Article: Perpetual Leadership Bench

When it comes to identifying their own successor, CEOs of foreign companies in Japan whom I know often find themselves in exile in a land of no good options. Yet it does not have to be so.

What do I mean by “no good options?” The CEO’s own internal leadership bench yields no unquestionably qualified candidate, despite a number of good performers. You can choose the best of the bunch and hope he or she rises to the occasion, yet depending on the candidate, this is a risky proposition. An external search can take a lot of time and results are unpredictable. In one company I know, it took over a year to find a qualified candidate—and even then, the candidate changed his mind and took a different role. In the meantime, the current CEO is tied down, unable to move on, or the business is left leaderless.

The problem is not unique to succession. An organization that is full of refraction layers—those layers of mid-level management that block, bend, or dissipate waves of change from the top—typically also suffers from leadership dearth, because the former begets the latter. CEOs often tell me how their leadership pool is inadequate, despite a plethora of people with the right titles and requisite years of experience. They have had to compromise, placing a candidate who was not right for the role simply because no one else was available. There was no time to field external candidates, let alone allow an external hire process to ramp up to find someone who was best in class.

And yet I have never met a CEO who lacked for talent. He or she lacked for developed talent—which is an entirely different problem, and one with an entirely different solution.

In my experience, the only thing worse than a business without a leader is a business with a mediocre one. Yet even hiring a competent CEO from the outside, or tapping an international executive from elsewhere in the global business to serve as expat CEO, can come with hidden costs. At one European company I know, local mid-level and senior-level managers complained that there is no career path to the top. “The top jobs are reserved for outsiders and expats,” one explained. “Internal candidates never seem to be good enough!” The best and most ambitious managers often leave for opportunity elsewhere, exacerbating an already dire dearth of leadership bench internally.

There is no fast way out of the Land of No Good Options—no helicopter rescue extraction. You will have to hike your way out. The good news is that the path out is the same as the path that ensures you never end up stranded there again.

Leadership cannot be trained. It must be cultivated.

Every CEO I have ever asked about how he or she learned to lead has cited a boss held in high regard who advised, mentored, and coached—even if it was never explicitly called coaching. Learning is applied in vivo, and feedback is immediate. The fastest way to develop leadership bench at every level is to make coaching and mentoring one’s own staff part of your company’s way of doing things. Make it part of the job. Teach your minus-one reports how to coach their direct reports so they can do the same, all the way down the line.

If you want to develop leadership capability among those who are not yet in leadership roles, start early, and focus on two things: self-accountability and independent initiative. Self-accountability because a leader cannot hold others accountable if he is not good at holding himself accountable, and independent initiative because a leader who has never been encouraged and succeeded at acting on his own will tend to wait for cues from superiors before acting in any leadership role.

The best time to invest in leadership bench is when there is no urgent need.

Even when succession might seem to be years off, start investing in candidates now, while you have the runway to do so. Ideally, you always want to be in a position of having a slate of successors—and not just one—about whom you are reasonably confident you could hand off the business when the need arises. Often that need arises sooner than you think. Head office executives make snap decisions to recall expat CEOs. You might decide for one reason or another that you unexpectedly need to leave Japan. You might want to take on an attractive opportunity with another employer but feel ethically bound not to leave when your employer has few or no options for replacing you.

No matter what, leadership bench when you don’t need it serves you. Investing in the capabilities of your direct reports makes them better at their current jobs, resulting in better results for the business and fewer mundane issues that require your intervention.

Your leadership bench is often hiding in plain sight.

I coached four talented sales team leaders in an organization, each of whom had different sales directors—three of whom formed a refraction layer, and the fourth who was a top performer. All the team leaders had talent and enthusiastically absorbed the learning. Yet the three under the refraction layer directors quickly reverted to old ways after the coaching engagement ended. They simply could not spread their wings under their bosses. The fourth team leader sustained improvement and continued to grow. He was promoted to an international director position not long after. The talent was never the issue. The refraction layer above was.

Competence has far more to do with the desire to learn than what has been learned already. It’s not the learned, but rather the learners in your organization who are your leadership bench—no matter their capabilities now. They will always grow to fill any gap if you clear the way for them.

Below are Steve’s Four Imperatives for Perpetual Leadership Bench.

1. Make your direct reports’ duties include some of the duties of your own role, particularly where these require capabilities they do not yet have. My most successful clients involve mid-level and senior-level managers in strategy development and decision-making well before strategic thinking is an essential requirement of the job. At some point, outstanding strategic thinking will be critical. Best to start preparing people now, rather than hope they learn through osmosis.

2. Every leader, no matter the level, must be a mentor and coach to his or her staff, starting with you. Make coaching part of the job—not just a program, not just an annual initiative. If you are uncertain yourself how to coach, drop me a line and I will point you in the right direction.

3. Every leader, no matter the level, must begin cultivating a slate of successors from day one, starting with you. Not one successor—a slate. The best managers invest most of their time in their best people. Investing in the excellent can possibly help them double their results. The mediocre may improve only five percent, if at all. Play favorites. Favor the excellent. There is nothing unfair about it.

4. Employees with no staff must serve as leaders in some capacity as part of the job. Building out your leadership bench from the very bottom of the organization creates ample bench at higher levels. For employees who have no staff, ensure that as part of the job they lead a team—even if it is just a short-term project. The earlier you can start cultivating leadership capability, the better.

If you happen to be one of those people who thinks there simply isn’t enough leadership talent available in Japan, let me dissuade you of that notion. There is plenty of leadership talent in Japan. It works in companies that invest in it. Whether or not that company is yours is entirely up to you.