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Strategically develop your leadership pipeline through buying and building
Executives are worried that leaders in their organizations aren’t prepared to lead toward growth. Mercer’s Global Talent Trends 2017 study reveals that CEOs are most concerned about the gap in leadership skills and how it will impact business success going forward.
How to respond to the lack of available leaders with the right skills
There are two primary options to fill a leadership gap in organizations: hiring talent or developing the talent currently in the organization to fill critical roles.
In Mercer’s 2017 report, while 48 percent of organizations were planning to focus their strategy on buying, or recruiting, external talent, the report also shows 79 percent of organizations were planning to focus on building leaders from inside the organization. The reality is that in growing organizations, you need to do both.
Buying Leadership Talent
The competition is fierce, especially in 2018, which can make a leadership buy strategy a challenge. Hiring experienced leaders can also be costly and we’ve all seen leaders hired from the outside who don’t successfully assimilate in to the new culture.
Demographics also show that there are not enough GenXers to fill the gap left by Baby Boomer retirements so if you’re looking for leaders who have all of the skills you need, the reality is, there aren’t enough ready now to fill the gap.
Even with these challenges, buying should still be one part of an organization’s strategy. Hiring allows you to bring in different perspectives and different industry or technical expertise and to enhance overall diversity in the organization. For a high growth company, experienced leaders often have a quicker speed-to-ground and there will never be enough internal talent to fill all the needed roles.
The Benefits of Building Leadership Talent
Developing employees for future needs or higher-level roles should always be a core capability building strategy. Development efforts for emerging leaders, identified high-potentials, and aspiring executives are typically focused around helping them be successful today while also increasing the organization’s leadership bench strength for the future.
Strategies for building talent should include a long-term leadership development journey roadmap, which allows organizations to design a leader’s development “cradle-to-grave”–at all levels—and avoid gaps that may occur at different levels in the organization or at different points in an individual’s career.
Building up leaders within the organization takes time and resources, which often compete with other priorities. Leaders may only have enough time for one commitment, forcing them to choose between programs that aim to improve effectiveness within a role or build their skills for future roles. Organizations must also be careful to identify potential blind spots and encourage new perspectives.
Using a build strategy for leadership development can also be a cost-effective option that leads to long-term pipeline strength: leaders will appreciate that their organization has invested in them, which builds loyalty and decreases turnover.
Most organizations will find a healthy balance for their strategy: buying leadership talent when necessary and building leadership talent when possible and when appropriate for the organization.
*Mercer’s 2017 Global Talent Trends Study can be found here: https://www.mercer.com/our-thinking/career/global-talent-hr-trends.html