Grooming senior managers for the board
Grooming senior managers for the board
Selection of senior managers
Forty per cent of the companies do not have a set of selection criteria/competences
to identify top managers.
More progressive companies have developed competencies that go beyond the
traditional approach of leadership style, decision-making and commercial awareness,
and include multicultural awareness, risk management, networking and customer
On average, 67% of senior managers are promoted internally, with 33% being
Many companies indicated that an 80 internal promotion/20 external recruitment ratio
is a desirable one.
Only 15% of companies are presently concerned with undertaking a systematic
review of their senior management group - a form of management audit.
Development of senior managers
Standard development opportunities prevail in most companies. More individuallytailored
development, as in executive coaching or psychological development, is
offered less frequently.
Standard development opportunities such as business school courses are generally
rated as less effective than individually-tailored development. Yet, they are most
frequently offered. In future, companies may use individually-tailored approaches
The majority of companies believe that senior management development is the best
way to secure high calibre candidates at senior level, followed by recruitment of high
potential graduates in the first place. Succession planning is mentioned by 22% of
companies as a way to secure a pool of high calibre candidates.
Selection, management development, motivating factors
Sixty per cent use a set of competencies to identify top potential, but the majority do
this subjectively using appraisals. Only a few companies use more objective
assessments, such as psychometrics and assessment centres in order to
benchmark and select their executives.
The following main categories of competencies were found:
- Management style/team style/leadership style:- interpersonal skills, organisational
awareness, change management
- Personal characteristics:- initiative, flexibility, responsibility, decision-making
- Business skills/technical skills:- commercial orientation, direction setting, risk
Additionally, companies listed conceptual and analytical thinking, influencing and
strategic planning. More progressive companies use competencies such as
multicultural awareness, risk-management, networking, customer focus,
management of information systems.
Business school courses and international opportunities are the most common forms
of development for executives. These are clearly standard programmes that are
offered to many senior managers. Individual approaches including external
coaching, psychological assessment and mentoring are less frequently offered by
companies, although their effectiveness is seen as higher than the effectiveness of
What do senior managers expect from their companies in the future?
Opportunities that the company offers are seen as more important than job security
and remuneration at this level. Nevertheless, company success is seen as an
important factor, including corporate image and brand strength, company growth,
recognition given to senior management and support offered, flexibility, clear goals
and career management.
A quarter of companies mentioned autonomy and responsibility as significant
expectations. In the future, running a business unit is seen as a major challenge that
senior managers strive for, as opposed to performing in purely functional roles.
On average, one third of remuneration varies with performance.
While only a limited number of companies have introduced Equity Partnership or
Matching Share Plans, this is an interesting development at this level. Senior
managers are being asked to put their own cash at risk in the future growth of their
The majority of companies base their annual bonuses on profit, followed by revenue
targets and earnings per share. About one third of companies use a different basis
for their annual bonuses, such as external/internal customer satisfaction, personal
objectives, cash targets, performance against budget, cost of capital employed, a
combination of qualitative and quantitative targets, operating cash flow and budget
Senior development programmes are seen as the best way to ensure a pool of high
calibre candidates, followed by recruitment. Senior development programmes
include training and personal development.
Systematic succession planning does not feature highly. Only 15% of companies
are concerned with a systematic review of their management potential. This lack of
concern with benchmarking, that a systematic review in terms of a management
audit would produce, is surprising.
Other trends include personal development plans, systematic reviews by group
executives, structured development activity reviewed at board level, identifying fasttrack
individuals as early as possibly, creating a strong professional management,
succession planning designed to move across traditional functions and nonexecutive
Successful management initiatives
The following general initiatives were rated as successful:
Individual development (40%), internal group programmes (24%), business school
courses (12%); demonstrating that individual development is seen as more
successful than standard training courses.
There is a large mixed category of diverse initiatives which includes:-
Psychological assessment, mentoring, international opportunity, cross-divisional
transfer, remuneration, appraisal, action-learning, in-house change events,
individually tailored programmes, co-ownership of career development, involvement
in processes such as remuneration, peer group feedback, overseas assignments,
personal development plans, organisational management review process, coaching,
exposure to other businesses/cultures, development of broad-based general
managers who are regularly assessed against external benchmarks, bringing
managers from the divers parts of the group together, management audit, leaders of
tomorrow programme, development of executive profiles.
An interesting approach is the consortium approach where several international
companies ask a renowned business school to develop a tailored senior
Least successful seem to be standard training programmes, a rigid implementation
of programmes or a lack of strategically planned training. Given that most of the
development programmes for this management group are of a standard nature, the
present results call for a review of management development programmes and,
again, show the need for more individually-tailored initiatives.
Psychological assessment is seen as one of the most successful initiatives and also
an unsuccessful one. This raises the question as to when and how psychological
assessment is used, in order to maximise its effectiveness.
Source: This paper is a summary of a report "Grooming for the board" from NB Selection Limited.
Results are based on questionnaires collected from 48 Human Resource Directors
from the top 200 companies in the UK.
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