Filling the leadership pipeline and planning for succession rank high on every company’s priority list, especially since CEOs’ length of tenure is declining and internal candidates are the main source of talent. The grooming of leaders throughout an organization is absolutely critical for international competitiveness, core competency and corporate distinctiveness.

Strategy as the driver

The need to compete in various and changing international climates has wiped out the old assumptions about stability, advantage and long-term planning. Strategy is more and more a series of options along a continuum. Companies need talented people with the global mindset, competencies and commitment to execute strategy both today and in an increasingly unknown future. Clients and other key stakeholders rely on it. International leaders need to be able to navigate the complexities of the transnational business environment. They must articulate the corporate vision and strategy from a multi-country, multi-environment and multi-function perspective, so that they connect and engage all people. The teams that they lead need a set of values and a global affinity that respect and build on the strengths that each of the regional or national businesses brings to the collective corporate capability.

High-performance global companies must create an inclusive culture where people feel that their interests and those of the company are much the same -a culture where people are self-challenged and oriented around a clear purpose. In this type of culture, motivation and a sense of belonging stem from shared values, doing work that is interesting, challenging and has meaning, being able to make choices with professional integrity and making a difference. People who work in such a company are not motivated primarily by financial reward-after all, the best people can always get that. Global companies with strong, respected cultures continually attract and retain the best talent from around the world. The Corporate Leadership Council’s study on succession management (Hallmarks of Leadership Success, Washington: Corporate Executive Board 2003) revealed that organizations with top-tier leadership teams achieve shareholder return that is10 per cent higher than that of their industry peers. This highlights the business imperative for disciplined talent management.

To develop a leadership pipeline, companies need to identify the key people with the ability to take on greater responsibility in the future, and adopt strategies associated with gap analysis, reduced risks, recruiting, international assignments, on-boarding and development.

The process should be broader than pure “succession” so that it touches all aspects of talent management, from sourcing to retention, assessment to engagement, and development to deployment. It is equally important that the executive group is involved. They should have a borderless and informed view of key contributors several levels down in the organization. They also need to take a holistic approach to the process so that the sharing of talent against global business goals, and the identification of cross-function or offshore moves, can act as a development and risk prevention tool. This article will describe how to create a smoothly functioning global talent pipeline.

Talent mapping sets the agenda

Organizations often assume that having a good group of talent will automatically provide them with a strong backup for newly created roles or roles that become vacant within and across regions.

The problem is, of course, that high potential doesn’t necessarily translate into high performance at the next level, and high performers don’t necessarily have the potential to take on broader responsibilities in the future. Moreover, they may not be a good match with the cultural values of the organization. It is useful to think about talent in terms of both performance and potential, and to take a hard look at what development and retention strategies are needed. (The Leadership Pipeline, R. Charan, S.Drotter, J. Noel, 2001 Jossey-Bass.)

High-performance and high-potential individuals need accelerated development, exposure to different cultures, appropriate rewards and opportunities to keep them learning and growing. They are often targets for head-hunters, so giving them a very personal reason to “stay, belong and contribute” is necessary. It is easier to retain high performers when they are receiving a clear message that they are valued and being groomed to take on more responsibilities. It is critical that these individuals get the right experiences, including international assignments. Some companies also map external talent or successors for future skills upgrading or recruitment.

High-potential individuals who are new in a role may not yet have achieved their full-performance level. At times like this, the retention and development connection comes into play-with coaching, training and experience, their performance can rise to meet the organization’s expectations. While these individuals value reward and career advancement, they also appreciate and personally value the investment in their learning and education.

People who are high performers but who will not progress to another role are also important to the business, and their contributions should be recognized. They should be given opportunities to adapt or develop new skills that will preserve their relevance to the organization — for example, teaching others or becoming knowledge coaches. You need to make sure they are productive and motivated and do not feel that they are being taken for granted. Low performers with low potential need analysis. Sometimes, out of loyalty or a sense of compassion, the wrong person is left in a role too long. If the person is in the wrong role or at the wrong level, there may be some action needed to retain the person. If it is better to part ways, use the organization’s power with restraint and compassion.

Note the roles or skills that are likely to be in demand, plus the positions that are business-critical and difficult to recruit externally. Think through the shifts in global market share and how this will drive the need for talent. Look for gaps in the leadership pipeline. Look at key people who may be “at risk” due to plateauing, motivation, reward expectations or work-life balance.

The level of transparency a company adopts around these talent plans is a matter of culture, leadership style and having the systems to make it happen. It is often a matter of degree. Traditionally, the view was that if succession plans were kept “secret,” then those who were not on the fast track would not become de-motivated. Also, if the actual succession decisions did not reflect the original plans, there was less need to deal with unmet expectations or disappointments.

Today, more companies believe in being open and honest. They also believe that the individuals themselves should be involved, as they are a good source of information about their skills, experience and the development they need.

Some companies actually communicate that an individual is part of the talent pool. Some even go as far as highlighting the positions for which they are being groomed, or where the individuals are on the “career opportunity map” — the document that details the sequence of roles a person can expect to hold in order to get to a certain position. Transparency around development objectives helps people know that they are valued and the organization is investing in their career.

Diversity and demographics for a deeper pool

Globalization has clearly put diversity and meritocracy on the agenda. Diversity is valued in the broadest sense, including diversity of experience, style and thinking. It is important that the talent pool reflects the diversity of the client base and the communities and regions in which the company operates. Experience in “crossing borders,” — whether they are physical, cultural, linguistic, or socioeconomic or emotional borders — are a key ingredient for successful leadership in today’s global world. (New Faces of Leadership, by A. Sinclair and V. Wilson, 2002, Melbourne University Press.) This experience helps produce culturally adaptable leaders with an awareness of diversity.

Retaining talented women is a key concern. There has been little change in the number of executive women in corporations over recent years, and this is true on a global basis. It may not be “just a matter of time” for talented women to make it through the pipeline. Research from Catalyst shows that companies with a higher representation of women in senior management positions financially outperform (35 per cent ahead on return on equity) companies with proportionally fewer women at the top. (The Bottom Line: Connecting Corporate Performance and Gender Diversity. January 2004, Catalyst). There is a real business case to look for solutions.

The developed countries have aging populations and shrinking labour pools. Notions about retirement are changing. The concept of transitioning from full-time employment is gaining in popularity as more people aspire to change the way they participate in the workforce. Examine your turnover, age profile and potential retirement statistics. Plan for the social and macroeconomic imperatives of demographic change. The challenge is to encourage more people to enter or stay in the workforce.

Global businesses cannot be complacent about enhancing the employer-of-choice proposition. The leadership team should signal that diversity is a strategic goal, model the diversity message and be committed to achieving real outcomes for both women and men. The objective is to attract and retain the best talent, working together in an inclusive environment.

Personal development nurtures the global executive

People with global skills are very aware that their experience is unique and in demand. They look for high-performance firms that respect their global expertise and provide rewarding learning experiences with international leadership opportunities. The most valuable personal development is challenging and experiential; it broadens skills, builds expertise, gives the opportunity to work in other countries and cultures, tests judgment, gives autonomy and promotes visibility.

The aim is to build a culture of development with the right learning. This can include a range of approaches: making sure that emerging talent is given the right leadership education from a leading business school; accelerating development for a high performer; providing the support needed to help a successor make a transition; or giving seasoned executives new learning to remain current. It can also involve giving the high performer an offshore move or a position on a global taskforce. Mentoring from successful executives in other regions, and multiple role models, also play a part.

Leadership is intellectually simple, but behaviourally complex. As many executives “manage in the moment,” actionable feedback helps them interpret what they see. It can be difficult to get through to people-even those who are smart and intelligent-to assess their values, level of “emotional intelligence” and changes in skill sets, so that adjustments can be made on how they spend their time or if they are operating at the right level. They need to “look in the mirror and out the window.” Real change will only occur if there is both a cognitive and emotional need to do so.

Executives often need a “transitional space” to help them understand and evaluate the “inner theatre” that drives their behaviour. This helps them experiment with changes in their leadership in a safe environment. They also need help to think about what could derail them from the fast track. Executive coaching, if done right, helps the individual envision the future and its possibilities while shaping tangible goals and prioritizing concrete action. It provides reflection time-a rare commodity within fast-paced organizations.

The executive group can incorrectly assume that all key talented individuals have the same career growth ambitions. But burnout, boredom, lack of challenge, a desire to repatriate for family reasons, dissatisfaction with work-life balance or a sense of “Is this all there is?” can affect even the most talented people. Some work their own way through the slump, while others need help. It is important to watch for the signals and mentor the person through this phase. Sometimes critical positions cannot be filled internally, or an opportunity exists to “buy in” some top talent. The selection process is critical, but so is the support needed to help these people navigate the culture, decision-making structure, and relationship networks.

Winning the new global talent war

The truce in the global war for talent is over. The combatants may change, but the battles will not stop. Continue to think through, talk about and decide on actions to build talent. The talent pipeline process needs to be continuous. Its strength will determine corporate success in the international arena.