Is your people pipeline alive?
A couple of years ago we were working with a very successful company in medical appliances. They had already a decade of successes and were based in the UK. They were showing excellent organic growth and returned often over 30% EBITDA (gross profit) margins year after year to their shareholders. But, at the same time, if you looked deeper into the second and third management level of the company, you saw a huge risk.
They did not have a strong leadership team. The CEO was making most of the, often very good, decisions. But he cast a big shadow over the business. How sustainable was their success? The CEO left a couple of years ago and they did not have a successor ready. The company lost its growth and operating profits started to melt away in just 16 months.
Judging people
Not paying sufficient strategic attention to your people pipeline is in my view one of the big risks facing many companies today.
Sure, leaders talk about their and other people all the time. But that’s not what I’m talking about here. These conversations are often informal and too anecdotal. People are being judged as ‘good’ or ‘bad’ people. I often see that the emotions of everyone involved are taking over. They lose sight of the strategic perspective. The bottom line is that these discussions aren’t helpful.
What you do need is a clear view on the people that are ready for the next step, who is almost ready and the gaps that you need to fill to help move the company forward. Who is ready to execute the strategic agenda of the company? Furthermore, you need to know who is underperforming and how you are going to address this.
Where to start?
It starts by reviewing your key people regularly and strategically.
Start by taking the emotions out of the process as much as you can. Make the discussion much more strategic. It’s not about ‘good’ or ‘bad’ people. It’s only about the ‘right’ people for today and for tomorrow. You probably will need to coach your executives to really engage with this approach and change some of their behaviours.
Structure your discussions with some tools. Do this once or twice per year, review it with the executive team and you will start to see trends. This is the starting point to act strategically on your people pipeline.
Acid test
An elegant approach to start with is to ask the question that Reed Hastings, founder and CEO of Netflix, asks to all of his business leaders:
“If one of your people tells you that she has found a comparable job elsewhere, would you fight to keep this person on board? Or would you be somewhat relieved?”
Try to answer this question honestly for all your direct reports.
Hope this inspires.
Paul Donkers
Paul Donkers is the founder of tèn company. A global boutique coaching and consulting firm founded in 2009. Every week they work with their clients to help them navigate through these challenging times. Let us know if you want to have a confidential conversation via This email address is being protected from spambots. You need JavaScript enabled to view it.
