CLOs, be warned: There are several seemingly inescapable skill gaps to guard against when developing high-potential leaders. Future business leaders might lack six critical knowledge areas because today’s workers tend to stay within a functional area for a good portion of their careers, said Michael DiGiovanni, president of Celemi Inc., a consulting and business-simulation firm.
“If you get hired in sales, you tend to grow up in the sales function — that’s where your experience comes from,” DiGiovanni said. “Future leaders haven’t had an opportunity to go over and work in the manufacturing plant or service area or in the backroom, supporting whatever from a customer-service standpoint. They haven’t had an opportunity to experience all the various functional areas within the organization.”
DiGiovanni said future leaders (those at the director or manager level who eventually will run business units and ultimately take over senior-level positions) need a more rounded experience before they step into advanced leadership roles, where the implications of their decisions can trickle down to the various parts of the organization.
First, future leaders must know how to plan for and run a total business versus a functional area. DiGiovanni said Celemi often encounters leaders who excel in their functional areas but lack an overall understanding of how the entire company operates.
In fact, they might not be aware of how decisions in one part of an organization influence other areas.
“They tend to look in this kind of siloed mentality,” DiGiovanni said. “What’s needed is a way to break them out of that thinking and look at the company as a whole while making decisions.”
Second, future leaders sometimes lack financial acumen, but DiGiovanni said this is not about reading financial statements. Instead, the gap lies in individuals’ interpretation or analysis of such documents and understanding how their actions — and the actions of those who report to them — affect key financial metrics.
“For example, a major credit card company moved from an association to an IPO, and one of the key issues was to get the managers and above to understand that the company was now going to be measured in a very different way once they went public versus when they were a private association,” DiGiovanni said. “It was getting people to understand those measures and, more importantly, how they could influence it in their particular areas of responsibility to strengthen the organization.”
Third, future business leaders need to learn how to better manage people in terms of performance management. Essentially, how do you recruit, develop and retain employees and really maximize performance on a daily basis?
“That’s been an ongoing challenge for organizations almost forever,” DiGiovanni said. “An organization will do a great job of attracting and then developing people, and then the retention issue comes into play — how do you put processes in place when managing that performance management system to capture knowledge so it doesn’t walk out the door? This touches on the issue of knowledge management, but what’s critical is managing that process and doing the best in terms of maintaining the employee for as long as possible.”
On the surface, concerns about performance management might seem to lie outside the chief learning officer’s scope of responsibility and perhaps be more suitable for HR or talent management executives, but DiGiovanni said the learning organization cannot operate in a vacuum.
“The chief learning officer should be providing the tools, processes and support for line managers and the HR function so that they have the tools,” DiGiovanni explained. “The daily actions obviously lie with the first line manager or whoever is responsible for managing those individuals, but they need some kind of support system.”
Fourth, new leaders must understand how to compete in the global marketplace. DiGiovanni said that as CLOs are developing individuals into future business leaders, it’s critical they understand different cultures.
Fifth, new leaders must know how to develop internal partnerships. They have to learn how to collaborate across functions and work horizontally versus vertically, developing relationships with counterparts across functional areas of the business and around the world.
Sixth, new business leaders should understand strategy implementation, but DiGiovanni said this critical knowledge gap focuses on more tactical aspects, not necessarily strategy development.
“Once the strategy is developed, how do you make it come alive? How do you make it tactical? How do you communicate that vision to the organization and get everybody to see how the new vision relates to them, to the business, to the competition, to customers?” he said. “That’s the responsibility of a new leader: To take strategy, put it into tactics and do it in such a way that all the people they’re responsible for have a clear picture of what they can do to support and make that strategy come alive.”