04 Aug 2020
Building a talent pipeline to increase confidence in leadership
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The Odgers Berndtson Leadership Confidence Index 2020 surveyed nearly 1,900 senior executives from companies in a variety of industries around the world to measure confidence in global business leaders to manage through disruption and drive success.
The report reveals a weak spot in terms of prioritising talent. Specifically, it found out that the lack of an adequate talent pipeline and succession plan can drive down confidence in leadership.
In Germany, this finding is backed up by academic research that reveals that, although organisations consider talent management to be very important, they often don’t have the processes in place to prioritise it.
So, how should companies prioritise talent to increase confidence in leadership and what are the longer-term benefits that can be generated by this shift?
Measuring confidence in an organisation’s ability to manage the talent agenda
Executives’ confidence in their leadership’s ability to prioritise talent planning is alarmingly low. According to the Leadership Confidence Index, only 11% of global executives are confident that their organisation is building an adequate leadership pipeline. Similarly, only 12% are confident in their organisation’s ability to manage succession planning.
Clearly, executives are concerned about succession management and the development of future high potential leaders, both of which are vital to ensure an organisation’s long-term success.
Leadership needs to demonstrate that it understands the importance of building high-quality talent pipelines far in advance.
“To build confidence in this area, an organisation’s leadership team needs to demonstrate that it understands the importance of building high-quality talent pipelines far in advance. Doing so will not only increase confidence in the organisation but also help it to attract and retain top talent for the long term.” says Marco Henry Neumueller, Associate Partner at Odgers Berndtson Germany.
Why every organisation needs a talent pipeline
Turnover is inevitable, even during times of economic volatility. That’s why an effective and proactive talent strategy, aligned with the needs of the business, is so important.
This includes putting the systems and processes in place to create a talent pipeline of potential candidates and specific talent pipelines, or succession plans, for key C-suite roles. The process of creating talent pipelines enables the identification of candidates who may be interested in taking on leadership positions within the organization as and when they become available.
Having an actively managed and dynamic talent pipeline and leadership succession plan is a key part of being able to weather disruption.
Robust, externally validated succession plans in place for the CEO and key C-Suite positions will go a long way to increasing confidence in an organisation’s leadership.
Building morale while building confidence in leadership
Another benefit of taking a proactive approach to talent planning is that employees feel more valued and engaged, which builds morale and confidence in leadership.
“Creating talent pipelines helps an organisation identify high performers and develop internal high potential talent. Employees who are identified as part of a succession planning process can then be given the training and leadership development coaching they might need.” says Emanuel Pfister, Principal at Odgers Berndtson Germany.
Identifying and nurturing high potential talent with the ability to learn and adapt with the organisation through uncertainty and disruption, helps to ensure an organisation’s long-term success.
Putting an abstract commitment to talent management into practice
An empirical study published in 2016 by a researcher in the Faculty of Management, Economics and Social Sciences at the University of Cologne found out that while German companies rate the importance of talent management highly, the quality of their talent management practices and infrastructure is often quite low.
The study, which was one of the largest ever done on this topic in Germany, asked 125 talent managers and other HR professionals about their roles and responsibilities in the talent management process, the processes and tools they use, and the success measures they apply.
The study notes that while the importance of talent management is recognized on an abstract level, it is inadequately managed in practice, perhaps due to the complexity of the task.
For example, only half of the companies surveyed attempted to measure and track the results of their talent management activities. In addition, external benchmarking is rarely applied.
The study concluded that despite the great importance placed on talent management in general by the leadership of German companies, there is a lack of commitment and support for the implementation of talent management activities which needs to be addressed.
A renewed commitment to putting in place the resources and infrastructure needed to proactively manage talent pipelines and create a focused leadership succession plan will go a long way to addressing the weakness in many organisations’ resilience to face disruption. The result will be renewed confidence in leadership, better retention of high-potential employees and a greater ability to adapt and thrive in a disruptive context.
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