Article: Management-Go-Round: Developing Future Leaders

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Management-Go-Round: Developing Future Leaders
by Tom Floyd

When aligned with organizational needs and leadership competencies, management rotation programs build a robust pipeline of candidates who have the knowledge and skills needed to steer the company into the future.

According to this year's IBM "Global Human Capital Study," 75 percent of 400 human resources executives surveys said building leadership talent is a significant challenge. Perhaps in consequence, many of these executives said they develop leaders internally, highlighting action learning, mentoring and job rotation as valuable methods to build talent.

In the talent management field, rotation programs that focus on high performers and other roles in the organization are common. But what about an organization's managers? What additional challenges come into play when developing management rotation programs focused on developing managers who are well-rounded, experienced and ready to tackle challenges at the next level?

Seth Lieberman, managing partner for consultancy Leadership Breakthroughs, said he has seen companies grapple with challenges in developing management rotation programs, including lack of program goals or purpose, how best to develop and retain institutional knowledge and how to cope with an unwillingness to share constructive feedback with employees who are temporary direct reports - a phenomena he refers to as "terminal niceness."

"Rotation should be for a purpose," Lieberman said. "Applying learning and placing emphasis on a direct manager's role in the development of program participants is critical. Everyone says they want to give people education, experience and support, but it should be done purposely in dialogue on an ongoing basis with each leader in the program."

Designing, offering and facilitating purposeful management rotation programs may not be as easy as other types of development offerings, but the payoff in terms of improved retention and succession planning are great. Consider Blue Cross and Blue Shield of North Carolina (BCBSNC) as an example. The organization has implemented a succession planning process that provides a strong talent pipeline of leaders at various levels. Those identified as key talent are provided development opportunities including coaching, mentoring and cross-functional job assignments.

"We realized going into it, one of our challenges was asking the organization to give up its most talented individuals in these roles. Essentially there would be a perception of losing people in these programs," said Fara Palumbo, senior vice president of human resources for BCBSNC.

"It's been key to educate our executives and focus them on the longer-term succession planning benefits. We're not only providing exposure for key executives that rounds out their careers and experience, we're preparing them to take on visible chief officer roles within the organization that ultimately helps them run the business better."

"Another way we've helped overcome the perception of losing people is by helping our stakeholders see the fruits of the program," said Lynn Duffy, vice president of organizational development for BCBSNC. "Our 18-month Management Associate Program has been in place since 2006, and many of our stakeholders have already gotten highly qualified team leads as a result." Intuit's Rotational Development Program (RDP) provides a well-rounded perspective of the organization's leadership while building future leaders. Nancy Smithline, Intuit's RDP leader, said the 27-month program was designed for new university graduates and focuses on leadership, business and technical skills in core functions including product management, marketing and sales, and customer support.

"We expose participants to different businesses across the organization, while using senior leaders, middle managers and peers who have already been through the program to coach, mentor and provide feedback," she explained. "The program provides a solid foundation to learn our business and various functions and provides a better opportunity for participants to accelerate their careers.

"At the end of their rotation, participants not only have a good sense of where to point their careers in the company, but also demonstrate sensitivity as to what goes on within other groups," Smithline said. "By going through these different rotations, they internalize how the decisions they make can and will impact our business."

Engage Executive Sponsors

Companies such as BCBSNC, Intuit and others have learned several best practices in developing management rotation programs. That would include the importance of executive sponsorship. This is true for most talent management and training initiatives, and management rotation programs are no exception.

Before rolling out the program, it's critical to engage senior leaders across the various functions in which rotations will occur. The goal is to facilitate conversations that highlight the benefits of the program, answer questions and concerns, and secure buy-in and participation, if possible.

From there, talent leaders should present senior leadership with a proposal that highlights the overall design. Topics to address in the proposal include program structure (centralization vs. decentralization), alignment with the organization's overall talent management framework, selection criteria and other business rules, resource allocation, budget and funding, change management and more.

"At Intuit, it was important for our steering committee of senior managers to have ownership in the program," Smithline said. "We wanted the line organization to own the budget and selection process, and we also wanted them to own driving and rolling the program out. Our program managers did the facilitation and design, but the steering committee held the budget and key decisions."

Duffy said senior executive involvement and engagement have been instrumental in the success of BCBSNC's rotation programs, as have communication and visibility.

"Having a communication plan that builds and generates excitement about our programs has really helped ensure their success," Duffy said.

Align Competencies and Career Development to Programs

Talent leaders also should make it a primary goal of management rotation programs to grow individual ability against the competencies and skills required to be successful as a leader in the organization. In addition to making participants more well-rounded, rotation programs should ensure potential leadership candidates are assessed, coached and groomed in ways that align to the organization's leadership, business and technical competencies as appropriate.

Examples could include competencies such as business-unit knowledge, coaching and mentoring of direct reports, conflict management, cross-functional collaboration, industry and vertical knowledge, organizational agility, relationship management and strategy development.

"Our competencies for leadership development form a common language for developing leaders at all levels of the organization and are the backbone of our leadership success profile and methodology," said Sharon Hertle, vice president of talent mobility for Intuit. "Our action learning programs, new director programs and rotation programs, as well our development road maps, are framed around competencies. We try to build that foundation into everything we do."

"As far as using competencies to evaluate the success of the Management Associate Program at Blue Cross/Blue Shield, both for our program and individual evaluations, we made the decision to use the same type of performance assessment process the rest of our organization uses," Duffy explained. "What's different is that we added leadership profiling competencies, as well as functional skills and technical knowledge."

"It's imperative to ensure your management rotation program aligns to the personal development goals of individual managers in your organization," said Sheri Smith, senior manager of sales and leadership development for Cisco Systems. "Many managers are already on a specific career path. Rotational programs, therefore, need to be aligned with their individual career goals and aspirations."

Before submitting an application for the program, managers should discuss the particulars and their goals for completion with supervisors or senior leadership in the organization, and they should be able to articulate how participating in the program relates to their long-term career goals with the company.

"Take information and input from interested managers and current program participants into consideration from a development perspective," Hertle said. "Each participant's development plan within the program should have an individualized focus."

In terms of program enrollment, management rotation programs also should be optional. Talent leaders will need to establish a predefined selection criteria and process that is communicated up-front to prospective participants. In addition to providing a guide program managers can use to narrow the pool of applications, it also helps interested managers understand how selection is determined, as well as how the program relates to their personal development.

Consider Program Size, Duration and Frequency

As the talent management team defines the management rotation program and the business rules that will make it run, there are three important factors to keep in mind with regard to program size, duration and frequency. In general the rules are:

1. Keep each class in the program small; aim for 10 to 14 participants maximum.

2. Ensure the program is long enough to build the depth of experience needed to perform successfully as a manager. A minimum of two years is recommended.

3. Keep the program manageable. Depending on the size of the program team, as well as availability of executives, coaches, mentors and other people within the program, the rule of thumb is avoid juggling more than two new classes each year.

Without considering program specifics, too many organizations experience unexpected side effects as a result of management rotations programs. They begin to have trouble developing and retaining institutional knowledge. Lieberman said it often takes a year for managers to learn and add value. Individual program lengths vary and should be customized. Eighteen months may create little time for managers to excel at their jobs when they are moving to a new role in a larger organization, whereas in a smaller organization, this might be ample time to get off to a great start.

"When tweaking the duration of the rotation, of course from a cost perspective, shorter is better," said Duffy. "But to retain quality, the program has to be long enough to really help people hit the ground running. Quality is important."

"Don't rotate them out too fast," Hertle said. "I'd recommend looking at keeping people longer to get more depth of experience versus breadth of experience."

With best practices like these in mind, an organization will have a solid foundation on which to build a fluid system to fill its leadership pipeline with managers who have the organizational awareness and knowledge needed to steer the company into the future.

[About the Author: Tom Floyd is the CEO of management consulting firm IEC in San Jose, Calif.]