1: “Most CEOs have a ‘top talent’ list that can be counted in the single digits,” Carolyn Dewar, Scott Keller, and Vikram Malhotra write in CEO Excellence: The Six Mindsets That Distinguish the Best Leaders from the Rest.
“CEOs can entrust them to do things that others can’t,” they write. “These stars sit on just about every standing committee and act as sponsors for most task forces or initiatives, while also having significant leadership responsibilities both internally and externally.”
So what’s wrong with this approach?
Many times these individuals are “overstretched and far less effective than they’d be if others were able to step up,” the authors observe.
2: The best CEOs take a different, more comprehensive, more analytical approach regarding who does what.
“To fill the top fifty or so most valuable jobs, they demand that HR provide robust information on the knowledge, skills, attributes, and experiences of, say, the top two to three hundred leaders in the organization.” They set expectations that there will be at least five viable candidates to consider for each of the most valuable roles.
When CEOs use this strategy, they typically encounter two surprises:
“The first is that as many as 20 to 30 percent of people they previously handpicked to place in priority roles are actually a relatively poor fit,” Carolyn, Scott, and Vik write.
“I found some trusted and loyal executives were no longer ‘in the right role’ because the job had changed, and different skills were required,” says Westpac’s Gail Kelly. ” I tackled these situations head-on and early because, quite aside from hampering progress of the business, being indirect or delaying is unfair and disrespectful to the people concerned.”
The second surprise is that this process identifies many more qualified candidates for the most critical positions.
“Even though a candidate may not have, say, the desired experience managing a $100 million P&L, they might be stronger when it comes to having a global mindset, making quick decisions, and displaying team building skills,” they write.
For Shantanu Narayen, CEO at Adobe, his process identified Gloria Chen, who had risen through the sales and corporate strategy ranks. She was promoted to Shantanu’s chief of staff and then to lead the Human Resources.
“You want someone who understands people and strategy,” Shantanu says. “You want someone you can trust one hundred percent. And you want somebody who can push back like crazy if need be. Gloria may no have experience in HR, but she was all of that.”
3: What other strategies do the best CEOs use to put the right people in the right seats? They “also are constantly taking in information to uncover who are potential stars (and to uncover strugglers),” they write.
GE CEO Larry Culp says: “Operating reviews are a great place to take stock: Is someone learning, growing, synthesizing, integrating, and moving forward? Also, while walking around the factory or talking to customers, you’re always doing an informal 360 evaluation on your leaders.”
The best CEOs also expect to see “multiple diversity lenses applied,” the authors write
Merck CEO Ken Frazier recalls: “At the time [before I was the CEO], I was minding my business practicing law in Philadelphia, representing Merck among others. The only reason I’m the CEO of Merck today is that Roy Vagelos, who was CEO then, called me into his office and said, ‘I’m two years from retirement. I can’t seem to get my colleagues, my white colleagues, to promote any African Americans. Guess what, I’m going to make your career. I’m going to take a lawyer who has all the right raw material. I’m going to give him a job in the business and I’m going to mentor him.’
“And on my best day as CEO, I’m simply channeling what Roy taught me.”
Adidas CEO Herbert Hainer emphasized bringing in outside talent as well as promoting from within. “As a result,” Carolyn, Scott, and Vik note, “he instituted an overarching rule that for any promotion in the most value-adding roles the question was, ‘Who is the most qualified person for this job?’ whether inside or outside of the company.”
He also communicated that candidates would not be excluded by age: “It could be that I put a 35-year-old into a high-ranking position, but it could also be a 55-year-old,” he says. “It was always about finding the best fit.”
U.S. Bancorp’s former CEO Richard Davis also prioritized hiring externally: “The best way to introduce new thinking is to introduce new thinking.”
The best CEOs use multiple strategies to identify, attract, and retain the best talent. As GE CEO Larry Culp states, “As a CEO, you absolutely have to get those [people decision’s] right. And you can’t do that at a distance.”
More tomorrow!
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Reflection: What can I learn from the best CEOs about identifying top talent?
Action: Select one of the strategies outlined above. Be specific. Run an experiment and pay attention to what happens.
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