What is a leadership pipeline, and how is it built?

---

Today, your CFO informed you she intends to announce her retirement next week. You’re happy for her—she’s had a long and successful career, and much of the organisation’s prosperity can be attributed to her invaluable experience and strong financial leadership.

But inwardly, you’re worried. This is a succession crisis.

Recruiting a new CFO and bringing them up to speed will take time which your organisation cannot afford. You think about the finance team and wonder if anyone has the potential to step up, but soon dismiss the idea. As far as you know, no one fits the bill.

You’re not alone. 77% of organisations believe they are experiencing a leadership gap. 80% of CEOs see a gap in their employees’ skills as a direct threat to their organisation during a time of rapidly emerging tech, disruption, and change. Persistent skills shortages and the need to drive performance despite dramatic changes to ways of working are putting pressure on leadership teams at every level.

What should you do? Should you reach out to external talent markets or search within your team to close the gap? How do you know what good looks like? How will you identify high potentials and gauge their readiness to lead? One thing is certain: you should have planned for this eventuality.

What is Leadership Pipelining? 

Leadership pipelining—otherwise known as succession planning—is a long-term investment in internal mobility. By defining the talent you need, assessing your team, and developing your pipeline to close the gaps, you will embed a continuous culture of identifying and developing your most promising people at all levels.

Note the term “pipeline.” We often use imagery such as “pool” or “bench” in talent acquisition, which can paint an inaccurate picture of a group of people all at the same stage of readiness to lead. But the reality is that every high-potential individual in your organisation will be at different stages in their leadership journey. Some will be at the beginning and may be one or two years away from readiness. Others are situated in the final stage of the pipeline and are ready to step up immediately.

The point is that a well-functioning pipeline will have future leaders continuously moving from one end to the other—and it’s up to you to create the powerful learning journeys to catalyse that movement.

Why is a Leadership Pipeline Necessary? 

Is a leadership pipeline really necessary, or will it just create extra work? Perhaps you’ve “winged it” in the past by successfully hiring external talent or making a snap decision to promote someone from within the team. For many of us, succession planning is a vague set of ideas in the head of the CEO rather than a concrete leadership pipeline model. Yet there are several benefits to formalising leadership succession in your organisation.

Preparedness

Building a leadership pipeline is about preparedness on two fronts:

1. Being prepared for immediate succession
2. Planning for the future

It’s crucial to determine the readiness of your high potentials; knowing who is equipped to step into the C-Suite at a moment’s notice, and having a plan to build the skills and experiences of those situated higher up the pipeline.

Engagement and Retention

We know that attrition is becoming a major challenge for businesses of every size, but we also know the key to stemming the tide: employee engagement.

An analysis of Korn Ferry global engagement data found 76% of Gen Z employees view learning and development as an important driver of their own engagement in the workplace, while 60% of employees under the age of 40 viewed understanding their own career advancement as another important driver in their commitment to a company. Across all generations, 94% of employees report they would stay at their job longer if the company invested in their own learning and progression.

A leadership pipeline helps you engage your high potentials and build loyalty by offering them a genuine career path to the C-suite and a leadership development plan that shows how they will get there.

Visibility and Data

Leadership pipelining is about visibility. Leadership talent assessments will provide you with the data and skills map needed to understand where the gaps are and how they can potentially be filled. This data, in turn, will inform your external hiring decisions as some roles will inevitably need to be filled through recruitment.

Slash the Costs of Recruitment

The best people strategies involve a balance between internal mobility and external hiring. Relying too heavily on external hiring puts the organisation at the mercy of talent shortages, rising recruitment costs, and the risks of a poor hire.

Employer Brand

Becoming known as an organisation that nurtures and promotes its people will boost external talent attraction; particularly if you are able to broadcast this benefit in your employee value proposition (EVP).

Valuable Business Knowledge

Promoting leaders from within the organisation provides the added benefit of long-term, intimate knowledge of the business. Familiarity with your systems, processes, and people means your newly promoted leader is more ready to hit the ground running than an external hire.

What Are the Challenges Involved in Leadership Pipelining? 

Some of the challenges involved in establishing a leadership pipeline include visibility, not knowing what good looks like, ineffective techniques, and retaining your high potentials.

Invisible Talent

It’s common to see headlines where CEOs fret about skills gaps in their organisation. But in many cases, the talent is right under their noses. Many leadership teams lack the tools and know-how to define exactly what they are looking for, identify internal talent who meets that profile, and build a leadership development plan to help future leaders grow into the job.

Not Knowing What “Good” Looks Like

Identifying future leaders will always be a hit-and-miss exercise without a Leadership Success Profile. These dynamic benchmarks show what traits your leadership team needs to have to get your organisation to its goals and promote the right people using the power of data rather than guesswork.

Confusing Performance with Leadership Potential

Your best salesperson may not necessarily make a great leader. Too many companies rely on the misguided assumption that the skills that make people top performers are the same as those that are needed for them to develop and lead high-performing teams. The reality is that the skills required for effective leadership often differ substantially from those necessary for individual high performance.

Ineffective Techniques

Old habits die hard, with many companies continuing with efforts to identify leaders through ineffective performance reviews or through “gut feel” succession planning. These techniques fail to place the right people in the right leadership roles and can dramatically increase bias in decision-making. Instead, build a leadership pipeline model based on data flowing from objective and bias-free assessment criteria.

Retaining Future Leaders

High-potential individuals will be more driven to seek new challenges and may be more likely to be poached by other organisations. You can’t expect 100% of the people in your leadership pipeline to complete the journey, but a well-designed total rewards program will help you engage, motivate, and keep the right leadership talent.

The Three Stages of Leadership Pipelining 

The best advice for building a leadership pipeline model is to keep it simple. Distill your succession planning into three stages: Define, Assess, and Develop.

Ask yourself the following questions:

DEFINE: What talent do we need?

• How do we know what roles drive success in our company?
• How do we know which attributes are key to business success?
• What is the right mix of breadth and depth required?

ASSESS: What talent do we have? 

• How do we know we have the right people in the right place?
• How do we know who will fill our most critical roles in the future?
• What capabilities do the incumbents have?
• What is each individual’s potential?
• Who is ready to assume a more challenging role?

DEVELOP: How do we close the gaps?

• How do we ensure we have the right talent to deliver on strategy right now?
• What are we doing to ensure our next-level leaders are ready to lead our organisation?
• How much should we build vs. buy?

Crisis-Free Succession Planning 

Fast-forward six months, and your CTO tells you he’s planning to take a job in another organisation and will leave in a matter of weeks. As you shake his hand, you realise you’re not worried. Investing in the leadership pipeline now means you can think of two—make that three—people in the tech team who could step into the role immediately and take it in exciting new directions. Beyond them, you know there are several other high potentials in the background who will be ready to lead in six to twelve months. The pipeline is working.

Accelerate Leadership Pipeline Success

The right leadership development solution partner will know how to define the talent you need, assess your team, and develop your pipeline to engage and nurture your most promising people at all levels.

Korn Ferry’s Introductory Guide to Talent Assessment has been created to help you choose the right talent assessment partner. It runs through key information that’s essential to develop a future-ready leadership talent pipeline for organisational success. Download your copy today.

The article was first published here.

Photo by Ridham Nagralawala on Unsplash.