Every business wants to grow, but with 60% of companies reporting a leadership shortage in 2012 according to research by Ernst & Young – an increase of 40% from the previous year – how can you be confident that your business is identifying who will be leading your company’s next growth spurt?
Identifying who your next leaders are, or could be, and then managing that talent has a quantifiable connection to your company’s financial performance, but very few business owners have a strategic plan to ensure they won’t be left high and dry when the next generation of leaders are required to take the reins. Ultimately, if your business fails to implement talent management plans, growth becomes impossible. Studies show that high-performing companies tend to manage their talent more effectively than their lower-performing counterparts. So, how do you make sure you don’t lose that growth momentum?
There are practical measures you can take to make sure your talent management programme fits your company’s future requirements. The first step is to increase your awareness of talent within your own business. Instead of looking externally for promising candidates, it’s much more efficient to identify and develop talent already within your organisation, thereby reducing recruitment costs, inspiring loyalty and encouraging current employees to commit fully to the future of the company by looking upward for their next career move instead of looking outside the company.
In order to achieve this, you need to know what you’re looking for. In other words, you need to develop a record of skills and leadership competencies specific to each role. Identify the most important success factors. Think about what kind of person performed well in the role previously. What kind of person didn’t? What are the major challenges the team faces and what kind of person will best lead through those challenges?
Many companies select the next candidates for leadership roles by choosing the employee who possesses the best technical skills to succeed a leader who shares those technical skills. This is often because technical skills are the easiest to quantify, but the best technical skills aren’t necessarily the most important aspect of a leadership role.
Our experience as a psychometric assessment company, working with thousands of businesses to maximise their talent management programmes, shows that the majority of leadership issues are to do with behaviour rather than technical competencies, so having a structured framework in place to identify which soft skills are important for each role offers a constructive solution to a nebulous problem.
Communication skills, an ability to manage junior members of staff, a strong relationship with customers or clients, and the ability to adapt well to change are often skills that contribute more significantly to a new leader’s success.
Identifying which attributes you want to encourage and hone will make your talent management strategy much more streamlined and efficient and, for an SME, is absolutely vital to allow you to make informed decisions about who to train and where to invest your development budget.
If you’re struggling to know where to start, or how to assess the skills you’ve identified as being key, there are various tools available that can help you identify core skills and inject objectivity. A tool such as the Thomas International 360, which provides information on specific competencies by gathering feedback from both the candidate and anonymous peers and managers to offer a complete picture of an individual, can help you identify individuals with the right qualities to become leaders of the future.
Resources like this can be useful as the basis for development work with managers, leaders, supervisors and promotion candidates. Using this type of framework can help highlight issues that would otherwise remain undiscovered, address sensitive issues in an objective way, open up a constructive dialogue between current, and potential future, leaders and give managers insight into competencies to develop.
Simply taking the time to assess what you’re looking for and how you’re going to measure whether you’ve found it in particular individuals will give you more control over how your business is going to grow and develop in the future.
Adopting a more disciplined approach to talent management does take time but will give you the peace of mind to know you’re thinking strategically about the future of your business.
Successful companies take a longer-term approach to leadership development, and extend their succession planning beyond their current leaders to encompass other high-potential employees across the organisation. By factoring in a more structured framework to develop talent internally and identify key competencies for each leadership role, alongside utilising tools to assess, measure, feed back and act on insight gathered, your company will be in the strongest position to ensure its continued – and consistent – growth.