A top consultancy opined recently that a CEO of a firm can’t afford to take the time to develop the executives directly under him/her. Their reasoning is that the job of a CEO, particularly of a large firm, is such a demanding and time-intensive chore that the CEO simply lacks the time to do this. The solution: hire executives who already know their role and possess outstanding capabilities.
There’s a top Silicon Valley investor I know well who is brilliant at identifying the “Best When Used By” date for technology executives. He knows that a fast growing firm cannot wait for an executive/manager/etc. to grow into a role. By the time the person can now do what’s needed of him/her, the company has grown some more and this executive will not catch up. This isn’t the same as the fabled Peter Principle (i.e., where a person is promoted to their level of incompetency). This is a realization that the skillset a company needs at a particular point in time may not be what a given person can provide.
I get it.
Ask any high-tech startup CEO and they’ll all tell you of the conversation that inevitably surfaces at a board meeting: “When do we need to start looking for your replacement and do you have any suggestions?” The first time I had this posed to me, I was a bit taken-aback. But except for a few, rare startup CEOs, most get changed out when the hockey-stick growth kicks in. This is true for more than CEOs, too. It often triggers changes throughout a high growth firm.
The point the consultancy above makes possesses a logical rationale but I’m not 100% sure it’s always right. I have trouble with this as:
- Most firms do NOT experience the extraordinary hockey-stick growth of high-tech firms
- Someone has to develop the next generation of leaders
- People can’t become great, future leaders via osmosis
It’s the need for capability development that I see all too often but it is the execution of it that is not happening. There’s a capability or leadership development problem for all levels within a firm not just at the top.
I’m close to some fresh out of college folks who have shared with me their trials and tribulations of entry-level positions and internships. When they compare notes, the key items they discuss aren’t salaries. They discuss what opportunities their employer will or will not give them to improve. Businesses seem to be failing on several fronts:
- Firms that think contract-to-permanent placement is a great way to check out potential long-term talent are blowing it. The best and brightest know that while they possess contractor status, they aren’t getting any training, no benefits (like training reimbursement), and no real mentoring. Because they aren’t get what they need in the short-term, they keep looking for an employer that will hire them outright and will help them progress in their career. The only contractors who will stay are the ones too desperate to leave or are too unambitious to care. Either way, the company is NOT creating a pipeline of future leaders.
- Firms that think most people only want a job are not getting it either. Again, when you speak with jobseekers, you hear their earnest desire to advance their careers. They want to be more than what they are today. They need employers who will help them improve their personal balance sheets over the life of their careers. They don’t want an employer who intends to keep them in a given position, unchanged, for years on end. A career is fundamentally different from a job – it’s a shame more employers don’t get this.
- Spans of control have widened considerably over the years while lip-service to ‘mentoring’ has grown, too. Unfortunately, how can a manager/executive be an effective mentor when there’s only one of them and dozens/hundreds of staffers? The math for effective mentoring is failing. Something else must fill the gap but will HR or HR technology fill this? I’m skeptical.
- Companies that abdicate leadership development are doomed to problems. You can spot the companies with this as they never seem to be able to promote anyone from within. Worse, they have no one new in mind when a vacancy suddenly appears. This mode of operation is talent management/acquisition by crisis. It’s disruptive to the company and it gives investors the willies.
- Companies that outsource leadership development may not be much better off. When firms turn all training over to third parties, the essential context of what the firm needs (vs. a generic training/development solution designed for any firm) is lost. Yes, using generalized training is great for teaching someone accounting basics, a new programming language, etc. But, the application of the knowledge in real-world scenarios that the company faces daily may be the most important part of the training that participants need. Where will they get it?
Don’t believe me? In the last few weeks, I’ve had a couple of calls from the board chairman of a major manufacturer. This chairman reached out to me regarding troubling concerns with one their division presidents and they may need to terminate this individual. The board was panicked on two fronts:
- They didn’t have anyone ready to fill this division president’s spot.
- They were upset that this person made such bad business decisions.
When you trace it back, you could see how this issue came to be.
In this company, people are hired for the skills they possess at the moment of hiring. There is no development program for these individuals. There is no continuing education program, no leadership development program, no training courses to take, etc. Folks are just supposed to learn on the job. Critical business skills (e.g., business case development, ethics, etc.) are not offered. Since this person was hired right out of high school, there was a deficiency in business skills (although this person’s operational knowledge was first rate). Did the board or other top executives spend time with this individual? Apparently not. Was this person proactively groomed for a top-level position? Apparently not.
The best run firms create a talent pipeline internally. They identify the skill needs and potential career paths for their personnel. They map the skill sets of their people to the current and future needs of the firm. And, they supplement from the outside only when unusual situations dictate this.
When I attended the Skillsoft user conference a couple of weeks ago, I heard their executives comment on some of these same issues. They painted a vision for a “Self-Developing Organization” where all manner of technologies, HR data, big data and more create a unique training and development experience for all employees throughout the life of their career.
This approach can work when one finds enlightened employers who see their role as ones where they create environments where people end up working years longer at their firm versus competitors. People will stay with firms when the firm and its management choose to invest in them and their future. Tying the futures of the firm and its employees just makes good business sense.
But not every firm sees this and even those that do may be tied to outmoded methods/practices for developing their team. Breaking these old habits and management practices may be tough – but – it will become necessary.
One thing that doesn’t change though is that people usually leave a firm because of their boss. No matter how much training you offer, if their boss makes Attila the Hun look like a pushover, then the employee will leave. And this represents the one big area of training that no HR tech firm wants to address:
- - How do we teach our managers to become “empathic” towards their personnel? Can empathy actually be taught or is it something you have to be born with?
- - How do we get our managers to become aware of (and successfully deal with) their managerial shortcomings? How do you sell an HR solution that evaluates managers when it’s the manager that must buy the solution? Those managers frequently won’t buy it.
- - How can we ensure that a great internal candidate for a management spot will actually be a great manager?
In HR circles, everyone today is trying to ‘fix’: employee engagement. Whether it’s a HR analytics, talent management or HR technology vendor, they all see employee engagement as a problem that the employee has. Well, if you do a bit of root cause analysis, you might find that people aren’t engaged because they have a bad boss or work for a firm that refuses to invest in them.
Getting people to complete daily mini-surveys to find out how they feel, won’t solve a thing. If you’re going to fix your development issues or your engagement issues, then do the root cause analysis first. Then, get the technology that solves that problem.
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