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A study conducted by the Economist’s Research Unit suggests that CEOs have greater responsibility for talent management than ever before. [1] Traditionally the preserve of the HR function, talent management is emerging as a critical factor in developing competitive advantage and this has pushed it to the top of the organizational development agenda. Using data gathered from the leaders of 20 organizations across the world, the study outlines the methods CEOs are using to find, develop and replace their talent. This article provides an overview of the new strategies business leaders and CEOs are using to nurture their leaders of the future.
The Hands-On CEO
With CEOs taking a greater interest in organizational talent, the balance of responsibility for planning and overseeing talent management activities has gradually shifted away from HR. A report by Accenture shows that CEOs rank talent management as their highest priority, with many seeing it as a key driver of business success. [2]As a result, many CEOs now spend a substantial 20% or more of their time on talent management activities. [3]
CEOs are increasingly involved in the development of talent management strategies which link to wider business goals, with input from an ‘inner circle’ of senior advisors from across the business. The CEO’s inner circle takes an active role in spotting future leadership talent as well as providing the CEO with regular updates on the performance and succession potential of key individuals.
Talent Management by Example
Many leaders take an active role in talent management activities to set an example to managers across the business about its importance. Forward-thinking CEOs are using behavioral change as a means of embedding their commitment to talent management and encouraging their senior managers to 'do as I do'. This can be achieved where CEOs demonstrate an open communication style and devote time and increased availability to talent management activities. CEOs also engage in a range of specific talent management activities which add value and raise the profile of talent management across the organization. Examples include:
- involvement in the recruitment process, including interviewing candidates and providing input into key selections
- demonstrating commitment to the performance evaluation of their direct reports, including follow-up meetings and discussions of strategies for development
- improving retention of talented people across the business by holding regular informal meetings to discuss their development plans and forthcoming career opportunities (this demonstration of genuine commitment can prevent talented individuals being lost to competitors)
- attending a range of leadership development events to meet with key individuals and raise the profile of talent management activities
CEOs play a critical role in driving the talent management agenda and ensuring that all areas of the business understand the importance of developing and retaining talent at all levels.
Strong Succession Planning
As business environments become increasingly competitive, CEOs now have a greater awareness of the importance of succession planning to create organizational stability and continued business success. As a result, many CEOs directly contribute to decision-making regarding the succession planning pipeline.
CEOs are often involved in identifying potential successors for key posts across the whole organization. A popular approach is a three-tiered system, where individuals are identified and matched with key roles as 'ready now', 'ready later' or 'ready future'. [4] CEOs also take an interest in updating succession plans in consultation with their inner circle to ensure they are sufficiently forward-looking. In addition, some CEOs choose to link talent management to reward, where bonuses are dependent on senior managers' ability to nurture successors for critical roles.
Accelerating Potential Leaders' Development
Formal leadership and management development programs are a key means of nurturing internal talent, and CEOs are often involved in supporting and championing these opportunities and determining their focus and direction. A number of CEOs take an active role in the formulation of strategies to develop talent internally, including:
- establishing internal leadership academies where the curriculum is often developed in conjunction with leading universities and business schools
- creating internal development opportunities such as away-days and workshops which will grow leadership capability by focusing on improvement of specific competencies such as strategic awareness, motivation and influencing skills
- working in partnership with specialist services such as executive coaching and mentoring which complement existing development programs
- providing opportunitis for individuals to pursue further education, such as MBA programs
- creating opportunities for individuals to rotate through different areas of the business to increase and broaden their experience and business knowledge
Mentoring the Leaders of Tomorrow
The research shows that many CEOs mentor and coach key individuals, to help them prepare for a future leadership role. Increasingly, CEOs view themselves as the organizations' 'chief mentor' and are actively involved in a variety of mentoring activities. Some have ad hoc mentoring arrangements while others adopt formal 'mentoring contracts'. These outline areas of particular focus for the individual, such as improving key skills and competencies or pursuing new opportunities and projects.
Many CEOs carve out time for informal discussions, not only with their direct reports but for any employee needing advice on career or business issues. SOme CEOs hold regular 'open surgeries' or Q&A sessions, where individuals or groups come together to discuss key development issues. Other CEOs encourage employees to email them for career advice.
Conclusion
The successful management of talent depends on decisive leadership and clear direction. CEOs therefore have a pivotal role to play in setting the talent agenda, securing support and commitment for talent management across the organization and ensuring that talent management initiatives remain aligned with business objectives.
References[1] 'The CEOs Role in Talent Management: How Top Executives from Ten Countries Are Nurturing the Leaders of Tomorrow', The Economist Intelligence Unit in Cooperation with Development Dimensions International (May 2006).
[2] Virginia Matthews, 'What Keeps CEOs Awake at Night?', Personnel Today (22 May 2007).
[3] 'The CEOs Role in Talent Management: How Top Executives from Ten Countries Are Nurturing the Leaders of Tomorrow', The Economist Intelligence Unit in Cooperation with Development Dimensions International (May 2006).
[4]As above, page 30.
