The ‘4C’s of High Potential Leadership Development

In Brief: The vast majority of companies don’t feel confident about the number and quality of management successors in their organisation. High potential leadership development programmes are a key weapon to help businesses win the war for talent. Without a rigorous well-designed focus on the next generation of leaders any organisation is heading for trouble. This article outlines the “4Cs” for the successful delivery of High Potential Leadership Development Programmes:

1. Clarify Goals
2.  Collaborate on Development & Delivery
3.  Choose Carefully
4. Communicate Honestly

The War for Talent Rages On

Even in these tough economic times winning the war for talent continues to be a crucial objective for businesses. Recent Harvard Business School research shows fewer than 30% of European companies felt confident about the quantity of talented, qualified management successors in their organisation. Creating and filling a management talent pipeline has become a business critical issue for forward-thinking leaders.

In fact, there is a good argument that the ability to attract and develop leaders becomes even more important when the economy is in turmoil; businesses have fewer chances to “get it right”, and to take profitable opportunities. Beating the competition requires good leadership at board level – and the level below. Even more true when times are tough.

What’s more, finding and retaining good leaders will get even tougher for western-based international players in the coming decades. This is because most have to focus, in part at least, on emerging markets for growth such as India and China. Here the supply of experienced managers is even more limited than it is in the west. So, what can companies do to put them ahead of their rivals?

High Potential Leadership Programmes

More and more companies are recognising the value of high potential leadership development programmes as a powerful weapon in the war for talent. But it can be tricky to get right. And even trickier to ensure there is a genuine long-term return on investment. If the design and delivery of these programmes is mishandled there can be serious damage to staff morale – quite apart from being a huge waste of time and resources.

This article is a collection of insights and best practice in attracting, incentivising and transforming high potential management into true leaders. It’s based on experience. I spend a lot of my time working with creative businesses to design and develop leadership programmes to transform great mid-level execs into influential board-level leaders.

The 4Cs which follow are guiding principles to help you to design interventions in this area that have a far greater chance of transforming both your high potential people – and your organisation.

Experience plus Research = Best Practice

Over the last few years I’ve worked with advertising agencies like Ogilvy & Mather and BBDO; content creators such as Shine Group – as well as other global concerns such as the recruitment giant Randstad, and the well-respected World Economic Forum. Before this I ran the Centre for Creative Business at London Business School which delivered leadership development to executives in the UK’s creative industries.

I’ve blended my first-hand insights and experience with rigorous research. Harvard Business School joined forces with the global executive search firm Egon Zehnder to conduct a large-scale cross-sectional and longitudinal analysis* of how companies manage their rising stars. They also interviewed executives from 70 companies which had all taken the decision to run high potential leadership programmes. The research essentially asked: “what worked for you; what didn’t work for you?” The “4Cs” for Successful High Potential Leadership Development is my summary of both.

Why invest in leadership development?

The business rationale for investing in leadership development is strong and growing. Firstly, top talent gravitate towards companies that have strong development opportunities. Secondly, a well-managed talent pipeline increases the odds the company can continue to appoint great leaders in important positions – which increase its chances of success.

Fortune’s Most Admired Companies – the likes of Coca Cola, Johnson & Johnson, Proctor & Gamble, IBM and Mars – have known this for decades. They consistently spend more time and energy on developing leaders than average companies do – and they have better share price returns to show for it.**

Alan Lafley, former P&G CEO, said: “Nothing I do will have a more enduring impact on P&G’s long term success than helping to develop other leaders. I think the most important thing we do is that we are a continuous selection machine”

1: Clarify Goals

Let’s be clear: there is no generic leadership programme that works for all companies. Like any good investment, leadership development needs to align with organisational purpose, strategy, values and culture. A transformational leadership programme perfectly aims the right content, at the right people, to address the right questions. In practical terms this involves clarifying two sets of leadership development programme goals:

1. What’s the programme trying to deliver for the organisation?

2. What’s the programme trying to deliver for participants?

The answer to the first question needs to be linked to strategic objectives and culture change; the output of the answer to the second question should always involved leadership attitudes and behaviours.

For example, if you are working in a creative content company that has grown fast through acquisitions in a market-place that values creativity and innovation, you might need a programme that encourages highly-collaborative leadership – and which has cross-disciplinary organisational development projects as a key output to help knit the emerging  organisation together.

On the other hand, if you are working in a restaurant chain, which needs to grow through a well-established franchise model; the leadership behaviours and outcomes required will probably be more focussed around operational and productivity improvements.

In summary, a key point to clarify is how much of the leadership programme goals are around changing the organisation – and how much about changing participant behaviour. Clearly, these two goals are inextricably interlinked; but for the sake of clarity it’s vital to produce separate and mutually-supporting goals for each.

2: Collaborate on Development & Delivery

Like any intervention to try to change an organisation thorough groundwork makes a successful outcome much more likely. It ensures a leadership development programme will better deliver in the areas most needed by both participants and the company. It sounds like simple common sense, doesn’t it? But it’s surprising how easy it is for poorly-focussed programmes to get blown off course by pursuing content and objectives not directly linked to actual need. Even worse, when a leadership programme is not tied to agreed goals it can degenerate into the worst kind of corporate political football.

Collaborating on development and delivery means gathering input from as wide as possible – both inside and outside the organisation. Well-targeted programme content can then be co-designed and delivered by the senior organisational sponsors and whichever external learning and development experts are involved.

Senior-Level Engagement

The best way to deliver a transformative leadership programme is to ensure it has the buy-in and sponsorship from the most senior people in the organisation. There’s an old saying that “marketing is too important to be left to the marketing director”. The same is true for developing high potential leaders. Talent management strategy is a not an area that should involve only the HR Director.

Of course, it can be tricky to get the CEO involved. But it’s vital. This high-level sponsorship ensures the programme is not perceived by applicants as a frivolous “sheep dip exercise”. I’m sure you’ve come across the sort of fluffy, arm-waving away days which often give management “training” a bad name.

The perception of non-applicants and personnel at all levels across the company also changes. Having a CEO or similar senior figure onboard signals “this is important”. It immediately encourages other senior people to give freely of their time. This guarantees participants are exposed to the key people, in charge of the important issues, which are engaging the executive board.

Finally, senior-level involvement “raises the stakes”. This emphasis transforms what could be mere information and skills training into transformative experiences that can change behaviours permanently. Because of the massive difference senior involvement drives on all the programmes I direct, I push for one or more of the sessions to be run by the CEO – and ideally other sessions are run by other senior players from finance, operations, marketing and sales.

A learning organisation – not classroom training

A leadership programme has failed if it’s only about what happens “in the classroom”. Training is passive and centred in “someone else”; learning and self-development is active and based on what “I” can do.

Transformational interventions need to be about instilling a passion for self development and learning beyond the set-piece group sessions which usually form the core of a programme.

A holistic, multi-strand approach works best: group sessions supported by on-the-job development, mentoring, coaching as well as real-life projects and job rotations. Clearly, reinforcing group work with one-to-one support requires a larger investment in planning and coordination. It’s worth the additional effort and expense because the organisation is then not offering mere training, but designing a transformational experience which will play a crucial role in creating a genuinely learning culture.

3: Choose Carefully

Who chooses?

High Potential Programmes are a significant investment in time and money, so it makes a lot of sense to ensure the right people are sitting in the room on the first day. Having now tried both open application processes (perceived as “more democratic” in internal communications terms), and manager-nominated approaches (perceived as “more accurate and targeted”) I’ve come to the conclusion neither works very well on their own!

Research backs me up. Across the board the data shows that people often overestimate their own potential, or feel they are ready earlier than they really are for leadership, so applicants can’t be relied upon to put themselves forward at the right time. And untrained managers are often subject to serious prejudices and blind spots. Again, research clearly illustrates as a group managers are poor at reliably spotting potential leadership talent in their direct reports.

Because of this I recommend a combination approach which has a better chance of getting the right people as programme participants. Start with a tight, well-explained brief on who can apply in the first place. Then manage the process carefully to involve input from senior management, line management as well as output from annual appraisals, written applications, references and interviews. Anything less than a thorough multi-stage approach risks wasting time and money on the wrong people.

Understand Potential

Another necessary step is to create a shared definition for “potential” around the basic idea that it’s “the ability to handle responsibilities of greater scale and scope”. Participants need to be chosen with an understanding that potential is measured (and developed) on a number of different levels.

In my programmes I use the metaphor of an iceberg with visible behaviours above the water, and deeper layers, like identity, motivation and purpose, below the surface. The following diagram illustrates a model of executive potential (that combines my experience with the Harvard/Egon Zehnder Research) to demonstrate the importance of selecting, and then delivering programmes, to address the “easier to change” and “harder to change” aspects of people.

Inside-Out Programmes

Programmes which seek to engage participants at the core “Purpose” and motives level (“Inside-Out” Programmes) are incalculably more powerful than those which seek to work “Outside In” – i.e. focussing on skills and knowledge and hoping for the best on the more powerful Identity, Assets and Purpose.

4: Communicate Honestly

Senior executive sponsorship of a leadership programme naturally leads to a high profile within the organisation. This is to be celebrated, not avoided. A study of 225 companies in 10 industries found that while 78% of the organisations did not inform high potential people they were labelled thus; 90% of the employees knew anyway!

My approach, as it is in all my organisational development work, is to deliver the greatest degree of transparency possible (“transparency” being the corporate expression for what we call “honesty” in the rest of our lives!). Of course, an honest approach is not without risks. To mitigate this risk there needs to be careful management of expectation for those chosen for high potential programmes – as well as for those that are not.

Copyright © 2011 Greg Orme All Rights Reserved

*How to Hang on to your High Potentials, Harvard Business Review, October 2011

** Hay Group, Develop Your Leaders, 2011