Managing Leadership^®

Recruiting executives from outside is proving, as we have seen in recent posts, to be distinctly problematic. Experienced managers at this level are dwindling, driving up costs for finding and hiring them. Often, part of the expenses involved are generous guaranteed payments in the event of the failure of the relationship; these are intended to enable the hire in the first place, by protecting the executive against the “risk” he or she is taking on by agreeing to the move. The irony is, as we saw yesterday, that these outside hires seem increasingly to have failure in their immediate future. And then the cycle repeats.

The obvious solution is to build solid, serious management and executive development programs within your own organization. It is really quite striking how much attention this seemingly basic idea is receiving in the press, lately. Consider this WSJ article on this topic. It describes a small company that has designed its own in-house executive development program. It has proven to be so effective they have expanded it; it even is becoming a draw encouraging new talent to seek out employment at the firm.

Note that the article touches on an internal dynamic similar to that discussed in yesterday’s post. Managers in this program are required to rotate into positions in varying departments and business units. As such, even though they aren’t outside hires, they can often be perceived that way by the new sub-organizations they’re placed in; they can even feel that way themselves, given the new sub-cultures they discover in these various positions. A benefit, though, is that since they are not outside hires, they have more time and resources to enable them to find a way to success – both operationally for their new unit and personally for their continued development as executives.

This program is cost-effective. It doesn’t have a school-house; it’s a virtual institution consisting of a selection method, attendance at outside business training programs, a graduated assignment system, mentors, and a committee of senior executives who spend part of their management time managing the growth of their successors. Ironically, this all was set up by a CEO who was, himself, an external hire.

In the current environment of scarcity, more companies are looking at building such programs to identify and develop talent from within. But, like so many trends, it can run away with itself. First, we shouldn’t forget that prudent hires from outside help a firm avoid insular thinking that can gradually distance it from the reality of its own markets. Second, such programs should be a continuous – not a stop-gap – feature of the management of a firm, and they should extend to all levels – not just executives, and even just managers, but throughout the staff.

Low- or effectively no-cost development programs can help people keep skills current, as well as generate new ones for eventual promotion. They can help staff rotate laterally into new assignments, generating greater job satisfaction and depth of experience and knowledge in the company, as well as better interoperability between units. At the same time, and just as importantly, they help assure staff at all levels that they have a future at the company. This, of course, helps assure that the company has a future, as well.

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