In the 1970s companies aggressively worked to reduce costs because of increased competition from lower foreign labor rates, and elevated oil prices. There was a drastic reduction in the investment in people. Training, developmental assignments, and coaching time were minimized or eliminated.
What tends to happen when leaders are not fully developed is that they spend too much time doing work at levels below their position, such as line supervisors working as tradesmen or craftsmen. Managers spend time backfilling for the supervisors. Human capital costs more because of this dislocation; people are being paid to work below their job description. What an incredible waste of leadership capacity.
A lot of organizations are confronted with a problem when they need to expand or improve their leadership team. Internal potential leaders leave due to retirement, because highly talented people are drawn away by better opportunities elsewhere or they are dissatisfied.
When leadership development has not been a priority, organizations look outside of their own talent pool and attempt to hire leaders from the outside. The problem is other organizations are also looking to hire from the same limited talent pool. Sometimes a highly talented person is found, and they are offered premium pay or other costly perks to accept the position. Organizations pay dearly to recruit candidates with no guarantee that the newly hired leader will perform to expectations.
This approach is difficult to sustain because corporate wage policies and market forces limit how far hiring managers can go. There’s also the risk that they will "jump ship" at the next better offer. Outside recruiting is not a good answer for filling leadership gaps.
Why not develop people already in your organization? Grow leadership from within. There are prospective leaders already in your organization, and you have a shared history with those persons. If you grow your own leaders, they are more likely to recognize that they work for an organization that cares about their success. When people feel valued they have much greater loyalty. Yes, some of these leaders will leave for better opportunities, but it will be harder to leave.
How do you know who the prospective leaders are?
You need to be engaged and observant. When growing your own leaders, your top priority should be to identify prospective leaders by determining their work values. Their work values are much more important than technical skills. Work values are what the person believes is important; this is critical, because what a person values will drive where they allocate time and how they make decisions. Each level of leadership has a different set of work values. For instance, front-line supervisors should value getting results through others, success of their team (not their own success), and removing barriers to their team’s performance.
How do you determine what work values a prospective leader has? There are indicators if you know where to look.
First, understand that values drive priorities. Look over the daily routine of the prospective leader. What do they get involved in? If their day is loaded down with meetings look at the meeting subjects, agenda items and the types of actions or decisions triggered by those meetings. Are the meetings aligned with good work values?
Second, have discussions with the prospective leader after important events; good and bad. Ask the person why they made the decisions they made. Listen closely for rationalizations ("I didn't have time.", "Operations caused it."); these indicate the prospective leader may have trouble taking responsibility, or that they may not focus enough time on planning and preparations.
Third, observe the content and areas of emphasis in plans or strategies. Think about where this person places the greatest importance. Do they focus on areas that are appropriate for the person's current leadership level and future responsibilities?
Another priority is to determine is the prospective leader's history of getting things done. If prospective leaders do work below their level, they will not be empowering and leveraging the team’s capability. Do they procrastinate in their current position? The chances of acting differently at a higher leadership level are unlikely.
One caution is that you need to make several observations so that you are not forming an opinion on too few examples. When you see patterns, there is an opportunity to coach prospective leaders. Provide positive reinforcement and appreciation for work values aligned with future positions. Take time to explain non-aligned work values and encourage improvement. Growing your own leaders allows better control over your leadership team’s future.