Grow your own leader

More than 40 percent of the upper level managers William C. Byham works with will be eligible for retirement within the next 36 months.

They come to Byham, president and CEO of Pittsburgh-based Development Dimensions International, because they want to prepare their companies for the executive shortage expected to dig its claws deeper into American businesses over the next 10 years.

Part of the shortage is due to the fact that nearly every company nationwide faces difficulty finding qualified workers. But another, more compelling reason is the simple fact that the number of people between the ages of 25 and 44 is decreasing and will be 15 percent lower than it is now by 2015.

Despite this pending leadership crisis, Byham says many executives fail to consider who will be their company’s next generation of managers.

“A lot of business leaders are in denial,” he says. “This is a big deal and it’s going to be a long-lasting deal.”

Some executives have already started grooming employees for future leadership positions. That’s not a bad idea, given the fact that Byham’s research shows that 70 percent of promotions to upper management positions come from within a company. Moreover, nearly half of the executives hired from outside end up failing.

These figures have convinced more than a few executives that they should start looking within their own ranks for future leaders. Byham suggests four ways to get started.

Create a pool of candidates

Identify employees who would make good leaders based on job performance and experience. Byham says only about half of the executives he works with tell their employees when they have been placed in one of these acceleration pools.

There are drawbacks with either choice. If you don’t share this information with employees, they may leave the company, believing their careers have stalled. On the other hand, since a promotion is never guaranteed, employees are periodically bumped out of this pool of future leaders, leaving managers with the task of explaining why.

It is crucial, then, to be selective when deciding which employees to include, so upper managers can maximize the time and attention the process demands.

“I believe you can only get a one-to-one ratio in a mentor or coach relationship,” explains Byham. “You only have so many people who can offer this mentoring role in an organization.”

Analyze strengths and weaknesses

Determine the competencies and weaknesses of the employees in your company’s acceleration pool. No matter how the process is handled, Byham urges executives to make sure the process is free of workplace biases.

These assessments are often handled by outside companies that operate assessment centers and are contracted to provide one-on-one, neutral evaluations of employee management skills.

“We’re dealing with people that haven’t had a chance to perform at (the executive) level,” Byham says of employees tabbed for future leadership positions. “That’s what an assessment center does best.”

Provide opportunities for growth

After determining in which areas employees need improvement, assign projects and responsibilities that help develop those skills by using real world experiences rather than training. It is commonly believed that time is the ultimate teacher, but Byham says experiences are more valuable than the amount of time served on the company’s payroll.

“What you want to do is make that development have the most impact as possible,” noting that it should also happen in as short a time as possible, he says. “People assume you have to take two or three years. You can do it a lot quicker.”

Review employee progress

Regularly evaluate the status of the company’s work force and, at the same time, check to see how candidates tabbed for future leadership roles have improved. The process depends on the size of the company, but Byham says ongoing involvement by management is one of the most crucial steps to the success of a leadership growth program.

“If you’re a company that has three divisions, you visit each division and go over manpower decisions,” he says. “At the same, you should be looking at acceleration pool members to see how they are progressing.”

How to reach: Development Dimensions International, (412) 257-3998

Jim Vickers ([email protected]) is an associate editor at SBN.