The Leadership Pipeline: How to Build the Leadership Powered Company

In their book, The Leadership Pipeline: How to Build the Leadership Powered Company, Ram Charan, Stephen Drotter, and James Noel lay out a model for building a pool of leadership talent at all levels of your business or corporation.


  • There are Critical Career Passages (Transitions) in a Large Business Organization
    • Manage Self
    • Manage Others
    • Manage Managers
    • Functional Managers
    • Business Managers
    • Group Manager
    • Enterprise Manager
  • To navigate these passages, the leader needs to acquire a new way of managing and leading and leave the old ways behind
    • Skill requirements – what are the skills and abilities appropriate for the new position?
    • Time applications – what does the leader spend his or her time doing?
    • Work values – what does the leader believe is important and becomes the focus of effort?
  • Top management needs to monitor if transitions are going well
    • Observation
    • Sampling (360 degree feedback)
    • Gap analysis
    • Coaching – Feedback
    • Peer learning and partnering
    • Meetings, reading and travel
    • New work assignments

Leadership Transitions

  • Transition from Manage Self to Manage Others
    • Define and Assign Work to be Done
    • Enable Direct Reports to Do the Work
    • Build Social Contracts (Boss, Direct Reports, Suppliers, Customers, Others)
  • Transition from Managing Others to Managing Managers
    • Select and train first line managers
      • Create a supportive environment that allows mistakes but not failure
      • Use power to motivate and instruct not to demean and demoralize
    • Hold first line managers accountable for managerial work
    • Deploy and redeploy resources among units
    • Manage the boundaries that separate units reporting to you with other parts of the business
      • Tear down the boundaries that impede the flow of work and information
  • Transition from Managing Managers to Functional Managers
    • As a functional manager, they must believe that their function exists to support the overall business objectives
    • Requires
      • Longer term thinking
      • State of the art awareness
      • Complete understanding of the business model and long term strategy and goals
      • Shift from talking to listening
      • Valuing what you do not know
  • Transition from Functional Manager to Business Manager
    • Key tasks
      • Think differently about the business
      • Manage the complexity
      • Learn to value all functions
      • Being highly visible
    • Warning Signs
      • Uninspired communication
      • Inability to assemble a strong team
      • Failure to grasp how the business can make money
      • Problems with time management
      • Neglect of the soft issues
    • Development Options
      • Self-learning
      • New Experiences
      • Reflection
  • Transition from Business Manager to Group Manager
    • Key tasks in the new role
      • Allocate limited corporate resources
      • Develop business managers
      • Develop an appropriate portfolio strategy that creates horizontal synergy among various business units
    • Requirements
      • Succeed indirectly
      • Manage and develop business managers (value on more than results)
      • Connect the business to the corporate objectives
        • Walk tightrope between doing what is best for the corporation and supporting the businesses in their group
      • Manage the uncovered and the potential
    • Warning Signs
      • Acting like business general managers rather than group executives
      • Maintaining an adversarial relationship with the Corporation
      • Ignoring the uncovered
      • Passing up business manager development opportunities
    • Developing Group Executives
      • Training
      • Measures
      • Experience
  • Transition from Group Manager to Enterprise Manager
    • Challenges
      • Deliver consistent, predictable top and bottom line results
      • Setting enterprise direction
      • Shaping the soft side of the enterprise
        • Right people in the right jobs
      • Maintaining an edge in execution
        • How is my performance?
        • Do I know what is going on?
        • Are people telling me the bad news?
        • Is the board fulfilling its mandate?
        • Is my team productive and enthusiastic?
      • Managing the enterprise in a broader, global context
    • Requires a significant shift in values
    • Warning Signs
      • Ignorance of how the company gets things done
      • The majority of the CEO’s time is spent on external relationships
      • The CEO is not diverting enough time to the soft side of the business (e.g. developing people)
      • Board members keep asking the CEO the same questions

Creating Successful Transitions

  • Development
    • No skipping levels allowed for proper development
  • Diagnostic
    • Common failings
      • First line managers who are spending most of their time doing individual contributor work
      • Business managers who are doing functional work
      • Group executives who are focusing on business manager work
    • Consequences
      • Important work is not getting done
      • People do not develop properly
    • Diagnosis tool
      • Think and talk about time applications and values in relation to each other
  • Performance Improvement
    • Role clarity is important,
      • For example; Mid-level managers need to …
        • Enable others to be successful
        • Engage a team emotionally as well as physically and intellectually in order to unleash their energy
        • Provide specific guidance in the form of standards
        • Work horizontally to assure smooth flow of work
    • How to improve performance
      • Start with the boss
        • Poor job definition
        • Poor communication
        • Inadequate resources
        • Lack of performance standards
        • Favoritism
      • Search for Evidence of an appropriate values shift
        • Conduct a “lessons learned” discussion
        • Examine managers’ calendar to see where they spend their time
        • Listen carefully to how managers evaluate subordinates
        • Look at plans managers submit from a values standpoint
      • Use Action Learning
        • Guest speakers
        • Team building exercises
        • Coaching (360 degree feedback)
        • Reflection
        • Real business challenges
      • Address Inappropriate performance immediately
    • Retention – Development Connection
      • Development is the ultimate perk to keep your high performers

Succession Planning

  • Succession Planning
    • Definition:
      • Perpetuating the enterprise by filling the pipeline with high performance people to assure that every leadership level has an abundance of these performers to draw from, both now and in the future
    • The focus should be performance with high performance in the present as the admission price for future growth and development
    • The pipeline demands a continuous flow
    • The pipeline transitions must be fully understood
    • Short Term and Long Term must be considered
    • Transforming potential
      • Transition potential – Able to do work at the next level in 3 – 5 years
      • Growth potential – Able to do the work of bigger jobs at the same level in 3 – 5 years
      • Mastery potential – Able to do the same kind of work currently being done, only better
    • Succession planning is a two way street. Communicate with people so they receive a clear picture of how they are viewed by the organization
    • Goal – get the right people in the right jobs with the right preparation while producing targeted results now and in the future
  • Identifying potential pipeline failures
    • Remember the following guidelines
      • General requirements for two adjacent levels may be similar but specific skills, time applications, and work values reveal significant differences
      • Generating results at one level should not be the main reason to select someone for a higher level position
    • Assess whether a manager is relying on skills, time applications and work values from a previous level
    • Do they fail to seek or listen to feedback?
    • Keep one’s mind open as well as one’s ears
    • Be aware of what one should listen for
    • Discuss failures in terms of skills, time applications and values
  • Coaching
    • The best way to learn and grow as a leader is through “on the job” stretch experiences.
    • Clarify expectations by using the passages
    • Keep it simple
    • Focus on a few developmental items
    • Encourage a deeper understanding
    • Facilitate reflection
    • Provide an honest assessment
    • Communicate the benefit for both the individual and the organization
    • Challenges
      • Not valuing what you do not know
      • Letting go

Benefits of the Leadership Pipeline

  • Up and down the line, the company has strong leaders
    • Avoid having top executives being reluctant to change “what got them there.”
  • Establish a common language in the company
    • Marriott Corporation developed common guidelines for success in their company
      • Learning agility
      • Dealing with adversity
      • Emotional intelligence
  • Build a framework for self-management

CEO Succession – Challenges

  • Lack of job specification for the CEO position
  • Exclusive focus on the CEO position
  • Neglect the health of the larger system

Final Thoughts

  • Biggest weakness in most companies is with the manager of manager training.
    • Manager of Managers should value teaching and coaching first line managers
  • Leadership entails a series of passages that come with very specific values, skills and time requirements.
  • Leaders must not skip passage as they take on more responsibility and influence in an organization or they will end up working at the wrong level and will clog the pipeline.

About David Shedd

David has been a President - CEO - COO of an up to $350M group of manufacturing, distribution, specialty retail and services companies, having led 22 different businesses from turnarounds to start-ups to fast growth companies.
This entry was posted in Leadership, Team / People and tagged , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s