Your company is looking to grow in new directions, toward new markets and new opportunities. Where will you find the future leaders to make that happen?
For many companies, the first impulse is to bring in talent from the outside. But the fact is that with careful planning and thoughtful execution, you can grow your talent pool with the proven, motivated candidates who are already on your payroll. Consider the following in building your leadership development roadmap:
Build or buy. As with many management decisions, the question of talent comes down to creating it yourself or acquiring it from the outside: If you need a particular skill set immediately and it’s not available in-house, you may need to “buy” outside talent that already has it. If you do, expect to pay more for the privilege, and risk potential culture clashes. But why find yourself in such a reactive position? The alternative is to create a clear path for developing (or “building) your most promising candidates in-house. The reasons are multiform: current employees are already imbued with the organization’s values and invested in its success. High-potential employees are motivated to stay, reducing turnover. Your company becomes an employer of choice. And it’s good for the bottom line: Several studies estimate the cost of re-filling a position—whether an $8-per-hour worker or a high-level executive—can cost 150 percent of annual salary.
Planning ahead. The biggest factor in developing in-house talent is time. By having a clear vision of where the company wants to go vs. where it is today, you can have some idea of the talent needed to get you there. “On an organizational level you have to be very clear where you’re starting from (Point A) and where you want to go (Point B),” says leadership development and strategic planning consultant Greg Bustin, author of the forthcoming book, Accountability: The Key to Driving a High-Performance Culture. “Not only do you need to be clear on goals, but on values as well,” he adds. “What you stand for should drive hiring and promotion decisions.”
Holistic approach. Just as you need to plan your talent needs, you need to understand what talent you already have on hand, and how to get from Point A to Point B. That requires a consistent, cross-functional approach. It starts with a uniform performance evaluation process so that employees are evaluated fairly and ranked in comparison to one another. That information should aggregate upward, where functional leaders can share it. This sharing serves multiple purposes: It brings to light high-potential employees and best practices, offers a 360- degree view of candidates, identifies common development needs, and helps expose bias in the distribution of incentives and plum assignments. Finally, it offers senior management clarity into the company’s strengths, weaknesses, and potential across functions and other divisions, and it addresses deficiencies.
Development programs. How you actually develop your in-house talent, again, depends on size, resources, and culture. You may encourage informal mentoring or create a formal program. Some companies offer incentives for additional outside training or advanced degrees. Others establish a clear career path for each position, to give employees a goal to aim for. And of course managers should be ready to provide their best performers with stretch assignments— preferably ones that offer cross-functional experience—and be ready to set them up for success with the support and resources they need.
Above all, leadership development requires clarity of purpose and clear communication. “I’ve seen instances where the talent clearly is there, but the message is garbled, and roles and responsibilities are not clear,” Bustin says. “Everyone was trying to do too many things instead of the two or three big things the company needed to move forward. You can’t pin that error on your talent—that’s the leaders’ responsibility.”