Pipeline to Success
It is not uncommon to hear about the early departure of unsuccessful CEOs across Europe and North America - indeed, the average tenure of a FTSE CEO is only four years, six fewer than a decade ago. Recent corporate casualties include Merrill Lynch's Stan O'Neal, who resigned in late 2007 following spiralling losses on mortgage-backed assets, and EMI's Eric Nicoli, who received a six-figure payoff to depart from the music firm.
These departures cause considerable disruption and cost, not to mention embarrassment. One major reason for this pressing issue is the continuing inadequacy of leadership development and succession management within businesses today. For effective, long-term senior management, companies must create, nurture and maintain their "pipeline" of high potential leaders from within the organisation. There is a desperate need for "homegrown" leaders of tomorrow, which distinguishes successful organisations from their competitors.
The Leadership Pipeline
Based on their original work with General Electric, Drotter and Charan developed a six-passage model for understanding the leadership requirements throughout any company. Understanding the transitional requirements of the six leadership passages, and appreciating each level's unique challenges, can optimise management structures and provide effective senior leaders of the future.
How Can Human Assets Help?
Noel Tichy, director of the Global Leadership Program at the University of Michigan Business School, has argued that, "any institution that invests in the development of leaders at all levels is going to get ahead of its competition". Several best practice leadership development methods exist to obtain the ideal leadership pipeline. Human Assets Ltd work with clients to facilitate effective leadership transitions at every level, using tools such as 360° feedback and executive coaching.
In a 360° feedback programme, individuals evaluate themselves and receive feedback from other organisational members (typically, immediate supervisors, peers and subordinates). Human Assets defines for clients what high potential looks like at each level, and uses this as a framework for a bespoke, holistic 360° feedback intervention. The gaps between current performance and desired performance at the next leadership level become clear - enabling objective evaluations of readiness to progress based on the required skills. To facilitate the process, Human Assets recommends using executive coaching to assist managers to give and receive feedback and reflect on emergent ideas. Research has shown that coaching is a critical factor in effective 360° programmes, but is commonly overlooked.
By implementing a thorough 360° feedback programme within a leadership development framework, organisations can nurture and train their leaders, and foster the knowledge, skills and abilities required for effective CEOs of tomorrow.
If you would like to find out more about how Human Assets can help your organisation to maximise its leadership pipeline and identify high potential, please contact our consultants on +44 (0)20 7434 2122 or by email at enquiries@humanassets.co.uk.
References
Antonioni, D. Organizational Dynamics, Autumn 1996, pps 24-38.
Drotter, S. J., & Charan, R. Building Leaders at Every Level: A leadership pipeline. Ivey Business Journal, May/June 2001, pps 21-27.
Groves, K. S. Integrating leadership development and succession planning best practices. Journal of Management Development, 2007, 26(3), pps 239-260.
Hogan, R., Curphy, G. J., & Hogan, J. American Psychologist, 1994, 49(6), pps 493-504.
Newsletter: February 2008