Are your leaders up to the job?

Just because you have corporate speak and the ‘right’ contacts both inside and outside the organisation, does not mean you are necessarily a born leader. By Tom Smith, head of organisational development at Lane4 development consultants.

Businesses are becoming increasingly aware that they must focus on their talent management activities or face the consequences. In fact, 80 per cent of top executives believe that attracting and retaining the best people will be the primary force influencing business strategy by 2010 (The Economist). This move has been determined by globalisation, consolidation, new channels, growth in markets like India and China, falling birth rates and an ageing population in the West. These changes have brought about an international talent drought that some organisations just are not tackling.

There are many reasons why these talent issues are not being addressed. One of the major reasons and challenges facing HR departments is: how do you help your organisation identify top talent? It seems hard to believe that we still come across examples of people being promoted to the top ranks through patronage or because they are skillful social and political movers. As a result, people who are socially skilled or team players or who have good contacts both within and outside of the organisation – to the exclusion of strong leadership capability – may make it to the tier one level of management. They are not necessarily the best people for the job. In fact, in many cases they do not last because they simply cannot lead, do not deliver or both.

I don’t blame these individuals for rising up the ranks into a position they are incapable of fulfilling. But I do blame their managers and their HR advisors for failing to review and assess their potential properly. An individual’s suitability for a new role should be assessed on a thorough analysis of future potential rather than promoting them on the basis of past performance. If someone is brilliant at financial management, it does not necessarily make them a good financial director nor does an excellent department head make an exceptional managing director.

Firms need to steer away from this subjective approach and implement more rigorous methods to help source and retain talent for the future. Having systems in place will help distinguish between long-term leadership potential and short-term job-specific potential; help with measuring future potential so that better predications about their future performance can be made; and help take into account not only high potentials but also people who really make the business work. They will also identify talent but some questions need to be asked: are they ready, do they have the skills and expertise to move into a new role, are they willing (and do they want) to rise in the organisation, and do they possess the right characteristics for the organisation or a specific role?

Once a process has been created, it is vital to stick to it. If it is changed every year, people become confused and it becomes difficult to achieve buy-in. It is also important to look at the bigger picture and to create a strategy in accordance with business needs. This advice sounds obvious but it is not always executed. Some HR departments fail to identify the future needs of their business before embarking on a high-potential programme. Such programmes should be driven by a business rationale, whether this is to fill a particular skills gap or help younger blood progress to the top of the organisation. After all, not all organisations need high potential programmes. The worst thing a company can do is identify, develop and raise expectations of high potential staff only to have nowhere to place them.