How to Manage Executive Talent
The cover story of the March 2010 issue of BLOOMBERG MARKETS, on newsstands now, addresses the crises that financial services firms have faced over the last year, and how failures of leadership development and succession planning may have exacerbated the troubles on Wall Street. Our colleague Mark Nevins was interviewed for this article. An on-line version can be found here:
While the BLOOMBERG article makes some excellent points about the imperatives for companies and boards in terms of talent management, ultimately it’s a criticism of what some financial firms didn’t do well. (Only time will tell if the firms that are still standing put in place changes to do better.)
To bring a more productive slant to the dialogue, we thought it would be useful to offer some suggestions on how organizations can improve their talent management and leadership development practices:
• Conduct succession planning on an ongoing, real-time basis. Too often, succession planning is treated as an event rather than an ongoing process. Succession needs to be part of a forward-looking, deliberate, and well-informed talent management process: understanding today’s and tomorrow’s leadership capability based on the enterprise strategy as well as the external environment. Talent management is an executive priority that is no less important than financial management. (The appropriate role of Boards in talent/succession is a critical component for success . . . but that’s a whole other topic.)
• Don’t truncate formal leadership development two or three levels below the C-Suite. There is a tacit (and dangerous) belief that successful executives are “fully formed” once they reach the SVP or EVP level, and that they no longer need to grow or learn. In actuality, it is a lack of self-insight or understanding of their stakeholders’ needs that often lead to executives’ failures . . . and often those executives are the last to know that they are in trouble. If senior executives see themselves as completely evolved, how can they expect to lead effectively in times of great change? Senior executives need ongoing leadership development as much as, or even more than, middle managers—and in the best companies the senior executives will also play lead roles in the formal development of more junior executives.
• Conduct strategic executive assessments, executed by qualified external advisors. Organizations must formally assess their leaders—and use those assessments to provide honest feedback, make smart promotions decisions, and hold individuals accountable for their self-development. Far too often, succession decisions are disproportionately driven by politics and entitlement. While it’s a good idea to avoid the trap of “searching for the corporate savior” by going outside for new leaders, it’s also important to remember that a strong #2 doesn’t always effectively make the transition to a successful #1.
• Ensure a clear understanding of what is needed for success in executive roles. While search firms and HR heads are great at banging out “job descriptions,” what’s even more important is thoughtful engagement in the question of what will really determine success in a given role. Companies would do well to consider questions such as: What kind of leader is needed given our current realities—and why didn’t the previous leader succeed? What are the two or three critical things this person needs to accomplish in the role over the next 12-18 months . . . and how will we gauge success? How important are technical qualifications and industry knowledge versus people skills and “emotional intelligence?” Competency models are important, but so are simple common-sense considerations such as the above—especially when it’s discovered that there is no consensus among the key stakeholders for the position.
• Manage and support executive transitions carefully and deliberately. When talent decisions are made in a vacuum and new leaders are left entirely to their own devices to succeed or fail, success tends to be uncertain at best. We know from extensive research that most executive transitions are sub-optimal, but what should organizations do to better support them? Bosses need to see the active support of transitions as a critical activity, and executives hired or promoted into a new role need to be aware that aligning their new teams, organizations, and stakeholders is as important in “the first 100 days” as establishing their own individual leadership point of view.
What other important focal areas are there for effective executive talent management? What did we miss? Do you agree or disagree with the points above? Let us know: email@example.com.
"No institution can possibly survive if it needs geniuses or supermen to manage it. It must be organized in such a way as to be able to get along under a leadership composed of average human beings." — Peter Drucker
© Nevins Consulting, Inc. www.nevinsconsulting.com