You can’t be a great company without great leaders, and even the best leaders aren’t immortal. Sooner or later (and probably sooner) you’ll need to replace them. Is your company ready?
Many aren’t. That’s one insight from Workforce 2020, a global survey by Oxford Economics and SAP. Nearly two thirds of employees surveyed said their companies didn’t have adequate succession plans and they didn’t believe their leadership focused enough on continuity. And while millennials aren’t nearly as different from their older colleagues as some think, the influx of this tech-savvy generation provides a great opportunity to reconsider whether your training is up to date.
It’s not that we don’t know that leadership development is a key issue. U.S. companies spend almost $14 billion per year on such training. A recent McKinsey survey found that two thirds of executives ranked the leadership pipeline as their top human resources priority. So how can we take that urgency and translate it into better results? Here are five ideas:
1. Use metrics
Objective measurement is important for measuring the success of your training program (something only 14 percent of organizations do, according to a UNC study), and for identifying those who are selected to take part in leadership development to begin with. Don’t just rely on your managers’ subjective assessments on who in the ranks should be tapped for greatness; look at the data you already have to assess employee potential. Not sure where to find that data? Start by identifying specific criteria based on the leadership roles you know you need to fill.
2. Go beyond 70-20-10
The classic leadership development training framework is: 70 percent on-the-job, 20 percent from other people and 10 percent formal education. But does that reflect your organization’s current needs? A recent survey by DDI and The Conference Board found that today’s leaders spend their time very differently, with more time on formal learning and less on-the-job. A more optimal ratio, they suggest, would be 52 percent of training time spent learning on the job, 27 percent from other people and 21 percent in formal education. Another benefit of metrics is that they can help you to determine what ratio works best for your company.
3. Take your time
Building your leadership pipeline isn’t going to happen in a brown-bag meeting, nor do you need to send half your team to expensive two-year EMBA courses. Recognize that leadership development is a play for the long term. Give employees the time needed to focus on strengthening their leadership skills over an extended period. The AGES neuroscience model shows that people learn more when they’re able to devote attention, generate their thought processes, connect emotionally and space the learning out over time. (You might even consider adding mindfulness training to the package.)
4. Network mentoring
Mentoring is absolutely key to developing future leaders, and I’ve been honored to work with some outstanding mentees both in my own workplace and internationally through my work with the U.S. State Department and Fortune’s Most Powerful Women network. Not surprisingly, mentoring represents one of the biggest forecast areas for growth when it comes to leadership training. But make sure mentor-mentee relationships don’t happen in a vacuum: a key benefit of mentoring, after all, is knowledge transfer, so give mentees and mentors structured ways to share what they’ve learned from these relationships. Successful employees have multiple mentors — build on that network effect, rather than limit it.
5. Start earlier
Great leaders start out as great employees. But many leadership development programs aim mainly at turning middle managers into senior ones. In fact, the UNC study found that while two thirds of companies tracked potential mid-level and senior leaders, only 40 percent looked at individual contributors. Similarly, the Workforce 2020 survey found less than half of employees say their companies give them a chance to expand their skill sets. That’s a lot of talented employees who may go elsewhere if they can’t find leadership opportunities. So start looking for leadership potential in cubicles as well as corner offices.
Finally, remember that time is not on your side. By 2020, 25 percent of the workforce will be over the age of 55. That includes a heck of a lot of C-level executives, many of whom will retire before they’re 75. So don’t wait for a leadership vacuum to develop — act now. If you do — when your CEO asks if the company is ready for the future, you’ll be sure to have the right answer.