Addressing the Leadership Gap: Diversity is an essential ingredient to development, succession

Editor’s Note: This is Part 3 of a three-part series on succession planning as an important function for organizations. The authors are Mike Fucci, chairman of the board, Deloitte, and Audrey Murrell, associate dean of the University of Pittsburgh’s College of Business Administration and director of the David Berg Center for Ethics and Leadership.

High-performing job seekers have several factors to consider when determining their next career move. Compensation is on this list of factors, as are organizational culture and reputation. Increasingly they are turning their focus to an organization’s senior leaders and asking a pivotal question: Can I envision myself as a leader of this organization in the future? If they don’t see a leader who looks like them or with whom they can identify, many of them are answering “No” and moving on.

Recent research reinforces this trend. In a recent Deloitte report, 80 percent of the 1,300 full-time employees who were surveyed said inclusion is an important factor in choosing an employer. Furthermore, 72 percent said they would leave or consider leaving an organization for a more inclusive one.

Many professionals today want to feel comfortable being themselves and be valued for who they are and what they can bring to the organization. They want to know there’s a path for them to move up and, perhaps, one day be an executive or a board member.

A Leadership Succession Wake-Up Call

For organizations that lack an inclusive culture, this should serve as a wake-up call. In an intense competition for talent, organizations that are tied to traditional succession planning and leadership development risk missing out on high performers and, consequently, may fall behind on innovation. They can miss opportunities to enhance employee engagement, elevate their brand, and drive performance.

In her recent book Mentoring Diverse Leaders, Audrey Murrell explores organizational efforts to build a diverse pipeline of leadership across a variety of organizational settings. Prevalent within this research is the importance of the purposeful development and success of leaders who—while they may not reflect the same demographics and strengths of current leadership—should represent the organization of the future. Given the intense competition for talent, traditional methods of leadership development are typically outdated, ineffective, and unable to reach a diverse pool of potential leaders. The irony found in Murrell’s research is that leadership success is often about developing future leaders who may look and work very differently than those who must develop them.

It appears as if many organizations remain stuck in the past when it comes to action. Mike Fucci’s “Seeing Is Believing” survey revealed a surprising disconnect between the value of diversity and the steps an organization takes to enhance diversity. In the survey of 300 board members and C-Suite executives, more than 90 percent of respondents said that greater board diversity enables an organization to improve its ability to innovate and manage disruption, as well as accelerate its overall business performance. In spite of this, only 46 percent said they have a specific process for recruiting candidates with diverse skills. This begs the question: If organizations see the value in diversity, why aren’t they doing a better job at creating systems to advance it?

Diversity-Driven Succession Planning

We believe it’s impossible to be an inclusive organization without having a succession planning approach that systematically identifies a wide variety of candidates, provides stretch projects and training, and embraces diversity of thought.

One key factor that can drive the development of diverse leadership is the use of effective mentoring programs. Murrell’s research and work with organizations finds that well-designed and executed mentoring efforts are key strategies for developing a diverse pipeline of leaders. These efforts can send a strong signal that the organization cares about leadership development and engages current leaders in the cultivation of diverse future leaders. While the engagement of current leaders is necessary, it alone is not sufficient. The impact of peer-to-peer mentoring is explored in Murrell’s work as a powerful tool not only for developing leaders, but also in shaping an organization’s culture in a way that values diversity and inclusion. At Deloitte, Fucci continues to stress leader-led sponsorship—sponsorship initiated and sustained by the business leaders themselves—as a long-term strategic imperative to cultivate and develop capable pools of talent and successors. For more on sponsorship, access our three-part series on the topic.

In our experience in the marketplace and academia, we’ve noticed five factors that are often necessary for an inclusive leadership development strategy.

Widen the perspective of candidate readiness: Gone are the days when experience exclusively within an organization is the primary factor when evaluating leadership candidates. Leading organizations study their strategy and look for candidates that will fill gaps now and especially in the future—whether it’s in a traditional pipeline, a traditionally overlooked area of the organization, outside of the organization, or even outside of the industry. When the pool of candidates is widened, and traditional definitions of candidate readiness are challenged, an organization invites fresh perspectives and new ideas.

Build a leadership culture: A complex organization calls for leaders who can create leadership ecosystems to move strategic priorities forward. This means building diverse leadership alliances through inclusive relationship management. Leaders who are effective in developing the organization’s ecosystem often spend a great deal of time and attention reaching up, down, and sideways internally and externally. Leaders who are able to build relationships on this scale are able to act more decisively and efficiently.

Leverage emerging technology: Organizations are increasingly using existing data and emerging analytics for products and services. This means organizations must go beyond being a consumer of technology and instead move to be an innovative user of technology. Similarly, leaders must also leverage cutting-edge technology in succession planning, which includes different tools for mentoring and leadership and talent management. Emerging technology can allow organizations to objectively identify, develop, and evaluate candidates. It also can allow them to evaluate their current approaches and identify where things might be outdated and ineffective. This focus promotes an approach that isn’t rooted in favoritism or a next-in-line mentality, but rather emphasizes effectiveness and impact.

Build a broader leader toolbox: While some traditional leadership skills remain necessary, an effective leader in today’s complex environment often needs a broad set of competencies and capabilities to embrace differing points of view, to recognize bias, and to be curious and innovative. Globalization also makes cultural intelligence an essential part of the leader’s toolbox. This nature of global competence as part of cultural intelligence is developed through experience and the use of relational role models, which can challenge a leader’s current thinking and expand skillsets. We believe professionals will know if their organization has an inclusive leadership development approach if they are asked to step outside their comfort zone to develop these new skills.

Target diverse candidates early: Achieving a diverse leadership team that’s representative of the organization’s stakeholders doesn’t happen overnight. For example, some organizations panic and move individuals into leadership roles without spending the time on talent and leadership development. When these candidates experience problems or challenges, it can negatively impact their careers and their assessment of their leadership capability. We have witnessed this in the case of diverse candidates who have not received the proper support and development, yet are thrust into leadership roles. When problems occur, it is blamed on the “lack of fit” of the candidate rather than the lack of investment in diverse talent development, which does the organization and the professional a disservice. Therefore, it is extremely important for organizations to identify talented, diverse candidates early and to develop them over time and sustain them as a long-term investment.

Making Inclusion a Priority

Why is there a lack of diversity at the top of many organizations? We believe the only legitimate answer is that inclusive leadership has yet to become an enterprise-wide priority of leadership—“yet” is the key word here. While creating a diverse leadership team is solvable over time, the first step is to take an honest look at current leaders and existing practices for developing a diverse pipeline. This requires a candid assessment of the successes and shortcomings of existing leaders, along with the courage of these leaders to own the findings of this assessment.

In many ways, we’re at a crossroads with leadership development and succession planning both in business and within higher education. With this series, we’ve attempted to elevate the importance of leadership in a complex, tech-driven world. In Part 1 of the series, we mentioned eight components of effective succession planning. In Part 2, we discussed ways in which academia could learn from business to improve leadership development. While some of the tools and strategies that we have reviewed in this series (e.g. effective mentoring programs, targeted leadership development programs, leader-led sponsorship) can have an impact, there is no substitute for the commitment of existing leaders to be agents of change throughout their organizations.

It’s our belief that executives who continuously evaluate their leadership development investments, processes, and programs through an inclusive lens will position their organizations to prosper today and in the future. Stakeholders—including talented, high-performing job seekers—are watching.

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