Are Leaders Born or Made?
2001, Volume 44, Number 12
Are Leaders Born or Made?
By William C. Byham, Ph.D.,
Development Dimensions International
More organizations are
growing their future leaders by identifying and cultivating their existing talent.
- Companies acquire
leadership talent through natural selection or by developing high-potential
- Employees in low-visibility
positions often are overlooked for leadership roles.
- Hiring from the
outside is expensive and lowers employee morale.
- An Acceleration
Pool helps employers identify and develop internal candidates for future
Nature versus nurture:
The classic debate has raged for years. What skills and attributes are individuals
born with? What skills and attributes can be developed over time?
This debate is at the heart
of how an organization acquires its leadership talent. Should companies let
born leaders rise to the top? Or is it better to attempt to develop promising
individuals into leaders -- to treat leadership as a discipline that can be
developed through knowledge and skill acquisition and the application of that
knowledge and those skills? Organizations fall on both sides of this issue.
While there are good reasons to support each, both approaches have drawbacks.
The Natural Selection
Many organizations adopt a Darwinian natural selection strategy
for filling their leadership ranks, assuming that the fittest successfully move
upward. These organizations need only have systems to identify the best individuals
and then apply appropriate compensation and other strategies to retain them.
Often, part of this approach is an inherent reliance on hiring individuals from
the outside if not enough people bubble up from within the organization.
This method is defined by
a mindset that dictates: Lets not try to change people. Lets
find the best horse and ride it. The approach presents obvious difficulties.
In the short term, it can be unfair to employees, because chance plays a significant
role in determining who gets developmental assignments and higher levels of
responsibility earlier in their careers. Frequently, individuals who have considerable
innate skills get trapped in organizational silos or by managers who dont
want to lose key contributors. As a result, they end up with a narrow scope
of organizational knowledge and experience, and a short list of achievements.
Meanwhile, less skilled individuals may benefit from receiving much broader
assignments with greater visibility, providing opportunities to build a better
résumé that will tip the scale in their favor when promotional
Also, talented individuals
often are overlooked because top management doesnt know them. They might
be in low-visibility overseas jobs, or dutifully carrying out special assignments
in small divisions of their companies. In some cases, they simply dont
have bosses who will promote their abilities.
Furthermore, the difficulty
in having the best people bubble up is exacerbated by fewer rungs
in todays organizational ladders, which provide fewer opportunities for
people to showcase their skills. Against this prevailing reality, people have
to sparkle early or they may not get another chance if they fail.
The corollary to the Darwinian
approach -- the reliance on outside hires -- also presents several potential
drawbacks. (See below.)
to Outside Hires
Hiring from the
outside is expensive. Its almost always more expensive to go
outside of the organization to hire talent. When organizations pay more
for outsiders, it creates a higher salary standard that ripples throughout
and retention can suffer. Morale is negatively impacted when the organization
hires people from the outside, rather than filling slots with internal
candidates. Employees see fewer opportunities for promotion and start
looking for jobs elsewhere.
can slow down. A company often is destabilized while the individual
hired from the outside learns his or her job, determines new strategy
and meets people within the organization.
Outside hires often
fail. A 1997 research study by the Corporate Leadership Council indicated
that 40 to 50 percent of outside hires fail within the first three years
of being hired.
Plant a Seed Watch
Some organizations invest in making their future leaders, rather
than taking the relatively hands-off Darwinian approach. They identify people
with leadership potential and attempt to nurture their skills and other attributes
an approach that is akin to operating a farm club for a professional
baseball team. These organizations attempt to find people with potential and,
with coaching and training, gradually move them up into increasingly important
and varied leadership positions until they reach the top executive ranks.
Despite the good intentions
and sound reasoning supporting this model, it poses the following difficulties:
- Developing leaders
is expensive. Providing adequate development opportunities, such as university
executive programs and in-house action learning experiences where teams of
high potentials tackle various organizational challenges, demands a substantial
amount of organizational resources. Making sure high-potential employees get
the job experience they need, along with the necessary coaching,requires the
significant commitment of one of an organizations most expensive resources
- Turnover can wipe
out development. If an organization is unsuccessful in retaining its star
performers, a lot of time and money invested in developing high-potential
employees is wasted.
- Selecting the right
people to develop can be tricky. An effective leadership development system
needs to have a good built-in selection system to identify high-potential
employees who can realize the greatest benefits from development.
- Development needs
need to be accurately diagnosed. An organization needs to find a way of
assessing the development needs of its high-potential employees so that the
effectiveness of development actions can be maximized. Many organizations
have given up on the developmental approach because they havent seen
anticipated on-the-job behavior changes. In many instances, the absence of
behavior changes stems from misdiagnosed development needs or an organizations
one-size-fits-all approach to development.
- Too often, development
doesnt happen. High-potential employees and organizational leaders
may have good intentions, but too often the intentions do not result in meaningful
developmental changes because development plans arent followed; conflicting
short-term job priorities and reinforcements divert attention from the plans;
and there are no opportunities for individuals to apply new skills and knowledge
once they are learned.
- Absence of new ideas
and fresh perspectives. An over-reliance on internal talent can make an
organization insular and prevent it from benefiting from new ideas and technology
and, most of all, new perspectives and strategies that outside hires can offer.
A Better Mousetrap
A Development Dimensions International (DDI) study of more than 1,000 executives
and HR professionals worldwide shows that most organizations would like to fill
70 to 80 percent of their leadership vacancies with internal people and the
remainder with talent from the outside. However, to draw 70 to 80 percent of
its leaders from within its own ranks, an organization needs an effective system
for developing a steady stream of internal leadership talent.
A study by McKinsey &
Company found that three-quarters of executives at 77 companies studied said
that their company either didnt have enough leadership talent at times
or was chronically short of talent. The study also revealed that
many HR executives are dissatisfied with their organizations approach
to leader development and that, while the majority of organizations are having
difficulty finding qualified leadership candidates, the percentage of organizations
with formal succession plans has actually dropped over the past decade.
A Blended Approach
The Acceleration Pool method is a new way of helping organizations fill the
desired 70 to 80 percent of leadership vacancies with high-quality internal
candidates. Acceleration Pools differ from traditional replacement planning
systems where individuals are designated to fill specific positions as they
become vacant. The traditional approach, based upon numerous outdated assumptions
-- steeply hierarchical organizational structure, stable jobs and strategy,
etc. -- is inefficient and requires an exorbitant amount of executive time.
The systems excesses were exemplified by one major U.S. company, which
discovered that its executives were spending upwards of 250,000 hours each year
discussing and filling out forms.
The greatest flaw of traditional
systems is that they generally dont work. Organizations that have conducted
research on their replacement planning systems have found that the designated
back-ups fill less than 30 percent of the jobs for which they are slotted --
an alarming figure considering the investment in the systems.
In the Acceleration Pool
system, high-potential individuals are identified and targeted to organizational
levels, such as general management, as opposed to specific jobs (although specific
individuals should be slotted to fill the highest positions). The individuals
are developed to be all-around athletes, who might merit consideration
for a variety of jobs within the organization.
What Benchmark Organizations
Effective succession management programs have the following elements:
- More accurate identification
of high-potential employees. Selecting the right individuals for the Acceleration
Pool is easier through improved criteria of what is needed now and in the
future, and by a more organized system of processing candidate information.
- Diagnosis of development
needs. The strengths and development needs of pool participants are diagnosed
through the application of multiple assessment tools, including interviews,
pencil-and-paper-tests, 360° multirater surveys and an Acceleration Center,
which is an updated version of an assessment center. Some organizations that
use Acceleration Centers include Steelcase, Dow Chemical and the United States
Candidates are assessed
against the following executive descriptors selected by the organizations
senior leadership for the target level of the pool. The four sets of descriptors
- Organizational knowledge
(what one knows). This refers to the level of understanding that those advancing
to senior management should have about the company, including organizational
functions, processes, systems, products and services.
- Behaviorally defined
competencies (what one is capable of doing). Competencies are clusters of
behavior, knowledge, technical skills and motivations related to success in
senior management, including developing strategic relationships, global acumen,
operational decision-making and communicating effectively.
- Executive derailers and
other personal attributes (who one is). These are predisposed dysfunctional
behaviors, including arrogance, risk avoidance, approval dependence and obsessive
- Job challenges/preparatory
experiences (what one has done). Individuals who are advancing into senior
leadership positions need to have a variety of experiences to prepare them;
such as, experience in implementing a companywide change, negotiating agreements
with labor unions or other outside organizations, and working at Web
Once this assessment has
been completed, the individual meets with an HR professional to learn the results
and to assemble a development priority list. In helping the individual compile
this list, the HR professional also seeks to determine any extraneous issues,
perhaps related to the individuals personal life, that might have an impact
on the development process or his or her retention.
- Organizational systems
that encourage development. In all of the benchmark organizations, a senior
leadership committee, which includes the CEO and/or COO, takes responsibility
for succession management. This committee takes responsibility for placing
pool participants in situations where they can gain organizational knowledge,
develop target competencies, experience key job challenges and work to overcome
their executive derailers. The HR department in these benchmark organizations
supports and facilitates the process, but does not own it.
In most organizations, the
committee meets twice a year with business unit leaders and other key executives
to discuss business needs and gauge the development progress of leadership talent
in the Acceleration Pool. During this meeting, the committee will make new assignments
based upon business needs and the diagnosed development needs of pool participants.
Pool members are assigned
mentors to help them achieve their development goals. They meet with their mentor
and their current manager to discuss the specific objectives of their job assignment
and how their development targets will support success in the job assignment.
Measurable development objectives are specified that align with the successful
completion of the job assignment. Thus, pool members are motivated to achieve
their development goals because they see a tangible impact on job performance.
Their managers are motivated to encourage and reinforce development activities
because they want to help the pool members succeed in their jobs. Bristol-Myers
Squibb uses development guides (internal professional coaches) in
its development planning process, in addition to a mentor and a manager.
Managers, mentors and the
individuals themselves know their roles and responsibilities in the discussions
and use forms that facilitate the development process.
A System that Works for
No matter on which side of the nature-nurture debate an organization is, the
reality is that it needs to effectively develop future leaders from its existing
talent pool. The Acceleration Pool is an excellent method for developing leaders,
by systematically and effectively selecting people, diagnosing development needs
and creating an environment where individuals are encouraged to grow.
Annual replacement planning
forms are no longer filled out. The system takes less time for middle managers
and no additional time for senior managers. The entire process is devised to
retain the best people by providing them with meaningful job challenges and
growth of their knowledge and skills. Throughout the process, their personal
and retention needs are considered in decision making.
The Acceleration Pools
greatest benefit is ensuring that an organization has the necessary leadership
talent to guide it into a bright and successful future.
About the Author
William C. Byham, Ph.D., is chairman and CEO of Development Dimensions International
and senior author of Grow Your Own Leaders.
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