By Austin MacDonald

Good leaders are worth their weight in stock options, and their value is accruing even more as retirement rates increase. Lynn Palmer, CHRP, CEO of the Canadian Council of Human Resources Associations, sums up the challenge of replacing top managers who are on their way out. “Human resources should provide a framework that outlines the company strategy for dealing with succession and for grooming staff for managerial leadership.” It is essential that HR works with the organization’s other divisions to develop a sustainable management succession plan because new managers are the key link in a healthy organization’s chain of command.

The inside track

Leadership is the most important and elusive quality that organizations seek in their new managers. Palmer acknowledges that some experts believe leadership skills can’t be taught, but prefers to take a practical view. “Every leader has strengths and weaknesses, and it’s often more effective to invest in somebody from within the organization for a leadership role than to recruit someone. Advertising, recruitment, training and orientation are all very costly.”

Promoting management-calibre employees is natural enough. After all, good workers make their way up through the ranks—it’s the very definition of the young, upwardly mobile professional. “As well, it takes a while for new people to be productive,” Palmer explains, “which adds to the cost. But if a person has potential, it makes sense to work with them. You want these high-potential, management-material individuals in the employee ranks of the organization.” And as British magazine Director pointed out in their July 2007 edition, identifying potential isn’t the hard part—development programs that offer coaching and supervisory opportunities will help reveal leadership skills in the workforce, and immediate supervisors can spot shooting stars even on day-to-day activities. The problem arises when managers need to be trained faster and in greater numbers.

Targeting top talent

“Because of the growing talent shortage, people are being promoted faster than they would have been 10 to 15 years ago,” says Dr. Karin Kirkpatrick, Director of the Centre for CEO Leadership at the University of British Columbia’s Sauder School of Business. “Historically, new managers would have been people with higher experience and maturity levels.”

Forward-thinking HR managers need new strategies if they want to keep pace. According to Palmer, “Organizations need to identify high-potential people early in the game and take them through ongoing learning and experiences, so that when the opportunity for promotion comes up they are well-prepared and there are no surprises.” How to know which employees have the most potential? The Society for Human Resource Management’s HRMagazine made it clear in its August 2007 edition that there are no one-size-fits-all criteria when selecting managers, and HR should proactively identify the technical and personality requirements for each position. Once identified, promising employees must be overseen by a senior management team. The results of this strategy are win-win: it trains top talent for key positions at the organization’s next level. When the time comes, an organization can choose from among replacement candidates rather than one heir-apparent.

Don’t just stand there, do something

“In most cases, the new manager received a promotion for their good technical skills or for their people skills. Usually they’re promoted for one and have to work on the other,” says Carter McNamara, CEO of Authenticity Consulting LLC, a Minneapolis-based human resources firm specializing in advising small organizations in Canada and the United States. Left to their own devices, new managers may keep up the good work that earned them the promotion in the first place—but that’s not always enough.

As Kirkpatrick warns, “The risk is to lose other good people through poor leadership, so new managers need to be up and running fast.” The ideal is somewhere between six months to one year. “It depends largely on the organization, the complexity of the role and the maturity of the person.”

New managers face no shortage of challenges. They have to be at ease supervising former peers and producing objective end-of-year evaluations. Other possible rites of passage are stretch assignments, which Palmer describes as activities in which future leaders are challenged and learn something new. “It could be field work where someone gains operational experience, a position at head office, an assignment in human resources, a special project to manage or being on the hook for a large deliverable.”  These practical steps help a company build the bench strength necessary for replacing departures, by giving up-and-comers the support they need to succeed.

All hands on deck

“New managers can crash and burn. They need to work smarter, not harder,” stresses McNamara. If a new manager is working longer hours, this can actually be the first sign of trouble ahead—and if they fail, it’s usually the organization’s own fault.

Concrete solutions for the succession plan may include pairing novice leaders with more senior managers for hands-on coaching and mentoring, as well as formalized training or on-site workshops. For organizations with a succession plan already in place, Kirkpatrick is developing a High Potential Program for training employees with five or more years of experience, scheduled to get underway at UBC in 2008. The possibilities are broad and must be tailored to the company, but the take-home message is clear: as the management market tightens, human resources departments can’t leave their starting lineup to chance.

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