By Stuart R. Levine
Published In, The Credit Union Times

Planning for, managing and developing your organization’s talent are among the most important responsibilities of boards and senior leadership. Everyone knows that top employees are your greatest asset, so it’s important to get this right.  In engaging the board, the CEO and Chief Human Resource Officer (“CHRO”) must address how the talent pool is being developed and how its development is aligned with the organization’s strategy and mission.  Importantly, the board must determine if it is sufficiently focused on talent related matters, as harnessing the power of people is key to driving long-term results.

Recently, I moderated a National Association of Corporate Directors web seminar for 224 participants entitled “Leveraging Talent to Drive Shareholder Results”.  One of the presenters, Steven Rice, Executive Vice President, Human Resources at Juniper Networks, explained the importance of organizational culture in supporting growth, as well as the importance of removing hurdles that inhibit growth.  To quote Steven, “Culture eats strategy for breakfast.”  Strengthening your organizational culture is as important as individual development.

At the conclusion of the conversation, participants were asked to respond to polling questions.  In response to a question, how would you rate the level of insight on executive talent provided to your board by Human Resources, participants responded 46% “very insightful” or “insightful”, leaving 54% of board members expressing a knowledge gap relating to talent.

In response to the polling question, are you confident that your company has the right talent in place to execute its strategy, only 24% responded “very confident”, leaving 76% in the category of “somewhat confident”, “unsure” or “not confident”.

Remember the fundamentals of governance are:  1. To participate and validate strategy; 2. To select the CEO and be engaged in succession planning.  These polling responses show a profound gap around succession planning.  This gap opens up major opportunities for HR executives to participate as strategic partners and serve as a strategic resource for the CEO and the board around the gaps expressed by board members.

Let’s now laminate this data against additional research findings.  The majority of companies do not believe they have the right pipeline of future leaders in place.  Pricewaterhouse Cooper’s 2014 global CEO research study in 68 countries showed that 63% of respondents indicated concern about the availability of skills at all levels.  And at the most senior levels, Boston Consulting Group’s research reflected that 56% see critical gaps in their ability to fill senior management roles in the future.

The assessment of employees should be based on motivation, intellectual curiousity and determination.  These new skills set, in my estimation, are the defining skills for future leadership.  Leading-edge companies are increasingly using analytics and data for assessing and developing their people in addition to tracking customers and business logistics.  Sophisticated methods of analysis are creating a competitive advantage through enhanced understanding of the drivers of employee productivity, engagement and retention.

Google experimented with eliminating all managers, but found that after years of research data, managers do matter in achieving results. They used this analysis to increase leadership capacity.  Google employed 360-degree and upward assessments to gather data that identified eight significant behaviors of its most effective managers.  Not surprisingly, Google found that a good manager: 1. Is a good coach; 2. Empowers the team and does not micromanage; 3. Expresses interest in and concern for team members’ success and personal well-being; 4. Is productive and results-oriented; 5. Is a good communicator—listens and shares information; 6. Helps with career development; 7. Has a clear vision and strategy for the team; 8. Has key technical skills that help him or her advise the team.  The information was used for development, not performance measurement.   This analysis gave Google a shared vocabulary for discussing management and clear principles for improving it.

Senior leaders are key to creating the right climate for development.  Their expressed buy-in and understanding of their impact on the organization’s culture, not only serves to effectively drive strategy and develop leadership capacity, but creates common language and common practice around productive and results-oriented behaviors.

Everyone knows the challenge and all smart HR executives are thinking about these issues.  But how to execute them is truly at the epicenter of creating a competitive advantage for your organization.  There is increasing awareness that behaviors matter.  The ability to create consistency of learning which helps people to stay honest, creates a massive opportunity for organizational culture to reach not only senior executives but people in the middle of the organization, where execution takes place.