Leadership pipelines must be continuously fed, but people have to be ready to lead. High-performing organizations differentiate their efforts at development with a focus on metrics, assessments and coaching.
by Donna Parrey
September 17, 2014
Organizations need business agility, and this need is reflected in their efforts to prepare future leaders. “Accelerating High-Potential Employees on the Path to Leadership,” a 2013 study by the Institute for Corporate Productivity, detailed five practices that differentiate high-performing organizations’ efforts to accelerate high-potential employee development.
Key challenges in preparing the next cadre of leadership talent include identifying ideal participants, offering the right developmental opportunities and determining success measures. Yet even as organizations work to develop leadership acceleration programs for high-potential employees, many are plagued by insufficient access to elements such as stretch assignments, visibility and effective coaches.
The Five Steps
As organizations build strategies to develop key talent, it’s important to focus on elements that have been shown to affect company performance. This five-step framework can help:
1. Define successful outcomes for high potential development programs. Using formal measurement tools to gauge the effectiveness of leadership development efforts can have a positive correlation to market performance. Determine what the development program should accomplish and the measures that will indicate success. High-performance organizations report using a variety of measures.
One metric to consider is quality of movement — track the effectiveness of promotions and critical roles filled (Figure 1). This measure can complement more commonly used HR metrics such as performance ratings and retention rates. High-performance organizations also use 360-degree assessments, administered pre- and post-program, for insight.
- Select a small number of meaningful success measures to begin. These should align with goals.
- Use at least one measure that will allow for benchmarking progress year-over-year, such as promotions.
- Choose an external measure that will allow comparisons between the organization and competitors, such as industry retention rates.
- Review these measures and revise them as the program matures, creating new measures of success as needed to reflect the organization’s changing goals.
2. Choose talent purposefully; make branding and assessments work. According to the i4cp study, two factors that promote high potential development program success both have links to market performance: A company brand that tends to retain top talent and screening participants through an assessment process.
The brand-talent connection: Cultural fit should be a consideration when acquiring new talent; it’s a critical first step to build a workforce that will produce high-potential employees. The company’s brand can draw a talent pool that fits its culture in three ways:
- Consumer brand: The company’s visibility, longevity, success and reputation can affect the size of the applicant pool, allowing organizations to select the best matches.
- Employer brand: The firm’s reputation for excellence in leadership and culture helps to attract internal and external candidates who self-select to fit the culture.
- Talent brand: The organization’s ability to resonate with segments of workers in defined critical roles such as engineers, marketing or IT identifies the firm as a place where individual goals can be achieved.
The assessment-talent connection:More than two-thirds (67 percent) of high-performance organizations use assessments to screen participants for high potential development programs. Consider the transparency of the process; it should allow organizations to clarify what kind of business skills and behaviors it values. When employees understand the criteria for high potential designation, they can channel their efforts to achieve it.
Informing high-potential employees they have been identified as such can influence retention, motivation and engagement. About three-quarters (73 percent) of study participants from high-performance organizations do designate high-potential employees. Yet, of this group, 29 percent inform those employees of that status, while 71 percent do not.
Assessments are also used to determine when candidates are ready for promotion, a key differentiator for high-performance organizations. The readiness factor may include such elements as completing courses, participating in job rotations, acquiring recommendations from peers, supervisors or customers, earning a degree, accomplishing developmental goals, or other criteria specific to the organization or position. The most common pools reported are ready in two to three years, ready in one year and ready in four to five years.
Another important factor when developing a high potential talent pool is building a succession pipeline that reflects the diversity of the customer and community base. At insurance company AIG Inc., employees in the firm’s Passport to Success program come from the ranks of midlevel managers. “We have so many diverse high potentials around the globe,” said Courtney Williams, senior manager of global training and development in the company’s office of diversity and inclusion. “Passport to Success was created to identify them and prepare them for a future with our company.”
3. Excel at coaching. Coaching is a critical tool that two-thirds of high-performance organizations use to hone specific skills in high-potential talent or to help them reach full potential more quickly. However, coaching itself can be difficult to master. Companies should ensure that managers have sufficient opportunities to practice coaching skills via experiential training, such as role-playing. These sessions can help managers sharpen their listening, probing and feedback skills so they can effectively coach the high-potential employees they manage. Further, practice sessions help to build managers’ confidence, which increases their ability to gain the trust of those they coach.
Another success factor related to coaching is having a coaching culture, which i4cp has found to be significantly correlated to market performance (Figure 2). I4cp’s 2014 study “Creating a Coaching Culture” found that a coaching culture thrives when companies establish coaching as an organizational competency, when they invest in and train managers in coaching and when they use coaching on multiple levels to strengthen targeted skills to help high-potential employees achieve their performance potential and to transfer knowledge.
Campbell Soup Co. is devoted to a coaching culture. Emily Riggs, the company’s director of global talent management, said coaching is a critical ingredient in the organization’s global talent strategy. The Campbell Way for Coaching is part of a weeklong experience all newly hired and newly promoted managers go through. As a result, coaching is embedded as part of the culture, Riggs said. Even if people do not manage others, they use coaching skills as they work with cross-functional teams, project teams and peers. “We understand that for managers to be highly effective, to be able to discover those moments of truth and to drive performance, they have to be great coaches,” she said.
4. Expose high-potential employees to a broad business foundation. It’s not enough for employees to excel in their chosen fields. High-potential employees must develop broad business understanding as well. In fact, three times as many high-performance organizations as lower performers credit a broad business curriculum as a major success factor in their high potential development programs.
An effective way to build this broad business curriculum is to involve senior leadership in designing and conducting training. Invite chief officers from finance, marketing, sales, operations and human resources to inform the learning curriculum and help create learning tools to build relevant skills in high-potential employees.
Some organizations address broad business skills by partnering with or sending high-potential employees to external programs.
5. Focus on visibility and challenge to develop high-potential employees. A willingness to provide high-profile stretch assignments to employees identified as high potentials was the top factor differentiating high-performance organizations in the i4cp study. Managers should be encouraged to step outside their silos and collaborate to identify challenging projects that aren’t being addressed, then match high-potential talent to those projects.
Companies also should ensure that high-potential employees have an opportunity to present the results of those projects to the senior leadership team, or even the board of directors. This serves two purposes: it helps the high-potential employee get top-level exposure and it provides an opportunity for the executive team and board to begin developing relationships with those in the talent pipeline.
Intel Corp. has created an online talent marketplace to help project owners and employees to find one another. By the end of 2013, the company’s Developmental Opportunity Tool helped to connect employees with more than 3,000 short-term assignments.
Amreen Madhani, HR manager at Intel, said the organization needed an enterprise-wide solution to combat silos. “Everyone had their own tools, but there was limited visibility to employees across the organization. DOT met that need.”
Activate the Framework
Learning organizations that want to develop their future leaders more thoroughly and quickly than their competitors can activate the aforementioned five-step framework as follows:
- Audit. Take the time to purposefully examine how an organization identifies and develops high-potential talent.
- Act. Put the people, processes and programs in place that will produce the future leadership talent an organization needs.
- Accelerate. Build a sustainable system of leadership talent acceleration that will provide an organization with a competitive edge.
Read the sidebar to this article, "Are You Developing High Potentials Wrong?"