Leadership development and capacity has always been a key concern for executives and senior HR professionals. But this concern has been heightened in recent years by factors such as increasing globalization and business complexity, as well as the impending retirement of vast numbers of seasoned leaders. At a time when organizations need more high-quality, experienced leaders, what they face instead is the single largest departure of leadership in modern history. This leadership gap has led an increasing number of organizations to place renewed emphasis on the development and acquisition of what can be called emerging leaders ― particularly through grooming high-potential Generation X and Millennials ― who show promise as the leaders of tomorrow.

At Taleo Research we feel very strongly about this urgent need, and we are in good company in believing it is a top issue. In fact, leadership development was rated the number one human capital issue in multiple recent studies and surveys, including those from i4cp, Hewitt, and IBM. Taleo Research, in partnership with DDI, has recently released a white paper titled “Emerging Leaders: Build Versus Buy,” which outlines how to identify emerging leaders—what to look for and how achieve success through the use assessments and talent management technology, such as talent intelligence derived from robust and dynamic individual talent profiles. It highlights the practices and process required to develop leaders internally by building their capabilities, as well as the best practices involved in acquiring leadership talent externally.

This blog posting is the first in a new series that will focus on this critical challenge: the need for organizations to focus on the development of emerging leaders.  This first post will present the general argument of the paper and some of the related data.  Future posts will drill into specific arguments as well as related issues. In outline format, here is the basic gist of the argument, the full details of which can be found in the paper itself:

• Leadership drives results. Better leadership drives better bottom line results and improved business success across multiple metrics. Investing in leadership therefore is not just an “HR thing,” but a business imperative.
   
• The impact of demographics. With the coming retirement of Boomers and the demographic weakness of the Gen X cohort, we don’t have enough “raw material” to fill all the holes the Boomers are going to leave. We need to develop more frontline leaders, and soon, in order to find our future senior leaders and middle management leaders.
   
• The need for internal development and hiring the best talent. We can’t look abroad to “import” leaders for a variety of reasons, not least of which is that emerging markets don’t have as ready a supply of talent as the popular wisdom would suggest. Thus, our only real options are to develop the folks we have or find additional talent in the marketplace and hire for leadership potential.
   
• Success profiles, talent profiles, and talent pools. Central to these efforts is the need to understand your existing talent across multiple information vectors:
  • Who are you top leaders today?  What skills, attributes, competencies, and knowledge do they possess, and what combination of these should drive a “baseline” profile for any potential leader in the organization?
     
  • How many folks on your existing team meet the baseline profile? What’s your expected leadership gap in the coming years and what does your existing leadership succession plan look like? Are there areas of weakness?
     
  • Do you have enough folks in house who meet the profile requirements who you can begin grooming to bolster these areas of weakness?
     
  • Do you have enough folks when you factor in relocation needs, culture, language issues? Do you include this information in your talent profiles, for example "willingness to relocate" and where?
     

• The need to focus on frontline leaders. Once you have the data, the calculus gets a bit easier – based on the above, do you have enough people who are already in development or who could be considered raw material?
  • If not, we recommend that you use the same profile information you established to find external talent to plug some of these gaps.
     
  • If you do have enough talent, we recommend a rigorous investigation of existing frontline leader development practices. Our research shows that the majority of leadership development efforts aimed at frontline and emerging leaders are far from adequate. When companies have them at all, they are often manager-driven with zero oversight, under-resourced, and effectively ad hoc. This results in some scary truths about frontline leaders – e.g., just one third of frontline leaders have a written development plan and HR leaders rank them as their “least ready” workgroup, below even entry level employees.
     

• The future of leadership. In looking forward, many of these frontline leaders will become the senior executives and leadership team of tomorrow. Therefore we also suggest some characteristics and attributes that might characterize these future leaders so that in your current hiring and development efforts you can build for the future rather than the past.
   

Leadership development is a complex effort requiring strong tools and processes across the full talent management suite (a topic we will consider further in the next post in this series). It also benefits substantially from the presence of deep, unified talent profiles that enable organizations to see opportunities, areas of strength and weakness, and patterns across their overall talent landscape, while also enabling managers to see a complete talent “picture” for any individual on his or her team. This kind of Talent Intelligence provides the foundation for managers to better support frontline leaders and for organizations to make better strategic decisions about current and future needs.

In future posts, we’ll explore some of the topics above in more detail, but we’ll also tackle related issues around the critical role of an LMS in leadership development, a more detailed look at the workforce demographics, and the critical skills that will define leadership over the next 10 years.  We’d also encourage you to check out DDI’s blog as they will be running a similar series of related posts.

Finally, note that this week, in conjunction with our partners DDI and Talent Management Academy, we kicked off a six-city roadshow entitled "Grow Your Own: Finding and Developing Emerging Leaders." Cities included are Seattle, WA; Toronto, Canada; Columbus, OH; St. Louis, MO; Charlotte, NC; and Detroit, MI. Each half-day workshop will feature presentations highlighting current research as well as select Taleo customers presenting examples of how their organizations drive leadership initiatives through Taleo and DDI solutions to generate improved business performance. See the roadshow’s website for more information.