the future, as future-leader development practices mature, it is likely that senior leaders will be more involved with growing the next generation. Companies that report greater involvement by senior management in developing future leaders also report a higher level of confidence in their ability to meet future growth needs by drawing on high potential talent (Spearman’s rho = .221, p < .05). Thus, it seems clear that the active involvement and commitment by senior management is pivotal to building a deep pool of talent.
Practices in Identifying and Developing Future Leaders
Commonly sought characteristics. The overall picture of what companies are looking for in their future leaders suggests a melding of traditional individual strengths—like courage to make the right decisions (75 percent of companies endorsed) and decisiveness (60 percent endorsed)—with a more nimble, relational style. When asked what characteristics they look for when identifying and developing future leaders, the number one response was the ability to build strong relationships internally and externally (86 percent), closely followed by openness to change and growth (81 percent).4 In contrast, only 57 percent emphasized the ability to identify and develop talent, reinforcing the idea presented earlier that talent development is not necessarily a core value or a strategic priority, even in companies that are seeking to improve their ability to grow future leaders. Only 45 percent of respondents emphasized superior intellectual abilities in their future leaders, an interesting and somewhat puzzling result given the increasing complexity of the global business environment. This result will be explored in more detail in Phase 2 of the research.
Exhibit 1.3. What Companies Look for in Their Future Leaders
(Percentage of companies that endorsed each ability, N = 111)
| • Ability to build strong relationships internally and externally | 86% |
| • Openness to change and growth | 81% |
| • Courage to make the right decisions | 75% |
| • Ability to motivate and inspire others | 75% |
| • Level of self-confidence | 70% |
| • Awareness of one’s own strengths and limitations | 68% |
| • Personal desire to succeed | 68% |
| • Commitment to the success of the business, even when personal sacrifice is involved | 67% |
| • A core set of leadership values that the individual lives by | 67% |
| • Broad, comprehensive knowledge of the business | 65% |
| • Decisiveness | 60% |
| • Ability to identify and develop talent | 57% |
| • Superior intellectual abilities | 45% |
| • Other | 12% |
Identifying future leaders. Nearly two-thirds (62 percent) of companies reported that they tell individuals they are perceived to have high potential, but many respondents qualified this statement by adding that the conversations happen informally and inconsistently. Of the many issues companies are grappling with in this area, how to communicate to the organization that certain individuals have been targeted as future leaders is apparently one of the most daunting. Some companies fear they will inflate the expectations of talented managers and then disappoint them. Others are concerned about anointing heirs apparent, who then may grow complacent and lose their drive to succeed. Still others are concerned about demoralizing solid performers who are not identified. These concerns are often exacerbated when the company culture is highly egalitarian (so no one is “special”) or where employees do not often get direct performance feedback. Managers of future leaders are key to this feedback process, but our early investigation suggests that companies do not prepare their managers adequately to communicate the right, balanced message to future leaders and also to engage in real dialogue with them about their career interests, family and personal needs, and all of the other issues related to advancement and assuming more significant responsibilities. (See also chapter 2 for reasons that organizations tend to be naive about what it means for individuals to climb the corporate ladder.)
Developing future leaders. In developing future leaders, companies rely heavily on internal resources, particularly the managers of those future leaders. An actively involved boss was the most important development resource, cited by 84 percent of companies. The second most important experience was stretch assignments (endorsed by 71 percent of companies), followed by mentoring and internal coaching with senior executives. Peer contact and feedback, in contrast, were endorsed by less than half of the companies, both of which are experiences that the Voice of the Leader research (Corporate Leadership Council, 2001) suggested up-and-coming leaders value and would like to have more of. Stretch assignments and actively involved bosses were also the experiences rated as being most effective in developing future leaders. Development assessments by outside consultants ranked third in effectiveness, even though only half of the companies reported using such assessments as part of the development process.
Larger companies, on average, tend to use a greater variety of development experiences to grow future leaders (Spearman’s rho = .315, p < .01). Thus, while larger companies have a more diversified portfolio of development interventions, there is not a great deal of difference in the kinds of experiences smaller and larger companies rely upon. In terms of what does distinguish these two, our early interviews suggested that larger companies rely on internal executive education and formal action-learning projects more frequently than do smaller companies. Companies that use a greater variety of experiences in developing their leaders are also more confident that these leaders will meet their future growth needs (see exhibit 1.5; Spearman’s rho = .205, p < .05). Providing a greater diversity of experiences to future leaders may prove effective on two fronts: First, it suggests that companies are tailoring the experiences to the individuals (that is, there is no boilerplate plan that is being applied to all future leaders). Second, it suggests that individual future leaders are being developed through a variety of methods in order to develop a greater breadth of skills, perspectives, and abilities.
Exhibit 1.4. Experiences That Companies Rely on to Develop Future Leaders
(Percentage of companies that endorsed each activity, N = 105)
| • Actively involved boss | 84% |
| • New, significant roles that stretch individual | 71% |
| • Mentoring relationships with senior executives | 70% |
| • Coaching relationships within company | 67% |
| • External executive education programs | 67% |
| • Formal development planning | 67% |
| • In-house executive education programs | 54% |
| • Use of outside-the-company coaches |
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