3 Steps to Building a Stronger, Future-Ready Leadership Pipeline

Nanette Miner’s epiphany sounded less like “a-ha” and more like “uh-oh.”

In 2015, while working with leaders at Fortune 500 companies, Miner heard a U.S. Census Bureau statistic predicting a mass exodus of Baby Boomers from the workforce by 2030. She looked around at her clients’ leadership training programs and realized they were all essentially filled with Boomers.

“I looked at the Millennials and thought, ‘You know, they’re our next set of leaders. And if the Boomers are going to be gone in 15 years, that’s really not enough time to teach somebody leadership concepts and capabilities,’” says Dr. Miner, Ed.D, Founder of The Training Doctor. “I realized these companies were not getting their future leaders ready. And if they weren’t doing it, nobody’s doing it.”

Frequent Vistage speakers Dr. Miner, Simon Vetter, author of “Leading with Vision,” and Chris Czarnik, author of “Winning the War for Talent,” say cultivating a strong leadership pipeline allows small and midsize businesses to keep striving upward. Here, these 3 thought leaders offer tips for small businesses to build the leadership pipeline today that will propel them to sustained success tomorrow.

What is a Leadership Pipeline?

Imagine creating a football team. You’ll need a whole roster of players committed to improving throughout the season. From that group, you’ll want to cultivate a starting lineup and identify a future team captain. That, in essence, is pipeline building — cultivating an engaged, motivated team that grows in individual and collaborative skills.

How do you know if you’re on the path to victory? Start with your HR data.

“If a business has too much turnover in early career employees, they won’t be able to develop a leadership pipeline because they won’t have enough people to tenure,” Dr. Miner says.

If you already have a committed team — congratulations! If not, Vetter suggests clearly communicating your company’s vision.

“Top teams are aligned around a common purpose,” he says. “Communicate where the company is heading, as well as what their roles and responsibilities are that contribute to that forward momentum.”

Pipeline Vs. Succession Planning

Czarnik views the pipeline as a set of stairs, with each step representing internal opportunities to learn and grow.

“Over the last 7 years, Millennials have changed companies every 3.4 years,” he says. “The caveat is that they didn’t really want to. When they stopped learning, they started leaving.”

Preparing a capable pool of leaders across various age groups for the long term requires instilling leadership behaviors early, not just when individuals are promoted.

“My mantra is ‘Leadership from day one,’” Dr. Miner says. “Why are we waiting until we promote someone to a leadership role, or waiting until they are 10 or 20+ years into their career before we develop their leadership capabilities?”

Adopting that mantra helps companies develop leaders at all levels, Czarnik says. Not every employee needs to be groomed to become the next CEO to keep teams engaged, invested, and growing within the company.

“Promotion is the end result,” he says. “Be a problem solver and a teacher inside the organization, and then promotions and advancement will be a natural end result of that.”

Why is a Leadership Pipeline Essential for Organizations?

Bank of America recently elevated two long-standing executives to co-President, even though both blow out nearly the same number of candles on their birthday cakes as the current CEO, a 65-year-old who vowed to stay in his role for the next decade.

This, Dr. Miner says, is a cautionary tale about how not to build a leadership pipeline.

The short-sighted approach not only creates a conundrum for the executives involved, but it communicates to the entire organization that new ideas, new faces and new people are not valued. Applying this scenario to a small business, Dr. Miner asks CEOs to consider what distinguishes an “ideal” leader for their organization and to start cultivating the skills and capabilities in younger generations so they are ready when the time for advancement arrives. This allows a smaller company to keep its culture, values and goals “in-house” and reduces the risks associated with hiring a senior leader from outside the organization.

Looking to develop your leaders? Learn about Vistage Leadership Development Programs and how they can help you drive transformation within your organization.

The 3 Stages of Building a Leadership Pipeline

Building a leadership pipeline is a lot like building a company. You identify the need and opportunity, assess your resources and execute.

How do you assess your resources? Czarnik’s approach involves pairing a new hire with someone who has been with the company for 18 to 36 months. This helps acclimate the new hire, while simultaneously giving the mentor an opportunity to grow.

“We’re not going to give you a 12-person team and a P&L to manage after 18 months,” he says. “First, we’re going to see if you can mentor one person through this dramatic and traumatic time of coming to work with a bunch of strangers.”

Step 1: Define. What Talent Does Your Organization Need?

Dr. Miner likens some companies’ approach to leadership development to a game of whack-a-mole, with HR struggling to fill vacant positions rather than building the internal capabilities necessary for growth. With an 85-million-worker shortfall predicted by 2030 according to a Korn Ferry report, that’s simply too many moles to whack.

“The business world is changing so fast now that you really don’t want replacement leaders. You want somebody who’s got the next vision,” she says. “So, instead of interviewing leaders with questions like, ‘What was your budget and how many people did you manage,’ ask questions like ‘What do you think this company should be doing to prepare in the face of today’s changing political climate or the economic climate?’”

Through Vistage peer groups, small business leaders have been sharing best practices that have helped them think specifically about the question: “What do we need today, and what will we need tomorrow?” Czarnik says.

“That’s why we put Advancing Leaders into Vistage, because we’re actually trying to create subject matter experts on topics and improve their leadership,” he says.

Step 2: Assess. Who On Your Team Has Leadership Potential?

To assess, use an assessment, right? Kinda.

Dr. Miner cautions against relying too heavily on annual performance reviews to suss out emerging leaders. Instead, she recommends looking at an even older assessment of an employee: the hiring interview. What was that spark that got them through the door in the first place? Did they exhibit a growth mindset, a thirst for learning and a desire to work collaboratively?

And how well has the company developed those qualities in that employee?

One of Dr. Miner’s Vistage group members shared a story about an employee who had been “phoning it in” until the day the company relocated to a new facility. Touring the new plant — with its new machinery and equipment — the employee lit up. He went home and looked up how everything worked, became engaged with the equipment’s placement and functionality, and showed up to work reinvigorated by the new potential the change created.

“He responded to the opportunity of learning something new,” she says. “You have to keep people engaged and growing so that they don’t want to leave.”

Need a tool to help you align your goals with your talent? Download the Vistage Leadership Development Guide and unleash your team’s full potential.   

Step 3: Develop. Closing the Gaps and Preparing Future Leaders

Czarnik recommends a two-for-one approach to employee development: Ask a junior or emerging team member to choose from a list of company-wide problems, then give that person the opportunity to become a subject-matter expert and advise on actionable solutions. Arm the subject matter expert with Coursera, LinkedIn Learning (whatever is needed and reasonable) and give them the time and space to drill deep.

“Not only does this approach solve the problems of the organization, but because the person chose the topic themselves, they really lean into it,” he says. “In seven years and 200 companies, I have yet to lose a subject matter expert to a recruiter.”

The second part of this approach? When the time comes to select a leader, the right candidate is an obvious choice.

“They will have earned it, and everyone will know it,” he says. “The only caveat here is that the company has to be committed to promoting from within instead of hiring from without.”

Overcoming Challenges in Leadership Pipelining

Vetter, Dr. Miner and Czarnik acknowledge that if it were easy to build a leadership pipeline, every CEO would already be doing it. By recognizing high-potential leaders early, providing developmental opportunities to close talent gaps, and measuring and cultivating leadership potential, small businesses can not only develop leaders but also become employers of choice in their industry.

Invisible Talent: Recognizing High-Potential Leaders Early

Creating a culture that encourages visibility and career growth within a company helps senior management identify emerging leaders — turning the “invisible into the visible,” as Vetter describes it.

“Most leaders have tremendous pressure for short-term results, and they get overwhelmed with transactional projects, so they don’t dedicate enough time to vision-setting,” he says. “They underestimate the power of a vision, but when they are able to create that picture that people can get committed to, it unleashes energy and motivation.”

That motivation, in turn, surfaces people who are committed and want to rise to the challenge of making that vision a reality. “A result that you see with Vistage’s focus on long-term success is the cultivation of leaders who have the ability to pose questions about what’s next and what’s better,” Vetter says.

Measuring Leadership Potential: What Does “Good” Look Like?

When in doubt, turn to the data. By developing clear benchmarks and criteria to evaluate leadership readiness, leaders can use data to reduce bias and improve decision-making throughout the pipeline.

The key, Czarnik says, is to devise benchmarks and metrics tailored to your own company’s needs. While talent management software and leadership analytics can help track progress and identify gaps more efficiently, Czarnik cautions leaders to use metrics that align with their company’s needs—not just those that come pre-installed in a talent management system.

“I’m a former military officer,” he says. “The 14 leadership traits we were trained on were bearing, courage, decisiveness, dependability, endurance, enthusiasm, initiative, integrity, judgment, justice, knowledge, loyalty, tact and unselfishness. Well, those were great 45 years ago. If I started my research by just saying, ‘I want to learn about leadership.’ I would be predisposed to only look in those areas, because that’s all I know.”

Enhancing Leadership Engagement and Retention

Vetter and his colleagues conducted a trend survey nearly 7 years ago, in which they asked employees of more than 400 companies to rank the most critical needs in leadership development. The answer? Creating a compelling vision and ensuring employees are emotionally connected to the vision.

“Creating a compelling vision was one of the most important leadership competencies, and it was also one of the most underdeveloped. Seven years later, I don’t think the gap has been reduced. In fact, it has widened,” Vetter says.

A lack of excitement affects how employees, particularly Millennials, show up. And it greatly impacts how often they leave. A Gallup poll found that a full 55% of Millennials reported feeling “unengaged” at work, with 21% switching jobs within the last year and 62% “open to a different opportunity.”

It’s difficult to help people up the corporate ladder if they’re constantly moving through the revolving door.

How a Strong Leadership Pipeline Improves Employee Engagement

Dr. Miner overheard two young men talking at a wedding reception. Both were in their 20s, and one was raving about the company he worked for.

“He talked about the training he was getting, and about a five-year apprentice program that was going to give him all these skills and capabilities. The other young man said, ‘Oh, that sounds great. Could you refer me?’” she says. “And I thought, ‘That’s it right there.’ When your employees are your recruiters, you become the employer of choice.”

Retaining High-Potential Leaders Through Continuous Development

Dr. Miner credits Vistage peer groups with helping organizations create career development pathways for internal talent — the kind of strategic, tailored growth opportunities that can recruit and retain top talent today while nurturing their leadership capabilities. Providing ongoing support for high-potential leaders is crucial for small businesses competing in a shrinking talent pool.

“In a good company, the leader should be saying, ‘Well, what are you interested in? You know, I can help you learn that skill or move to that department,’” she says.

Building Future-Proof Leadership Pipelines

What happens to a small business when a visionary leader climbs their peak, huffs and puffs in the thin, rarified air, and realizes that they’re standing atop alone?

From this vantage point, it might look as though it is “all downhill from here” for the company that a leader worked so hard to build. But it doesn’t have to be. Developing a strong leadership pipeline ensures that no leader has to make the trek alone — and that companies can continue striving for greater heights for generations to come.

Laying that pipeline requires a radical shift in the way leaders think about how (and when) they identify emerging leaders. The process is about being open to identifying new ways of thinking, working, and growing talent from within.

If done well, a leader can reach their goal, realize their vision and confidently shout, “A-ha!” — instead of looking down from their lonely peak and shrieking, “Uh-oh!”

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