With retirement on the horizon, William
was fully aware that selection of the individual who would succeed him
as CEO was of vital importance to the company. To this end, he had begun
a process which he believed would prepare the best potential candidate
for elevation to the position. A year earlier, he had promoted Frank,
his best and brightest executive, from CFO to the role of vice president
of North American operations. His hope was that after two or three years
with this responsibility Frank would be ready to become senior vice president
of global operations and eventually his successor as CEO.
As CFO, Frank had shown excellent leadership abilities,
a strategic mindset and a thorough understanding of both the business
and the competitive landscape. William knew Frank lacked experience
dealing directly with customers, but presupposed that in the VP of operations
role, he would receive enough exposure to teach him the skill sets required.
After intensive briefing sessions with customerfacing managers for background
information, meetings were arranged with all of the company’s top clients.
Soon after Frank started in his new position, it became
obvious that the competition was making inroads on the company’s customer
base. Sales and profits fell as defections continued throughout the
year. When questioned, clients indicated that Frank was not responsive
to their changing needs despite repeated attempts to communicate them.
In an attempt to salvage the situation, William arranged for Frank to
attend an executive education program on customer intimacy. However,
continued negative feedback indicated that his behavior had not changed
to the satisfaction of the clients. After 18 months of declining sales,
William was forced to terminate his former protégé. The company had
not only lost key customers, but also someone who was an excellent CFO.
In addition, it was now without a clear internal candidate to succeed
the current CEO.
Development of the next generation of leaders is one
of the CEO’s most critical responsibilities. As talent pools shrink
with the accelerating retirement of the Baby Boomer generation, the
preparation of candidates for the top levels of management will be even
more imperative. One method available to the CEO to increase the proficiency
of any high potential executive is providing custom-designed developmental
assignments or job rotations. However, as outlined in the example above,
when not properly planned and executed, the experience can fail to transfer
the hoped for skills and behaviors.
Why didn’t Frank’s perspectives and behaviors change
after prolonged interaction with the company’s customers? What made
the learning process less than successful? It may surprise you to learn
that disappointing results from on-the-job development experiences are
quite common. As an example, the expatriate experience, in which an
executive is sent to another country to run a business unit for a predetermined
period of time, has a notoriously high rate of failure. Other examples
of ineffective efforts can be pulled from current headlines.
Yet, despite this documentation, research clearly shows
that when successful executives are asked to recall their most valuable
learning activity, the vast majority of responses describe a challenging
on-thejob assignment. This would indicate that experience is one of
the most powerful developmental vehicles. Then why is it that knowledgeable
executives are still promoted into senior level positions lacking some
of the critical skills they need to execute their jobs successfully?
Why are so many companies concerned about the lack of adequate candidates
in their leadership pipeline? Why aren’t enough executives learning
what they need to know on their jobs to take a place on the executive
bench? These are questions the perceptive CEO must consider to ensure
that the developmental assignments his or her executives are undertaking
will deliver the desired outcomes.
Initially, the answer would appear simple. If a person
does not grow professionally from a developmental experience, then either
it is not the right experience, and/or the individual doesn’t know how
to benefit from the exercise. The solution, however, is more complex.