Leadership Talent Management

Leaders matter. Their ability to influence followers has immediate and direct impact on your bottom line. For example:

• Thought Models: How people think about their work has a huge impact on success. As a simple example, workers who think their jobs are important contribute more than those who think of their jobs are inconsequential. You want leaders who know how to help followers think about their work in ways that breed success.

• Retention: The number one reason people leave a job is a “bad boss,” i.e., someone with authority but not the skills to use it effectively. Costly turnover may signal leader talent in need of development.

• Ethics: You don’t want your leaders to engage in actions that put your company at risk for an Enron-like reputation. Ethical lapses may be made by well intended but overly stressed leaders. Maintaining sound, ethical judgment under stress and temptation is a learnable skill. (To be clear, dedicated thieves and con men are hopeless. If you find them, fire them.)

How much does leadership impact profit? A study of four thousand business leaders found that leadership style controlled 50 - 70% of organizational climate. So what? Climate has been found to control 20 to 30% of profit! Put that in perspective. Consider the many factors that impact profit that you can’t control, such as economic conditions, trends in your industry, costs of goods and services your organization buys (think petroleum!). But you can control a big chunk of profit by controlling the quality of leadership in your organization, i.e., leadership talent management.

Perhaps you have good leaders right now. Great! But change happens. As an exercise, think about your five or six most important leaders. How many of them are Baby Boomers? Most Boomers have begun to think about the next phase of their lives. What are you doing to develop bench strength to replace them?

Talented leaders always have options. They get calls from head hunters all the time. Even if you are a great boss in a great organization, your key leaders may get opportunities too good to pass up – in terms of money, location (“We always wanted to move back to California to be close to family.”) or opportunity (“It’s a small company, but they want me to be their CEO.”)

To maximize profits and protect the future of your organization, leadership talent must be in a constant state of development. Many organizations today actively work to prepare promising mid-level leaders to step into more senior roles. For example, consider the 2005 Baldrige Award winning healthcare system and its comprehensive plan for leader development.

First it asked my company to work with eight of their second tier leaders, the folks who will step into the top jobs one day. They already have significant responsibility, some leading hundreds of workers. Through development of their emotional intelligence (EQ) skills, which have been demonstrated to more than double one’s contribution to profit, these leaders are becoming ready to handle tougher, higher level responsibilities. When the most senior leaders are ready to move on, this organization will have such bench strength that this change will not be a crisis.

They also are training key leaders in coaching skills to use with their direct reports, which builds their leadership skills. Research shows that leaders who coach create better climates, and in so doing, greater profits. To coach well, leaders must have good coaching skills, which can be learned by developing specific EQ skills.

Finally they have given mentors, current leaders, to promising line personnel to help get them ready to step onto the leadership ladder.

This organization, with a work force of over 4000, has broad leadership demands. It also has a plan to build and maintain a pipeline of leadership talent to see it safely into the future.

Dana C. Ackley, Ph.D., is president of EQ Leader, Inc. and the author of The EQ Leader Program, a comprehensive approach to the development of EQ skills that make great leaders. The EQ Leader Program Manual was published by MHS, world leading publisher of EQ assessment and development materials. Dana can be reached at (540) 774-1927 and by e-mail at dana.ackley@eqleader.net.