It’s a wonderful feeling for the whole organization when a home-grown high-potential executive in treasury or finance moves upward and takes his or her rightful place in the C-suite. Everyone celebrates the selection and sits back to watch the magic happen. At least, that is how it’s supposed to work. But what happens when the individual with so much promise can’t deliver after the big day arrives?
It always comes as a shock when someone with an impressive combination of talent, experience, and results fails to achieve success in a new role. What causes a high-potential executive to crash and burn when scaling to the next level? Failure can usually be traced to one of two causes—either an unaddressed shortcoming in the individual or a failure at the organizational level.
The first steps in putting together a successful talent management program are to look at the direction in which the company expects its industry and its business to evolve, and then determine what that evolution means for its treasury, finance, and risk leadership. Outside business management consultants may be required to evaluate how changes in the business landscape should affect the company’s performance expectations for individuals in certain roles.
Once the C-suite and function-level managers reach consensus around the key leadership behaviors and functional skill sets that the company’s executives will need to sustain future organizational success, those characteristics should be codified and publicized. The selection and development of high-potential executives should revolve around these qualities, ensuring tight alignment between leadership and strategy.
Bringing the creation of development plans for high-potential staff into the format of a cross-functional roundtable integrates multiple points of view into the process. Candid discussions that are part of these talent review roundtables help eliminate subjective decision-making that can be driven by personal biases or political agendas. They also provide information about how people outside of finance see each person, helping ensure that the people identified as high potential provide great service to their internal customers in addition to having strong technical capabilities within finance.
One CFO we worked with on succession planning remarked, “I have been hiring and promoting the smartest people I could find for 15 years. Now I have a lot of really smart people around and no one to delegate to.” His point was that he’d made a lot of individual decisions with no one to challenge his thinking. Each hire and promotion looked like a good decision in isolation, but on the whole, there was a distinct pattern to behaviors he was valuing and those he was ignoring. He had a department populated by experts but few true leaders. This created a big problem for succession planning and even handing off strategic responsibilities. By bringing together diverse perspectives, a talent review roundtable can help executives avoid these blind spots.
Talent development can not only provide bottom-line benefits by populating the organization with highly effective leaders, but it can also play a critical role in the retention of a company’s best employees. Investment in their professional development signals to high-potential individuals that they are valued by the business, and it enables them to envision a future with the company. Executives advancing through the ranks are very attractive to outside organizations, and giving them a clear internal career path helps reduce the chance that they will jump ship.
Ultimately, senior management must determine whether a high-potential talent development program would be worth the effort for their company. The answer may vary by industry and by organization. But companies that want to build enterprise leaders within their finance function will likely decide that a high-potential talent management program is a smart investment in the future of the organization.