Among the smartest organizations today, there’s an understanding that managing talent is about playing the long game – assessing who might be the most valuable assets to your company in the coming years. The savviest organizational leaders are thinking big-picture, asking questions like – who might make a good CEO 10 years from now?
This is always a key consideration to keep in mind, according to HRE Online. The news source noted that, per research by Temple University and the University of Missouri, the average tenure of a CEO is just 7.6 years. Furthermore, the Harvard Business Review found that 40 percent of chief executives fail in their first 18 months on the job. That means that you might need to find your next head honcho sooner rather than later.
Jean Martin, executive director of the Arlington, Virginia-based Corporate Executive Board, told HRE Online that finding highly qualified people to reach the top ranks is a major challenge that faces today’s companies.
“It’s a hugely significant problem,” Martin said. “High-potentials are the cornerstone of the workforce, and in particular the future workforce, and companies are consistently getting it wrong.”
What can be done? For one thing, companies need to do a better job of identifying candidates early in the game.
Identifying high performers
Part of the challenge is to identify people who are doing their jobs at a high level right now. Who are your highest performers right now? Michael Lamb, senior partner at Los Angeles-based Korn Ferry, told HRE Online that answering this question is certainly one factor in the leadership equation, but it’s not the only factor.
“When asked why someone is considered a high-potential, most organizations will say, ‘All of her projects are done on time and under budget, her customers really like her and she has low turnover with her own internal talent,'” Lamb explained. “That says nothing of her potential to lead.”
Doing your current job well is certainly important. But what if leadership requires an entirely different skill set? If you work at a newspaper, being a good reporter is valuable, but does it qualify you to be an editor who manages 100 reporters? That’s a tougher question.
Searching for long-term potential
Rich Floersch, executive VP and chief HR officer at McDonald’s, told HRE Online that finding people with high potential for the future can be challenging. He says that at McDonald’s, high-potentials make up only 20 to 25 percent of the total workforce. When looking for people with potential, he explained, it’s not all about people’s short-term accomplishments.
“Individual year performance should not drive a change in potential,” Floersch said. “Some of the challenges that arise may actually be some of the best learning experiences.”
Enduring a rough month – or year – at the office might be difficult, but it might make an individual stronger in the long run. Ultimately, developing leadership is about turning smart, capable people into real contributors who are experienced and battle-tested.