Strategy

Leadership succession: Who's on deck?

Do not take your eyes off next-generation leaders.

A shortage of leadership bench strength has plagued North American companies for years, but actively cultivating the next generation of execs has been shoved to the back burner as business conditions have deteriorated in the past nine months.

Bad move, says Steve Krupp, who heads up the executive talent management practice at Delta Organization & Leadership, a unit of international management consulting firm Oliver Wyman. “If you just focus on short-term survival and you alienate your key leaders, they may stick it out, but they won’t forget,” he says. “The best and brightest can always find jobs; that particular subset will always have a bull market.”

Yet they are being ignored. Nearly 80% of top execs do not communicate directly with those managers who show potential, according to Delta’s research. The result, says Krupp, is that leadership development initiatives are not tailored to the most urgent — and these days, rapidly changing — business challenges. “One of the most powerful things is to reach out and engage key leaders in solving the pressing problems you’re facing. And it doesn’t cost a dime,” says Krupp, who notes it can be as simple as regular meetings with small teams over lunch.

Although this is common sense, Delta’s research suggests it’s not common practice. Only about a third of companies give high-potential managers roles and experiences necessary to develop the capabilities needed to execute the company’s strategy, and less than a fifth use job assignments to prepare them for business-critical roles. “There is a shortage of people who are prepared and have the leadership breadth to navigate this,” Krupp says. Developing from within is a first step to better days.