Building Healthy Leadership Pipelines

by: Issues: March / April 2015. Tags: Leadership. Categories: IBJ Insights.
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There is no question that leaders can make or break an organization. But to maintain success over the long-term, organizations need more than a great leader—they also need a great leadership pipeline.

Unfortunately, when it comes to ensuring the development of future leaders, even the best CEOs can fail to give pipeline building the attention it deserves. The trick is to think about leadership pipelines in the same way that an energy firm thinks about building pipelines that carry oil to market. In other words, as with any long-term infrastructure project, building a heathy leadership pipeline requires time, attention—and a significant commitment of financial resources.

The good news is that attention to leadership development ensures that an organization has the right people in the right place today. And this allows existing leadership to better focus on more immediate matters by giving them the peace of mind that comes from knowing the future organization will be in good hands. This is a real benefit, one that many organizational stakeholders (such as directors, shareholders, employees and clients) care about—a lot.

So how do organizational leaders get this peace of mind? Here are three steps to follow:

First, when developing a strong leadership pipeline, the first thing an organization must think about is the “product” the pipeline will deliver, meaning it is important to identify and target employees with the most potential for leadership positions.

At the Ivey Business School, we have identified three components of great leadership: competencies, character and commitment. Organizations tend to focus heavily on competencies and commitment, perhaps because these are the easiest to assess. But while character may be the hardest to measure, it is also the most important in defining leadership success. Ivey research has identified 11 inter-related dimensions of leadership character: Accountability, Collaboration, Courage, Drive, Humanity, Humility, Integrity, Judgment, Justice, Temperance and Transcendence. As noted in the IBJ article Developing Leadership Character, these dimensions work together, and excess in one dimension, without the capacity to dial up or dial down in another, can turn virtue into a vice. Drive without integrity, for example, can lead to self-serving goals.

Second, organizations also need to ensure that employees are allowed to develop in roles that push them beyond comfort zones. Leaders need to stretch, and sometimes this means placing a person in a role for which they may not appear quite ready, at least not on paper. In this regard, senior managers must balance the need for leadership development with the risk of failure. This means being able to step back and watch people learn through adversity – and, yes, this can create setbacks. Keep in mind that healthy leadership pipelines are developed via mentoring, not micromanaging.

Finally, organizations must invest in their leadership pipeline. Investments in things like executive development programs, executive coaching and mentorship initiatives are investments in people that offer the dual benefit of building both competences and commitment. Sending someone to an off-site program for three days is expensive, but there is a significant ROI since it gives high-potential employees the time and space they require to really focus on building new skills, new knowledge and a new capacity for judgment.

At the same time, these investments signal a commitment to future leaders. And when valued employees see this, they double down on commitment back to the organization. This is the essence of the win-win mindset that characterizes the best of leadership pipeline thinking. As one CEO recently told me, “We view Ivey’s executive programs as a key part of our retention strategy.” To ensure pipeline success, of course, senior managers need to show personal commitment to people development by investing their own time and effort in these programs as well as financial resources. This requires a mindset that looks beyond today’s results to the long-term future of the organization.

The big thing to understand is that smart companies do not spend real dollars on leadership development in an attempt to buy employee loyalty; they invest real money because not investing in people always comes back to haunt an organization.

Talented employees who don’t see a commitment to their development will jump ship. And if there is one thing that keeps CEOs awake at night, it is the prospect of losing key people to competitors and not being comfortable with prospective replacements. In other words, just like in the oil patch, paying attention to pipeline development today will ensure peace of mind about the future.

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