Leadership development disconnect
by Miki SaxonThere is an almost surreal disconnect between those evangelizing/teaching leadership, succession planning, management development, etc., and the real world.
Eric Jackson is a good example. He says that
The “Sales Funnel” is one of the most tried and true tools in business today. For every prospect you put into the top of the funnel, only a small percentage will drop out of the bottom of the funnel as a closed sale. Unless the funnel is constantly replenished at the top, it will experience moments when no sales drop out of the bottom. Every CEO, VP of Sales, and sales rep understands the importance of constant vigilance over the funnel – or else deal with the consequences of dry spots as they go on.
Yet, most organizations approach the issue of succession planning and leadership development as if it was two weeks before the end of the quarter and they realized they needed to close some business. You could make a few calls to drum up some sales – just as you could tap the executives that are immediately closest to the position that requires a new leader – but your odds of being as successful with the last-minute approach are quite low, compared to if you had been working sales opportunities and future leaders for many weeks or years in advance of needing them.
Of course, he’s right and is backed up by management gurus in universities and consulting firms across the board all counseling the same thing, albeit in a variety of ways.
But the reality is where it becomes surreal.
In an article on the phenomenal turnover in chief marketing officers, Business Week compares them to other C-suite positions.
Now, compare these numbers to the idea of constant development in order to have a deep management bench and you tell me why, let alone how, CEOs are going to focus on development and succession issues when their average tenure is 44 months.
December 8th, 2007 at 1:32 pm
Miki- the tenure issue seems to be THE issue when you consider the lack of innovation and the poor execution rate of strategies (I’ve heard that it’s about 10-15% in a given year). When you put stats like this together they become nonsense if the managers, and therefore strategies, are changing all the time; when you consider that the CMO, CEO, CFO, CIO could all change in a 12-24 month period due to simple timing, plus all the changes caused below these levels, it could be that strategies are so unstable that they almost never get a chance to be executed. I think you’ve hit on something here- it would be nice to see some stats on the reasons behind changes to strategies, e.g., simply management change or some better reasons like a change in customer expectations.
December 9th, 2007 at 3:14 pm
Bob, I don’t have any stats, but it seems reasonable that if a CEO is terminated for not meeting Wall Street’s expectations or not having a vision that it considers viable, then the incoming exec is unlikely to proceed with the exiting person’s strategies.
I’d love to hear what some of the other readers think about this.
December 9th, 2007 at 6:10 pm
Stats would probably be hard to come by because the strategy management process seems so infrequent and poor. These problems are exacerbated by the organizational changes. Sometimes I wonder how companies get anything done.
December 14th, 2007 at 9:57 am
If we’re talking about leadership development, which is what underlies succession planning, it’s a matter of creating a system that outlasts a single CEO of whatever tenure. If you look at the companies who are constantly held up as great for leadership development (as opposed to the latest survey where firms move up and down from year to year, leave the list and re-appear), the great companies have systems that begin the leadership development process early, spread it widely, and make it a priority of all managers, including the CEO. The results after a generational cycle or so is that they also turn into the companies with long CEO tenure. GE has had 12 CEOs in slightly more than 100 years.
December 15th, 2007 at 11:05 pm
Wally, I agree with you regarding succession training, but when the CEO turns the attrition often ripples out through the executive ranks and down, plus senior management turnover is an open invitation to recruiters to raid the organization. As a result, the training that supports succession often benefits a different company.
December 16th, 2007 at 7:54 am
I understand your point, Miki, and I think you’re right. But I also think that an effective leadership development program prevents or minimizes the ripple and raiding effect you describe. If you compare what happens at companies with effective leadership development programs (GE or PepsiCo to name two) you don’t see what you’re seeing at places like Citi.
December 16th, 2007 at 4:58 pm
Wally, first, I’m not disagreeing about the importance of effective leadership development, but neither company that you’ve cited had high management turnover in the first place, so management development was the norm. As to Citi, is that pre or post Sandy Weill?
To achieve the generational effect you mention I would think you need at least a decade of relatively smooth CEO sailing to plant it and have it take root. The last decade or two hasn’t offered that. What do you think?