From Within: Developing Leadership Pipelines for Organisational Success

Our analysis, enriched by feedback from various high-profile CHROs, reveals a collective aspiration towards more dynamic and proactive talent management and succession strategies. 

Future Proofing Leadership: Enhancing Organisational Resilience

Recent evidence points to a reduction in the tenure of CEOs. A Harvard Law School Forum on Corporate Governance article cites that the median time-in-role of CEOs among S&P 500 companies decreased by 20%, from six years in 2013 to 4.8 years in 2022. Other research reports that there were 55% more CEO changes in 2023 than in 2022. Shorter tenures will mean increased change and flux, naturally begging the question of readiness to deal with leadership vacuums, even momentary ones. How are organisations being proactive in minimising the risk of leadership disruption, rather than reactive? 

We previously shared our insights into managing external talent pipelines: Strengthening Leadership Succession: The Critical Role of External Talent Pipelining and now turn our attention to how leading organisations are identifying, nurturing and preparing future leaders from amongst their ranks. The following themes have emerged as best practices:      

• Go deeper. While CEO succession gets natural attention and focus, strategic pipelining involves identifying and developing future leaders several layers below the top. In "The Leadership Pipeline" by Ram Charan and colleagues, six leadership transitions are identified, each requiring a shift in skills and mindsets. Developing talent for each career phase ensures a larger talent pool as mid-level leaders step into senior roles and senior leaders move into C-suite and CEO positions.
• Differentiated paths. The performance vs. potential debate has long been challenging, but CHROs now report a greater understanding of the distinction when speaking with stakeholders. They are becoming better at identifying the "best bets" for complex roles, and know it is important to clarify “potential for what?” at regular intervals – to ensure the pursuit of the proper development strategies. Clear specialist paths for subject matter experts, alongside high-potential leadership paths, reduce pressure on managers to push technical talent into broad, multi-disciplinary roles that may not match ambitions.
• Robust assessment mechanisms. CHRO respondents referred to diverse methods of identifying future leaders, including cognitive and emotional intelligence testing, metrics to evaluate potential and popular frameworks like leadership agility. Odgers Berndtson's research highlights Thinking Dexterity, Interpersonal Savvy, Personal Spirit and Growth Proficiency as key markers of future potential. A data-driven process improves the chances of preparing suitable individuals for future roles and developing under-utilised skills. Organisations are increasingly expected to showcase their talent assessment methodologies to demonstrate rigour, consistency, and fair governance.
• Measuring against external talent. CHROs report the use of external talent mapping and meaningful external candidate engagement to understand their talent strengths and gaps – this helps mitigate skill shortages, identify their competitive advantage, and promote equity. Increasingly, external consultants are engaged to provide objective insights into internal talent readiness, which also allows future leaders to reflect on their current position, future goals, necessary experiences, and the behaviours and mindsets needed to adapt to a changing business landscape.
• Comprehensive talent calibration. Most organisations recognise the risks of a narrow, department-specific view of talent. Sharing talent insights through well-structured forums across business units, functions, and geographies helps widen the organisational view of talent, and engage "ready now" successors by casting the net wider for growth opportunities. CHROs report using variations of the 9-box framework, organisation-wide talent mapping, and annual reviews to gain that broader perspective. Talent reviews are also an excellent opportunity to ensure talent and leadership programmes continue to align with organisational strategy and optimise talent deployment.
• Focused and actionable development plans. The 70/20/10 framework (Experience, Exposure, Education) is still widely applied to develop talent for succession. On gaining Experience, a more cautious approach is being taken to stretch assignments, rotations, etc. in uncertain times – as organisations strive to maintain stability and predictability. However, they continue to value Exposure through mentoring (and reverse mentoring), coaching, and engagement with external interests (e.g., professional bodies and board roles). On the Education aspect, there is increased use of app-based learning, VR and AR for emerging talent. CHROs also share that executive education (MBAs, EMBAs) remains critical for senior talent, fostering multi-disciplinary thinking, leadership skills and strong alumni networks.

Ultimately, the full benefits of effective succession planning are realised when several conditions are met. These include aligning succession and talent management objectives with the organisation’s strategic goals, viewing leadership succession as a business imperative rather than just an HR process, and ensuring talent conversations occupy meaningful space at the Board and senior levels. Additionally, treating succession as a holistic, forward-looking series of activities rather than isolated events is crucial. Progressive organisations understand their ability to “get succession planning right” is a real competitive advantage.

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At Odgers Berndtson, we function as strategic partners to our clients in shaping robust leadership pipelines – both with external talent through our expertise in accessing and assessing leaders and with internal talent in helping identify, develop and retain key talent.  

Get in touch. Follow the links below to discover more, or contact our dedicated leadership experts from your local Odgers Berndtson office here.