CREATING A WAVE OF TALENT
An integrated leadership development process creates a wave of talent, that can be directed into a succession pipeline for GM and CEO positions.
WHY THIS HAPPENS
HR is typically delegated the task of building leadership within a company, but only allocated a meagre budget for this crucial task. This means HR is forced to design their own low-cost internal leadership training courses for middle management, and hire outside facilitators to run them. Meanwhile, senior managers go offshore to some expensive Ivy League Business School to gain a badge of honour they can boast about on their CV. But what does this route offer in terms of building an integrated strategic leadership platform?
From an overall organisational perspective, this fragmented approach does little to build a high performing business. It fails to provide the CEO with successors to choose from when GMs and team leaders change direction and head to another company to pursue their career aspirations. Even worse, the business becomes dependent on external hires, which costs 15% more than promoting internally. Many ‘shiny’ outside hires arrive with polished CVs, yet when the rubber hits the road, they lack the leadership skills and cultural fit required to add horsepower to the senior management team.
THE COST AND RISKS OF USING IN-HOUSE TRAINING FOR SENIOR MANAGERS
The cost is literal as well as figurative. Assuming the new hire is replacing a former manager who was receiving a salary of $300,000, the on-boarding premium could exceed $45,000 annually (over and above the cost of an insider successor) for every year they’re employed by the Organisation – and even more if they start bringing across colleagues from their previous job. Research suggests that the overall cost impact of replacing a talented manager is three times their salary, so in this example, the actual price tag is $900,000.
RHONDDA – THE HR SUCCESS STORY
Let me tell you about Rhondda, who has one of the most impressive HR success stories to come out of ISL in the last 17 years. Rhondda accelerated through multiple career checkpoints, squeezing every drop from the learnings, skills and tools she acquired along the way. Her first step up was from team leader to general manager, and ultimately, she took her place on the podium as Group CEO.
Early on, HR identified Rhondda as a gifted manager with significant potential who was somewhat dysfunctional as a leader. Given the initial success with John Wayne, HR decided to invest in Rhondda as the second step in creating a driven team of ‘high potential successors’.
One Sunday afternoon in the mid-2000s, Rhondda arrived at our Leadership Programme for High Potentials in the Queensland Rainforest (a hinterland retreat with awe-inspiring views of the McPherson Ranges). During the ‘get-to-know-one-another’ session, Rhondda proudly announced that she grew up on an impoverished Welsh Council Estate. “I’ve got to where I am as a manager by grit and determination, without any fancy university education,” she declared.
The week was a rollercoaster ride for Rhondda. Resort staff told us that her Syndicate was up late most nights, calling for bar service into the early hours. Our faculty crew were challenged; we had to keep reminding each other to ‘trust the process’.
At the end of the week at the wrap-up session, Rhondda said the course had been “a bit of a life changer.” As she walked out the door, she mumbled “Just watch this space!”.
Rhondda called each of her direct reports early that Saturday morning, as soon as she got far enough down the mountain to get mobile coverage. Apparently, she told each of them with her characteristic determination: “I’ve changed; you will change. We will all step up!”. She meant it – and, fueled by her new understanding and skills, she made it happen.
HOW HR CREATED A ‘PIPELINE-OF-SUCCESSORS’ AND A ‘WAVE-OF-TALENT’
Within six months, Rhondda was promoted to GM, taking responsibility for 2,000 staff. Three years later, the HR department of her organisation was on the phone to us again. “Hey Geoff, we want to develop Rhondda further. Your ISL team did an amazing job setting her up to step up to GM; now we want you to provide her with the strategic competencies to prepare her to be a CEO succession candidate. In fact, we need more people like Rhondda in our Organisation. We would like to meet to create a development and succession plan for our top three tiers. We need to look at the skill gaps and tailor an advancement solution”.
This time Rhondda attended the Strategic Leadership Programme at Millbrook. This amazing campus in the foothills of the Remarkables is a safe haven where senior managers can view themselves through the lens of other senior managers, and test themselves and their thinking in a confidential environment.
At her first session, Rhondda informed her coach that she was preparing for the ultimate ascent: to the CEO office. Sure enough, in 2013 Rhondda reached her goal – she was appointed Group CEO of one of the largest businesses in Australasia, with over 12,000 employees. Soon after taking up her new position, Rhondda called and asked for a place on the two-day CE CLASS, so she could test her ideas and plans with a small group of experienced chief executives.
Rhondda worked hard to fulfil her vision: “creating a wave of talent”. All her direct reports attended the Millbrook Programme to “build a robust leadership foundation”. It took Rhondda three years to embed her leadership processes throughout the company – but in that time, the Organisation saw a shift from ‘silo culture’ to ‘high performance culture’. Crafting an ‘uncontestable’ strategy and ramping up staff and customer engagement enabled Rhondda’s Organisation to notch up a 20% growth in share price.
In February 2017, Rhondda and her family returned to the UK. On her departure, the Board chose one of her direct reports to be the interim Group CEO while they undertook an international search process. Unsurprisingly, the interim CEO proved to be a standout; he was made permanent Group CEO four months later.
HR STEP-UP FROM HEAD OF HR TO STRATEGIC PEOPLE PERFORMANCE PARTNER
What may be less obvious is that the real champion in the Rhondda story is the Head of HR.
The CEO grew to trust and value her and the contribution that she had made to ‘create a wave of talent’: instituting a fully-integrated learning and development platform; transforming the ‘Silo Culture’ to a ‘Culture of Performance’; and (most importantly) creating a pipeline of team leader, GM and CEO successors. The value she and her team added, enhanced peoples’ perception of her. Consequently, she was promoted from HR specialist to Strategic HR Partner; her voice and influence at senior management meetings increased significantly.
“40% of senior managers are considered “not prepared” to take the step up to the CEO role and 36% of middle managers are considered “unfit to lead”
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