Leaders don’t create followers. They create more leaders.-Tom Peters
Senior executives often avoid building their leadership pipeline because they feel like they’re digging their own grave. After all, it’s about preparing others to step up so that you can step down. Unfortunately, every leader will have to step down at some point, and successful leaders are marked by the fact that, when the time comes, they have prepared enough that they are no longer needed.
What is a Leadership Pipeline?
The term ‘leadership pipeline’ refers to an organization’s procedure for building and maintaining their leadership bench. It is a systematic process that encompasses all forms of employee development, evaluation, training, and promotion. When properly established, leadership pipelines identify, nurture, and promote top talent, allowing companies to fill vacant positions from within, rather than recruiting externally. In this way, leadership pipelines also provide a systematic pathway for grooming succession candidates
Five Signs of a Strong Pipeline
Leadership pipelines come in many different shapes and sizes. To help you build the best one possible, we took a look at which features are common across strong leadership pipelines. Here’s what we found:
1. Strong leadership pipelines enable companies to promote from within
One of the best indicators of a strong leadership pipeline is the ability to promote from within. Over 20-30% of todays’ boards replace outgoing CEOs with external hires.[i] In the short-term, this may seem like an efficient solution, but in the long run, being forced to hire externally will cost your company money, time, and talent.
2. Strong leadership pipelines have collective ownership
Regardless of how simple your pipeline may be, no one person is responsible for the entire process. It isn’t up to your CEO (or HR) to develop leaders for each critical role in your organization. You must collectively build and maintain a leadership pipeline. They require full commitment from boards, executives, managers, and succession candidates in order to operate the way they should.
3. Strong leadership pipelines are transparent
Succession plans are often kept secret to avoid offending those who have been passed over. High potential employees may choose to leave the organization if they do not see opportunities for advancement. This, however, is precisely why management should be intentional about making their leadership pipelines transparent. Communicating the development and promotion process is likely to have a positive impact on employees’ motivation and long-term commitment to the organization. Having a transparent leadership pipeline will also aid in attracting and retaining top talent.
4. Strong leadership pipelines are simple and consistent
Leaders tend to assume that their pipelines need to be complex in order to be successful. In reality, less is more. A simple and consistent structure allows employees to better understand and navigate leadership pipelines. This makes advancement seem more achievable, which in turn increases motivation and commitment to development activities.
5. Strong leadership pipelines track progress
Perhaps the most important feature of successful leadership pipelines is that they systematically track progress. This may seem like a hassle, but studies have shown that measuring and monitoring development efforts over time significantly improves the likelihood that goals will be attained.[ii] Not only that, when leaders take time to coach followers through the development process, they are significantly more likely to see lasting behavior change.[iii],[iv]
Building a Pipeline
Given that the best leadership pipelines are simple, transparent, and consistent, they are much easier to establish than most management teams think. At SIGMA, we coach our clients through a six-phase succession planning process. Because all strong leadership pipelines ultimately function to facilitate succession, this process is essentially the same as what you need to establish a ‘leadership pipeline.’
The first phase of developing your leadership pipeline is to identify critical roles. Next, you develop success profiles to describe the talent composition required for each critical role. In the third phase, you nominate succession candidates using objective input from multiple sources (annual performance reviews, surveys, etc.). After that, each candidate is assessed, and you create a Candidate Profile to identify strengths and areas for improvement. Then, a development plan can be put in place, including concrete goals, activities, and timelines for improvement. Finally, the plan must be executed, and you must monitor and measure progress.
It is important to understand leadership pipelines cannot be left to their own devices; they must be built and maintained. The above five steps are not a one-time to-do list, rather, they are a cyclical process that you must repeat during succession at each critical role, as well as for each individual who moves through the pipeline.
Critical Points in the Pipeline
After you establish your leadership pipeline, take note of the following critical points.[v] Knowing when and where to expect these will help you ensure that steppingstones don’t become stumbling spots.
1. Managing Self -> Managing Others
One of the first transitions any leader will make is the transition from managing self to managing others. This transition occurs when an employee is assigned subordinates (e.g. as team-leads, managers, and supervisors, or simply as a mentor to interns and new hires).
Managing others seems like a natural leadership transition, but it is often the one where people stumble. Especially for first-time managers, it can be hard to shift from ‘doing’ to ‘delegating.’ New managers need to learn to complete their own tasks, while helping others complete theirs. They must take time to assign, review, and apply the work of their subordinates, in addition to providing ongoing guidance and communication.
Tip: The most important change at this point in the leadership pipeline is a change in values. New managers must value making others productive as much as they value being productive themselves. If this initial shift isn’t made well, all subsequent promotions will only amplify the problem. The result is that leaders become liabilities; in essence, clogging the pipeline. Managers must learn to value managerial work from the start, not just considering it a part of their role, but the purpose of their role itself.
2. Managing Others -> Managing Managers
The next critical point in the leadership pipeline is the shift from managing others to managing managers. This is where leaders have the power to set expectations and create reward systems that promote good management. Leaders must hold managers accountable to managerial work, rather than technical work alone. They must keep in mind that managerial subordinates will (and should) have fewer concrete deliverables than individual, task-based employees.
Tip: At this point in the pipeline, leaders must be careful not to fall prey to The Peter Principle. This principle refers to an organizational phenomenon where employees tend to rise to their level of incompetence.[vi] Just because someone excels at one point in the pipeline, does not mean they should progress to the next. It is the responsibility of the manager of managers to differentiate between technical and managerial employees and put people back in task-based roles if they are unwilling or unable to adapt to managerial ones.
3. Managing a Department
After learning to manage managers, leaders who continue to move through the pipeline will be challenged to manage departments. This transition stretches communication and relationship skills, as leaders need to penetrate at least two layers of management to reach individual contributors. Another challenge at this stage of the pipelines is that leaders must integrate departmental strategy with overall corporate strategy. This requires careful prioritization, and the ability to communicate overall strategy down through lower levels of management.
Tip: Due to cross-departmental interaction, department managers must also be capable of valuing tasks they understand very little about. This means active listening and a desire to learn are important competencies for managers seeking to rise to this level in the leadership pipeline.
4. Managing a Businesses
The next transition in the leadership pipeline occurs in managing a business (e.g. roles such as General Manager, CEO, or President). This is where leaders must learn to set strategies rather than simply communicate them. This position holds more risk and more reward than lower positions in the pipeline; leaders have the freedom, but also the responsibility to be visionaries, make long-term plans, and be forward thinking.
Tip: Some employees may be offered this position, but turn it down voluntarily because they are fully aware of the burden that managing a business can be and understand that it is lonely at the top. Alternatively, others will pursue this position despite not being well-suited in skills and/or values. Often, these are the people who desire leadership for the wrong reasons, and you should identify them as early as possible in the leadership pipeline to curtail the damage that may be caused at higher levels.
5. Managing a Group/Enterprise
The final transition in the leadership pipeline occurs in managing a group or enterprise. Many small businesses will never reach this level, and they may also skip levels in between simply due to the size and structure of their organization. For leaders who do find themselves managing a group or enterprise, the biggest stumbling block will be the temptation to use a one-size-fits-all approach. You may need to manage each business in a group or enterprise differently.
Tip: A common misconception about managers of a group/enterprise is that portfolio strategies are like business strategies; they should all align. In reality, a portfolio is not a collection, but a combination of interdependent units. They may all be incredibly different but interact in collaborative ways.
Benefits of a Leadership Pipeline
Establishing a strong leadership pipeline requires an ongoing investment of time and energy. But when built properly, it’s more than worth the cost. A strong leadership pipeline is a talent magnet. It standardizes development efforts, motivates employees, and fosters long-term commitment to the organization. It nurtures in-house talent and creates a strong leadership bench, enabling more promotion from within and facilitating simple succession planning. Leadership pipelines cannot be built half-heartedly; they must truly be valued as essential business processes. And when they are, they become a powerful competitive advantage.
Ready to Get Started?
Are you ready to start building your leadership pipeline? SIGMA offers custom succession planning, consulting, workshops, and resources. Take a look at our services here, or contact us below for more information on how we can help your leaders prepare for tomorrow.
[i] Harrell, E. (December 2016). Succession Planning: What the Research Says. Harvard Business Review. https://hbr.org/2016/12/succession-planning-what-the-research-says.
[ii] Harkin, B., Webb, T. L., Chang, B. P. I., Prestwich, A., Conner, M., Kellar, I., …, & Sheeran, P. (2016). Does monitoring goal progress promote goal attainment? A meta-analysis of the experimental evidence. Psychological Bulletin, 142, 198-229.
[iii] Baron, L., & Morin, L. (2010). The impact of executive coaching on self-efficacy related to management soft-skills. Leadership & Organization Development Journal, 31, 18-38.
[iv] Sonesh, S. C., Coultas, C. W., Lacerenza, C. N., Marlow, S. L., Benishek, L. E., & Salas, E. (2015). The power of coaching: A meta-analytic investigation. Coaching: An International Journal of Theory, Research and Practice, 8, 73-95.
[v] Drotter, S.J., Charan, R. (June 2001). Building Leaders at Every Level: A Leadership Pipeline. Ivey Business Journal. Retrieved from https://iveybusinessjournal.com/publication/building-leaders-at-every-level-a-leadership-pipeline/.
[vi] Wagner, R. (April 10, 2018). New Evidence The Peter Principle Is Real – And What To Do About It. Forbes. Retrieved from https://www.forbes.com/sites/roddwagner/2018/04/10/new-evidence-the-peter-principle-is-real-and-what-to-do-about-it/#1267059f1809.