Have you seen the disturbing headlines (du
jour) in the business press? Executive turnover is continuing a steady
trend upward. If you are a business leader, you probably have one of
two reactions to that news: Either you're excitedly looking at
your options to jump ship, or you're wondering how the heck to
ensure a solid pipeline of executive talent for your organization.
The online Wall Street Transcript
characterizes executive turnover as being "on a tear" over
year. And figures compiled by Liberum Research offer a sobering
comparison of January 2011/January 2012 changes for CEOs (up 191%),
CFOs (up 144%), and C-level executives (up 107%). The latter category
includes board members, CEOs, CFOs and other execs down to the VP
level. Sectors taking the hardest hits across the board: energy,
banking and drugs/biotech.
And turnover among executives
a matter of choice. Along with voluntary departures, there is the
still-fresh-in-our-minds loss of Steve Jobs - and the protracted
debates about succession that his long-term illness engendered -
remind us that the unexpected can happen to anyone at any time ...
potentially leaving a void at the top of an organization. Further,
ethical missteps, sudden changes in organizational structure,
unforeseen market shifts, changes in business strategies or results,
and other factors offer vivid reminders that involuntary turnover at
the executive level can have profound and rapid ramifications.
ahead for organizational leaders
In the shadow of executive turnover
concerns, leadership-related research conducted by i4cp confirms that
companies are concerned about the challenges that lie ahead and about
their ability to prepare leaders for them. When we surveyed 512
business leaders late last year, these were their predictions about the
issues their leaders could look forward to:
The high response percentages
affirm significant agreement that the future will bring leaders a wide
array of issues to manage. But in this and other i4cp surveys,
respondents also revealed that their effectiveness at developing
leaders isn't what it should be.
There are other considerations,
too. Even if leaders can be found, groomed and retained, they need to
operate within a supportive environment if they are to achieve success.
For instance, organizational cultures must facilitate good leadership
outcomes. HR, learning and other functions play key roles in leadership
success. Business strategies must be carefully developed and the
mechanisms put in place to guide their execution. These are just a few
of the elements that enter the overall leadership mix.
Like tremors building toward a
major earthquake, steadily rising executive turnover, predictions of
coming leadership challenges, acknowledgement of poor leadership
development results and questionable organizational support factors
signal trouble for companies that don't take action to improve.
Will there be qualified talent to populate executive pipelines? If
organizations can find the candidates they need, how do they ensure
that their leadership development programs are equal to the task of
preparing emerging leaders effectively? How can leaders determine and
orchestrate the "right mix" of supportive factors?
In a 2011 i4cp survey into
leadership competencies, results found only one in four organizations
taking action to a high or very high extent to address the various
barriers they encountered in their efforts to develop future leaders.
The same percentage of survey respondents confessed that their
companies were doing little or nothing at all to overcome obstacles
impeding development - a sure recipe for eventual disaster.
work to improve leadership development
That same survey confirmed that
high-performing organizations (based on revenue growth, customer
satisfaction, profitability, and market share) do more to tackle
barriers to leadership development. Leaders of organizations focused on
performance educate themselves about the business environment. They
read the research, they monitor trends in their own and other
industries, they study the strategies that winning companies use, and
they implement initiatives aimed at improving the results their firms
For example ... Texas-based
energy company Luminant - an i4cp member - read the
handwriting on the wall for its industry and undertook a proactive
workforce planning program to identify critical jobs (including
leadership positions) at risk due to retirements and turnover. Once
talent risks are assessed, Luminant's workforce planning team has
the information it needs to prioritize pipelines to be stoked.
When it comes to building those
pipelines, the company enhances recruitment and outreach efforts by
operating Luminant Academy in Tyler, Texas. There, the company pays for
high school students to study a Luminant-developed curriculum designed
to teach the skills needed for future employment at the company's
At ConAgra Foods - another
i4cp member organization - development of an HR data warehouse is
underway, and workforce metrics already are in use to provide insights
into key issues. The company uses quality scorecards to help identify
trends in such areas as attrition, succession and internal movement.
Applying metrics to regularly gauge workforce issues (including
executive turnover) can help empower leaders at any organization to
recognize and avert potential problems before they occur.
High-performing companies work to
identify and address issues that drive turnover, interfere with
succession planning and impede leadership development. They look for
ways to gauge the health of their leadership and crucial role
pipelines. They assess the results their development programs achieve.
i4cp research shows that higher-performers apply metrics more often
than lower-performers do. High-performers use a broader range of
to focus on executive leadership development
Executives in higher-performing
companies are driven to build a thorough understanding of key
leadership issues and the innovative and practical strategies that can
make positive differences in their business results. For leaders who
want to take their know-how to a higher level, i4cp created a program
of strategic working groups - called Exchanges - to offer
an exclusive and powerful resource to fuel growth and change. The
disturbing trends in executive turnover and leadership development are
behind a soon-to-begin Executive Leadership Development Exchange that
will enable members to investigate, collaborate, share best practices,
and craft new tactics to help them build reliable pipelines of prepared
leaders for their organizations.
Exchange participants will work
together with subject matter experts, researchers and colleagues on
actionable takeaways related to such crucial considerations as these:
- Managing supply chains for senior leadership
- Understanding the trends that affect supply and demand of
- Making build-versus-buy talent decisions
- Designing leadership development programs and experiences
that really prepare and engage leaders
- Defining and applying metrics to capture ROI on development
- Exploring succession planning, coaching, governance,
high-potential programs, competencies and other key aspects of
There are many ways for
organizations to make positive impacts on leadership development and
executive retention - from DIY efforts to collaborative learning
and strategy-building offered by working groups like i4cp's
Exchanges. The point is that the writing is already on the wall. The
trends in executive turnover and leadership development ineffectiveness are gathering more
momentum every day. Your organization can shape its future, or become a
victim of it. It's time to decide.
Carol Morrison is a senior i4cp
research analyst and has authored white papers, playbooks, reports,
analyses and other publications on a variety of topics related to human
capital, leadership and talent management. Feature articles by Carol
can be found in Talent Management Magazine, Chief Learning
Officer, HR Executive and in other leading print and online media.