Readying the next generation of senior leaders for success is a core mission for any organization. Research published in the Harvard Business Review found that poorly managed C-suite transitions may result in nearly $1 trillion in lost value in the S&P Composite 1500 (which represents a massive 90% of U.S. market capitalization). On the other hand, stronger leadership development and succession planning could boost company valuations and investor returns anywhere from 20% to 25%. Yet many companies struggle to adequately prepare their high-potential leaders to take on senior leadership roles. A study by Deloitte indicates that this isn’t for lack of awareness: 86% of leaders believe leadership succession planning is an urgent or important priority. But only 14% of executives believe they do it well.
It’s about building your talent pipeline
When identifying a high-potential senior leader, most companies ask a common question: Is this person ready? However, the critical leadership development and succession planning question should be: How do we get them ready? The most successful companies are proactive, not reactive. Rather than focusing on identifying successors through performance, organizations should provide learning opportunities that help the next generation of leaders develop the experience and people skills they need to lead.
Succession planning and leadership development naturally tie together in an organization’s pursuit of preparing the next generation with vital leadership skills needed in the modern workplace. The Deloitte research report suggests that an effective leadership development environment includes an artful combination of three learning elements:
- Experience: Giving potential successors opportunities to learn through intentionally provided day-to-day experiences.
- Exposure: Establishing opportunities to learn from others inside and outside the organization, and from a broader ecosystem across industries and functions.
- Education: Developing successors’ expertise through formal instruction focused on building capabilities.
Using these elements to create a development process helps employees build the experience, skills, and competencies they need to excel in senior leadership positions.
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Dedicate your organization to development
The Great Resignation has proven that developing talent internally is essential to retaining top talent. That’s why continuous employee development—especially leadership development—should be part of your talent management strategy from the moment you onboard a new hire. Demonstrating a commitment to providing leadership training, investing in your employees, and creating promotion opportunities not only builds your leadership pipeline, but also helps you retain top talent. By dedicating your organization to succession planning through leadership development, you enhance career opportunities for all and create more incentives for employees to actively engage in the process.
The benefits of a succession plan focused on leadership development are:
- Creates a pipeline of high-quality candidates for critical positions
- Develops the competencies of your most valuable talent
- Helps retain your top talent
- Provides opportunities and incentives for high-potential employees to remain dedicated
- Avoids costly work interruptions
- Minimizes the threat and high cost of turnover
Closing the gaps in leadership development and succession planning
Closing succession gaps in your organization requires new insights and skills that can only come from experience, exposure, and education. How will you ensure that your next generation of leaders will get the experience they need to respond effectively to the myriad of strategic challenges your executives face every day?
Real-world simulations provide an immersive experience for candidates to hone, test, and practice their knowledge, skills, and capabilities. Executive Challenge™ uses a fully immersive business simulation to give your high-potential employees the insight and skills they need to deal with nearly every strategic challenge imaginable, from forming a strategy to making critical personnel decisions, setting operational capacities, and designing effective sales campaigns. In Executive Challenge, senior leaders are tasked with running a business in a fast-paced, competitive marketplace, an experience that helps them translate high-level strategy into sustainable business results, recognize personal leadership blind spots, and practice high-level influence and presentation skills.
What is your business doing to equip the next generation of executives with the skills and experience they need to succeed as leaders in your organization? Get in touch with the team to schedule a free demo today.
Not ready for a demo but want to give simulations a try?
We’ve created two free scenarios that you can download and try with your first- and second-level leaders. These simple exercises have been shown to create profound experiences for leaders on two important topics: resolving conflict and leading hybrid teams.
Could your team benefit from leadership development?
Effective leadership training should be:
- Truly productive
Experience scenario-based learning with these FREE leadership development scenarios with 1st and 2nd level leaders.