How to effectively develop the next generation of leaders for your organization.
The engineering and construction industry is notoriously competitive. You often hear people say, “We work harder” or “We are more focused on our clients,” or “We can beat anyone’s cost.” A healthy sense of competition can be characteristic of success throughout the industry. However, when it comes to winning in the war for talent, many organizations overlook the critical nature of beating their competition in this domain. The best organizations know that firms with the best people have a clear competitive advantage.
To succeed over the next decade, organizations will need to not only attract great people, but also to retain their existing, high potential leaders. This requires an intentional effort to address two key issues. The highest performers want to (1) be recognized and rewarded for their contributions and (2) receive continuous opportunities to grow and develop. Many organizations tend to focus mostly on the first two. They reward high potentials through raises or bonuses. While this may generate short-term motivation, a monetary-based strategy won’t help retain your employees if your competitors can offer more. To build long-term loyalty and deep levels of motivation, organizations need to do more than simply offer monetary rewards for good work. Offering opportunities for high potential employees to grow and develop is a more strategic and more effective tool for retaining top talent and for maximizing their potential.
A recent FMI survey found that only 43% of organizations surveyed in the construction industry are using a consistent process to identify and develop the next generation of leaders. That means the majority of organizations do this inconsistently, or not at all. To win the war for talent, organizations will need to master the art of identifying and developing high potential talent, yet far too many have not even started the process.
While less common, the best organizations in the industry have identified a clear and consistent process for identifying and developing high potentials. They have built the internal systems and structures needed to ensure that their next generation of leaders is continually developing its skills. This greatly contributes to longer-term loyalty because leaders who believe that you are investing in their long-term potential have a greater sense of commitment to your organization. By helping leaders clarify their short- and long-term developmental goals, you are sending a strong signal that you are interested in their career growth and potential to take on additional challenges and roles. This type of proactive development is an intentional, focused and purposeful process that is planned out and implemented. This approach takes time and energy, but the payoffs are great. The three main steps in building a high potential program with a clear strategy include clarifying competencies, identifying high potentials and building the high potential program.
Clarifying Competencies
When building a high potential program, organizations must first identify the specific competencies required for successful leadership. Competencies are different from the basic job duties that you might find in a job description. The most effective competency framework identifies the specific skills and traits that separate the highest performers from average performers. While it may seem like an easy step to skip, establishing clear criteria for success informs the rest of the high potential program. If we truly understand what differentiates the success from average performance, then we can begin to evaluate and develop candidates in these key areas. Though every organization is different, competencies such as talent management, effective communication, self-awareness, and results-orientation might represent a few that are critical for a high potential leader to master. For example, if an organization identifies the need for high potentials to provide deep and meaningful feedback, this guiding competency will help clarify expectations for what high potentials must master in their roles and beyond. Once competencies have been identified, organizations can start to develop these competencies in their high potentials (through executive coaching or training, for example). Achieving these competencies should define success in one’s role and future career trajectory.
High Potential Identification
Top organizations expend a great deal of effort on effectively identifying their high potentials. Knowing that not every employee is a high potential, how can you identify these individuals? The most effective method is to assess candidates’ performance and potential objectively. This is critical because in the absence of an objective process with clearly identified criteria, subjectivity and favoritism tend to creep in. An objective identification process allows firms to separate out current performance levels from future potential. Current high performers may be great contributors to the organization, for example, but they may have relatively low potential for future growth. Likewise, current midlevel performers may have great potential for future growth with the proper training and development. Without a close examination of different candidates, we could invest in developing the wrong people or miss an opportunity to develop a future star player. Indicators for potential often include: learning agility, a passion for increased responsibility, and self-drive.
Assessing high potentials also requires a closer look at how each individual aligns with the organization’s overall purpose and values. Many companies get into trouble by promoting individuals who may be great performers, but who are fundamentally misaligned with the organization’s stated purpose and values. This can demoralize other individuals who recognize the disconnect. To achieve success, organizations developing a high potential program must ensure that the candidates closely align with the vision and culture of the organization. Having both current and future leaders who walk the walk is a foundational element of shaping a strong culture.
High Potential Program
Once the organization clearly identifies the required competencies for each leadership position and identifies its high potential leader group, the next step is to build a compelling and skill-enriching high potential program. This program should be designed to move the participants from their current state to a desired future state. Many organizations create unnecessary issues for themselves by cloaking the high potential program in secrecy. Instead, the program should be fully transparent across the company, including information about the participants and the selection process. When organizations invest a great deal of time clarifying competencies for success and identifying leaders based on clear and objective criteria, those who are/aren’t included in a high potential development program appreciate the rigor of the approach and tend to agree with participant decisions. Greater transparency can also be a great motivating tool to more individuals interested in what they need to do to be included in the high potential group. This may inspire them to take a deeper look at their own levels of performance.
Because high potential programs face insurmountable challenges when top leaders aren’t involved, the programs must have the right levels of executive and senior leadership support. Senior leaders will need to assist in the process of identifying the high potentials, communicate the strategy of the program to the high potential group and the broader organization and play an integral role in the various stages of the progress. A high potential program also requires commitment from key leaders, especially in the early stages. Internal champions must manage program logistics and ensure the right content and learning opportunities are present. Each high potential program will look different and be designed to support the larger initiatives and strategies of the organization. Most effective high potential programs use a variety of developmental options. For example, they may send their high potential group through formal training sessions (either internally or externally), pair high potentials up with an executive coach, or develop action-learning initiatives or stretch assignments. Regardless of the format, consistent, clear feedback is a hallmark of great high potential programs.
Preparing for the Future
Developing an effective high potential program requires an investment of time, energy, and resources, both initially and on-going. Some organizations in the industry have delayed this first step, with the mindset that they’re too busy getting work to spend time on internal initiatives. Those organizations will face great challenges winning the war for talent and will play catch up to those organizations that have already started. The most forward-looking companies recognize that to retain their top talent, they need to invest in developing the next generation of leaders. As the Baby Boomers continue to leave the industry, organizations will need to rely increasingly on younger workers to step up and take on levels of increased responsibility. If you aren’t preparing your next generation of leaders for that responsibility, you can expect to face great challenges in the not-too-distant future. The time to start developing your high potentials is now. Q
Tim Tokarczyk is a consultant with FMI Corporation. He can be reached at 303.398.7222 or via email at ttokarczyk@fminet.com. Emily Livorsi is a staff consultant with FMI Corporation. She can be reached at 303.398.7216 or via email at elivorsi@fminet.com.
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