Of all the concerns keeping CEOs awake at night, finding and keeping talent reigns supreme. Human capital emerged as the primary challenge facing leaders in Development Dimensions International and The Conference Board’s 2014-15 Global Leadership Forecast — ranking above customer relationships, innovation or operational excellence. But only 27 percent of more than 13,000 leaders consider themselves “very prepared” to address it.
Outside hires rarely solve the problem. They’re difficult and expensive to find, and equally difficult to retain. Half of all leaders, in particular, hired from outside fail within 18 months, according to the survey.
Internally promoted leaders fare better across industries, however. This factor influenced Cisco Systems Inc.’s investment in talent management programming.
“When we looked at the data, we discovered that internally promoted candidates had much greater success,” said Brian Koldyke, senior director of talent management at Cisco. “They were achieving above average business results, while those hired from outside reverted to the median. Outside hires also had greater turnover.”
Deloitte’s ‘NextGen’ Leadership Development
Each year, global professional services firm Deloitte launches a “NextGen” leadership development program targeting a select class of high-potential professionals in the prime of their careers, preparing them to take on the most senior client service and firm management positions.It began around 2010. Deloitte realized it needed a deliberate approach to advance future leaders, and found that public recognition of future leadership potential helped to inspire employees to do great things (Editor’s note: The author works for Deloitte).Nomination criteria includes a sustained track record of high-performance client service, a desire to take on top-client service and firm management roles, a strong commitment to developing themselves and others, the ability to make an impact and an appetite for mobility.Nominees undergo an intense but collaborative two-year program emphasizing challenging assignments, experiential and formal learning, in-depth assessments, intensive executive coaching, network building and 360-degree feedback.First, participants create an individual development plan to identify specific roles, positions and situations they’d like to experience. These plans require periodic updating to be most effective, and ideally include honest self-reflection, which can be one of the toughest parts of the process.Participants’ self-candor can help them to identify strengths they’ll need to leverage in future roles, and to focus on experiential gaps they need to fill to reach longer-term goals. Individual development plans can help provide the confidence to knock on senior executives doors to ask to be considered for a role. This often pays off via new opportunities.In addition to Deloitte’s robust internal resources, participants work closely with external leadership development organizations — including the Center for Creative Leadership and the Army War College, where senior military leaders share their thoughts on strategic decision-making skills in a high-pressure atmosphere — and award-winning national executive coaches.Access to senior executives and the strong support network of fellow NextGen participants instills deep respect for the program’s esprit de corps. Most participants in the NextGen advance rapidly, with many reporting they’ve taken on a more challenging and visible role after joining the program, as well as improvements in their personal leadership effectiveness. This includes enhanced vision and purpose, heightened self-awareness, increased connections across services and markets, and sharper clarity in their leadership style and philosophy.In the battle for the best talent, organizations must maintain a deep bench of ready leaders. Succession planning and talent development should link to business strategy and be integrated with business processes. Investing in future leaders should be an integral part of an organization’s cultural DNA — from the top down. Doing so helps to instill a sense of ownership in the firm.Strengths-based leadership and career development should be a priority for any successful leadership program. A high-potential leadership program can accelerate its leaders’ growth through broad perspectives and a commitment to developing themselves and others.Krissy Davis is a partner at Deloitte & Touche. To comment, email editor@CLOmedia.com.
In emerging markets, it’s also important to develop from within. Leaders with an instinctive understanding of the local market and culture are more likely to succeed than expatriates, no matter how high-performing those expats may be on home turf.
But growing talent internally isn’t easy. In the aforementioned Global Leadership Forecast, only 15 percent of leaders rated their company’s “future bench” as strong.
Part of the problem is the changing nature of the workforce itself. People no longer expect, or want, a job for life. Millennials — who will comprise 75 percent of the global workforce by 2025 — are renowned for being fickle when it comes to their careers, with a median tenure of just two years.
According to a 2015 study, 58 percent of millennials expect to stay in their job for less than three years. Worse, millennial job-hopping often stems from limited development prospects.
Traditionally, career progression was about advancement; pay raises and promotions were the means by which individuals measured success. But today’s organizations are flatter; it’s easy to see why new entrants to the workforce feel disheartened. Before, they would have faced a series of small rungs to climb to the top of the ladder. Now, they see colleagues 15 or 20 years their senior just one or two job grades above them. Fearing stagnancy and motivated by advancement, they logically seek faster routes to the top elsewhere.
To get millennials to stay put, learning leaders must break the association between development and promotion. Today’s employees must navigate the career lattice where a sideways step is as valid a measure of progression as an upward move.
At Cisco, Koldyke and his team discovered that high-potential individuals tended to remain within a single function “because that’s where their career accelerated the fastest” — but this singular focus meant they lacked the cross-functional skills and experience essential to succeed at a senior leadership level. “Our most successful existing leaders have careers spanning different functions, and that contributes to their effectiveness,” Koldyke said.
There are structures and processes that can help achieve deep generalism. At MetLife Inc., an internal survey revealed that strengthening the global leadership pipeline was a priority. The team, led by Arnold Dhanesar, senior vice president of global talent management, identified critical roles and designed accelerated development programs to close the gap — including setting up an internal talent brokerage.
“We conduct monthly global talent brokerage meetings which assist in matching talent supply and demand, aligning key talent to critical global roles,” Dhanesar said. In these monthly meetings, human resources business partners and talent leaders identify individuals who have experience gaps that could be filled by a new role, or those who need a new challenge to continue to grow. They then look for “nonspecialist” roles that could offer suitable experiences.
A similar, albeit more informal, process also exists at Cisco. “Cisco has a very relationship-based culture, but there are systems that honor that culture without making development fully dependent on people’s networks,” Koldyke said. “We’ve started marketing talent, becoming a ‘clearinghouse’ of sorts. It helps to build awareness of candidates in other functions, and we’ve had great success — people who ordinarily wouldn’t have got an interview are getting jobs because of the capabilities they bring.”
Setting up such an internal market helps talent feel fresh and constantly moving. They don’t necessarily need to be moving upward so long as they are growing. The alternative is to get stuck to feel uninspired about the future with no opportunities to grow. Stuck employees deliver the bare minimum, are less engaged and unsurprisingly more likely to leave than the moving.
To keep talent moving, managers have to have the right kind of conversations with employees about their careers. Leaders often shy away from these discussions when promotions and pay raises are scarce. But if an ambitious individual seeks growth and there’s no vertical progression in sight, managers need to help them craft a rewarding route through the career lattice. Otherwise, they’ll look elsewhere.
Instead of advancement, the focus should be on growth — helping employees get better at the things that matter to them. Employees can grow without changing roles as long as they see the link between improving performance now and getting what they want in the future. The best managers draw out employees’ ultimate career aspirations and explicitly link them to their short-term goals — even if long-term aspirations lie outside the organization.
“While it is very important for us to continue to develop and retain our talent, we recognize that sometimes growth may need to take place elsewhere, before they return to us again as an employee or customer,” Dhanesar said. While many see it as a taboo subject, millennial employees will interpret conversations about external opportunities as their manager taking an authentic interest in their future — a trait likely to promote loyalty down the line.
Re-hiring employees who have broader perspectives, meaningful experience and a rich network — accumulated at a competitors’ expense — is not a bad thing. This is the ethos of Johnson & Johnson’s “boomerang” program, and Cisco also champions the value of a cohesive alumnus diaspora.
“We’re beginning to explore ways for Cisco employees to go and do something different if they want to, but still keep them within the Cisco ecosystem as a partner or contractor, with a view to coming back as an employee later,” Koldyke said.
Before planning their exit route there are a number of ways employees can keep moving. They can, for example, develop a niche within their current role and become an expert in their chosen field. Or, they can seek a new role or job rotation in a different area of the organization. Lateral moves are becoming more common in today’s flatter organizations. Not only do employees keep moving, but also organizations benefit from fresh perspectives and a more diverse range of skills.
Promoting lateral moves as an equally valid measure of progression as promotions required some reframing at Cisco. Koldyke said they had to debunk a few myths — specifically if someone moves to another function, then they lose their spot in the promotion queue. “People felt like they had to sacrifice career advancement for functional movement, whereas in fact it’s the opposite,” he said. “This type of development can accelerate career advancement because it increases diversity in their career.”
To facilitate such moves, Cisco set up career advice and career-coaching sessions between volunteer leaders and talent, matching coaches and coachees from different functions to expose talent to different parts of the business. Of the top 2 to 4 percent of managers, senior managers and directors, 53 percent have achieved promotion in the past 12 months — a significantly higher proportion than would have been expected before these measures were put in place.
Ultimately the responsibility for career progression lies with employees themselves. Autonomy is one of the main engagement drivers, and individuals who take responsibility for their long-term career goals are more motivated to make them happen. It’s down to individuals, with the support of their immediate managers, to understand what’s important to them, what makes them tick and to grab opportunities to grow and do more of those things.
MetLife talent management strategies include integrating career and development conversations into the formal performance management cycle. Dhanesar said employees complete a career and development plan, have discussions with their managers to align and agree, and then the employees make the updates.
At Cisco, the approach is also underpinned by a culture of ownership. Koldyke said people realize that diversity of experience is important, managers are taking ownership for themselves, and they’re amplifying it for their teams. “When it comes to succession planning, you can bet it’ll be the individuals who’ve sought out a range of experiences that’ll be first in that queue.”
Editor's note: This article has been updated to correctly attribute the 2014-2015 Global Leadership Forecast to Development Dimensions International and The Conference Board. The copy was further amended on Nov. 9.
