Let’s be honest: leaders aren’t born; they’re made. Experience and guidance can turn the average manager into a potential top executive. Before someone can be put into a leadership role, they must be capable of understanding the leadership state of mind.
“Replacing people” is a dying practice. Developing leaders and grooming them for succession is what helps companies stay ahead of their competition. According to an article by Recruiterbox:
The total cost of hiring one new employee could be as high as $5,000
That being said, it’s surprising to see how little global corporations invest in their long-term leadership development. According to the Deloitte University Press:
86% of HR and global organizations cited leadership as a top issue
But only 6% of these organizations believe their leadership pipeline is “very ready”
The data above proves that organizations around the world understand the value of longevity. Having high-quality leadership today is great, but being prepared for tomorrow is what successful businesses are made of.
So here are four steps you can take today to actively build a team of potential leaders:
01. Define/identify your ideal leaders
If you’re trying to build a healthy leadership pipeline, the first step is going to be actually identifying the talent. Generally, there are common themes that most of these high-potential employees share. According to this Forbes article:
These employees have a sense of strategic perspective, direction, and clarity
Highly promotable leaders show the ability to produce excellent results
High-potential leaders have a deep understanding of how the business works and the technical issues that are fundamental to success
Once you’ve picked your high-potential employees, focus on teaching them the skills that will produce your ideal leader. If you’re looking for inspiration, here are the three skills a leader must have, according to this Inc. article:
Innovation competence: These employees need to learn the specific skills to create a safe environment where individuals and teams are not afraid to risk and will push new ideas
Political competence: These employees need to learn the micropolitical skills that leaders use every day to implement agendas and achieve results
Managerial competence: These employees need to acquire the skills of enhancing others through career development, coaching, and reflective listening
There are a variety of ways you can teach these lessons. Mentoring is one of the best places to start when it comes to tackling this issue. In fact, according to this Chronus article:
71% of Fortune 500 companies offer mentoring programs to their employees
Mentorship is popular and for good reason: there’s nothing like being able to turn to a top-level executive for guidance and support. If you’re able to teach potential leaders those lessons successfully, you’ll be one step closer to developing your future leaders.
02. Get leadership on board
OK, so this might seem like something that’s purely symbolic. But frankly, all the educational events in the world won’t make a difference if your leadership hasn’t bought in to the idea of long-term leadership development.
Here’s the deal: remember what we mentioned about experience and guidance earlier? Well, those are both much easier to get when the top levels of leadership are willing to provide it. More importantly, make sure to get the top-level executives involved as soon and as visibly as possible.
Let’s face facts: some people aren’t going to think leadership training is serious. They’ll think it’s some forced managerial exercise. Once they see that the top-level executives are on board, they’ll be more likely to realize that long-term leadership development is here to stay.
03. Start measuring everything
Knowledge truly is power. Possibly the most important aspect of this process is actually keeping track of your leadership pipeline. This pipeline shouldn’t be some arbitrary concept that only comes up every six months in business meetings. It should be seen as a critical part of your business plan from now on.
By keeping track of what an employee’s strengths and weaknesses are (mostly through the use of performance reviews), your company can make educated decisions about each employee.
For example, if a performance review shows that a high-potential employee has been successfully delivering results, that would be an indication that they deserve a training opportunity. Things like interpersonal skills, analytical thinking, and work experience should all factor into these decisions as well.
According to the Harvard Business Review, Ken Lewis, the CEO of Bank of America from 2001 to 2009, would meet every summer with his top executives and review each executive’s talent pipeline. Sending potential leaders to weekend seminars is a good place to start, but keeping track of the growth of your company can be the difference between a good company and an extraordinary one.
04. Transparency is the best policy
When it comes to the conventional company approach to succession strategies, employee standing is generally kept a secret. By keeping the employee out of the loop, top-level executives can change their minds at the last minute without worrying about disappointing an employee.
Just one problem: it’s hard to hit a target with your eyes closed. If an employee is struggling in certain areas, bringing that to their attention is a great way to encourage growth. If those issues are never addressed, the potential leader’s chances of being a candidate for succession are reduced dramatically.
The best way to handle this? Make your employees manage part of their own development plans (with supervisor reviews, of course). Henk Jan van Commenee, talent management specialist at Raet, says, “In this way, employees will actively improve the way in which they can be found inside the organization.”
Have your employees keep track of their strengths and weaknesses and possible succession scenarios. Giving feedback then becomes as simple as discussing what they’ve written down.
When it comes to the future leaders of your company, don’t leave things to chance. Figure out whom your potential leaders are. Take the time to keep track of your high-potential employees, mentor them, and provide them with opportunities to learn and grow.
Better yet, develop honest communication between your potential leaders and their managers. When it comes to setting your company up for success, developing a healthy leadership pipeline may just be the smartest investment you ever make.
Editor’s Note: This post was originally published in July 2015 and has been updated for freshness, accuracy, and comprehensiveness.