By Jocelyn Bérard

The pace of baby boomers retiring from organizations has not been the expected tsunami-like mass exodus. Instead, it’s more of a slow undercurrent. Consequently, many organizations have been addressing succession management only sporadically, perhaps as an occasional topic on the agenda of an executive group meeting. As today’s leaders gradually turn into tomorrow’s retirees and the need for ready leaders reaches a steady boiling point, many companies may find themselves completely unprepared. 

According to the Bureau of Labor Statistics (January 2012), the number of people 65 and older will double between 2010 and 2050 in the US. By 2020 (note, that is in less than seven years), 25% of the labor force will be composed of older adults (55+), up from 13% in 2000. 

Also, new expectations are coming from executive boardrooms: integrating leadership development into an organization’s risk management. In the report “The new business imperative” that outlines seven trends in leadership development, Deloitte identifies four risks:

• Vacancy risk: risk of critical leadership positions left vacant
• Readiness risk: risk of underdeveloped successors
• Transition risk: risk of poor assimilation of executive talent
• Portfolio risk: risk of poor deployment of talent against business goals

This trend has also been confirmed in an important study of C-level executives conducted by Ivey Business School faculty in 2010. Their findings were published in the Ivey Business Journal article entitled “The Role of Leadership in Managing Risk.”

How can organizations accelerate leaders’ development to prepare for succession and mitigate these risks?

Identify High-Potential Leaders More Rigorously
A key part of the succession management process is identifying high-potential leaders, though doing so can raise many challenging questions. How can leaders consistently determine potential?

A common practice is using a nine-box grid to position the probable high-potential leaders on a low, medium, or high performance and potential axis. But, to predict and rate leadership potential objectively and consistently, HR professionals and leaders need to assess candidates against a standardized, reliable set of leadership potential factors.

Experience and extensive review of research about what determines future leader success led to six factors that, when measured and used effectively, streamline and improve the high-potential leadership assessment process:

1. Cognitive complexity and capacity
   Key descriptors: conceptual thinking, strategic thinking, differentiating, integrating
   

2. Drive and achievement orientation
   Key descriptors: initiative, perseverance of effort, consistency of interest, achievement,  realization
   

3. Learning orientation: self and others
   Key descriptors: learning orientation, continuous improvement, openness to feedback
   

4. Personal and business ethics
   Key descriptors: personal and business ethics, fairness, authenticity, honesty, integrity, trust
   

5. Motivation to lead
   Key descriptors: leadership self-efficacy, leadership emergence, value leading others
   

6. Social and emotional complexity and capacity
   Key descriptors: emotional intelligence, interpersonal sensitivity, emotional resilience

Executive leaders can use standard factors like these six, along with the key behavioral descriptors, to determine which of their high performers have the potential to perform at one or two levels higher.

Seminal research by the Corporate Leadership Counsel and the highly popular article in Harvard Business Review “Are you a high potential?” strongly support the necessity to improve the way we define high potential in order to maximize the return on the development effort. Using high-potential leadership factors leads to selecting true high-potential leaders, helps avoid possible errors, and saves time and investment.

Read Part Two of this series now

Jocelyn Bérard is a speaker at the 2014 HRMA Conference + Tradeshow. His session, Getting There Faster—Accelerating Leadership Development, is on Tuesday, April 15.For more information, please visit bchrma.org/conf2014.

Jocelyn Bérard M.Ps. MBA is the International Vice President Leadership and Business Solutions at Global Knowledge. He is an experienced executive with extensive Canadian and international experience in the areas of Human Resources and Business Management. He holds two undergraduate degrees in Psychology and Human Resources, a Master’s Degree in Industrial/Organizational Psychology and an Executive MBA. Jocelyn is the author of the book Accelerating Leadership Development published by Wiley in 2013