COACHING THE CLIMBERS

Jack Welch, a CEO who knew how to win, spent much of his time developing talent when he was leading General Electric. “We build great people who then build great products and services,” he writes in his book, “Straight From the Gut.”

For any organization, identifying high-potential talent is critical to succession. The key word is “potential”: Who has the talent, the ideas, and the skills — whatever is needed to take the organization forward?

Generally, there are two groups of talent in a company, says Tom Pitts, a consultant for Right Management’s Florida and Caribbean division who recently gave a briefing on talent development to Right’s clients. There are high-performing experts who have deep knowledge in a particular area. There also are “agile learners” who are able to handle dissimilar jobs, using their same skills.

An example of latter was Pitts’ former boss, Louis Gerstner Jr., who headed IBM. Pitts worked in human resources and strategic functions for IBM and Office Depot in South Florida. Gerstner was brought in as IBM chief executive even though he didn’t know anything about technology. But he knew how to run a company and is credited with IBM’s turnaround.

Most companies have a process for developing high-potential employees, yet human resources executives indicated they had an insufficient pipeline of high-potential employees to fill strategic management roles, according to an article by Douglas Ready and Jay Conger in the June issue of Harvard Business Review. The problem, the authors say, is “those practices may have fallen out of sync with what the company needs to grow or expand into new markets.”

There are plenty of tools that companies use to identify their high-potential employees. Welch used a grading system of sorts. “A” players at GE were “people filled with passion, committed to make things happen and open to ideas,” Welch says in “Straight from the Gut.” “B’s” were the operational people who needed guidance to become A’s. And “C’s” were those who didn’t get the job done; you can guess what Welch did with those people.

Top companies develop talent and reap the benefits: Ten of the 11 “Good to Great” CEOs were from inside their companies, Pitts points out. “Good to Great” is Jim Collins’ study of how good companies, which include Walgreens, Gillette and Kimberly-Clark, made the leap to great companies.

At IBM, Gerstner eventually replaced himself with someone from inside the company, 30-year IBMer Sam Palmisano.

Pitts says that identifying a high performer is “an art form. This isn’t a science.” At Office Depot several years ago, the company found common personality traits among its high performers at its calling center and was better able to hire for the center after identifying those traits, he recalls. “It worked like a charm.”

But do you tell the high-potentials that you’ve identified them as such? Pitts says organizations don’t want to spur speculation, so there are underlying concerns. Managers need to be trained on how to communicate about succession planning, to let employees know where they stand and how they can develop.

“One of the most important things is context. Build a context to be better at their chosen profession, rather than make the context about being promoted or who ranks where,” Pitts says. People usually want to improve, he points out. “Seldom are you going to hear people say, ‘I’m not interested in being better than I am.’”

But if talent management is done right, Pitts says, “it forces a look at every single person in the process.. . . It can have the wonderful effect of letting everybody know they’re important, of really doing something to help people be better at what they do. That can produce a tremendous return.”