Study: Lack of ‘Ready Now’ Candidates to Fill Leadership Jobs

Korn Ferry Releases Third Installment in 'Succession Matters' Series

By Bill Leonard May 13, 2015
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Approximately one-half of business leaders responding to a global survey on succession planning admitted that their organizations did not have a solid pipeline of candidates who are “ready now” to assume critical leadership roles. The survey report further showed that slightly less than one-third (32 percent) of the business leaders surveyed felt that their organizations were doing a good job in cultivating leaders.

The report is the third in a series commissioned by executive search and management consulting group Korn Ferry and conducted by Hanover Research. The newest installment of the series is titled Succession Matters: Impactful Leadership Development and Accelerated Readiness. More than 1,000 business leaders from 54 countries and a variety of industries participated in the survey.

According to officials with Korn Ferry, survey data revealed that many organizations are not identifying and developing potential leaders among lower- and mid-level managers.

“Businesses are failing to begin succession and leadership development deep enough down in the leadership pipeline, and this is hugely detrimental,” said Jim Peters, senior partner and global head of succession management at Korn Ferry.

Just over half—54 percent—of respondents reported that their organizations were offering potential leadership candidates sufficient new challenges and assignments to develop their capabilities; 53 percent said their organizations identify candidates who are ready now for promotion into specific positions.

The report authors said it is fundamental that businesses give future leaders a variety of assignments and work experience during the development process. Leaders who have dealt with complex challenges in their career tend to perform at a higher level.

“It’s not enough to develop leaders generically and expect them to take on the specific challenges of a company’s strategic direction,” said Noah Rabinowitz, senior partner and global head of Leadership Development at Korn Ferry. “Development needs to be inextricably linked to business goals and strategy.”

The study also revealed that organizations that don’t start development early on in managers’ careers can find themselves without the talent they need when a leader resigns or retires. Almost 50 percent of respondents reported that their organizations are more likely to hire from outside than to promote internal candidates into top leadership roles—especially for top-level management or “C-suite” jobs.

“There’s no right answer or mix of how much an organization wants to build talent from within or to buy talent from the outside. It depends largely on your business strategy,” said Stu Crandell, senior vice president of Global Offerings at Korn Ferry and the Korn Ferry Institute. “For example, if you’re in a startup or turnaround situation, you’re probably going to need to bring more talent in from the outside. A good rule of thumb is that you want two-thirds ‘build’ versus one-third ‘buy,’ yet what we often see is the reverse.”

In addition, the report examined how organizations can and should determine the readiness of candidates. The best assessments come from live simulations that candidates must react to in real time, the report concluded. These simulations can demonstrate decision-making skills in high-pressure situations, indicating candidates’ readiness to step into senior leadership roles, according to Crandell.

“Simulated assessments clearly show a leader’s current state of readiness and provide a real taste of what a role will demand of him or her,” he said. “When organizations know the development gaps that need to be filled, management can then target development needs, often through coaching, to specifically close skill gaps.”

According to the report, successful leadership development initiatives should:

  • Have sound, reliable data. Decisions will only be as strong as the available information.
  • Be relevant to the business strategy, culture and mission.
  • Develop the whole person. Leadership characteristics should fit with the person and the organization’s culture.
  • Make development a journey. The best leadership development is an ongoing learning experience that aligns with strategic goals.
  • Treat leadership as a service. By contributing to the greater good of an organization, managers can better understand the power and impact of true leadership.
  • Use common language to encourage effective decision-making and talent-sharing across an organization.
  • Ensure that there is cross-functional development. Individuals and the business benefit when talent is accessible and developed across the entire organization.
  • Assess for readiness. The best practice is to use coaching techniques that deepen learning, close development gaps and strengthen accountability.
Bill Leonard is an online editor/manager for SHRM. Follow him on Twitter @SHRMBillLeonard.
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