You run a successful business. Your years of growth and profitability have given you the one thing that all businesses crave — stability. People like working for your company. Your management and executive teams are full of people who have been on board for 10 years, 20 years or longer.
You’re the envy of your industry, and everything keeps grooving along until one morning, you wake up and realize that time has a way of slowing down even the most well-oiled machines.
Now, a couple of people have retired, taking a career’s worth of experience and knowledge with them. A few others have found better opportunities elsewhere. Another few have left the work force to focus on raising families.
Suddenly, that all-star team you once had is now a roster pockmarked with holes, in desperate need of a rebuild. And your company is suffering because of it.
Where is that talent going to come from?
In professional sports, teams spend millions of dollars scouting the college ranks in advance of their sport’s draft for this very reason. They’re always in need of new talent to replace players who retire, get injured or move on to another team. And the world of business isn’t much different.
If you’re not keeping your pipeline filled with leadership talent, your business will find itself on a steady decline. That makes identifying and grooming the next generation of leaders one of the most important tasks on any business leader’s plate.
Leaders are both born and made. They have natural talents that lend themselves to leadership roles, but if those talents aren’t cultivated, and the person isn’t empowered to lead, that talent will never be maximized.
How are you to create your next generation of leaders? Now is the time to start thinking about it — before your hand is forced.
A cultural matter
The alternative to grooming leaders from within is to hire externally. Many businesses do that, and it can have the benefit of bringing fresh perspectives into the organization. But doing so is also risky; by rebuilding your leadership or management teams from external hires, you bring in people who haven’t been groomed in the organizational culture, and that can have long-term adverse effects for your business.
“All organizations have a culture,” says Lorraine Moore, president of Calgary-based Accelerate Success Group. “A culture can be cultivated or it can evolve, but every organization has a set of values it needs to live by. If you groom leaders from within, you take steps to strengthen and perpetuate that culture.”
The long-term health of a culture is dependent on the development of leaders — not just managers. Many businesses fail to recognize the difference between the two and develop people who are good at managing subordinates but who lack the vision and initiative to truly lead.
“Lots of people are good at taking a predetermined set of responsibilities and managing those who carry them out,” says Debbie Good, an assistant professor of business administration at the University of Pittsburgh’s Joseph M. Katz Graduate School of Business. “As a leader, by contrast, you have to have a vision and communicate it in a way that gets people to want to follow you. The communication aspect is very big, especially in this era where we have a lot of issues with face-to-face communication.”
Good says the dearth of quality leaders is due, in part, to a lack of emphasis on developing good leadership skills, both during formal schooling and as young workers matriculate into the workforce.
Over the past few decades, there has been more of an emphasis on developing team players who can flourish in a flat organizational structure. And while collaboration and peer relationships can be very productive, companies still need those with vision and initiative to fashion the big-picture direction and strategy for the future.
“For a long time, I think leaders got a bad rap,” Good says. “They weren’t recognized for altruistic things, only that they did what was good for themselves and their careers, so there was this focus on the negative view of leadership. Instead, we should have been focusing on the positive attributes of good leadership — the idea that great leaders can move an organization forward.
“It’s great to be a team player, but leadership is the ingredient that reinforces your culture and makes a business successful in the long run.”
What makes a leader?
A leader can’t be defined by a specific set of personality traits. Some leaders are extremely extroverted, while some lead with quiet confidence. Some are brilliant orators, and some can make their message heard with a few well-placed words. But apart from personality type, every leader has a certain set of qualities — and they’re qualities you should be on the lookout for among your own people. They indicate the raw materials of a future leader.
“Great leaders will show initiative and have integrity,” says John Murphy, founder and president of Venture Management Consultants, based in Palm Beach, Fla. “Those are two of the most foundational qualities any leader can have — that you’re willing to step up and take the reins of something and follow through on it, doing what you said you were going to do.”
Leaders also demonstrate a high level of self-awareness. Much like an actor on stage, they’re aware of their words and actions and how they’re being interpreted.
“In short, those with leadership qualities are going to demonstrate emotional intelligence,” Moore says. “They’re going to understand how they impact others. It’s something that factors heavily into the communication skills that are so critical for good leadership. Leaders understand that words are only one element of communication. Your actions, your mannerisms, even your facial expressions — all of it is a form of communication.”
Emotional intelligence also means having an awareness of the verbal and nonverbal cues of others. Good leaders are able to pick up on the signals of others and react to them. It’s a skill that goes a long way toward establishing a trust factor, which is essential to leadership. Without trust, you can’t lead.
“Are they good listeners?” Murphy says. “Are they observant? Do they pick up on the body language of others? Are they aware of not just their own capabilities but the capabilities of those around them? Great leaders develop a high level of understanding, which makes them trustworthy and believable. Leaders have credibility. If you have people on your staff with that level of awareness, you have people who are demonstrating leadership qualities.”
Technical knowledge is also a part of leadership, but a leader doesn’t necessarily have to have a granular knowledge of the work being performed by everyone on the team. What a leader needs is an ability to utilize data as an accountability and quality-control tool.
“Obviously, technical knowledge of the work is necessary, because you can’t have the blind leading the blind,” Murphy says. “Leaders need to have a head for data and use that as the basis for decision-making, because shooting from the hip is one of the worst things you can do in a position of authority. You must be able to do your due diligence on a matter and come to patient and thoughtful resolutions.”
The ability to analyze data plays into the trust factor, especially when reconciling disputes or conflicting viewpoints within a team.
“It means you’re striving for fairness,” Murphy says. “You’re not skewing your viewpoint, you’re trying to see the situation from all possible points of view. If you are fair, but with a sense of empathy, that all ties back to others and their willingness to have confidence in you.”
Training for the top
Finding those who possess leadership potential is only the first step in the grooming of future leaders. To form raw materials into a finished product, you need to take a multipronged approach to training that encompasses both real-world and classroom settings.
Good works with companies on the development of formal leadership training programs, and a fundamental part of her classroom training programs centers on the honing of communication skills. Even if a person is self-aware and empathetic, there is still a need to refine those qualities in leadership training.
“We really push the idea that you need to become an expert on learning how to read people,” Good says. “It’s something that I think the younger generations, in particular, need training with if they’re going to become effective leaders. Younger members of the workforce have become very tethered to their cell phone for communication, and that tends to cause the face-to-face communication skills to take a back seat.”
A person’s educational background upon entering the workforce can also play a role in the level of interpersonal skill development.
“Sometimes, if your area of study in college was very technical, like engineers, you didn’t put a lot of time or effort into developing the softer skills,” Good says. “That’s something we have to watch for. Someone might have natural leadership qualities, but they were never developed due to other factors.”
Outside of the classroom, mentoring — either one-on-one or in a small-group setting — is one of the most effective ways to educate associates on the essentials of good leadership. Mentors can provide individualized attention and can serve in a tutor role as a young associate is given increasing levels of responsibility.
“If you have particularly strong and knowledgeable members of your senior leadership team, and if they’re willing to mentor, take advantage of that,” Murphy says. “Let them learn from the masters, so to speak, and see great leadership qualities in action. Let them observe how you interact, how you get your message across, how you listen and learn.”
Murphy also recommends setting up projects that allow younger associates with leadership aspirations to contribute to an initiative in a meaningful way, but still under the watchful eye of superiors who can step in, correct mistakes and offer advice.
“I’ve consulted with companies where we’ve constructed projects that send younger leaders on fact-finding missions,” Murphy says. “They perform the research and bring the data to senior management. It’s a win-win, because it gives the established senior leadership a window into the company and how their people are performing, and it gives younger associates a chance to show what they can do. The ones who take the opportunity and run with it are the ones who are going to get noticed.”
Team members with leadership potential can be among the most difficult to retain. They’re high achievers who constantly seek out new challenges, and if you don’t provide those challenges, would-be leaders quickly get restless and start searching for other opportunities elsewhere.
A competitive salary is an ingredient in keeping a high achiever happy and engaged. But just about every data point that researchers can come up with suggests money is not the deciding factor in a high-achieving employee’s happiness.
“Money doesn’t keep people, but it can lose people,” Moore says. “What that means is, a lack of adequate pay is a demotivator, but adequate pay is a basic expectation. Challenging work and recognition of achievement are what really keep people. And that goes hand-in-hand with an organization’s ability to create a career path for a promising employee.”
The high achievers who will become your future leaders are seeking avenues for career advancement. They want to know that the company is a partner in helping them realize their potential.
“The satisfaction is going to come from self development,” Moore says. “The company can help with that through mentorship programs, or the opportunity to develop skills in an off-site setting, perhaps something like an allowance to take a course or attend a seminar in their field, or the opportunity to change roles with an eye toward developing new skills.”
Retention of future leaders is every bit as important as identifying and grooming them, particularly as baby boomers age out of the workforce in the coming years.
“It’s going to be particularly important over the next 10 years or so,” Moore says. “Due in large part to business owners retiring or selling, there is an estimate that says 50 to 65 percent of businesses will change hands over the next decade. If your business doesn’t have good people to take over those leadership roles, it is going to lag behind.
“And now is the time to start doing something about it, because it can take years to develop those new leaders.”