Gear-Up!

The process of development of leadership talents in organization intends to deliver their future senior level leaders. This process, which I will describe later, received a lot of attention and popular discussion. Irrespective of the amount of attention there is still no general defined methods for the development of leadership skill . Development of leaders seems to be the least explored topic within the field of leadership  and systematic investigations on leadership interventions are rare in literature, as are theories of leadership development . 

But if this is so, then why has this not been flagged in the past as an issue, what changed in the environment of leaders that made this a need to look into? Though job titles have changed, from tribal head to CEO, the grooming of successors and nurturing of talents in organizational contexts has existed through the ages. Its origins are in family settings, where traditionally the parents raise their children to become. Be it a small or large barn, a blacksmith shop or a small company, the parents created a strong bench of internal successor(s) to safeguard the long-term existence of the company by preparing their children as successors. This nurturing the children is as natural as breathing itself, as one cares, and teaches what they need to know. Over time we evolve the challenges we have them face, and this increased complexity supports the children’s development and prepares them for their final challenge, the succession into the (family) business. As time evolved and complexity of the organizations increased, so did society and the thinking about leaders. From the environment came the diverse economic and technical development—and so did development of management, or so it seems. 

What changed really was that we became employees and managers instead of the owners of an organization. This does not seem to make a great difference to the leaders, who still lead people, still developed others to help the company prosper over the long term. But we started to behave differently. For instance, we found that the age-old and proven practice of one’s own children as the natural successor of a company disappeared when the managers stopped being the owners of the company. 

Now not only family members work in the companies and form their leaders. Also the companies have  become more and more an amalgamation of people from different backgrounds, which creates the new workforce. Stakeholders and stockholders now look at companies as an investment, where annual returns are one of the key drivers, instead of continuity and the ability to pass the business on to the next generation. In turn employees are – or should be- seen as assets for a company, where the company invests in these assets in order to ensure continued operational performance. In 2009 in the US alone, according to the American Society of Training and Development, $125.88 billion was spent on development of employees .

Through the hierarchical structures of our organizations, it is expected that the added value of the employee, increase with their rise in the hierarchy in companies. This is the rationale explaining why higher hierarchies in the organization are compensated (paid) more than employees lower in the organization. 
Any employee should bring a multiple of his or her cost as added value to the company. As with other assets, the investment in the employees has an expected return on investment. For this return to be optimized, it is key that the investment takes place in those employees who in future will bring the bigger added value, hence those employees who are expected to be at the highest point in the organizational structure, the future leaders. Of the population of employees, those with the talent to progress in the organization are viewed as a source of competitive advantage and a way to improve the bottom line . The iconic 1998 McKinsey study  depicted prominently the negative impact through the lack of care for Talents in the organization in their study, which first used the words “war for talent”. The finding of people with the potential to develop for senior leadership positions and the support of their development has since become even more important due to the demographic shift, which means that fewer people will become available to succeed the current senior level leaders. In a PricewaterhouseCoopers (PwC) survey it was found that 97% of CEOs stated that having the right talent is the most critical factor for business growth . It seems the continuing difficulties in many economies has strengthened this, as the Chartered Institute of Personnel and Development (CIPD) states in their 2012 survey that “in today’s challenging economic climate, the effective and strategic management of talent is critical to differentiate organizations from their competitors and drive business success” .

So, the awareness of the need to develop the right talents has increased. Combine this with the demographic effect that there are fewer talent to work with. For instance between now and 2020, 30 million US employees will retire, whereas only 10 million of the following generation are there to succeed them. The already existing ‘war for talent’ combined with this demographic effect, leads to an increased pressure to find and develop your own talent in the organization, as there might not be hat many ‘out there’ to fish for.  

Finally lets come back to the investment. A lot of money is already involved. Of the above-mentioned amount of $125.9 billion, 24% is spent on leadership development . 
A 2006 survey of HR leaders showed the number one problem for HR directors is identifying and developing the leadership talent needed for growth and expansion of their respective organizations . This is where this book finds its mark.