Identifying and developing high potential leaders

Citation

Hall, P. (2001), "Identifying and developing high potential leaders", Journal of Management Development, Vol. 20 No. 7. https://doi.org/10.1108/jmd.2001.02620gaa.001

Identifying and developing high potential leaders

Identifying and developing high potential leaders

The trouble with excellence

I recently attended an HR symposium where delegates from companies all round the world were asked what was the single biggest issue that concerned them. I was expecting an answer like globalization, EU regulation or the net. Instead the answer was much simpler and closer to home: identifying and developing high potential leaders. How do you handle the brightest people in your business? How do you spot them in the first place? How do you develop them? How do you make sure they stay with you and become the exceptional leaders that the business requires for the future?

Not only was this seen as our biggest headache, but it was seen as a problem that was growing ever more pressing. Why?

First, the job market for high potential people is getting ever tighter. Business is doing well and is keen to invest in excellence. At the same time, supply is drying up. A year or so ago, there was an overhang of quality managers who had been victims of the last recession and its consequences. These managers have now found suitable challenges.

Second, in the background, is the rise of "Generation X" to maturity. These individuals, many of whom saw their loyal corporate parents getting a sharp kick in the teeth in the mid 1980s, are much more sceptical of corporate intentions. They want to participate, but on their terms. They work hard, but they want a life outside the workplace. And they won't hang around if they feel they are not being stretched and challenged enough. Okay, and rewarded enough – but one thing that is clear is that this isn't a problem that can be solved by throwing money at people. Generation X want interest and involvement.

A third aspect of the "excellence squeeze" is the rapid change in the way business is done, which is placing a premium on new skills and styles. Companies are less hierarchical; networking and flexibility are becoming core competencies. But many able people learned a different kind of management, in older-style business environments. They have a lot of relearning to do before they can really become effective again. Companies are also becoming more international – the old-style "pith helmet" ex-pat. does not have a sufficiently global mindset for the twenty-first century. And then, of course, there is the rise of e-commerce, creating ever more barriers for less flexible managers.

So, you need bright people with truly contemporary management skills in your organization. Supply is short: getting hold of them is seriously expensive. The best answer is to "grow" them in your business. But how? And how can you retain them, now that Generation X won't buy the old "corporate lifestyle" deal?

It was a scenario that got heads nodding.

It is also an issue to which we at Wadenhoe have been giving a great deal of thought. Last year, we brought out a paper on "Identifying and developing high potential", and we are in the process of developing this, and other work on how senior people learn, into a specific research programme on "learning for the top".

Identifying and developing high potential leaders

Our original work on "Learning at the top" took a classic psychological model that outlines six kinds of learning into a sample of boardrooms, where it was seen that only the most basic kinds of learning took place.

The model, developed by Professor John Burgoyne at Lancaster University, divides learning into conditioning (basic habit-forming), information transfer (learning facts), cybernetic learning (how to), cognitive learning (overall patterns, a "big picture"), experiential (self-knowledge) and social (knowledge of human structures). The last two will be recognized by anyone who has been following the emotional intelligence debate; the fourth one, cognitive, is essential for survival in the modern business environment where change is the only certainty. And sadly, our research showed that only the first three kinds of learning prevailed in the boardroom.

The work went on to look at ways that "higher", broader styles of learning could be encouraged and developed at the top of companies. The different kinds of learning have their own natural styles that need to be encouraged, and also their own barriers and blockages that need to be overcome. The new project will look at putting this model to work in the context of specific, optimal development procedures, ensuring that people are already equipped with a full armoury of learning styles when they reach the boardroom.

The paper on "Identifying and developing high potential", researched by Ray Atkinson, took a more systemic approach to the issue. We looked at selection, development and assessment processes within organizations, and asked what qualities these processes needed to have to spot, develop (and thus, of course, retain) excellence. Seven aspects emerged as crucial.

1. 1.

   Open selection processes. How do you select the people who are going onto the "fast track", in a way that is effective and which doesn't create envy elsewhere? The answer is, by any method you choose, provided that the process is open. "Open" has two senses, both essential. One is "open to all", perhaps best explained by examples of its opposite, of "closed" processes like the old-school tie or companies where leaders always come from a particular division or territory. The second sense of "open" is transparent: everyone can see how the process works. A truly transparent process flows naturally from the values, policies and practices of the organization: special selection events are not required.

2. 2.

   Speed of processes. High potential people are in a hurry. The processes must deliver results quickly.

3. 3.

   Broad self-management. High potential people should be given a substantial role in planning their own personal and career development. Training needs to move from a paternalistic approach to one of partnership: future leaders will negotiate their careers with their organizations. Naturally, this negotiation takes place within the context of the organization's strategy, but self-managed learning may well mean occasional turnings down quite personal development alleyways. You have to trust your future leaders on this – but then trustworthiness is an essential part of genuine potential, anyway. Our increased understanding of the role of emotional intelligence means that development must be a broad process. It's worth noting that skill in self-management is itself a sign of high potential. Individuals who are proactive and imaginative in designing their own development and careers are more likely to display these traits in the way they work.

4. 4.

   Role profiles, not job descriptions. Role profiles are much broader than simple job descriptions. Job descriptions concentrate on responsibilities and tasks; role profiles look beyond that to the context of the job within the company's overall strategy, to the kind of organization that surrounds it, to the "essential challenge" of the role, i.e. the personal and emotional qualities it will draw on. Good role profiling links in with self-management, above: once the individual knows what qualities they will need in the new role, they can go out and find how best to build them.An issue that arises here is the extent to which these deeper personal qualities can be developed. They certainly cannot be "taught" from a book, and they cannot be acquired from nothing. Such development clearly takes time, but this is no excuse for foot dragging. In-a-hurry future leaders need to understand that if a piece of personal development is taking time, it is because such development does take time, not because the process is being badly handled by HR, their coach or senior management.

5. 5.

   Measurability. As with all management development interventions, a high potential development programme must be seen to work. Regular readers will detect a favourite theme but I really do believe that management development is a "means to a means to an end" (this ultimate end being corporate success), and must justify itself in "hard" terms. Traditional accounts are not, however, the ideal way to effect this kind of measurement: the "balanced scorecard" approach has much more to offer.

6. 6.

   International perspective. The future of business is global. And as this future is realized, business leaders are going to have to think globally. This is a major shift. In the last century, "ex-pats." were a special breed: top people stayed at home and made their way up the corporate ladder. In this new century, it will be the men and women who understand global marketplaces who lead. This understanding is not just economic but cultural.My colleague Leszek Marcinowicz has done specific research on spotting and developing international high potential. Cultural sensitivity and a "global mindset" are two traits he has isolated as crucial. He also found that the issue of international management was of particular concern to corporations. They had the finance to expand overseas; they had the products and the ability to deliver; they lacked the people to manage the process effectively.This is a huge subject in itself – I've only skimmed the surface of Leszek's work, which includes specialised international potential assessment and development tools – and I shall no doubt return to it in the future!

7. 7.

   Championed from the top. The current leaders of the organization must be totally behind the development process. I cannot stress this too highly. Too many HR initiatives founder because the board is not really behind them – but the development of future leaders is far, far too important to leave to chance. If you're in HR and your board is not behind you, what are you doing wrong? How can you remedy the situation, starting now? And if you are on the board, are you really doing all you can to ensure your successors are the best they can be?

It is not easy to answer the last question – how do you know if you're doing your best? It might be useful to consider what a true leader-developing company should look like.

There would be a regular "talent audit", initiated and studied closely by the CEO. This audit would operate across all departments, without favour (this must be an open process, remember). It would be part of a broader process of monitoring the careers of high potential people, a process run by someone very senior in the company. "Leadership gap analysis" would look at the problem from the other angle: what leaders will we need in five/ten years' time? Succession planning must be much more than "who's going to replace ones"!

There would be a "shadow cabinet", where the next generation of leaders meet and discuss company policy. The more like the board this can be – in other words, the more information they have, and the more weight their decisions are given – the better.

There will be "rotation protocols", formal systems for moving senior people from department to department, so the CEO in 2010 really does understand what the different parts of the business do.

Assessment of individuals will include the coaching work they have done. A line manager doesn't have to be bound for the top to have a lot to impart to a future leader, but he or she must receive great credit for so doing.

Idealistic? The costs of failing to develop your highest potential people are enormous:

• •

  you may not have the leadership resource to deliver strategic intent;

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  your company reputation and brand value may be affected; and

• •

  your best people may leave and you could find it difficult to attract new, high-calibre replacements.

My colleagues at the symposium were right to be concerned about the spotting, development and retention of excellence. Business is ultimately about people, and especially about top people. But "cream does not always rise to the surface" naturally. Like everything else, the process needs to be set up and managed. Our "learning for the top" project is designed to create further tools for achieving this, and we are looking for appropriate corporate partners in this enterprise.

Peter HallManaging DirectorThe Wadenhoe Centre