7 Dysfunctions of High-Potential Companies
While a great deal of attention is given to leadership, there's a desperate need for more effective leadership across the enterprise — including the board of directors. Leadership succession is often poorly planned, managed, and unable to keep up with the need for new, competent leaders. And the leadership deficit is growing rapidly.
The Corporate Leadership Council finds that nearly sixty percent of organizations report they are experiencing a leadership shortage right now, an increase of forty percentage points from just one year ago.
- No organization can depend on genius, the supply is always scarce and unreliable. (Peter Drucker)
The impact of bad decisions is huge.
Often, leadership is defined by position instead of ability. High potentials, instead of proven performers, are promoted into positions before demonstrating their ability to lead successfully in the new assignment. And once in a new leadership position, there are few mechanisms in place to repair bad decisions, before irreparable damage is caused, or to effectively enable leaders to achieve their full potential.
Signs the leadership pipeline is failing:
- Leadership positions are poorly defined
- The wrong people are being selected
- Poor performers are left in the position too long
- Leaders are not receiving or listening to feedback
Considerable visible and invisible cost is incurred for failing to effectively develop leaders. With poor leadership, strong performance and growth is always a burden. And with poor leadership it’s impossible to engage employees' hearts and minds, keep the organization focused on strategic goals, and maintain momentum during growth.
Unclogging the pipeline.
Increasing the flow in the leadership pipeline can be a daunting task with companies often feeling forced to hire leadership from outside the organization. Hiring leaders may be a good tactic but it's a poor strategy — there aren't enough proven leaders available for hire to fill your leadership needs. And strong leadership success at another organization doesn't guarantee high success at your organization.
A consistent flow of high-quality leadership can only be realized through continuous, assessment-based, development and accountability, from frontline managers, to the senior team, to the board of directors.
'Increasing the flow' checklist:
- Are competencies and expectations for each level of leadership — from frontline to C-level to board of directors — fully defined? Are these criteria clearly understood by the leadership team and regularly assessed? The more senior the level, the more comprehensive the assessment process needs to be.
- Are at least twenty-five percent of leadership competencies and expectations unique to your organization? Are leadership development initiatives woven into each leader's day-to-day accountabilities? Off-the-shelf or out-sourced programs, at best, can only provide a portion of your leadership development solution.
- Do leadership candidates fully support your company's values and consistently demonstrate integrity? An essential selection factor dramatically underscored by the recent resignation of Mark Hurd, HP CEO, for unethical behavior.
- Is senior leadership actively and personally involved in the development and delivery of leadership growth experiences.
- Do leadership candidates have proven ability — not just high potential — before being given the new leadership assignment? Does each leadership position have a proven candidate prepared to move into that position?
Delivering on this year's annual promises depends on how well the pipeline flows.
This is the second of the seven dysfunctions. All seven create an incredible drag on a company's performance, with the first six dysfunctions contributing to the seventh which is the most destructive. See 'It's Time For A Reality Check' for an introduction to the seven dysfunctions.
The issues addressed in this blog, as well as the supporting examples, are targeted to the leadership of public companies on the way to a $Billion in revenue. These issues, though, are also critical to the strategic success of all profit and non-profit organizations from early stage to mature.
David Seregow, Ed. D. is Founder and President of Attaine Performance Corporation, providing strategic guidance, collaboration, and coaching to high-potential companies. www.attaine.com Copyright 2010 David Seregow, Ed. D. All Rights Reserved. Permission granted to post, print, or email this entire posting if full attribution is included and the post is not edited.