Insularity also reduces their ability to drive sustained performance by a third. So, if you want executives with:
- deep knowledge of your business and competitive landscape,
- intimate knowledge of how your organization competes and wins, and
- extensive wisdom that they generously pass along to the next generation of emerging leaders,
you must systematically move them around your organization, your industry, and the world. Many high performing organizations have talent management processes that rotate executives in assignments throughout the organization domestically, and sometimes globally. A rare few even include assignments outside their own organization.
As cliché as it may sound, there is no substitute for experience when it comes to deepening an executive’s wisdom – about the business, the industry, or competitive marketplace. Moving an executive around broadens and deepens their experience, and provides them with an array of different vantage points. Nothing creates better understanding and empathy than taking an assignment in another part of the business. Executives tend to be far more open minded to contrasting views when they have spent time on the other side of the table. Want a great marketing executives? Send them into Sales for two or three years. Want a great finance leader? 18 months in Operations will help. Need to build high-impact HR professionals? Poach your best leaders from Customer Service and train them in HR. Want world class strategists? Send executives on assignment to work outside the industry, with suppliers, or to sit on Boards of other companies. Successful General Managers? Ensure the early years of your younger leaders are spent in rotations across the organization’s functions, business lines and geographies. You can, of course, take this too far, and some move leaders through assignments haphazardly and too quickly. Our experience suggests that anything less than 24 months won’t produce the contextual development needed to deepen the knowledge and appreciation of that aspect of the business. Being held accountable for a tangible outcome is also critical – an improved customer pipeline, new product, or successfully implemented initiative are some examples.
When functions and business units are territorial about their talent they not only limit the career potential of top talent, they create insularity. Spending too many years in one part of an organization causes leaders to “go native”, and become entrenched in one way of seeing the world. Having deep knowledge of finance and accounting adds minimal value if you don’t understand how the organization makes money and creates value in the market. Human Resource knowledge is far more relevant and impactful when you have actually worked in the business for which you are trying to optimize talent. Designing brands with impact is easier when you’ve interacted directly with and sold to your customers or consumers. There are real bottom-line implications for this. According to one study, “organizations with advanced and integrated talent management and mobility processes tied to business strategy outperform companies with little or no talent strategy by 32%.”[i]
Talent management systems are critical to the proactive preparation of executives. Not only do they accelerate readiness for successively broader, more complex roles, they provide visibility to the talent available in the organization. Listen to how this CEO of a global defense and technology corporation talks about the process of cultivating executives in his organization:
“When you get out into the organization, and really look and listen to what people are doing, you realize there are all kinds of people with ideas about change, enthusiasm and energy, and doing great things. Contrary to what I was being told about a shortage of future talent, there wasn’t a shortage of them at all. There’s LOTS of talent. But it needs to be developed. The best way to develop it is to move it around. The preparation of future executives wasn’t just my responsibility of course, but if it was going to become a critical differentiator for us, and a deep part of our culture, I wanted to make sure it was one of my top priorities. Ensuring we had quality conversations meant I had to meet them in their world, not have them come to mine. I wasn’t trying to “go around” the hierarchy. I just found that the normal business review process was ineffective as a creative place for conversation. You need to get out and meet people to understand what they are capable of. I realized that there are people at all levels of the company doing very interesting work, committed to making a difference and actually making great change. The issue wasn’t that we didn’t have people, the issue was we didn’t know who they were, and didn’t have a mechanism for making sure they were being moved around into meaningful growth assignments. Institutionalizing this practice is definitely working. Our stock price has seen double digit EPS for the last several years”[ii]
If you want executives who master their context, be diligent in exposing them to a diverse array of experiences and roles in the organization. Pay special attention to ensuring they are grounded in external realities. Have them serve on strategic planning processes that force hard looks at competitive, industry, and market shifts to ensure they are equipped to adapt their views and approaches. Intentionally design their careers to assume roles that enhance their core expertise with perspectives of those they must serve or partner with. Build executives with world class capacity to own your business context by purposefully moving them around and deepening them through a variety of rich, challenging, and high-impact assignments.
[i] SumTotal 2010 “The State of Global Talent Management Survey” based on a combined aggregation of 12 business and HR operating metrics
[ii] Carucci, Ron; Originally researched for, and documented in part in Leadership Divided: What Emerging Leaders need and what you might be Missing” 2006 Jossey Bass