Increase senior leaders' readiness for the executive level.
Promote from within or hire an external candidate? That is the age-old question employers struggle with when it comes time to fill open C-suite positions. Yet, when you look at the stats, the decision becomes quite clear: Identifying and grooming high-potential talent from within your organization is often the better way to go.
For starters, it costs less. When companies hire external C-level candidates, they spend anywhere from $50,000 to $300,000 in recruiting costs. More importantly, internal promotions have better long-term impact. Studies have shown stronger financial performance in businesses that make proportionally greater investments in identifying and developing internal top talent.
Employers don't just experience financial gains by identifying and grooming high potentials either. According to the Harvard Business Review article "What Science Says About Identifying High-Potential Employees," talented employees are "force multipliers"—raising the performance bar for their colleagues and particularly their direct reports. That suggests that when companies are committed to developing and promoting from within, the entire team's performance skyrockets.
Thus, hiring from within the organization is optimal. So, the better question is: How do employers identify the right talent and groom those individuals so they are genuinely ready for the elevated responsibility that is required of leaders in C-level roles?
Identifying high potentials
The three general markers of high-potential C-level candidates are competence, grit, and presence.
Competence. Having the technical acumen to complete the job is the benchmark for entry. Are the candidates experts within their field and functional area, and have they already demonstrated that they can master the complexities that come with the role? Are they capable leaders—can they assemble a team and inspire them to work toward common goals?
If the answer to those questions is yes, your candidates are on the right track for consideration in the C-suite. If the answers are no, that's most likely an indicator that those individuals aren't quite ready to become executives.
Grit. If the pandemic has taught us anything, it's that life is unpredictable. The leaders who succeed are the ones who respond to crises with stability, flexibility, and optimal thinking. As executive leaders, being able to adapt while under pressure is a key characteristic to having grit.
When identifying top talent, remember that executive leaders have unique and accelerated pressures that senior leaders at the next level down aren't exposed to. Only when they enter the C-suite must they perform under those new responsibilities. In other words, that occasion is when their resiliency is put to the test.
To determine whether your high potentials have the resilience needed for a C-level position, assess their reaction to negative information, challenging assignments, and overall time to self-adjust to optimal thinking. Also, examine their impact on their team in light of unfavorable news or mounting workloads. If they bring the group up, great; keep them moving forward in succession planning. If not, consider getting them some training in emotional intelligence and resilience building. That doesn't have to be a deal breaker; however, the grit muscle is better (and more easily) built before adding the pressure to perform in a C-level role.
Presence. The best leaders often have an aura of confidence and poise that makes others want to listen to what they're saying and follow their lead. That quality is executive presence, which is often the it factor in determining who is capable of navigating the C-suite and beyond.
Maintaining an executive presence is more than the words that come out of one's mouth; it encompasses style, movement, grooming, posture, and attitude all rolled into one. To assess executive presence in high potentials, observe them in their daily actions.
Do they enter a room and command respect? Do they present in a manner that compels and inspires? Do their peers seek them out for support and advice? Would you put them in front of a camera and let them speak on behalf of the company? Can they build trusting relationships with board members, key clients, and industry leaders? Those are all major signs that your high potential may be capable of an executive role.
Five leadership leaps
To identify and groom executives for C-suite success, be aware of the leadership leaps between senior leadership and executive success. The common ground among them is that they are unanticipated, hard to experience without intent, and untested in the hiring process. By understanding the five leaps, the hiring team can assess where the company's high potentials stand in those dimensions and determine which areas the individuals need to develop further before making it into the C-suite. Unless employers evaluate and support each of the five areas of leadership before and early in first-time executives' new roles, those individuals will be set up to struggle.
Self-leadership. The biggest mistake new executives make is to assume that they receive the same support as the position they just left. Unlike any position they've had before, an executive is at the top, which means they don't have people above them giving routine feedback and direction. Sure, most CEOs provide some mentoring but not the structured guidance first-time executives need. The only person who has authority to structure their role and how they do it is them.
Before entering the C-suite, someone else was responsible for how they worked as well as what they produced. That layer is gone, so the new executives must self-direct and self-regulate without much supervision or direction. That is often an invisible issue for new executives until they are in the weeds, overwhelmed, and stressed out. Self-awareness, personal operating systems, and stress management are essential to maintaining the vitality necessary to operate at peak performance, which is good for the executive and great for the company.
Organizational leadership. When stepping into an executive role, a leader's relationship with the company shifts. Before the individual entered the C-suite, the organization was responsible for taking care of them. Now, as an executive, they are responsible for taking care of the organization. The situation is not dissimilar to when shifting from a child to a parent—priorities change, and the requirement for strategic awareness and empathy expands considerably.
Succession candidates must be more than aware of company values and purpose. They also need to be able to ensure that they live them and can create policy and programming to permeate those values throughout the organization.
Executive team leadership. Directors, vice presidents, and other senior leaders are tasked to delegate work to their direct reports, build cohesive teams, and work well cross-functionally. For C-level executives, their job isn't to delegate as much as it is to communicate vision with clarity, inspire performance, and steer the ship in the right direction.
Executive leaders need the knowledge, systems, and confidence to align the company's top leaders and their varying personalities to catalyze them and produce powerful results for the organization. That means that succession potentials must master the ability to inspire ownership versus merely delegating work.
Strategic leadership. When it comes to strategic leadership, the leap can be the difference between success and failure. Once a functional expert, a new C-level leader may not have had prior responsibility for developing and setting strategy.
Even those who understand strategy may not have developed an enterprise perspective that transcends their immediate functional area. That can result in downstream problems in planning, alignment, and eventually production. Moving from participant to driver of the strategic process isn't a natural shift, but entering an executive role prepared to meet that need sets up a leader for immediate and long-term success.
Public leadership. Everyday executive presence, large-forum public speaking, media interviews, handling provocative questions at an industry symposium—are the succession candidates ready for all that?
Chances are they're not. One of the greatest skills gaps for accelerating executives is the transition from being a solid internal communicator to a savvy public communicator. And it's not just public speaking; the everyday visibility and extemporaneous moments are where leaders are caught off guard and fail.
Here's the rub: It's tough to get the right level of exposure and practice to become a poised and polished executive until the opportunity presents itself to gain experience. Sadly, candidates and hiring managers often realize that too late—when others have formed unfortunate perceptions and damage control is an uphill battle.
High performers may be excellent at achieving their targets, meeting deadlines, and executing the assigned tasks, but they may not have the natural ability to excel in the five areas of leadership—at least not without the proper preparation and training. With intent, bright vice presidents and senior leaders can become brilliant executives who enter the C-suite at ease and who appear born to lead at the highest level.
From high potential to savvy executive
Developing and nurturing high potentials to be ready for the demands of the C-suite varies from candidate to candidate. However, there are some early preparation techniques that will help get high potentials ready.
Let's start off with whom to groom and when to start the process. Many of the signs to look for are above, starting with competence, grit characteristics, and presence. When someone has a better-than-average baseline in two or more of those areas as well as an open and ambitious attitude, they may be a decent candidate for your succession needs.
The time to begin actively preparing high potentials for executive roles is 12 months out. Within that 12-month window, a leader can develop the skills and tools they need to confidently take on the larger role. Any time within that time span and up to a year post-hire is ideal. Although companies would prefer that individuals enter the role with the skills intact, emergent vacancies and retention strategies create the need to provide the support and training on the job. The benefit of doing so is that application is immediate.
One factor to consider in the development process is that transparency is essential, as is balancing expectations. Beginning the development process can create the right environment for talented leaders to level up. It also can reveal that individuals you thought would be excellent won't be.
The truth is that not everyone is destined to excel in a C-level role. Some people are magnetized by the allure of the benefits of the corner office yet don't have the mindset, discipline, or desire to do what is necessary to be successful over the long term.
Many leaders delight in being technical experts and resist the shift to generalist and commander. By clarifying the distinctions between senior and executive leadership, companies can more easily identify whether candidates have executive potential—not solely based on their technical expertise, tenure, and commitment but rather by whether they have demonstrated the ability to excel in the five key elements of executive leadership.
Developing high potentials for the C-suite is a marathon, not a sprint. Small actions lead to major transformations.
The Executive Development Pathway
The key to preparing high potentials for senior leadership is knowing when to start and having a clear plan. Here is a breakdown of the development pathway designed to fill gaps and create transformation.
Month 1: Plan
- Identify potential openings within the next two years, keeping in mind the need to have a potential successor for each executive role as well as downstream strength.
- Identify high-potential leaders who may be appropriate for succession.
- Determine your program type: individual, cohort, or third party.
- Select an external partner to support your talent development needs. External resources that specialize in executive development are invaluable—they eliminate bias, providing candidates expert guidance in a safe yet candid space.
Month 2: Launch
- Invite candidates to participate in the process.
- Formally kick off the development program.
- Create a benchmark for each of the succession candidates using robust assessment tools to evaluate the five aspects of C-level leadership. This is an essential starting point because it guides direction and creates transparency for goal setting and managing expectations.
Months 3–12: Train, coach, and mentor
- Have participants partake in program training and coaching components.
Months 6, 10, and 12: Test
- Assess progress and review insights with candidates to narrow the focus in the remaining months.
- Provide specific projects and opportunities.
Months 11–12: Assess
- Reassess candidates and review against the initial benchmark.
- Determine the level of readiness and clarify remaining gaps.
- Deliver feedback and recommend continued development areas where they are needed.
- As appropriate, promote, discuss succession timing, or change gears.
Each step in this process is necessary for creating reliable outcomes and promoting executives with confidence. At this level, each candidate and role will have different needs and requirements. Tailoring programs to fit specific needs will produce the best outcomes in optimal timeframes.