The Leadership Pipeline E-Book

Ram Charan

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Serie: J-B US non-Franchise Leadership
• Sprache: Englisch
• Veröffentlichungsjahr: 2010

Seitenzahl: 439

Beschreibung

An updated and revised version of the bestselling The Leadership Pipeline - the critical resource for how companies can grow leaders from the inside. In business, leadership at every level is a requisite for company survival. Yet the leadership pipeline -the internal strategy to grow leaders - in many companies is dry or nonexistent. Drawing on their experiences at many Fortune 500 companies, the authors show how organizations can develop leadership at every level by identifying future leaders, assessing their corporate confidence, planning their development, and measuring their results. New to this edition is 65 pages of new material to update the model, share new stories and add new advice based on the ten more years of experience. The authors have also added a "Frequently Asked Questions" section to the end of each chapter.

Leseprobe

Table of Contents

Cover

Table of Contents

Half title page

Title page

Copyright page

Foreword

Preface to the Revised Edition: Observations from the Field

Introduction

1 Six Leadership Passages

Passage One: From Managing Self to Managing Others

Passage Two: From Managing Others to Managing Managers

Passage Three: From Managing Managers to Functional Manager

Passage Four: From Functional Manager to Business Manager

Passage Five: From Business Manager to Group Manager

Passage Six: From Group Manager to Enterprise Manager

Adapting the Model to Small Business Requirements

Passages Through the Pipeline

Frequently Asked Questions

Observations from the Field

2 From Managing Self to Managing Others

The Rising Power and Expectations of Individual Contributors

Three Achievements of Terrific First-Time Managers

Pipeline-Unclogging Tactics

Who Is Responsible?

Frequently Asked Questions

Observations from the Field

3 From Managing Others to Managing Managers

Five Signs of a Misplaced Manager of Managers

What Managers of Managers Should Do

How to Help Managers of Managers Through This Leadership Passage

Frequently Asked Questions

Observations from the Field

4 From Managing Managers to Functional Manager

Maturing into a Functional Leader Role

A Strategic Mind-Set, a Holistic Approach

Valuing What You Don’t Know

Identifying Dysfunctional Signs

Developing Mature, Strategic, Whole-Functional Managers

Frequently Asked Questions

Observations from the Field

5 From Functional Manager to Business Manager

Thinking Differently

Managing the Complexity

Learning to Value All Functions

Being Highly Visible

Addressing the Challenge of E-Commerce

Warning Signs of Leadership Transition Troubles

Development Options: Self-Learning, New Experiences, and Reflection

Frequently Asked Questions

Observations from the Field

6 From Business Manager to Group Manager

Succeeding Indirectly

Managing and Developing Business Managers

Connecting the Business to the Corporation

Managing the Uncovered

Warning Signs

Developing Group Executives: A Mix of Training, Measures, and Experience

Frequently Asked Questions

Observations from the Field

7 From Group Manager to Enterprise Manager

Challenge One: Delivering Consistent, Predictable Top- and Bottom-Line Results

Challenge Two: Setting Enterprise Direction

Challenge Three: Shaping the Soft Side of the Enterprise

Challenge Four: Maintaining an Edge in Execution

Challenge Five: Managing the Enterprise in a Broader, Global Context

A Significant Value Shift

Signs That a CEO Is Struggling

CEO Development: No Skipping Levels Allowed

Don’t Set Up a CEO for Failure

Frequently Asked Questions

Observations from the Field

8 Diagnostics

Three Good Reasons to Diagnose Early and Often

A Tool to Look Beyond What Got Done

Diagnostic Steps

Skipping Levels: The Brightest Aren’t Always the Best

Frequently Asked Questions

Observations from the Field

9 Performance Improvement

The Relevance of Role Clarity

Defining Performance Standards

Using Performance Standards to Develop Leaders

Strategies for Getting to Full Performance

The Retention-Development Connection

Frequently Asked Questions

Observations from the Field

10 Succession Planning

Toward a Leadership Pipeline Definition of Succession Planning

Transforming Potential from a Negative to a Positive

Setting Clear Standards to Assess Potential

How to Do Succession Planning That Fills the Pipeline

Frequently Asked Questions

Observations from the Field

11 Identifying Potential Pipeline Failures

Selecting the Wrong Person

Leaving the Wrong Person in the Job Too Long

Failure to Seek or Listen to Feedback

Defining Jobs Poorly

Institutional Failure

Frequently Asked Questions

Observations from the Field

12 The Functional Career Passage

Group Functional Manager

Broad and Complex Requirements

Signs That a Group Functional Manager Is Not Performing

Enterprise Functional Managers

Distinctive Skill Requirements and Work Values

Signs That an Enterprise Functional Manager Is Working at the Wrong Level

Developing Enterprise Functional Managers

Frequently Asked Questions

Observations from the Field

13 Coaching

Coaching Framework

Clear, Complete, Compelling Feedback

Letting Go

Redefining Coaching from a Leadership Development Perspective

Frequently Asked Questions

Observations from the Field

14 Benefits Up and Down the Line

Making Development Actionable and Understandable

Providing Boards with Insight and Information

Enterprise Leaders

Group Executives

Business Managers

Functional Managers

Managers of Managers

First-Line Managers

A Flexible Pipeline for Changing Organizations

Frequently Asked Questions

Observations from the Field

Acknowledgments

The Authors

Index

THE

LEADERSHIP

PIPELINE

Copyright © 2011 by John Wiley & Sons, Inc. All rights reserved.

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Library of Congress Cataloging-in-Publication Data

Charan, Ram.

 The leadership pipeline : how to build the leadership powered company Ram Charan, Stephen Drotter, James Noel. — 2nd ed.

p. cm.

ISBN 978-0-470-89456-9 (hardback)

 1. Leadership. 2. Industrial management. I. Drotter, Stephen J. II. Noel, James L., 1943- III. Title.

 HD57.7.C474 2011

 658.4'092—dc22

2010034709

9780470921463 (ebk)

9780470921470 (ebk)

9780470921487 (ebk)

Foreword

“This model has changed the dialogue at my table,” says the CEO of a major fast-moving consumer goods company. “We now focus more on strategy and talent, not just revenue and volume.”

“The Leadership Pipeline idea and model has helped us push accountability down the organization in a coherent way,” says the CEO of a major mining company. “It has freed us at the top to focus more on the future while lower levels drive productivity and early operating results.”

“We are now focusing our coursework on the right skills for the right level.”

“Our succession planning is now anchored in reality about what potential means and what it looks like.”

“I can do better coaching of my people, given the improved clarity of expectations for them and for me.”

The overwhelmingly positive response to the first edition of The Leadership Pipeline has been most gratifying. Our discussions with readers and our work as consultants have provided us with invaluable feedback about the Pipeline model—feedback that has helped make this model even more effective in practice than when we first wrote about it. We want to pass on the lessons we’ve learned so that companies can maximize the Pipeline’s value.

Since the first edition of this book was published, we’ve worked with over one hundred companies using this framework. Many of the best and most successful corporations in the world have adopted the Leadership Pipeline model as the core framework for their efforts on the human side of their businesses. Built around the common leadership “passages” all leaders go through, it helps organizations select, develop, and assess based on specific responsibilities and work values at each leadership level.

Our approach to revising this work is a bit unorthodox: we decided not to go in and change the individual chapters with all new examples and context. The reader will notice we talk about certain players in business who are no longer in the role they are cited in. Because the examples, although no longer all current, serve the point we are trying to make, we decided to leave them and instead to add two significant sections at the end of each chapter. The first, “Observations from the Field,” allows us to update our model, share some additional stories, and add some advice based on almost ten years of experiences working with companies around the world. We have also included the answers to frequently asked questions.

Our hope is that this new and “improved” version of our work continues to be effective and used easily by all.

Preface to the Revised Edition: Observations from the Field

As we’ve worked with a variety of organizations to put the Pipeline framework into practice, we’ve found a number of serious flaws with development efforts that must be corrected to enable sustained operational and financial success. At a time when organizations are enormously dependent on internal development of present and future leaders, these efforts are falling short. Here are four failings the Pipeline model is designed to correct:

Deep-Seated Development Errors

1. Line managements’ dissatisfaction with human resources has not abated. We believe one critically important reason is the lack of an enduring central architecture. Imagine a company that has a chief financial officer but doesn’t have a general ledger, a budget process, a cost accounting system, and a capital allocation process that are tied together. That finance officer wouldn’t have much success. Finance’s architecture enables the entire organization to work with and talk about financial matters in a consistent way. Companies need an enduring architecture to focus human resource processes and programs. The architecture should set common standards for both performance and potential, differentiated by layer of management. It should also establish language and processes to address issues, identify problems, and exploit opportunities effectively, as well as data for making decisions about everything from job transitions to performance improvement.

We’ve found that most development efforts lack this central architecture. Although most HR departments make sincere and sometimes even heroic efforts at leadership development, when these efforts don’t produce the desired results, they stop spending money on development, or they replace an existing program with the next one, or they try a third program and then a fourth. Changing programs often means one leader emerges speaking one language, while another leader from a different program speaks a second language. These changes in development content and philosophy create distrust. Because there’s no cumulative effect from a comprehensive but flexible architecture, there’s no solid base for development purposes. This book outlines a central architecture that you can adapt to your company’s specific situation.

2. Leaders don’t learn to do what is needed. We’ve found that this is a growing problem as leadership roles and responsibilities continue to evolve rapidly. Within most developmental assignments roles are poorly defined and measured. Specific content is rarely defined. The expected value-add isn’t defined, and the relationship to overall results is left to the imagination. Competency models place the emphasis on activity rather than results, and this creates misleading measurements. We’ve also found that under many existing development models, leaders learn to think about jobs in terms of turf—what they control. This notion has led to silos, excluding the ideas of others, and has also led to a lack of teamwork even within silos. A silo mentality precludes teamwork, and it motivates leaders to focus on details (that others should handle) and address immediate concerns rather than future goals.

Jobs should be defined by accountability for a set of results, a basic tenet of the Leadership Pipeline model. Required results must change as people move up the organization. When one set of results is achieved, a new set can be established. This allows organizations to adapt more quickly to changing business requirements and to new market conditions without having to reorganize. It also helps incumbents to focus on what is critically important, enables better decisions about who can help and who can’t, contributes to making jobs more doable, and greatly reduces the activities associated with defending one’s turf.

Leadership models must also be capable of redefining roles continuously in response to a changing environment. For instance, an increasing percentage of work is being done by people who are not on the company’s full-time payroll, because of outsourcing and other factors. The way a leader’s work is defined must encourage collaboration and inclusion, particularly when traditional control methods aren’t possible.

3. There is a lack of selection skill. We find that the intensity in producing the numbers is several orders of magnitude greater than the intensity around choosing people. Whether it’s because executives no longer have the time to devote to selection or because choosing the right candidate is more difficult, they often aren’t adept at selecting the right people for the right jobs. In assessment interviews, we asked about 1,300 senior executives, “How do you go about making a selection decision?” Most people answer with a brief description of (a) the kind of person they want (“honest,” “hard-working”), (b) some sort of search request, and (c) an interview process.

The Leadership Pipeline model helps people make superior selec­tion decisions. For instance, it focuses them on the triggering event that indicates why a change must be made. Some triggering events are obvious, such as when the incumbent quits or retires or gets promoted to a new job. Some aren’t so obvious, such as a change in strategy, a persistent pattern of mistakes, a bad attitude, or noticeable unhappiness with the leadership requirements. The Pipeline model also helps a senior executive judge whether an individual is working at the level to which that person is assigned, as well another individual’s potential for moving up to the next level.

The worst-case scenario for poor selection was always thought to be hiring the wrong person. But today that is only the third-worst-case scenario. Two even more serious problems are (1) failing to recognize and hire the right person, instead letting this ideal candidate sail invisibly through the selection process, and (2) leaving the wrong person in the job too long.

4. HR is focused on the wrong agenda. Historically, the human resource function has focused on the supply of labor. In recent years, to win an external war for talent, HR has focused more specifically on finding and getting A players. Internally, the focus has been on identifying future “stars,” the “high potentials” to be put in key jobs. This focus on “input” hasn’t gotten them very far.

Instead, the focus should be on the output. Output will be inappropriate unless the incumbent values the right work, unless there is a process in place to identify what the right work is for the right leadership position, and unless measures are in place to determine whether the right work is being done. Poorly designed jobs, leaders working at the wrong level, a lack of clear direction, and bad selection decisions are ubiquitous in the current organizational environment. If HR truly understood organization and assessment and helped all leaders work at the right level, the organization could make significant leaps in productivity.

Four External Pipeline Factors

It’s not just internal developmental shortcomings that are making the Pipeline model so relevant to organizations. We’ve witnessed the emergence of four external factors that have emerged in recent years and have a huge impact on leadership effectiveness up and down the line. The following factors also increase the value of the Pipeline approach:

Outside Talent Hasn’t Met Organizational Needs

For many reasons, recruiting people to fill key positions hasn’t worked out as well as expected. If we define success for external recruits as full performance and acceptance after three years, the success rate is low and gets lower for positions at or near the top. Cultural mismatches, lack of a relationship network, resentment by current employees who wanted or expected the job, and new hires focused on the next promotion rather than the job are just some of the problems. The highest-risk external hire situation involves people who are changing companies and changing layers simultaneously. Learning to work at a higher layer while learning the success formula at a new company puts these new hires under extreme pressure. The new hire commonly reacts by reverting to the skills and methods of the previous layer and the former company—and this almost guarantees failure. However, a development framework that helps outside people understand the values and skills required at a given managerial level—and that helps the com­pany transition them to this level quickly—can increase the odds that outside people will succeed.

The Critical New Markets: China, India, and Other Emerging Markets

Dealing with China, India, and other unfamiliar markets means learning to operate effectively in a new context. Executives must master different operating styles, sophistication levels, cultural nuances, and other new areas. Developing and measuring these leaders with these differences in mind is crucial. Unfortunately, they’re not kept in mind, because the HR development framework doesn’t accommodate the learning and measures that change as job levels change, especially from a global perspective. What skills, attitudes, values, and knowledge should be targeted for a country manager in China? For that manager’s assistant? Are there coordinated recruitment, development, and measurement programs in place to help leaders transition through the levels in these global jobs? The flexibility of the Leadership Pipeline model accommodates new and changing requirements in ways that other approaches do not.

Job Content Is Changing

Flexible models are required to cope with jobs that are evolving rapidly. Innovation and collaboration have become absolutely essential in a world where traditional market leaders no longer dominate their industries and where team structures are operating in tandem with the traditional pyramid. On top of that, the growth of electronic communication often requires leaders to work virtually or to meet face-to-face with people less frequently. The ability to lead from a distance and to communicate effectively online are skills that weren’t even considered until relatively recently. We observe more people at more passages being required to work outside the company structure with partners and other elements of the ecosystem. If development and measurements at all leadership levels don’t reflect this changing job content, new skills won’t be adopted—or adopted in a widespread and effective manner.

The Need for Role Clarity

Last but not least, this factor is paramount in a business environment that is increasingly ambiguous, paradoxical, complex, and volatile. In this rapidly changing environment, leaders are no longer sure of their roles and responsibilities. How are they to treat employees who invest so much time and energy in communicating electronically? How transparent can and should they be when it comes to issues such as downsizing and performance? How can they build trust among employees who are increasingly distrustful of management?

No leader at any level can answer these questions effectively without a framework that clearly defines his or her role. We’ve found that the Pipeline model helps leaders understand what is expected of them at every leadership level. As a result, they can filter the questions just asked through a framework that identifies what behaviors and values are necessary for them to do their jobs well. They know that as the head of a function, for instance, they must learn to manage and value what is new. This imperative allows them to define all their actions against it. It helps them avoid the inconsistent behaviors that sow distrust among employees. It helps them communicate a belief in a genuine and transparent manner.

A Model for the Future as Well as the Present

In recent years, organizations have become increasingly aware of the need to build sustainable enterprises, not just ones that create short-term profits. We’ve heard from organizations that the Pipeline model helps them focus on the future development of leaders rather than just present performance issues. We have observed many leaders at all levels working exclusively on the problems of the moment. This has been particularly true during the recession that began in 2007–2008; each day, it seems, brings another tough decision to leaders’ desks. In this environment, defining and preparing for a successful future for their company, business, function, or team has been given little or no attention. Without adequate measures and role clarity, they can’t prepare for the inevitable changes required for success or survival.

For this reason, many companies are failing to develop leadership bench strength and day-to-day leadership effectiveness. Leading-edge development programs, no matter how well designed, aren’t sufficient to achieve these goals.

What’s lacking is a connective context. In other words, the connection between leadership development training programs, succession planning, performance management, and rewards is tenuously defined at best. In most companies, human resources orchestrates these activities, and the various groups responsible for them compete for resources, management attention, and power. Human resources efforts are rarely integrated.

Standards for making judgments about people are different for different activities. Performance ratings, promotions, bonuses, and participation in development are based on varying standards, causing confusion for those trying to make judgments as well as for the judged.

When we wrote The Leadership Pipeline, we knew a need existed for a central architecture, a framework shared by all leaders to ensure consistency of judgment and application on the human side of the business so that a cumulative leadership effect results. What we’ve learned in the interim is that this need is far more compelling and widespread than we initially assumed.

The Leadership Pipeline is about how to build that architecture.

More so now than ever before, the architecture described in The Leadership Pipeline must be understood and used by leaders at all levels—not only those who lead the human resources department. Understanding and using the architecture will make leaders more effective, especially if they are a leader of leaders. Human resources people have a critical role to play, but it is an “engineering” role, not an “operating” role. Leaders are the operators; they make the judgments, and they will live with the successes or failures of those judgments. HR is the engineering function accountable for design and usability, the value and quality of the architecture.

Our readers have told us that The Leadership Pipeline has changed the way their companies approach the human side of business at a fundamental level. Our global society can’t continue to withstand the enormous failure rates of those in the highest leadership positions combined with the deepening shortage of capable men and women to lead our businesses. The challenge must be addressed in ways that are significantly more systematic, so the growth of leaders becomes organic and predictably successful. Given the growing need for a more effective leadership development model and the emerging obstacles to such development, this book is even more relevant and needed today than it was ten years ago.

Introduction

This is an era in which the demand for leadership greatly exceeds the supply. Signs of this imbalance are everywhere. Almost every issue of the Wall Street Journal carries news about a major corporation bringing in a top executive from outside the organization. Executive search firms are flourishing because of the demand for leadership talent. Consulting firms are offering six-figure starting salaries to make sure they get their fair share of newly minted MBAs from top schools. No less a consulting firm than McKinsey has spent a great deal of time formulating a strategy to cope with the “war for talent.” And just about every major organization is attempting to hire “stars,” offering enormous compensation to entice the best and the brightest.

These overly aggressive, sometimes desperate attempts to recruit outsiders suggest that the leadership pipeline is inadequate. Internal training, mentoring, and other developmental programs aren’t keeping the pipeline full, making it necessary to look outside. The problem, of course, is that there are only so many full-performing leaders to go around. Everyone is fighting over a relatively small group of stars who, even when successfully recruited, tend to move from company to company with alacrity.

What’s needed, therefore, is an approach that will allow organizations to keep their own leadership pipelines full and flowing. This is easier said than done because the requirements of leadership have changed so dramatically, and most development models are ill-suited for these changing requirements. We’ve found, however, that an approach that takes into account the different requirements at distinct leadership levels is viable. Before we talk about our pipeline model and how it works, we’d like to give you a better sense of how the demand for leadership has risen while the supply of leaders has not kept pace.

The Trouble with Finding and Developing Leaders: The New Economy, Globalization, and Organizational Perspectives

While there are many factors that have increased the demand for leaders, one of the most significant ones is the information technology revolution.

The New Economy has raised organizational consciousness about the human side of the business. New Economy companies have not only preached that people have tremendous value in this economy, but they’ve practiced it. Dot.com companies have lured highly talented individuals with the promise of great wealth through stock options, immediate involvement in meaningful work, and other perks. MBA students have taken summer jobs with these companies and never returned to complete their degrees. Unlike traditional companies, dot.coms continue the courtship of their employees after they hire them by providing empowering work, ongoing learning, and clear, continuous communication.

While these New Economy companies have siphoned leadership talent away from mainstream organizations, they’ve also spawned a new set of leadership problems:

Founders and CEOs Must Change What They Work on as the Company Grows

As these companies grow fast, their leaders must move to new leadership levels with amazing speed. One day they’re doing first-line manager work, the next they’re integrating with alliances and representing the enterprise to the world around it. Needless to say, many of these dot.com founders have difficulties with these lightning-like transitions.

There Aren’t Enough Leaders and Few Are Being Grown Internally

Search firms estimated that there could have been as many as a thousand dot.com CEO openings in late 1999. When Meg Whitman, president of eBay, was asked what her biggest early mistake was, she answered that it was failing to bring in enough heavyweight leaders fast enough.

New Horizontal Leadership Skills Are Necessary

New Economy companies grow horizontally through alliances and partnerships. Effective integration (managing organizational interfacing) of these partners is a crucial requirement, one that managers accustomed to vertical growth may have difficulty meeting.

Old Economy Companies Are Competing for New Economy Talent

A number of mainstream organizations have made great strides in Internet endeavors. Almost all the “old economy” industries—for example, autos, financial services, travel—have taken major steps to become e-commerce companies. As a result, the battle for e-commerce leadership talent has become even more intense.

What all this means is that finding the right types of leaders with the right types of skills is becoming an increasingly difficult task. The New Economy has also made development of these leaders more difficult, in that people need to acquire new skills that aren’t part of the traditional leadership package.

Just as significantly, over the past twenty years organizations have become aware of the need for local leadership because of increasing globalization. Edicts and strategies from the home office require local interpretation and application. Leaders rooted in these environments (rather than those removed from them) must address issues, such as differences in culture, customer demands, and local work habits. Local leadership, then, has become a prized commodity. Equally important is the need for leaders who manage the balance between global and local issues.

What is perhaps most significant, the lack of effective talent development within organizations has contributed to the leadership deficit. It’s not simply that companies have failed to train frontline people to use the power bestowed on them by the information revolution or to develop managers capable of local leadership. The issues are broader and deeper. Part of the problem is historical, going back to the late 1970s, when companies cut costs to become more competitive in response to dramatic increases in the price of oil and a flood of goods made in countries with cheaper labor. They dramatically reduced their investment in talent development. Training programs, developmental assignments, and management time for coaching were greatly reduced or even eliminated. Though some of these efforts were restarted in the 1990s, many people in key roles are the product of this “no money for development” era. In addition, there was a wave of faddish development programs that lacked much substance. As a result, many executives were never fully trained or developed for their roles.

Furthermore, organizations often don’t look at development as integral to business strategy, viewing it purely as part of the human resources function. CEOs don’t invest their time in it because they perceive it as outside their domain. A common organizational mindset is to view jobs as “work to be done” and not as developmental assignments. Even worse, a rather simplistic definition of leadership governs development. There is little acknowledgment that different levels of leadership exist and that people need to make skill and value transitions at each level. Relatively few organizations are thinking about the core competencies and experiences necessary to be successful at each level. Few of them are considering the leadership development needs of a first-time manager versus those of a functional manager. Instead, there is a focus on personal traits and technical competence. Organizations promote people with the expectation that they have the knowledge and skills to handle the job rather than the knowledge and skills to handle a particular level of leadership. They assume that if they’ve performed well at one job, they’ll likely perform well at the next one.

Given all this, it should come as no surprise that the leadership pipeline is dry. What is surprising is the organizational response to this situation: adopting a “best and brightest” strategy. Company after company has decided that it can solve its leadership problem by finding and nurturing the top talent. Hiring gifted people makes sense as a tactic but not as a strategy. Certainly if there’s an enormously talented individual you can recruit for your organization, you should do so. Strategically, however, this approach falls apart because of the scarcity of highly talented individuals. Not only will you have to pay through the nose for these people, but what is more important, they will probably never develop fully. The stars of the business world usually change jobs or companies so frequently that they have difficulty finishing what they started. They don’t stay in one place long enough to learn from mistakes, master the right skills, or gain the experience needed for sustainable performance.

Although star performers can contribute a great deal to any company, there are not enough to go around. Today’s companies need effective leaders at every level and in every location. Because of the information technology revolution, globalization, and other factors, leadership is a requirement up and down the line. To deliver on increasingly ambitious promises to customers, shareholders, employees, and other stakeholders, we need more fully performing leaders than ever before. This means finding a method that ensures that more managers than ever before will be prepared for and placed at the right leadership levels.

Untapped Leadership Potential

If we need more leaders at more levels than ever before—and if we need to build them rather than buy them—the question of potential naturally arises. Can today’s average salesperson become tomorrow’s “right-for-the-job” sales leader? Even though the work is different, our experience demonstrates that he can, because potential is not fixed. We believe in human beings’ ability to grow; society cannot achieve economic as well as cultural progress without it. Too often, however, executives view potential as an abstract concept that defies definition. As such, it’s difficult to see it as something that changes over time. When you define potential as the kind of work someone can do in the future, it becomes easier to see it as a dynamic concept. This future work potential is based on accumulated skills and experience as evidenced by past achievement, ability to learn new skills, and willingness to tackle bigger, more complex, or higher-quality assignments. The more people achieve, the more learning takes place; willingness to tackle new challenges increases as current challenges are met. Fueled by the rapidly changing nature of work, global opportunities, and on-line learning via the Internet, people’s potential changes several times over the course of a career. They can and do reinvent themselves.

What all this means is that you need to keep an open, optimistic mind about who might become the right person for a given leadership position. People who are skilled technicians might have the potential to be managers; managers who seem entrenched in their functions might have the potential to lead cross-functional teams.

To capitalize on this potential, you need to discern the true work requirements at key leadership levels and what’s needed to make the transition from one layer to the next successfully. Matching an individual’s potential with a series of requirements is how pipelines are built. The Leadership Pipeline model will help you achieve these objectives.

Passages Through the Pipeline

To build your leadership base, the starting point is understanding the natural hierarchy of work that exists in most organizations (the focus here is on managerial-leadership work rather than technical or professional contributions). In a large, decentralized business organization, this hierarchy takes the form of six career passages or pipeline turns. The pipeline is not a straight cylinder but rather one that is bent in six places. Each of these passages represents a change in organizational position—a different level and complexity of leadership—where a significant turn has to be made. These turns involve a major change in job requirements, demanding new skills, time applications, and work values.

The chart in Figure I.1 illustrates the six major passages leaders face.

Figure 1.1. Critical Career Passages in a Large Business Organization.

Note: Each passage represents a major change in job requirements that translates to new skill requirements, new time horizons and applications, and new work values. Based on work done initially by Walter Mahler and called Critical Career Crossroads.

Though there are other, minor passages between these six major ones, we don’t want to become bogged down in detail at this point. For our purposes here, it’s important simply to understand what these six are all about. In the following pages, we’ll explore these six leadership passages in detail, identifying the skills, use of time, and work values unique to each. Recognizing the requirements and pitfalls associated with each one is crucial, not only for the leaders themselves but also for their bosses and subordinates. With a universal understanding of the model, bosses will provide better coaching and differentiated accountability, and subordinates can be more supportive when they recognize the issues with which their bosses are struggling.

As you become familiar with each leadership passage, you’ll find yourself thinking about careers and planning development from a fresh perspective. What is more significant, this new perspective will provide you with the insights necessary to keep your leadership pipeline filled and flowing. Not only will it help you structure a process to develop leaders on all levels, but it will also enable you to ensure that they’re working at the right levels. As you’ll discover, each passage requires that people acquire a new way of managing and leading and leave the old ways behind in the following three areas:

Skill requirements—the new capabilities required to execute new responsibilitiesTime applications—new time frames that govern how one worksWork values—what people believe is important and so becomes the focus of their effort

The challenge for organizations is to make sure that people in leadership positions are assigned to the level appropriate to their skills, time applications, and values. Unfortunately, many managers often work at the wrong level: they’re clinging to values appropriate to Passage One (managing others) even though they’re working at Passage Two (managing managers), or they haven’t acquired the skills or time application expertise appropriate to their current level. As a result, not only are they less effective (or ineffective) leaders but the people they manage are negatively affected as well.

If you keep the metaphor of a pipeline in mind, you can see how things might become clogged at the turns. Imagine a company where more than half the managers at each turn are operating with skills, time applications, and values inappropriate to their level; either they’ve skipped a level and never learned what they need to know, or they’re clinging to an old mode of managing that was successful for them in the past. In some companies, at least 50 percent of the people in leadership positions are operating far below their assigned layer. They have the potential to be leaders, but that potential is going unfulfilled. In short, they’re stuck and clogging up the system (staying too long in one passage also can clog up the system).

Let’s look at two people with leadership potential who have become stuck in this manner.

Two Leadership Turns That Give Many People Trouble

Bob is at Passage One—From Managing Self to Managing Others—having recently been promoted to the manager of his group. Previously, Bob had proven to be a crackerjack engineer, the best problem solver in the department. Technically, he was superior, and this fact earned him his promotion. As a manager, however, Bob relied on a hands-on, problem-solving approach that had worked for him as an individual contributor engineer over the past seven years. It is a work style that he enjoys and is comfortable with; his work values dictate that he figure out the engineering solution himself. But it is also what prevents him from demonstrating the leadership of which he is capable. Typically, Bob ends up competing with his own direct reports when he gives them an assignment. It smothers them psychologically, thus wasting his time and theirs. He needs to stop relying on his work skills and valuing his ability to solve problems himself and instead learn to plan the work that needs to be done, select good people to do it, set objectives, hold people accountable for results, and offer feedback. Bob needs to learn all this to be an effective leader not only now but later as well. This first turn is where he’ll acquire people management and team leadership skills—skills that will be essential for him when he arrives at future passages.

Mary, a former sales manager, is now the head of a business unit; she’s at Passage Four—From Functional Manager to Business Manager. Over the course of her career Mary has aggressively pursued new customers, and she relishes the supplier-customer dynamic, spending a great deal of time in one-on-one customer interactions; she’s been highly innovative with her service ideas and has consistently hit or exceeded sales targets for her group because of her approach. As the head of a business unit, Mary is encountering a number of problems. She’s finding it difficult to communicate with people in functions other than her own and to create a business model that her people can understand and relate to. She doesn’t understand why Engineering and Manufacturing are always in disagreement and why deliveries are so late on new products. Frustrated by her inability to do what’s required, Mary decides that she can “bull” her way through by relying on her strength. By focusing on deepening and securing customer relationships, she is back in her comfort zone. Unfortunately that’s only one of many roles she needs to play in her current leadership position. This is the first time Mary has ever headed a multifunctional team, and she doesn’t value the contributions of each function or understand their contribution to the success of the enterprise. She has to become a more strategic and less transactional manager if she’s going to be an effective leader at her current level.

Making the Commitment to Fill the Leadership Pipeline

Helping people like Bob and Mary negotiate turns requires a commitment—a commitment of not only time and money but also energy and emotion. It means recognizing that poaching leaders and offering simplistic training programs isn’t going to fill the pipeline. To build effective leadership at all levels, organizations need to identify leadership candidates early, provide them with growth assignments, give them useful feedback, and coach them. What is more important, they need to do these and other things within the Leadership Pipeline framework. Without a process that helps managers adopt the skills, time applications, and values appropriate to each leadership level, no type of training or coaching will have much impact.

Over the years, we’ve worked with many companies that have made a commitment to this pipeline concept (though they don’t always use the terminology we’ll use here). Let us briefly tell you about two of them.

At General Electric, there’s a strong commitment to facilitating the leadership transitions we’ve discussed (though their leadership levels are labeled a bit differently from those in our model; they use “new manager,” “functional leader,” “general manager” and “officer/multiple group of businesses”). Their famed Crotonville facility plays an important role in GE’s leadership development experiences. GE has a succession planning process called “Session C,” part of which is designed to evaluate each individual’s readiness to make a career or leadership turn, as well as training programs that help them learn business, leadership, and cultural skills at each turn. It’s not a coincidence that the organization has always had several highly qualified candidates waiting in the wings to succeed the CEO when he retires and that it also has a well-deserved reputation as being a launching pad for leaders (both within GE and at other organizations). GE doesn’t have a smarter or more inherently talented workforce than other companies. GE’s leadership advantages stem from the investment they have made in growing their own leaders and their recognition that leadership revolves around mastering certain skills and values at each leadership level.

Citigroup is another company that had made this commitment in the 1990s. They were especially adept at helping people make the difficult transition from a transaction orientation to their first profit-and-loss positions as business managers. A year-long program for these individuals—many of whom have just been appointed chief country managers—helped them develop “hard” skills such as strategic cost management, as well as the softer values and thought processes. In the latter regard, the program provided them with a significant amount of coaching as well as interaction with senior Citigroup officers. As you might imagine, a year-long program for an entire layer of management represents a significant investment, but it’s an investment with a tremendous return, especially if you measure it in leaders working at full capacity.

Understanding the Passages and How to Use Them

This book is informally divided into two sections. The first (Chapters One through Seven) focuses on defining each leadership passage and illustrating the skills, time applications, and values that are required to make the passage successfully. To keep the leadership pipeline filled and flowing, it’s crucial that you are aware of the specific requirements, the common problems managers experience in making a passage, and behaviors or attitudes that identify someone as having difficulty with a passage. When organizations start to think in terms of pipeline requirements rather than job-title responsibilities, they are in a much better position to develop their leaders.

The second section concentrates on how to apply the pipeline to leadership problems and opportunities within an organization. Chapters Eight through Fourteen will help you diagnose pipeline problems, create development plans, and more effectively manage leadership performance. Within this second section, you’ll also find tools and techniques for coaching leaders, dealing with succession issues, preventing leadership failures, and maintaining the flow in the functional offshoot of the pipeline.

No matter what type of organization you’re in or your level of responsibility, you’ll find the information in the following chapters applicable in your environment. The pipeline is a very flexible model that organizations can adapt to their own situations and concerns. It’s also a model designed with changing leadership accountabilities in mind. The traditional notions of what a leader needs to be and do are no longer valid. The New Economy and other factors we’ve discussed are creating new requirements at all leadership levels.

To use the Leadership Pipeline approach effectively, you need to challenge traditional notions of leadership. You can’t grow leaders unless you have an accurate development target, and this means acknowledging that the roles and responsibilities of leaders have shifted. The multilevel, multidimensional concept of leadership is a reality of modern business life. Once you start developing leaders with this new reality in mind, it will be that much easier to make this model work for you and your organization.

Finally, we would like to warn you away from a “mechanical” implementation of the pipeline concept. In other words, avoid three-ring binders and the paper exercise mentality that comes with them. We’ve seen too many companies equate succession planning with leadership development. The criteria the Pipeline establishes for leadership are different from what succession planning often dictates. We ask you to think holistically and with the complexity of people in mind.

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Six Leadership Passages

An Overview

The six turns in the pipeline that we’ll discuss here are major events in the life of a leader. They represent significant passages that can’t be mastered in a day or by taking a course. Our goal here is to help you become familiar with the skills, time applications, and work values demanded by each passage, as well as this particular leadership gestalt. Once you grasp what these passages entail and the challenges involved in making each leadership transition, you’ll be in a better position to use this information to unclog your organization’s leadership pipeline and facilitate your own growth as a leader. Going through these passages helps leaders build emotional strength as they take on tasks of increasing complexity and scope. The following six chapters will provide you with ideas and tools to achieve full performance at all leadership levels in your organization.

As you read about each passage, you’ll naturally apply it to your own organization and may question how we’ve defined and divided each turn in the pipeline. The odds are that you’ll immediately think of at least one (and probably more) leadership transitions that apply to your own company that we have not addressed in the Leadership Pipeline model. While there certainly are other transitions, they are too small or incomplete to qualify as a major passage. For instance, many global companies have business general managers at the country level and regional executives with responsibility for several countries. These regional executives report to a person with a title such as global consumer products head. Although this global consumer products head manages group managers (the regional executives, in this case), she isn’t an enterprise manager, because she reports to a CEO or president and has little accountability for total corporate profit-and-loss matters. For our purposes here, we would categorize her as a group manager, even though she may have responsibility for other group managers.

Similarly, you may wonder why the transition from team member to team leader isn’t worthy of its own passage. First, this is usually a subset of Passage One (from managing self to managing others). Second, team leaders frequently lack the decision-making authority on selection and rewards that first-line managers receive. Third, team leaders usually focus on technical or professional matters (getting a project or program completed) and aren’t tested in more general management areas.

Each organization is unique, and each probably has at least one leadership passage with distinctive aspects. It’s likely, however, that you can fit that distinctive passage into one of our six passages. As you become more attuned to each of them, we believe you’ll see how they apply to your own situation and organization. If there is a passage in your business that doesn’t fit our model, create your own definition of the transition and tell us about it.

Passage One: From Managing Self to Managing Others

New, young employees usually spend their first few years with an organization as individual contributors. Whether they’re in sales, accounting, engineering, or marketing, their skill requirements are primarily technical or professional. They contribute by doing the assigned work within given time frames and in ways that meet objectives. By sharpening and broadening their individual skills, they make increased contributions and are then considered “promotable” by organizations. From a time application standpoint, the learning involves planning (so that work is completed on time), punctuality, content, quality, and reliability. The work values to be developed include acceptance of the company culture and adopting of professional standards. When people become skilled individual contributors who produce good results—especially when they demonstrate an ability to collaborate with others—they usually receive additional responsibilities. When they demonstrate an ability to handle these responsibilities and adhere to the company’s values, they are often promoted to first-line manager.

When this happens, they are at Passage One. Though this might seem like an easy, natural leadership passage, it’s one where people often trip. The highest-performing people, especially, are reluctant to change; they want to keep doing the activities that made them successful. As a result, people make the job transition from individual contributor to manager without making a behavioral or value-based transition. In effect, they become managers without accepting the requirements. Many consultants, for instance, have skipped this turn, moving from transitory team leadership to business leader without absorbing much of the learning in between. The result, when business leaders miss this passage, is frequently disaster.

The skills people should learn at this first leadership passage include planning work, filling jobs, assigning work, motivating, coaching, and measuring the work of others. First-time managers need to learn how to reallocate their time so that they not only complete their assigned work but also help others perform effectively. They cannot allocate all of their time to putting out fires, seizing opportunities, and handling tasks themselves. They must shift from “doing” work to getting work done through others.

Reallocating time is an especially difficult transitional requirement for first-time managers. Part of the problem is that many neophyte managers still prefer to spend time on their “old” work, even as they take charge of a group. Yet the pressure to spend less time on individual work and more time on managing will increase at each passage, and if people don’t start making changes in how they allocate their time from the beginning, they’re bound to become liabilities as they move up. It’s a major reason why pipelines clog and leaders fail.

The most difficult change for managers to make at Passage One, however, involves values. Specifically, they need to learn to value managerial work rather than just tolerate it. They must believe that making time for others, planning, coaching, and the like are necessary tasks and are their responsibility. More than that, they must view this other-directed work as mission-critical to their success. For instance, first-line knowledge managers in the financial services industry find this transition extremely difficult. They value being producers, and they must learn to value making others productive. Given that these values had nothing to do with their success as individual contributors, it’s difficult for them to make this dramatic shift in what they view as meaningful. While changes in skills and time applications can be seen and measured, changes in values are more difficult to assess. Someone may appear as though he’s making the changes demanded by this leadership turn but in fact be adhering to individual-contributor values. Value changes will take place only if upper management reinforces the need to shift beliefs and if people find they’re successful at their new jobs after a value shift.

Passage Two: From Managing Others to Managing Managers

This leadership passage is frequently ignored, especially relative to the previous passage (where the transition to new responsibilities is more obvious). Few companies address this passage directly in their training, even though this is the level where a company’s management foundation is constructed; level-two managers select and develop the people who will eventually become the company’s leaders.