HR Magazine (Belarus), February 2009

HR Magazine (Belarus)

February 2009

HR Magazine (Belarus)

Chet Warzynski was interviewed and quoted by the HR Magazine in Belarus.

Are many companies using the idea of "Leadership Pipeline" in America now?

The use of a "Leadership Pipeline in American companies today is mixed. Many Fortune 500 companies still have some kind of leadership pipeline in which high potential managers are identified and moved into challenging roles in order to develop leadership experience, knowledge, and skill for different parts of the company. The nine-box model developed at GE which examines the relationship between performance and potential is still widely used to identify and develop talent for the pipeline.

Recently, a "just-in-time" approach to filling key positions has emerged in response to changing market conditions. Either the company develops an oversupply or undersupply of talent because management is unable to predict the level of turnover in view of fluctuating market conditions. Adopting principles from supply chain management, these companies seek to maximize their return on investment by balancing talent supply and demand through just-in-time hires rather than investing in training and developing a leadership pipeline. This strategy makes some sense during recessionary periods in which business activity shifts from growth to cost reduction.

Have you ever implemented a Leadership Pipeline in private and/or non-private sector?

The goals of a leadership pipeline are twofold: (1) to sustain performance by developing a ready supply of top talent to replace key people as they retire or leave the organization; and (2) to reduce replacement costs (the direct and indirect costs of replacing a key position is estimated at twice the salary of the person replaced). In periods of economic growth where the demand for talent is high, a leadership pipeline can have a significant effect on attracting and retaining top talent. However, the development of an effective leadership pipeline requires a considerable investment in management development and involvement of senior management. In the case of $600M media company, it took five years and more than $3M to design and implement a comprehensive management development program to create a pipeline in place for internal succession. Over the next seven years the company replaced 90% of its mid to senior level positions from within resulting in an estimated return on this investment of more than 130%.

3. What would be the biggest difficulties in implementing it?

There are several challenges in developing a leadership pipeline. One is to make sure the process fits the culture and structure of the organization. As culture is largely a function of the leadership of the organization, the development and use of a pipeline requires some stability of leadership. In times of change, where is there is high turnover in senior leadership, the criteria used to select leaders for succession may be applied inconsistently resulting in a misplacement of talent. Building the right kind of management development experiences around the structure is also a challenge. Most learning takes place through on-the-job assignments rather than training programs. Leaders must be given a variety of job experiences starting early in their careers and continuing over a number of years in order to develop the experience and skill for leading under a variety of conditions. An effective mentoring system may supplement and enhance management development. Finally, senior management must have good information for decision making. Linking succession planning to the company's performance management system provides executives with timely information for tracking, evaluating, and placing leaders.