Planning for leadership talent is a never-ending cycle for successful organizations. With the markets and economy doing well, many leaders are retiring on time with financial security. While many will find ways to remain involved in some capacity, the cascading effect creates opportunities for promotion and new hires at senior levels down through frontline leadership.
The first consideration is understanding what must be protected in the culture and team environment as leaders are brought in or moved up. We find that organizations are taking a hard look at all their data on senior leaders to validate and tweak competency models and “fit” factors important to the culture of these successful leadership teams. How extensively collaboration is expected, how much risk leaders are permitted to take, and how much data is included in a normative business case can differ by industry and company. Is it preferable to ask for forgiveness or to consult every stakeholder before making a move? Cultural fit on a few key items can make or break new hires or those promoted into a new group of peers.
The second consideration is where the leadership culture and capabilities need to be stretched. Identifying competencies or characteristics needed to evolve the organization’s capabilities is another element of developing leadership talent. AI-assisted work is becoming more customer-facing and impacting a broader set of work tasks. Security and risk management have evolved, and innovation has become a skill set in conservation. A company may be looking for a new technical competence to expand business lines or integrate business units. Having people who can introduce new mindsets and tools can be highly valuable.
Finally, the organizational structure should be examined. The way senior-level roles evolve often contains assumptions and historical artifacts that are no longer valid. Some roles may be broken apart or combined to enrich developmental experiences and better match skill sets in the market. Reorganizing to align resources and value chains can also be instrumental in talent development and acquisition.
With an upfront analysis, assessing leaders against must-have cultural elements before evaluating the new talent they bring prevents falling in love with candidates who will ultimately destroy team value. For internal candidates, gathering 360 observations and testing skills against next-level expectations can be done well before a transition, allowing time for formal development programs and progress evaluation.
One client in a high-growth company split a now too-large role into two requiring different strengths. An internal candidate was selected for one, while an external hire brought fresh thinking to the other. The incumbent retired but now serves as a consultant mentor. These thoughtful moves are facilitating a smooth transition to the next generation of leadership.
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