Leadership is among the biggest challenges of our time. Without proper leadership, companies can fail and people’s lives can be disrupted.

It’s one of the challenges every corporation has to solve, no matter how small or big they are. One of the key aspects of leadership is the development and succession process at play. Without a proper leadership succession plan, the effects can be long lasting.

In this guide, we’ll look into one of the frameworks for building the next-generation leaders: the leadership pipeline model. We’ll examine the definition, the core components and the advantages of using the model. We’ll also provide tips on how to make the most of the system in your organization.

THE HISTORY OF THE LEADERSHIP PIPELINE MODEL

Issues regarding the succession of leadership have not been recent phenomena. Every company in the past would have had to think about how to guarantee the company continues to move forwards and to fill the leadership roles as people move on for a variety of reasons. For years, organizations have struggled with the task to a varying degree. Finding the necessary skills for these demanding positions has been, and will be, the most pressing human resource challenge to tackle.

Therefore, out of challenges organizations and theorists began experimenting with ideas and models around leadership succession. In the 1970s, Walter Mahler published a framework on his findings at General Electric. The paper ‘Critical Career Crossroads’, in which Mahler argued for shift in work values at different stages of the organization to ensure leadership success.

By focusing on the different stages, the management can ensure success as people move upwards within the organization’s structure. After publication, Mahler’s model was implemented in over 80 companies across the US. In 2000, Ram Charan, Stephen J. Drotter and James Noel developed Mahler’s ideas further in their book The Leadership Pipeline.

The book’s findings and recommendations were based on over 30 years of consultancy experience, with the writers having worked with a number of Fortune 500 companies. The objective was to present a strategy that would provide organizations with a model for nurturing leadership. It presented a six-step leadership pipeline model to reflect on the major events every leader goes through.

Charan, Drotter and Noel’s model outlines a framework of leadership development from the junior positions to senior executives. The model seeks to ensure organizations have strong leadership that stems from within the organization. Instead of the organization having to look outwards to find suitable leaders, the leadership pipeline model creates an internal stepladder that moves eligible candidates from one position to another.

The leadership pipeline model generates a framework, which identifies leaders, assesses competencies of the leaders, plans leadership development, and measures the effectiveness of the model. Charan, Drotter and Noel updated their ideas to further fit today’s challenges in 2011.

THE SIX STEPS OF THE LEADERSHIP PIPELINE MODEL

As mentioned in the previous chapter, there are six steps to the leadership pipeline model. Each stage is created in a way that the leaders are able to develop the competencies required for the next step and to ultimately lead to the ability to be in charge of the organization. The below describes the function of the step and the focus point for each level.

Although these are a great representation of the leadership passages, your organization might notice distinctive aspect you need to consider when implementing the steps.

THE LEADERSHIP PIPELINE MODEL
Step 1: Managing Self to Managing Others
Step 2: Managing Others to Leading Managers
Step 3: Leading Managers to Functional Manager
Step 4: Functional Manager to Business Manager
Step 5: Business Manager to Group Manager
Step 6: Group Manager to Enterprise Manager

Source: Tools 4 Management blog

Step 1: Managing self to managing others

The first step involves the employees, with still relatively little leadership experience. The employees are generally equipped with technical and professional skills, but not necessarily enhanced personal skills in terms of leading or managing others. The aim of the step is to sharpen and broaden the individual skills, with the ability to understand and accept the company culture at the top list of the skills that need to be taught.

During this initial process, the employee will become better at the initial responsibilities and eventually move towards the role of first-line management. According to Charan, Drotter and Noel, the first leadership passage can be the hardest, as it requires a shift in behavioral or value-based transition.

The skills employees should be taught during the first step include planning work, assigning work, the ability to motivate and coach others, and assessment of other employees. The emphasis is on the basic functions of management, such as reallocating time and other resources.

Since time management will increase in importance as the person progresses in leadership, the ability to allocate time efficiently is crucial for further development. But aside from the behavior changes, the step also emphasizes value-based changes. The employee attitude has to shift from tolerating management to valuing its importance.

The attention must shift from purely individual-focused mindset to understanding the value of control and team effort. While the job description of the first level managers still has individual responsibilities and tasks, they must slowly start shifting the mindset towards managing others, rather than just themselves.

Step 2: Managing others to leading managers

Charan, Drotter and Noel found the second step to be the most neglected passages among organizations. They felt the step is the most crucial as it “is the level where a company’s management foundation is constructed; level-two managers select and develop the people who will eventually become the company’s leaders”.

Therefore, it’s essential to get this point right. On the outset, the difference to the previous step is not as obvious, but the divergence is found on the level of tasks. The second-level manager must be able to divest him- or herself from the individual tasks, to purely managing others.

The focus in terms of skills will be on the ability to assess and select others for first-level roles, assigning and assisting them with managerial work, and measuring their progress in the new role. The first-level managers essentially become the mentors on stage two. In order for the leadership pipeline model to work, the second-level candidates have to be able to understand the value-based requirements of managers.

As Charan, Drotter and Noel wrote, “one of the tough responsibilities of managers of managers is to return people to individual-contributor role if first-line managers don’t shift their behaviours and values”. The other major skill to focus on at the second-level deals with coaching. Coaching of first-line managers can often be rather limited and therefore, the managers of the second-level should be able to provide performance-feedback. The emphasis begins to shift slowly towards the importance of mentorship and away from purely focusing on processes.

Step 3: Leading managers to functional manager

The third passage sees managing managers turn into functional managers. The change might not seem significant, but there are major changes to be discovered. The key to becoming a functional manager is developing the leader’s communication skills further.

Furthermore, functional managers are required to widen their understanding of the organization beyond just the tasks and performances they need to manage. Since the functional manager will be dealing with other managers, they must be good at understanding the different needs in a variety areas of the organization – in essence, the skill of “seeing the big picture” becomes increasingly important.

The main skills that need developing at this point are: the ability to be a part of the team (i.e. communication) and understanding the needs and concerns of others. The functional manager must be able to compete for resources, while maintaining the operational needs of the business at the centre. The development needs to start focusing more on the strategic abilities of the person and enhance his or her ability to delegate tasks to other managers and employees.

The emphasis becomes on focusing on long-term strategy, which is something Charan, Drotter and Noel called “managerial maturity”. This is described as an ability to create a functional strategy, which “enables them to do something better than the competition”. The functional manager is able to look beyond the current moment and devise strategies that give the organization a competitive edge in the long-term.

Step 4: Functional manager to business manager

During the fourth passage, the manager makes a big leap in the leadership scale. A business manager will need to be able to perform under bigger pressure, as the autonomy to make decisions expands further. The organization must find the right employees to this process, as the passage requires real leadership skills from the employees.

The fourth level is an important shift in the leadership pipeline model since the skills start shifting from being able to manage to being able to lead. The passage is not just about being able to think strategically and improving your ability to allocate time and resources. The step to becoming a business manager requires deeper understanding of functionality and its influence to profits.

The development focus should turn to improving the manager’s ability to work, inspire and control different teams. The manager must become skilled at understanding how different people operate and improve his or her abilities to understand employees at an emotional level. The ability to understand emotional intelligence should be at the heart of the development process. Furthermore, the focus should not be just on the ability to manage different people, the business manager must also understand how different functions operate together.

The emphasis must be on the strategic trade-off between future goals and the present needs of the organization. The manager can’t just ensure things are working smoothly, but he or she must be able to meet the financial requirements and needs. This means understanding how current functionality will influence the profits in the future.

Instead of allocating time and resources, the business manager will spend most of his or her time reflecting and analyzing the past, present and future performance. According to Charan, Drotter and Noel, the fourth passage can lead to problems in the leadership pipeline model. For the passage to work appropriately,

business managers must learn to trust, accept advice, and receive feedback from all functional managers, even though they may never have experienced these functions personally.

Step 5: Business manager to group manager

The shift from a business manager to a group manager is the most evident in the value they are able to put on different businesses. While a business manager will continue to focus on his or her team’s achievements, a group manager takes satisfaction from the success of others. The passage is about discovering those people who are able to support and encourage other managers to excel, instead of focusing on being perfect themselves.

The passage requires the development of the four skills. First, the emphasis should be on evaluation skills and devising strategy, which appropriately focuses on capital allocation and deployment. This is about the ability to analyze and identify the right data, as well as the application of the right corporate strategies in any given situation.

The second skill involves the development of other managers. Although mentoring is important in all the previous passages, the ability to identify and support the right talent becomes crucial at this part of the pipeline model. For the third skill, the group manager must be able to start looking at the broader business needs, in terms of expanding and growing the operational aspects of the business.

A group manager must be able to consider new ventures and the discarding of old operations if they aren’t supporting the profits of the organization. Finally, group managers must become better at self-actualization. According to Charan, Drotter and Noel, leadership becomes a holistic practice at this point. The holistic leader has to “evolve their perspective to the point that they see issues in the broadest possible terms”.

Step 6: Group manager to enterprise manager

Finally, the leadership pipeline model reaches the final passage, which sees group managers become enterprise managers. The emphasis at this point becomes almost solely value- rather than skill-based. The leader’s abilities should already have been proven in terms of the technical abilities.

From now on, the leader must be able to highlight the values behind their leadership strategy and success. The role of an enterprise manager becomes more about the long-term vision, although there is still some need for maintaining the short-term functionality. Above all, the final passage leaders have to become outward looking in their approach to leadership.

The development of the final stage leaders must emphasize visionary rather than strategic thinking. At this level, leaders must be able to think big and see the road ahead, even when it hasn’t been made yet. The leader has to learn to focus on the whole, instead of the individual pieces that make up the organization. Micromanagement is not something an enterprise manager should be concerned with.

Since the leader in the final passage will be in charge of the whole organization, the ability to inspire and motivate are crucial. The leader has to be able to communicate the vision clearly; otherwise, the pipeline will start clogging up.

THE ADVANTAGES OF USING THE MODEL

Applying a leadership pipeline model to an organization can provide a number of benefits. These advantages can be divided into two major groups: improvements in operational efficiency and improvements in employee skills and capabilities. Both benefits with their detailed advantages are examined in the below chart:

Improvements in operational efficiencyImprovements in employee skills and capabilities
The leadership pipeline model facilitates the selection process of the organization and its succession planning. This will boost the overall leadership development process, ensuring the organization has enough in-house talent.

 

The process also provides the HR department with a better understanding of the current leadership situation. The department will have better knowledge of the current, as well as the future, level of leadership skills in different stages of the organization, which allows for better planning in terms of staffing. The department doesn’t have to resort to additional training or hiring based on previous qualifications, but based on objective examination of the skills. Overall, the department will enjoy from the ability to better respond to staffing changes.

 

The ability to move people to higher leadership positions in-house, with a correct understanding of talents, will enhance operational efficiency. The staff is already equipped with enough information about leadership, but also the organization and therefore, the transition is smoother.

 

The skills required for each level are clearly defined, guaranteeing the process for replacing talent won’t take long, as the needs have already been clearly defined.

The leadership pipeline model is effective in empowering the organization’s employees and transforming their skillset to new heights. The model creates a transform where employees have a clear career path available to them, which can be a powerful motivation in terms of productivity, but also skill development.

 

The framework creates a system, which allows the employee to identify their specific capabilities, enhancing and nurturing their unique talent. This will ensure the employee will find him- or herself in positions that are most suited for him or her. This not only puts the right employees in the right jobs (boosting operational effectiveness), but also guarantees the person feel satisfied in the position. The selection to leadership positions is based on skills, not position currently held. Therefore, it provides everyone with the same opportunity to move upwards.

 

The model generates a system where people go after their individual career goals with speed. As mentioned above, the framework guarantees a path to move forwards, within an organization they enjoy working in. Overall, it can reduce a risk of people switching organizations because they already have opportunities to grow and develop further.

 

 

Overall, the big takeaway from having a leadership pipeline model implemented it’s the fact that the above benefits are not just for the organisation or the employee. As the chart shows, both parties can benefit from the framework, ensuring that the system is a win-win for everyone.

THE BUILDING BLOCKS OF SUCCESSFUL LEADERSHIP PIPELINE

Despite the benefits listed above, leadership succession remains a cause of concern for a number of organizations. DDI’s Global Leadership Forecast from 2011 showed how only 38% of participating leaders said the quality of leadership within their organization is either very good or excellent.

More importantly, only 18% of HR professionals in the same survey felt the organizations have a strong bench to respond to future needs. In order to make the most of the leadership pipeline model, organizations must also focus on the following four elements.

A simple system with buy-in from the senior leadership team

The focus should be on creating a clear and simple pipeline framework. The more complex the program, the more it risks failing at some point. If the organization is able to reduce the bureaucracy required to run the system, then it ensures the system is based on clarity and effectiveness. One way to remove complexity from the system is by narrowing its focus.

The processes used must be focused on the actual objectives and the needs of the organization. There’s no reason to add broadness by creating a far-reaching process when there is no need for it. The scope is at its best when it doesn’t focus on every person within the organization, but narrows the effort down towards a few key players.

Furthermore, it’s important to ensure the system is flexible enough to respond the changing needs within the organization. Organizations can grow, reduce or change objectives and the leadership pipeline model has to be flexible enough to respond to these changes without much trouble.

At any stage of the process, the evaluation and implementation of the model shouldn’t be on a single person’s shoulders. The model won’t achieve its objectives if there is only a single leader making all the shots. Although the detailed activities will be best dealt with by the specific management teams, depending on the level of the model, overall, the leadership pipeline model requires a buy-in from the senior level.

By having the whole organization and especially the executive behind the model, the success of the program is more guaranteed. It creates a more cohesive and supportive environment for the program to work. Cohesion in implementation is not the only benefit of executive buy-in, as organization-wide focus ensures coaching is more varied throughout the organization.

You don’t want to end up in a situation where each management level only has one suitable mentor, inspiring the next generation of leaders, but you need a number of different leaders supporting the upcoming talent. The more you can gather up in-house involvement, the better the results will be. It is possible to provide outside consultancy with a leadership pipeline model, but you want to aim to have a situation where a large part of the development process can be dealt with people working in the organization.

Focus on development

Once you’ve identified the talent, you want to nurture and you’ve created a flexible and non-complex process in place, your attention must be on development. The most important part of a leadership pipeline model is development at each stage of the managerial hierarchy.

This means that the nurturing of the high-level executive should not be any better than the lower level development. Leadership starts from the bottom and therefore, you need to ensure each of the six steps outlined above is working to its full potential.

The key thing to understand is how development never ends, even when the leader assumes his or her position. Development and engagement matters in the workplace, as it creates a more motivated workplace. One recent survey highlighted how employees with properly engaged managers are 59% more likely to stay motivated themselves.

A leadership pipeline model must emphasize the importance of continued learning among leaders, people participating in the program and other employees as well. Therefore, you need to provide enough resources and tools at all stages to ensure skills and qualities are adequately improved and enhance.

Another important point to understand about developing leadership is how the organization must have a mixture of internal and external talent. By just focusing on in-house training, you can miss fresh perspective on how the organization should operate. Therefore, the implementation of a leadership pipeline model should not mean you stop the recruitment process altogether.

You definitely want to ensure the organization is adequately recruiting fresh, graduate-level talent. This can help you better understand and identify the current skill level and get new perspectives regarding the future talent. By focusing on graduates, you are able to adjust your leadership pipeline requirements further.

Assess and identify potential

Leadership positions aren’t for everyone and you shouldn’t expect people to want to climb up the career ladder. It’s important to ensure you continue to assess and to identify the potential, within and outside of your company. The aim is to ensure the most qualified people are participating in your leadership pipeline and the positions are filled with talented and motivated people.

As mentioned above, don’t rely solely on your in-house pipeline, but add an element of recruitment to your leadership pipeline model. Furthermore, spend enough time identifying the right people within your organization as well. Continuous leadership monitoring and talent assessment at all levels of the organization are crucial for guaranteeing success.

The most important part of the assessment is naturally the identification of the qualities and skills you require. If you aren’t aware of the skills the organization’s needs to reach its objectives, then it will be difficult to ensure you are prepared correctly for leadership. There are plenty of characteristics associated with leadership and these should be at the centre of your pipeline program. But furthermore, you also need to identify the company objectives and the specific skills leaders would need to achieve these.

Once you’ve established the norms you need, you can start screening for potential talent. The monitoring system should be a combination of assessment by the managers, but also a level of self-monitoring. If the people are able to focus on analyzing their own talent and abilities, they might be more able to recognize the potential they have or don’t have. This means that people, who are not suitable for specific positions, might rule it out themselves and make the succession planning process easier.

Finally, to properly associate the talent within the workforce, you want the employees to experience a number of different roles. Therefore, an element of job change can boost leadership pipeline.

Keep succession planning transparent

Finally, for achieving the best results with the leadership pipeline model, you need to emphasize transparency. The process should be based on honesty and people should be on top of what’s going on. You don’t want to create a system where leadership decisions and succession planning are done in secret, without the understanding and input of the employees.

The organization will benefit if employees are told what the leadership options and chances are. You don’t want the organization to create a system where secret deals are made or the selection criteria changes from one moment to another.

Therefore, ensure the leadership pipeline model process is explained and employees have the option to learn more about it. You also need to set forward clear guidelines for participation and succession. You need employees to know how they can improve their chances of being part of the model and the skills that are required for them to move forward within the organization.

Each leadership position should have a clear set of selection criteria and the process for hiring people to leadership position should be clearly explained. If you do make chances to the selection criteria, the reasoning behind it should be explained thoroughly to ensure employees don’t find the changes unfair. By focusing on transparency, you ensure employees remain motivated and behave in a transparent manner.

Part of the model is built around self-monitoring and therefore, you want to create an environment where employees feel the best option is to provide honest data and assessment of their capabilities rather than to lie about their qualifications.

FINAL THOUGHTS

Leadership pipeline model is a comprehensive way of ensuring leadership is developed and cherished across the organization. The model understands one of the main building blocks of leadership, which is how the development of great leaders begins early. The framework ensures that companies are not focusing on the qualities and skills after it’s too late, but to provide the most talented employees the opportunities to move forward in their careers right from the start.

The model also recognizes the shifts managers have to go through from becoming leaders: learning to move beyond the technical skills and implement proper strategies and value-based decisions. The benefits of implementing a leadership pipeline model can be the difference between successful and failing companies.

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