Are Companies Failing to Build Their Leadership Pipeline?
Despite effective leaders being the cornerstone of business
success, leadership pipeline planning isn’t happening, research by U.K.-based
global talent management provider Penna finds today. Conducted among 1,000 senior corporate professionals, Penna’s
research found that the majority of respondents (63 percent) do not know if
they have a leadership pipeline within their organization, or they don’t
actively plan for what their future leadership will look like. This trend is
further supported by Deloitte’s2015 Global Human Capital Trends Report, which
found that despite ‘building leadership’ remaining paramount within
organizations, little or no progress has been made in the last year. In fact,
the capability gap for building great leaders has widened not just in the U.K.,
but globally.
“It’s concerning how many organizations are failing to plan
their leadership pipeline,” said Penny de Valk, Penna’s talent practice
managing director. “At a time when leadership capability is a precious
commodity and critical to an organization’s success, we need to get better at
succession planning and developing leaders at all levels. Building a leadership
pipeline means being able to spot and develop potential and companies that are
doing this well have a real source of competitive advantage.”
This competitive advantage is echoed by the findings showing
that the organizations that do directly plan their leadership pipeline believe
it’s paying off with nearly half (46 percent) saying they have a good talent
pipeline of future leaders and almost a quarter (23 percent) going one step
further to say it is ‘very strong.’
“Considering that 30 percent of investor’s decision making is
based on quality of leadership, companies are taking a real gamble by not
planning,” said Ms. de Valk. “Investing the time in leadership pipelines now
will help organizations reduce the risk of future leadership shortfalls acting
as a drag on business growth.” The investment shouldn’t be limited to
succession planning within just the top team, she added. “A strong
pipeline should consider talent from across the entire organization — after
all, among junior teams could be budding future leaders and it is critical that
their potential is recognized.”. Penna research also uncovered other findings that seem to
dovetail closely with research compiled over the last year by analysts tracking
the executive recruiting industry at Hunt Scanlon Media.
According to Penna, twice as many respondents said they
prefer to use internal recruitment for senior level hires over external
recruitment (31 percent vs 15 percent). The greatest risk identified with
hiring a senior leader externally is “finding out the candidate doesn’t have
the skills or the aptitude they said they did, or what was expected” (46
percent). On the flip side, the benefit of external hires is that “they bring
fresh ideas to senior teams” (52 percent).
More than one in three said that one of the biggest risks of
hiring a senior leader internally is “finding out that their experience isn’t
as good a fit for the role as expected.” The benefit of internal hires is that
professionals “understand what will and won’t work in the business” and “know
the business inside out, therefore requiring less training and support.”
“Penna’s research is an important additive to our
cumulative knowledge of why succession planning is a required business
imperative for companies looking to maximize their human asset potential,”
reports Hunt Scanlon Media.
Written
by Scott Scanlon (4th Aug 2015)
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