The next generation.

Following up on the introduction to the leadership topic presented by Jay Jamrog, Caren Gordon reviewed the research done by the Corporate Leadership Council on "The Next Generation: Accelerating the Development of Rising Leaders." Four major companies served as the models of current practice

Three distinct phases were identified in the leadership development cycle with specific practices linked to each phase, as shown in Exhibit 1.

Phase I: Redefining Leadership Needs

Leadership gap analysis is the key practice in this phase. A strategy-driven forecast identifies the leadership competencies and "bench strength" necessary to meet future corporate goals. Important factors in this phase are an organizational capabilities assessment to isolate critical skill investment areas and the incorporation of leadership competencies into the performance management system and individual development plans.

Phase II: Accelerating Development Trajectory

Two practices support this phase. First, the CEO-led talent audit consists of an annual audit of leadership in individual SBUs. The audit is intended to accelerate the development of the next generation and cross-calibrate performance and potential across the corporation. The objective is to break down traditional "chimneys": geographic, functional, staff and line, and cultural. Second, the appointment of cross-divisional development advisors allows each member of the company's executive committee to develop a portfolio of employees outside his or her own division to cross-calibrate performance and potential assessments. A 360 [degrees] leadership assessment is often incorporated into these performance/potential reviews.

Phase III: Engaging the Strategic Agenda

Again, two practices implement this phase. First, CEO challenge initiatives consist of high-profile developmental assignments intended to provide maximum learning to high-potential leaders. The company benefits from the assignments, and the CEO uses results as key input in deciding on high-level executive appointments. Second, a "shadow cabinet" is established. A standing group of high-potential employees convenes regularly to consider "live" issues on the agenda of the firm's executive [TABULAR DATA FOR EXHIBIT 2 OMITTED] committee. This practice is useful for developing the instincts of members of the shadow cabinet as well as for enhancing the perspective of the executive committee in actual deliberations.

Talent as a Corporate Asset

Some fundamental propositions underpin the process of accelerating the development of rising leaders who represent critical corporate assets. Among the most important to human resource leaders involved in executive development are as follows:

* Quantitative rigor characterizes successful gap analysis. A data-driven approach to identifying the number and type of needed leaders creates a tangible sense of urgency around a fuzzy, distant problem.

* The most leveraged use of leadership gap analysis is as an organizational change tool. Progressive CEOs and HR departments communicate the necessity for change by sharply contrasting future leadership needs against current competencies.

* For the relatively small set of talent with potential to fill top leadership roles, the corporate center must work with SBUs to develop new, empowered "movement" mechanisms. Self-reliant development is simply too slow to accelerate trajectories sufficiently.

* The CEO and senior executives - not HR - must "own" decisions regarding talent movement. The most effective efforts to accelerate movement build confidence among these executives in the quality of top talent working in other divisions.

* Pragmatic reality calls for checks and balances to ensure executive commitment to development. Without mechanisms to enforce the necessary quantity and quality of interaction, executives invariably focus on short-term issues of greater immediacy.

Gordon summarized the practices of leading companies by referring to Exhibit 2. To accelerate the development of rising leaders, a significant shift in emphasis and action is critical to success.

EXHIBIT 1

Accelerating the Development of Rising Leaders

Phase 1. Redefining Leadership Needs

Practice 1: Leadership Gap Analysis

Phase II. Accelerating Development Trajectory

Practice 2: CEO-Led Talent Audit

Practice 3: Cross-Divisional Development Advisor

Phase III. Engaging the Strategic Agenda

Practice 4: CEO Challenge Initiatives

Practice 5: Shadow Cabinet

[C]1998 Corporate Leadership Council