” Finally, Herman adds, “to be a future leader, you need to be able to create a vision then communicate effectively to inspire people. These are truly the leadership pipeline material.”

Determine a Track: Generalist or Specialist?

Another essential step in selecting talent for leadership development is to determine how well an individual is performing or is capable of learning to be a leader that aligns to the company’s growth strategy. “The main question is: is a leader on track to lead the company or are they simply on track to be successful in the work that they do,” said Herman. She added, “if your key strength is your subject matter expertise, you need to basically say ‘I’ve got that, now what?’” An employee who is outstanding at their individual specialty may not excel at extending that to the broader organizational objectives and their application. The wider perspective and organizational understanding of a generalist, who builds on their initial expertise, is often who the company will need for senior leadership roles.

Am organization will always need specialists to advance capabilities in one domain, but true leaders adapt and learn to be general utility players, ready to serve the company in whatever role the company leads. “Everyone wants to be a general manager, but,” Teal-Guess stipulated, “this requires a mindset and capability to adapt and grow into what the company needs you to do.”

Technical skills and knowledge of the industry must be combined with the broader capabilities of a leader and general manager to be successful in more senior leadership roles. Studies indicate that even those leadership roles which focus on technical requirements, such as in the financial side of an organization, require broader generalist leadership skills. Thus, leaders who will be impactful in attaining company goals must either demonstrate or show serious interest in attaining general management capabilities and competencies.

Ensure: Is there A Desire for More?

Although many people would like more in their work, not everyone wants to lead a company. Even if an employee is ready, they need to want a place in the succession plan.

Before formally including talent in the organization’s leadership pipeline, it is important to actually talk with your high potentials. Beyond learning skills and competencies outside of specialist domains, growing into a leader requires taking on new / stretch roles. These opportunities may require travel or relocation, and/or a change in remote and in-office work modalities. “What may sound attractive to your employee may have complicating factors: pipelines are challenged by the sandwich generation who are taking care of their children and their own parents. What may sound exciting at first may not really be sustainable” noted Herman.

When you have a place on the pipeline, it is important to understand it is a long play. There will be successes and setbacks, you will not be successful in everything. “You will be given stretch opportunities and you will fail in some of those challenges….you need to be resilient, recover, and to maintain a positive focus to lead both for the sake of the work and because people are watching you” asserted Effron. In short, he added “having a place on a pipeline does not mean you are being dipped in gold. It may not work out. But a true pipeline candidate will still jump at the opportunity to say “let me go win!”

What’s Next?

A final element in selecting the best talent to invest in is actually one that must be in place before you get started. Every organization must have a “now what” plan in place to maximize the development and use of your identified talent…In short, what’s next?

Tell them

If you are going to go through the work of identifying a leadership pipeline, you should tell the people on the list. “Always tell them. Be transparent. Your top talent should know where they stand” posits Effron. However, he added, this transparency must include the rewards and risks at stake. Conversations should therefore not be promises, but rather include both elements such as “Cameron, we think you can move forward fast with this company and see you have performed with capabilities, A, B, and C. We see those matching with needs we have that are X, Y, and Z…we want to see how you can adapt and add more value to the company.”

Including highly talented employees in leadership development programs, whether advanced education, direct mentoring, high-profile projects, or challenging assignments, requires a purposeful conversation about the individual’s development and opportunities. While some may argue that knowing you stand at the top of the company may encourage some employees to rest on their laurels, being clear about the opportunities, benchmarks, and expectations should alleviate this concern. Besides, with a pipeline designation, high potentials should not be able to rest in their positions but will be challenged – immediately – to demonstrate their ability to learn, grow, and adapt.

Keep Your Talent / Assign Stretch Opportunities

If your organization is not growing, you do not need a pipeline of leaders. Current jobs can be replaced with similar talent, leadership pipelines hold space for leadership roles that often are not yet known. Retaining highly talented and successful employees is essential to ensuring your leadership pipeline. To both develop and retain talent, every organization must provide opportunities for leaders at all levels to grow their skills and experiences.

“What high-potentials want are good / quality experiences that provide high resume value,” Effron shared. If you know Alexander has opportunities elsewhere, you are competing to give him a bigger growth opportunity that he knows he wants. “While you should be paying your top-tier well, another company may be able to offer a bigger paycheck. What you cannot let them do is beat you on an experience pathway that they will need to stay to accomplish.” Organizations must be proactive and intentional about how they develop leaders, providing opportunities to gain experience in new roles while being transparent about development. Engaging your current and future leaders about career paths and expected skills while providing challenging assignments ensure that your talent is part of the process of building your future leadership team.

Herman added companies should “set a high bar with high expectations and high optics…the roles and goals for those on the pipeline should not be easy measurements for success.” Research has indicated that retaining talented future leaders can hinge upon the provision of opportunities for growth and a transparent understanding of the organization’s development process and expectations. An organizational culture that encourages this, such as providing opportunities like taking interim roles while jobs are being filled or when people are on maternity leave, roles to lead different departments, project management roles during Enterprise Business Solution implementations, or a two year international rotations. “The goals are eventually to become competent general managers, but along the way leaders will be able to flex what they are comfortable and capable doing and see how they respond.” Growth opportunities are not guaranteed success; they depend on performance and may or may not lead to new leadership roles. That’s why it is called a pipeline, not an arrow.

Support Learning and Development

While learning on the job has its merits, every organization’s leadership pipeline must include a plan for upskilling and support. Skills-based training and experiential development as well as formal, structured leadership development programs enable participants to grow their skills and engage with the strategic goals and needs of the organization. The ultimate goal of these programs is to enable highly skilled employees to gain the experience, broadened skills, and strategic perspective needed to step into the roles already identified as essential by the organization.

Direct mentorship of future leaders is another common, successful path for leadership development. Potential future leaders are identified through common skills, attributes, and roles, and directly mentored by other leaders for future roles. Mentors can provide career development support and guidance for future leadership positions. Studies have indicated having a positive mentoring experience can contribute to career success and higher performance, both of which are likely to contribute to the growth of the leadership pipeline and organizational success. When possible, assigning senior executive sponsors who are not in the direct line of supervision is often a very well received form of development. “Having someone in the executive suite to talk things out with or get advice from not only helps develop competencies, it makes people feel special” shared Herman.

However your organization chooses to build the leaders of your future, ensuring that it is part of a culture of growth with strategic programs and opportunities will ensure that you have the right people with the right experiences when they’re needed to lead. Having resources to upskill and develop talent is only the beginning. A patient, mindful selection process is crucial to identify the people who are committed to leading and staying to do so.