Finding Leaders Early
Organizations and HR are more focused than ever on identifying and nurturing would-be leaders early on in their careers.
By Mark McGraw
IBM knows that the technology industry moves and changes at a pace that maybe no other field can match.
The Armonk, N.Y.-based computer software and hardware company also knows that it must remain on the cutting edge of the industry in order to stay competitive, and that the IBMers who will keep the organization there in the future must be extremely adaptable.
In fact, adaptability is one of the key traits IBM managers look for when spotting young IBMers with leadership possibilities, says Ted Hoff, vice president of leadership and learning at IBM.
Finding these future leaders earlier on in their careers has become an area of increased focus for the company in recent years, says Hoff.
"Change is a constant in our industry. And that's never been truer than in recent years. So, we look across all IBMers, asking managers and senior leaders to identify people with high potential, and the potential to stretch into new areas."
IBM managers are also expected to engage in discussions with these high-performing team members about their career interests, and provide guidance to would-be leaders around the development opportunities available to them, he says.
"This could perhaps mean an opportunity to participate in a formal leadership-development program, in person or online, but it's mostly about finding mentors or engaging in projects that help them become members of communities where they can learn from colleagues."
Hoff and the HR team ask managers and leaders "to encourage IBMers to take advantage of all those opportunities."
While the organization's methods for pinpointing employees with leadership potential early in their IBM lives are "fairly straightforward," the company strives to "continue getting better at it," he says.
One program designed, in part, to help these future leaders emerge early on is IBM's Millennial Corps, says Wagner Denuzzo, director of management development at IBM.
The program started as an informal initiative created through IBM's Connections social-media platform, a relatively new tool geared toward helping IBMers interact, manage projects and, many times, "initiate innovation that reflects their leadership abilities," says Denuzzo.
Millennial Corps, he says, is the result of a group of millennial-age IBMers taking it upon themselves to build a program in which they interacted with IBM clients in a workshop with the goal of creating engagement strategies for the cross-generational workforce of today and tomorrow.
The program has been met with positive feedback, and has made it clear that the young employees leading it "were actually high-potential IBMers to watch," says Denuzzo, adding that Millennial Corps has recently become an official group within IBM, working with senior executives on ways to increase engagement across generations of employees.
The need to spot and nurture these types of future leaders will only continue to increase -- and will continue to differentiate top companies in an uncertain and ever-more-demanding environment, says Lorraine Stomski, partner and head of Aon Hewitt's leadership-consulting practice.
"There are certainly challenges around driving growth, and some organizations find an insufficient number of leaders ready to meet those challenges," she says.
Factors such as economic uncertainty, and increasingly complex and ambiguous business markets are "changing the demand for talent and the [leadership] skills required for success," adds Stomski. "Companies need leaders [who] are going to adapt to the business environment more quickly, and that can be more resilient in the future."
A knack for finding and developing this kind of leader is a big part of what helped IBM land the No. 2 spot on Aon Hewitt's 2014 Top Companies for Leaders list. Experts say more companies and their HR leaders are recognizing the greater need to take such an approach to leadership development, and are placing a greater emphasis on earmarking future leaders in their careers' early stages.
An exceptional corporate leader typically possesses a combination of tangible and intangible qualities -- professional acumen, communication skills and uncanny business instincts, for example -- that spurs teams and organizations on to great things.
To compile Aon Hewitt's latest Top Companies for Leaders list, the Aon-assembled panel weighed criteria such as strength of leadership practices and culture, examples of leadership development on a global scale, alignment of business and leadership strategy, business performance and company reputation.
Of the 25 organizations to make the list (selected and ranked by a panel of independent judges including experts from the Wharton School, the Indian School of Business, PUC Minas and Ivey School of Business), the top five spots went to GE, IBM, Hindustan Unilever Limited, General Mills Inc. and ICICI Bank.
In its analysis, Aon Hewitt singled out five key characteristics all 25 organizations shared in their approaches to identifying and nurturing leaders (see sidebar). Those listed, for example, "assess the whole leader" early in their careers, evaluating leaders' experiences, competencies, values and organizational fit, according to Aon Hewitt's report on its most recent Top Companies list.
"What we see now is a really elevated urgency to develop leaders," says Stomski. "The environment we're operating in is a volatile one, which has really shifted what leaders need."
Indeed, given the increased focus on traits such as adaptability, more organizations are reconsidering how they evaluate a high performer's readiness for leadership roles, and how to develop the requisite skills, she says.
As such, the best companies for leaders are looking more closely at personality traits, she says.
"We see that overlaying everything," says Stomski, noting that what made organizations stand out in terms of leadership even two or three years ago is now "table stakes" for top companies.
"Some organizations are becoming more intentional in placing their high-potential talent into development experiences that stretch them out of their comfort zones, developing their resiliency and learning agility and potential."
For example, putting one of these employees in a developing market and having them work on a community project "requires them to be agile, resilient and resourceful," she says, noting that other Top Leaders companies incorporate inventory tests to help determine how an individual's personality is hard-wired toward learning, change and self-awareness.
At Top Companies for Leaders, "they're putting all these programs and practices in place that help them look at their current leaders and say, 'OK, how ready is the talent within your pipeline to take on these new roles?' And they're telling their current leaders, 'We're looking to you to make sure they are.' "
This increasing emphasis on developing leaders early is also "interesting as an outgrowth of what companies need to do to be competitive in what I call the 'transient advantage economy,' " adds Rita McGrath, associate professor of management at the Columbia Business School in New York.
"What that means," she says, "is that, increasingly, a company's ability to deliver exceptional results over time is going to depend on their key leaders being able to nurture new advantages."
The first step toward establishing such a competitive advantage is to pinpoint potential leaders early on in their careers and nurture them with stretch assignments and coaching, for example, reiterating to these high-potential employees that they have a bright future within the organization, says McGrath.
GE Crotonville, the Ossining, N.Y.-based home to the General Electric Management Development Institute, is well-known for producing leaders.
In fact, about 30 percent of the members of GE's current senior executive team are graduates of the Fairfield, Conn.-based company's leadership program, according to Marilyn Gorman, who is a member of the executive learning and development function at GE Crotonville.
GE will continue to look to Crotonville for coming generations of GE leadership, she says. But the top leaders that will emerge from the ranks will possess a slightly different skill set than those that came before. "In the last two or three years, we've taken an approach we called FastWorks," says Gorman.
The technique is based on concepts outlined by author Eric Ries in The Lean Startup, in which he espouses that organizations -- regardless of size -- adopt a more entrepreneurial, start-up mind-set in order to shorten product-development cycles, measure progress, become better attuned to customers' desires and "shift directions with agility," writes Ries.
That can be a tall order at a company as large and diverse as GE. Part of the training that newer employees receive at Crotonville is now designed to spot future high potentials with the flexibility to lead in rapidly changing environments, and cultivate a certain entrepreneurial spirit in those who will lead GE in the future. And, these same employees have greater input on how GE can improve in order to stay ahead of its competitors now, says Gorman.
"Whether it's a process or a product, we're asking [participants] what we can do that's faster, simpler and more flexible, and, in terms of our internal processes, to strengthen our connection to our customers."
Since adopting the FastWorks approach and integrating it into training efforts, "we've seen participants -- whether it's in class or just focusing on a project -- starting to challenge the assumptions we've maybe made in the past. There's a freedom for [high-potential employees] to learn, and it's helping us really build our next generation of leaders as well."
At IBM, managers are trained to keep an eye out for team members who take it upon themselves to seek opportunities for bolstering their leadership skills, says Denuzzo.
"We see new leaders emerging because they're taking initiative" on projects and on a day-to-day basis, says Denuzzo, adding that "there are ways of finding out who these self-starters are."
In addition to examples such as Millennial Corps, the organization has recently introduced new tests and tools designed to set select IBMers on the leadership track earlier in their careers, he says.
For example, young employees showing leadership promise and expressing an interest in becoming an IBM manager complete an online assessment based on a newly designed success profile, and undergo a formal assessment process that may entail online testing, interviews to determine areas for improvement and simulations to test their readiness.
And, these IBMers continue to receive such preparation when they actually become managers. For instance, brand new managers also undergo simulations designed to put them in situations they're likely to encounter in their new roles.
The new manager enters a simulated online environment, where they choose from a topic such as compensation or performance management, explains Denuzzo.
"The manager picks a subject that's most important to them, and begins a challenge," he says. "For example, the compensation challenge is a movie with a hypothetical scenario."
In said scenario, the rookie manager encounters an employee from his or her team who "wants to know what the new manager is going to do for him or her" in terms of opportunities to earn a larger salary in the near future, says Denuzzo.
The system allows for the manager to try his or her own response to the inquiry, then the manager receives some tips on how to handle the situation before issuing a response, after which "the manager watches a video for further context," says Denuzzo.
"We provide instant feedback, and move forward to another topic of their choice," he continues, adding that these new managers also have "an entire social network of managers to help them" via the Connections tool.
"Our perspective is that learning happens on the job, and it happens formally, informally and socially," says Denuzzo. "And we believe that offering IBMers the opportunity to go through these kinds of programs early in their careers is very important to their development as leaders."