HR needs a new “portfolio” approach to building leadership bench strength as digitalization complicates roles and succession plans.
Building the leadership bench is a major priority in 2019 for 67% of heads of human resources and 78% of talent management leaders, as HR helps to drive operational excellence and digital business transformation. HR leaders have typically filled the leadership pipeline with potential successors for specific positions or roles, but they need a new approach for today’s uncertain and rapidly changing times.
One of the challenges for leadership development is that most organizations expect more than 40% of leadership roles to be significantly different within five years. “This uncertainty around what the future of work looks like and what skills leaders will need to be successful makes it difficult to successfully build a strong leadership bench,” said Sari Wilde, managing vice president at Gartner..
Organizations reporting a strong leadership bench was a mere 13% in 2016. In 2018, 47% of HR leaders said their organizations struggle to develop effective leaders, and 45% said their succession management processes didn’t yield the right leaders at the right time.
In today’s complex and constantly evolving environment, where leadership is more complex and leadership roles are constantly evolving, progressive organizations take a portfolio management approach to building leadership bench strength, shifting their approach in four key ways.
Shift from supply-driven to demand-driven planning
HR has typically used supply-driven planning (assessing current roles and gaps in leadership supply). Organizations now need to develop stronger demand forecasting capabilities as well. Specifically, they should:
- Align leadership strategy to organizational strategy, not existing roles and vacancies.
- Design high-potential (HIPO) and succession processes that meet future, not just current, leadership roles and requirements.
Planning leadership strategy based on projected demand, not just current supply, has twice the impact on leadership bench strength as supply-driven planning.
Look broadly, not just deeply, in the organization
To safeguard your leadership portfolio against attrition as “destination roles” change over time, expand the search for future leaders across the entire enterprise, not just deeper in the organization. This requires increasing cross-organizational access to talent through broader transparency rather than static lists of successors and HIPOs, and encourage employees to aspire to leadership positions rather than assuming they will proactively do so.
“Sourcing and retention strategies should also be designed to include — and encourage — underrepresented groups, particularly given that 45% of HR leaders in the Gartner 2019 Future of HR Survey reported their leadership bench lacked diversity,” said Wilde.
Diversify potential career paths
Organizations typically organize career paths along a linear model that features an individual moving up a vertical hierarchy from level to level, all within the same role. This leaves successors narrowly prepared for one future role. A better option is to identify and develop future leaders for a few different roles and contexts. This doesn’t mean broadly preparing all successors for any leadership position; the focus is on designing leadership career paths around a few diversified experience requirements.
Preparing successors for more than one senior leader role has twice the impact on leadership bench strength than preparing them for only one role or for any leadership position.
Move from successor transitions to leadership team rebalancing
Leadership development and succession management strategies shouldn’t end after someone moves into the role. Evaluating senior leaders’ profiles against strategic goals and organizational needs and proactively realigning leadership benches is necessary to ensure continued strategic alignment. By regularly evaluating and rebalancing the leadership team, individuals can be reassigned based on complementary strengths, not just role fit.