Who Should Be Running Your Company?

The three systems that can change your company’s future

By: John Lankford

 

succession planningWe all know that hindsight is 20/20. Every executive can easily spot errors or omissions when looking at situations in hindsight. But think about it. Shouldn’t foresight be 20/20 also? In a word, yes, it should be. Imagine the possibilities, and success, if executives used foresight on an ongoing basis in all aspects of their leadership and selection decision-making. Instead it appears to be the opposite with a shortage instead of abundance of top leadership talent.

 

If you attempt to quantify the opportunities, imagine what would be different when your organization masters these three critical systems:

A)     Your hiring system for new managers/leaders

B)     Your system for promoting mangers throughout the ranks of leadership

C)     Your system for developing leaders

Ideally, one should scrutinize potential hiring decisions with an entirely open perspective, exploring every component of your system. Missing important details when making a decision or failing to anticipate the downsides of decisions greatly jeopardizes a company’s bottom line. Jim Collins, in his book “How The Mighty Fall”, says that executives should share the same top priorities:

–       Gross margins

–       Customer loyalty

–       Employee engagement
It does beg the question as to who is executing these priorities in your company. In other words, who is running your company?

If your company is not performing at the level you believe is possible, I suggest you take these three steps.

Step-1: conduct a business MRI on your hiring and selection system for all new management

Step-2: conduct a business MRI on your system for how you promote leaders up the ladder

Step-3: conduct a business MRI on your system for how you develop leadership talent

Are you ready for what you’ll find? Or perhaps the bigger question is, do you even have the courage to analyze these systems? Or, are you too busy?

Today’s executives are busy. And too often they find themselves lacking important information or the funds needed before making those decisions. This leads to making decisions that can often fall into the “why didn’t I see that coming” category. It’s human nature to get overenthusiastic about a new candidate and overlook if they are a truly a great fit for the key responsibilities required. Why don’t more companies make the decision to systematically develop their management team?

To better understand the impact of what you will find when you conduct your three MRI’s, let’s first break down your management team. 100% of your entire management team is currently distributed into four types of leaders, most of which are costing you every day. They are:

  1. Rockstars. Just as the name implies, this type of executive delivers fully on the “big three”: Deliver results, lives up to their values, and eagerly develop and inspires others.
  1. Survivors. They deliver results, but are not respected by their employees as they tend to be arrogant and even occasionally mean. Survivor executives tend to stay in position for long periods of time because they do get the job done.
  1. Midwest Nice. As expected, they are extremely nice and live the values, but they often don’t get the job done or at best deliver poor results. These “nice” managers also become blockers.
  1. Chameleons. Just like their namesakes, they tend to be two–faced and change colors as needed. They are nice when in a group – they say the right thing, but can turn on a dime when in one-on-one situations, making them very hard to work for.

Too many organizations have too many of all four types of the above leaders. L Often there is just enough information to instill confidence in the decision making process. If you’re not aware of this, it’s easy to continually make the same mistake. For instance, repeatedly hiring the wrong person for a position. Or not having a system in place for developing leaders internally. What most executives fail to realize is that promoting people past their talent level creates blockers. Blockers solve an immediate need but get bored over time and eventually clog your pipeline by being an average performer and preventing really talented managers from being promoted- continue this approach for ten years and you have put your company’s future at risk.

Here’s a surprising statistic. In our 2012 national survey of 33,000 executives, when asked, 39.6% of executives and respondents to a survey stated that they did not have a system in place for developing leaders within their organization. In fact, those respondents gave their organization a failing grade for not having this important system in place.

What are the key leadership traits that you should look for in an interview according to Jack Welch? The four non-negotiable traits are:

  1. Positive Energy. Think of this as the “Go-Go-Go” extraverted executive who thrives on action and is always positive. They love life and relish change, plus make friends easily.
  1. Energizes Others. These executives love to inspire others to do great things. They are great communicators and have a good sense of humor but are serious about work and have the enviable “can do” attitude.
  1. Edge. Tough decisions require courage. Executives falling into this type have that courage even when they don’t have all of the information needed.
  1. Executes. Putting decisions into action and having the ability to get the job done is key in this leadership trait. Winning is about results and the ability to execute.

In his book “Winning”, Welch adds one more characteristic to the four E’s above and labels it passion. What are you looking for when you promote leaders? What does your company’s development plans look like to continually improve their edge and their ability to execute at a high level?

Bear in mind that numbers three and four above can be developed and that strong leadership, not average leaders, is critical in order for an organization to be successful. Yet, it seems to fall short in many companies with 26.4% of executives feeling that the execution of their operational plan for the year was NOT a strength of their leadership team.

Another surprising statistic is how tolerable organizations are of employees who are not top performers. It makes sense that if asked if you would rehire from within your existing company, you would reply with a high percentage. Instead, 36.1% of survey respondents said they would consider rehiring LESS THAN HALF of their existing management team. This means that less than half of their teams can be considered top performers and that the rest are only being tolerated.

Pick one marker above all others to use as a warning sign. One danger sign that seems to be prevalent these days is the alarming number of declining proportion of key executive seats being filled by the right people. It’s time to evaluate your organization. Jim Collins states in his “How The Mighty Fall”, that you should be able to answer the following questions, 24 hours a day, 365 days a year.

–       What are the key seats in your organization?

–       What percentage of those seats are filled with the right people?

–       What are your plans for increasing the percentage?

Executives that can answer those questions have 20/20 foresight and the potential of a strong game plan. The key word is potential, but are you going to continue to tolerate your current situation or begin a new and improved path for growth?

John Lankford

John Lankford was recognized as the 2007-2010 Associate Business Advisor of the Year in North America and brings proven executive experience and best practices to select companies every year. He served 18 years at the Executive Education Center at Ford Motor Company and is former Senior Director of Ascension Health Learning Institute. John has developed top leaders around the world in partnership with the University of Michigan Business School, the Center for Creative Leadership, Comcast University and GE University, to name a few. His business expertise has been tapped by prominent business media such as the New York Times, CBS and Dbusiness magazine and has been a syndicated business columnist. He is the author of The Answer is Leadership and Superstar for life…Career Transitions. John’s keynote speaking has landed him on the elite team that trains and certifies the new Executive Coaches joining the worldwide coaching community. John is also former Chief Executive Officer of the Innisbrook Leadership Institute. Lankford can be reached at john@premierexecutiveforums.com or call (888) 730-1950

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