Building Your Leadership

Pipeline
Presenter:
Karen Elmhirst,
Leadership Analyst,
HR.com
Kelmhirst@hr.com

July 19, 2006

“If you don’t know where you’re going, you’ll
probably end up somewhere else.”
David P. Campbell, Author, Senior
Fellow, CCL, book title
 Goal

Getting the
right people
with the right
stuff in the
right places at
the right time.
 Defining the “Right Stuff”
Right Stuff = Skills + Aptitudes
+ Experiences to lead
successfully in the future
Performance + Potential
 Session Agenda
• What’s the Current State?
•Selecting for the Pipeline
•Developing Leaders
•Additional Resources
 A Growing Shortage in the US
200

190 Labor needed (theoretical)

180
Labor available
Millions

170

160

150

A theoretical shortage of 10 million

140
workers by the end of the decade
130

2002 2006 2010 2014 2018 2022 2026 2030

U.S. Labor Force vs. Labor Demand

Source: Employment Policy Foundation analysis and projections of Census/BLS and BEA data,
American Workplace Report 2002. Slide courtesy of Tamara Erickson, The Concours Group
 Where’s The Growth in The
80%
Workforce?
Percent Growth in U.S. Workforce by Age: 2000-2010

60% 52%

40%
30%
21%
20% 15%
8%

0%

-10%
-20%
16-24 25-34 35-44 45-54 55-64 65+
1. Declining number of mid-career workers
Age of Workers 2. Few younger workers entering
3. Rapid growth in the over-55 workforce
Source: U.S. Bureau of Labor Statistics
Slide courtesy of Tamara Erickson, The Concours Group
 55% of organizations
in sample have a
succession plan

Source:
DDI 2005-2006
Leadership
Forecast
Average score was
4.6 out of 10

Rated by HR professional survey respondents

Job Positions Covered by Succession
Plans

Source:
DDI 2005-2006
Leadership
Forecast
 Succession Qualities Most
Predictive of Success
Based on success rates for newly promoted
leaders
• Involves the CEO (or most senior leader)
• Involves line management to identify and/or
develop candidates
• Collects objective assessment data regarding
current performance and readiness/potential
Source: DDI 2005-2006 Leadership Forecast, Figure 18: Qualities of Succession
Management Programs
Top Areas Needing Improvement

1. Relies on a computerized system to

plan/track progress. (66% need work)
2. Evaluates managers based on their efforts
to develop direct reports. (64% need work)
3. Involves a coaching or mentoring program.
(55% need work)

Source: DDI 2005-2006 Leadership Forecast, Figure 18: Qualities of Succession

Management Programs
 Session Agenda
• What’s the Current State?
•Selecting for the Pipeline
•Developing Leaders
•Additional Resources
 Where do we start?
• Start where the pain is most Ask, “Where are we most at
acute. risk?”
– Usually senior level – Impending retirements
– Identify critical/linchpin – Expanding/new business
positions – Critical levers of strategy
– Cascade down to include – Highly specialized
lower levels expertise
 CPS Human Resource Services Study
The Just-in-Time Approach

Select Hire Promotion &

Career Mobility
Program
Recruit
Retain Evaluation
Workforce
Planning
Train &
Develop
Competency
Model
Performance
Management
Knowledge
Transfer
Total
Rewards

© 2005 CPS Human Resource Services. All rights reserved.

 CPS Human Resource Services Study

An Integrated Approach to Building

the Leadership Pipeline
g
i rin lity
ion ,H nt bi en
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ss ti o
n e Mo em n
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c od l e elo re na a
Su e v Ca a al
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n t, S De & eM Ev
rc ten
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© 2005 CPS Human Resource Services. All rights reserved.

 CPS Human Resource Services Study
Research Findings
Who’s in the pipeline?

1st-line All
Mid- Supervisors
High Potentials
& Replacement
managers employees?
Pool for Sr.
Managers Technical
Specialists

Time
© 2005 CPS Human Resource Services. All rights reserved.
 Talent Assessment
• Develop and communicate standard
competencies and other evaluation
criteria to all.
• Obtain input from multiple sources.
(Supervisors, multi-rater feedback,
assessment center, simulations, self
and peer nominations).
• Develop talent to meet future
demands of organization.
• Conduct regular talent reviews with
senior leaders.
 Nine-Box Matrix – One Standard
Way to Rank
Promotability/Potential
Low Medium High
L Questionable
o Low Solid
Medium
Performer
w Performer Performer
Performance

Typically based on
competency-based M Questionable Solid Strong
performance e Performer Performer Performer
d
reviews
H
i Solid Strong Top
g Performer Performer Performer
h

Source: AQPC, “The Matrix: A Tool for Succession Management”

 Discussion Questions
• How objective and
inclusive is your
process for
selection?
• What does being in
the pipeline mean?
• Do they know they
are in the pipeline?
 Transparency — Do you tell
them, or not?
Do you…
• Tell all potential candidates their ratings
• Tell only those who make it into the
pipeline
• Explain that participation needs to be
continuously earned
• Don’t tell anyone until ready to make
offers
 Basic Premise for Transparency

“…given that the employee contract is

now based on performance — rather
than loyalty or seniority—people will
contribute more if they know what rung
they’re on.”
Jay A. Conger, Robert M. Fulmer,“Developing Your
Leadership Pipeline, HBR, December 2003, p.6.
 Session Agenda
• What’s the Current State?
•Selecting for the Pipeline

•Developing Leaders
•Additional Resources
 Developing Your Leadership
Pipeline
Five Guidelines:
1. Focus on Development
2. Identify Linchpin Positions
3. Make it Transparent
4. Measure Progress Regularly
5. Keep it Flexible
Source: Jay A. Conger, Robert M. Fulmer, “Developing Your
Leadership Pipeline”, Harvard Business Review, December 2003.
 CPS Human Resource Services Study

What do Future How are Learning

Leaders Need to Needs Being Met?
• Formal leadership
Learn? development programs
1. Knowledge & understanding • Action Learning/other projects
outside employee’s dept. or • Rotational and/or
function developmental assignments
2. Knowledge & understanding • Data-driven devt. (based on
at the enterprise level assessments, feedback and
other sources)
3. A broad network of
• Senior leaders’ involvement
relationships
• Structured building of
relationships
© 2005 CPS Human Resource Services. All rights
reserved.
 “Leader Competencies Are Not
Enough”
• Each level of leadership requires a unique mix of:
– Skills
– Time Applications
– Values (Priorities)

• Six passages: (“bends in the pipeline”)

1. Managing self to managing others
2. Managing others to managing managers
3. Managing managers to functional manager
4. Functional manager to business manager
5. Business manager to group manager
6. Group manager to enterprise manager (CEO)

Source: Ram Charan, Stephen Drotter, James Noel, The Leadership Pipeline, Jossey-
Bass, 2001
 Common Development Methods
On The Job: Formal Development:
- Individual Development Plans - Assessments
- Stretch assignments - Coaching
- Rotational assignments
- Mentoring
- Cross-functional team projects
- Formal training
- Performance support tools
- Cross-functional promotion
- Action Learning
pathways - Discussion groups/book
- Shadowing exec-level clubs
processes
- Reference ware
 Study on What Works In Leadership
Development
• Study done with CEO Magazine, looked at 300+
global and regional companies.
• Identified 20 best companies for leaders based on
quantity and quality.
• Identified 6 vital practices from the 40 they studied
(accounted for 67% of the difference)
• The best companies work at 3 levels: organization,
team, and individual.

Source: “Confronting The Leadership Crisis: What Works, What Doesn’t, What Lies
Ahead”, Hay Group & Chief Executive magazine Research into “The Best
Companies For Leaders”, 2006
 Vital Six Practices
1. CEO and senior leaders make leadership development a top
priority.
2. Leaders at all levels accountable for creating a climate that
motivates employees to perform at their best.
3. Leadership teams receive training and coaching to work together
more effectively.
4. Mid-career managers receive job-shadowing opportunities.
5. High-potentials receive objective 360-degree assessments and
feedback on their leadership ability early on.
6. Mid-level managers given adequate time for leadership
development activities early in their careers.

Source: “Confronting The Leadership Crisis: What Works, What Doesn’t, What Lies Ahead”, Hay
Group & Chief Executive mag. Research into “The Best Companies For Leaders”, 2006
 Second Level Recommendations

If resources permit:
• External MBA programs
• External coaches for senior executives
• Internal coaches for mid-level managers
• Specific skill-building for lower-level managers
• Externally run development programs
• Job rotations

Source: “Confronting The Leadership Crisis: What Works, What Doesn’t, What Lies
Ahead”, Hay Group & Chief Executive magazine Research into “The Best Companies
For Leaders”, 2006, www.haygroup.com
 Measuring your Success Along
the Way
• % internal placements
• % candidates ready now,
ready soon and ready long-
term
• Retention rates
• Success rates of
promotions
• What were you trying to
accomplish in the first
place?
Technology As An Enabler…

Performance
ERP Management LMS
Vendors Vendors Vendors

•24/7 global access to information

•Search based on specific criteria
•Integrates with other HCM data
•Provides gaps and strengths at a glance
•View of talent across
geographies/functions
 Recommended Resources
• Research Study:Building the Leadership Pipeline in Local,
State and Federal Government, 2005, www.cps.ca.gov
• The Leadership Pipeline, Ram Charan, Stephen Drotter and
James Noel, Jossey-Bass, 2001
• Growing Your Company’s Leaders, Jay A. Conger, Robert
M. Fulmer, Amacom, 2004.
• Research Brief: The Best Companies for Leaders,HayGroup,
2006, www.haygroup.com
• Research Study: Leadership Forecast 2005/2006, DDI,
www.ddiworld.com/thoughtleadership/leadershipforecast.asp
• HR.com Webcast archives, “Measuring Leadership
Benchstrength: How is it done?” Claude Balthazard, 2006
So, now what?
 Thank You!
For copies of this
presentation, go to
www.hr.com/hrstar
Folder: Karen Elmhirst

“ A journey of a thousand miles begins with a

single step.”
Lao Tzu