Leadership pipelines at some companies are still under construction, according to a survey conducted by AMA Corporate Learning Solutions.
“For a long time we were talking about [how] the boomers would all retire [and] we wouldn’t have enough people slotted to fulfill the roles,” said Sandi Edwards, senior vice president of AMA. “Well, at this point in time the boomers haven’t retired, and yet we still don’t have an adequate source of a pipeline.”
In December 2010, AMA surveyed 1,098 senior managers and executives and released the results late last month. AMA found that 43 percent said their senior management team is “sporadic in its commitment” to succession planning, 34 percent said their team is “genuinely committed,” and 14 percent said their teams just “pays lip service” to succession planning.
According to William J. Rothwell, president of Rothwell & Associates and professor at Penn State University, this is a problem. He said that one in five of all the Fortune 500 senior executives are currently retirement eligible. But after years of downsizing, there are no successors properly groomed to take their places.
“Many companies think, ‘Oh we’ll just go outside the company and if we pay enough money we will be able to find a qualified successor,’” Rothwell said. “That strategy may have worked at one time, [but] it is less likely to work today because every other company has also been downsizing. The training ground for senior executives is middle management, and the group most affected by downsizing has been middle managers.”
Edwards said developing future leaders, not just replacement leaders, adds to innovation, creativity and critical thinking. She also noted that current leaders may want to focus in on middle management to develop as leaders since it’s the part of the organization that’s productive, yet vulnerable to disruption.
According to Edwards, having a strategic and well-thought-out leadership pipeline helps everyone in the organization have a stronger sense of engagement. It also gives employees knowledge of where they contribute and lets them know that they have already been tapped for future development.
“People who are involved feel that they are valued [and as a result] are much more highly productive, so there’s a business case for it,” she said.
Edwards noted that planning for who will take over vital roles and what skills they will need in the future is important as well. Learning leaders should ask themselves: Where is the company now and where do they see themselves in a few years?
“What are the expectations of the growth, the productivity, the range of products [and] the geographies that the company will be touching?” she asked. “All those need to be taken into consideration as you look at future leaders.”
Edwards noted that it’s also important for any kind of leadership development program to be in sync with the strategic business objectives and initiatives.
“Succession planning does not do well if it’s in isolation, like a leadership program that isn’t linked to the strategic and business objectives of the organization,” she said.
Edwards stated that succession planning not only helps the organization run smoothly, but also helps employees be identified, developed and recognized. In all, it helps employees understand what part of the big picture they’re in and feel good about the “placeholder that they occupy.”
“Essentially, it enhances the productivity of the organization [and] the performance of the people inside the organization,” she said. “You’re going to get a much healthier, much more robust organization and much stronger creativity, collaboration and better critical thinking from those people.”
Rothwell agreed. “If we promote a middle manager to senior management, then we need to have a front-line manager prepared to move to middle management, and we have to have an individual contributor groomed to move to front-line management,” he said. Rothwell added that companies can’t leave it to the “whim of circumstance” and rely on external recruitment to meet their needs. “Can we really rely on that?” he asked.
Natalie Morera is an associate editor for Chief Learning Officer. She can be contacted at firstname.lastname@example.org.