Various studies report that CEOs are by and large concerned about the development of the next generation of leaders. Not surprisingly, corporate training budgets, especially those allocated to leadership development, have steadily grown. According to Training Industry’s “The State of the Leadership Training Market,” in 2018 alone organizations around the world spent about $3.4 billion on leadership development solutions. Most futurists predict this number will continue to increase.
Yet, despite this investment, a leadership candidate shortage seems to persist. A 2014-2015 Global Leadership Forecast by The Conference Board and DDI revealed that 85 percent of executives are not confident in their leadership pipelines.
One major constraint to the leadership candidate pool appears to be the severely limited approach for identifying future leaders. In essence, organizations consider a few star performers with high visibility in typically preferred roles. Using what on the surface appears to be a rigorous psychometrics process, but which often is little more than an educated guess, they then label these individuals “high potentials.” The organizations then make large investments in these candidates and wait for results.
So how well is this process working? According to the Corporate Research Forum, about 53 percent of organizations are unsatisfied with the results of their high-potential programs.
The bottom line is highly visible star performers from favored corporate departments don’t always have what it takes to evolve into true leaders, especially inclusive leaders able to manage today’s diverse workforce. These are often people who perform exceedingly well in a current role that has a lot of senior management visibility and attention, but that does not mean they have the passion or even the native ability to be a leader. Furthermore, since most of these people have to date only proven themselves based on personal accomplishments, observers seeking nascent leadership skills in this group do not have a clear way of gauging their true leadership potential — at least not until they roll the dice.
Fortunately, there’s a group of people already present in most Fortune 500 and global organizations who demonstrate a passion for leadership and perform within a business microcosm that enables them to showcase their emerging talents. They are the leaders and members of employee networks, commonly called employee resource groups.
Beyond the Radar
Regarding leaders and members of employee networks, Simone Morris, author of “The Power of Owning Your Career” and CEO of Simone Morris Enterprises LLC, stated, “All one needs to do is look closely to see that many of these people are superstars waiting for the right opportunity to soar.” Indeed, some organizations have started looking more closely at the members of these groups as potential future leaders of the enterprise.
In an episode of my organization’s ERG PowerTalk podcast, numerous guests — including Morris; David Casey, chief diversity officer at CVS Health; Tracie Taylor, assistant vice president at Atrium Health; and Theo Bowling, assistant vice president at LPL Financial — discussed how some organizations they know or are directly associated with tap into these networks to find and develop future leaders. Bowling, whose role straddles the Office of Diversity and Inclusion and Leadership Development, believes there is good reason to tap into employee networks for future leaders. “When you add the ability to be coachable and the desire to be responsible for more, give me that person as a leadership candidate 100 percent of the time,” he said.
Unlike the traditional small future leadership candidate pools cobbled together with a couple of high-flying subject matter experts and/or a few senior-level contributors who’ve never demonstrated interest in the work of leadership, this pool is larger and has already demonstrated a passion for leading.
In addition to being a rich source of potential leaders, ERGs present several opportunities for developing these emerging leaders. First, they provide exposure and chances to practice leadership skills and behaviors typically not required in the day jobs of people in individual contributor roles.
Morris shared how she initially learned her management craft through participation in an employee network, telling us: “The things I learned in the employee network space were vastly different than what I was learning in my day job. For example, I learned about recruiting diverse talent. I learned about using my voice to educate and lead others. I gained more perspective on building, implementing and driving toward strategies.” To this list, we can add budgeting, influencing, managing and measuring results, plus many other dimensions of leadership.
Employee networks also provide what can be considered the perfect safe place to learn even for still-not-fully-confident developing leaders. As Bowling noted, “The networks act as a safe place to learn, practice, fail and grow.” That’s because, he went on to point out, while they are learning from a sponsor, chairs, other members and other diverse communities, and the office of D&I, these network leaders and members “know it’s okay to fail forward and make mistakes.”
Under such circumstances, it’s no surprise that these participants, who tend to be at earlier career stages, as well as some who may be further along in their career journey but from a different cultural background, are more likely to pursue developing challenging leadership skills here versus in their day jobs where performance results may be more carefully and critically scrutinized.
Some Common Concerns
One oft-shared concern with the idea of leveraging ERGs to expand the leadership pool is that quite a few ERG members, and even their group leaders, tend to be at much earlier career stages than the higher-flying star employees that most companies typically consider for high-potential designations. Another concern is that other candidates in these pools, who might be more advanced in their careers, may come from nontraditional backgrounds that may not seem to be a cultural “fit.” “Should we be digging that deep down?” some may ask. “Should we be looking into these pools that are outside of our regular sources? Are they ready for the kind of leadership development programs we run here?”
The answer is yes to the first two questions and most likely no to the third. Generally, companies known for successfully finding and growing leaders achieve this in part by digging deeper and cultivating people at early career stages as well as from all parts of their enterprise. So, yes, you should dig as deep and wide as possible. As for the concern that it’s likely these candidates are not ready for development programs that were designed for people at a certain level and from traditional leadership sources, the solution lies in building an “acceleration lane,” which brings these new candidates smoothly into your mainstream development program.
As this source of leadership candidates may comprise people in earlier career stages, they will have fewer business accomplishments under their belt; this group may also include those from demographics beyond the mainstream who are not acclimated to the norms of your organization or general social culture. So, what should your acceleration lane include? And how should you go about setting up mechanisms that will enable you to tap into these earlier-in-career and more diverse candidates, thereby creating a larger, more diverse future leadership talent pool for your company?
5 Steps Forward
First and foremost, you need to get senior leadership and middle management buy-in and support. Tapping into early-career and nontraditional candidates in your ERGs to expand your future leader pool is a major shift. Therefore, you must make the case for this approach to the CEO and senior leaders and gain their endorsement. Then, you need to get these leaders to add participation as a member, leader or executive sponsor of an ERG into their own and each of their direct reports’ development plans. They also need to require their direct reports to do the same with team members who report to them.
Bowling noted that senior and mid-level leadership support must not only be crystal clear, but followed by explicit adoption of the approach, because “managers will follow what they hear and see their leaders doing.”
Second, get everyone into the leadership talent scouting and development business. Establish a system to reward and recognize leaders who identify early-career and nontraditional future leadership candidates. Reward and recognize those who contribute to their development within ERGs. Reward and recognize those who sponsor them for next-level positions. In short, crowdsource early in career and nontraditional future leadership talent identification and development from within employee networks across your leadership team.
As a third step, set up a process to help early-career and nontraditional candidates gain speed so they can merge into your mainstream leadership development highway. Supplement your regular leadership development curriculum with training that rapidly helps them develop their interpersonal power skills, leadership presence and confidence.
StandingOut\W3, an e-learning solution provider led by CEO Stephen Kremple, the former vice president of global learning at Starbucks, offers great advice here. According to the provider, which specializes in helping early-career and nontraditional background professionals stand out from the crowd, the key is to help budding leaders rapidly amplify their interpersonal power skills within the context of their organization’s norms and culture. In the company’s words, “To be seen and heard as the internal talent which management is looking for, they [ERG leaders and members] need to be able to consciously ‘switch’ to their most effective mode in order to come across with their best foot forward.” Career progression is more about who knows you than who you know.
Next, promptly bridge leadership and interpersonal power skills learned and developed within the incubator of the employee network to the larger organization.
Some companies have developed sophisticated processes to use ERGs as experiential leadership development vehicles. As these newly acquired skills surface, Morris recommends bridging them out to the larger enterprise by giving the newly emerged leaders:
- Access to participation in owning a piece of a high-profile project or its budget.
- Opportunity to exercise and demonstrate to a limited degree their leadership.
- Opportunity to connect with senior leaders and form relationships.
Finally, it’s time to feed, weed and harvest. Initial investment in accelerating leadership skills of leaders and members of ERGs to prepare them for your mainstream pool can be small. As they perform and demonstrate their leadership skills and potential, you can increase investment in those who show the most promise. Ultimately, as you bridge these skills and pick from the best and brightest, you can steer them into your more standard existing leadership and executive development programs. Some candidates may ascend to the top rungs of leadership while others might peak at lower levels. In either case, you will have a much larger pool of new leaders in your organization.
Before leaving this topic, there is an elephant in the room that we need to address — specifically that some may worry that sourcing future leaders from employee networks will lead to ignoring more traditionally qualified candidates. This concern is unwarranted. First, ERGs span nearly every demographic. In addition to those focused on race, gender and ethnicity, some center around other factors, including military status, age, faith, and sexual orientation/preferences/identity.
Furthermore, in most organizations, these groups welcome allies, partners and other participants who do not share the social identity on which the group is focused. For example, a straight white male can be an ally of a LGBT, female or African American ERG. So based on its structure, this pool is quite inclusive.
Finally, as Morris noted, “Who says you have to ignore others to provide an opportunity to ERG/BRG leaders and members?” You can still pick up diamonds lying closer to the surface in your smaller pool of SMEs and high-level individual contributors while digging deeper into your organization via employee networks to expand your candidate pool.
Diamonds in the rough may be found on the ground’s surface due to volcanic activity. However, these easily found gems are nothing compared to the quadrillion tons of rough diamonds deep below the earth’s surface. Of course, getting to those buried treasures requires additional machinery and may involve a slightly different process of polishing before they can be turned into jewelry.
Likewise, it may be easier to spot people who you think might make good leaders from that small group of top performers operating in typical source pools within your organization, but further down in your company there is likely to be a mother lode of hidden potential. Reaching your rough diamonds buried deep below the workforce surface and preparing them may require some new machinery and effort, but the results can be bountiful. If you find that your pool of future leadership talent is inadequately constrained, my advice is to leverage your ERGs and dig deeper into your workforce for your hidden treasures.