Tag Archive: Blue Ribbon Commission on Talent Development

Talent Development Leaders Tackle Four Challenges

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Directors spend the bulk of their time every quarter reviewing financial results and receive updates on enterprise risk. However, very little time is spent reviewing talent development and succession planning. Compensation committee agendas and metrics tend to be dominated by executive compensation discussions, and relatively little focus is given to measuring and tracking talent development and retention across the leadership suite.

Talent Development

From Left: Steve Newton, Barbara Duganier, Eileen Campbell,  and Doug Foshee

Panelists at a recent event hosted by NACD Texas TriCities’ Chapter, all leaders in the field of executive management and human resources (HR), discussed board-level talent oversight. Barbara Duganier, director, Buckeye Partners, served as moderator of a panel including Eileen Campbell, former vice president of human resources for Marathon Oil; Doug Foshee, former chair and CEO of El Paso Corp.; and Steve Newton, partner, Russell Reynolds Associates. The conversation confronted the fact that while the vast majority of CEOs are promoted from within, boards spend very little time on executive leadership development—and even less time on talent development beyond the chief executive.

The development of executive HR talent in an organization seems often to be left to chance. Whether it’s because the CEO and board don’t place critical importance on the position, or the HR leader views their role less as a strategic asset and more as compensation or benefits cost center, development of HR talent—and others in the executive pipeline—deserves more board-level attention.

Below are several challenges that were discussed, as well as some solutions to developing talent and value from your company’s HR leadership.

Challenge 1: People think they’re good at recognizing talent, but biases and lack of process might lead to missing out on promising people. Ask any executive to identify high potential employees, and they can always name a few promising people. However, because the ability to recognize a talented person is considered a soft skill, it doesn’t get measured or tracked on a regular basis. Interestingly, most people will identify people in their own image—just younger. Therefore, if the leadership team is not diverse, promising people may go overlooked that do not meet preconceived notions of what leadership looks like.

A Solution: Measure and track. HR leadership and the board should insist on tracking talent development-specific metrics with the same level of importance as financial metrics. Measuring also allows boards and executives to notice unconscious biases in recruitment and talent development.

Challenge 2: People are protective of their highest performers. Lateral moves and broadening development positions are imperative in order to assess and build talent across the organization. But as Campbell pointed out, managers are often reluctant to recommend their highest performers to other divisions.

A Solution: Once people are identified as high-potential employees, they should be considered “group resources” rather than belonging to a department or division. By operating across departments, leaders outside of the individual’s direct supervisors can take part in nurturing the long-term development of employees’ talents.

Challenge 3: People are reluctant to put high performers in certain roles due to a fear of failure that could result in career derailment. As a result, sometimes leaders are not “tested” outside their comfort zone, and can remain unproven until they’ve ascended to the role of CEO.

A Solution: Develop a program similar to General Electric Co.’s “popcorn stand,” a concept shared by Doug Foshee. This concept provides a future leader with significant responsibility outside his or her comfort zone in a part of the business where commercial impact on the overall organization is less relevant. In smaller organizations, these could be roles that require managing through ambiguity or necessitating cross-functional skills. In larger organizations, these could be special projects or small profit and loss businesses whose bottom line is minimal or negligible.

Challenge 4: Boards are not comfortable addressing CEO succession if they have just named a new CEO. Steve Newton remarked that given the average tenure of a CEO is four to five years, it’s never too soon to begin assessing readiness of internal candidates if you believe they have gaps between current and desired capabilities.

A Solution: Identify a wide candidate slate within an organization early in a CEO’s tenure and begin developmental plans to grow a leadership team that has both breadth and depth of understanding.

For additional NACD thought leadership on effective management of human capital culture and talent development, members can review the Report of the NACD Blue Ribbon Commission on Talent Development. Key takeaways from speakers at the chapter program can be downloaded here, and to view the entire program visit NACD Texas TriCities Chapter YouTube Channel.


Catalano_Anna Anna Catalano is director of Willis Towers Watson, Mead Johnson Nutrition, Chemtura Corp., Kraton Corp., NACD Texas TriCities Chapter, and the Alzheimer’s Association.

Blue Ribbon Commission Report on Talent Development

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As the marketplace grows in complexity and turbulence, it is increasingly clear that true  success depends on people. As boards face more disruptions, they will need to ensure the company has the right skills and agility in the talent pipeline to meet these challenges. This topic—talent development—was the subject of this year’s Blue Ribbon Commission (BRC) report. In the second session of Tuesday’s Board Leadership Conference, NACD’s Managing Director and CFO Peter Gleason was joined by the chairs of the 2013 Report of the NACD Blue Ribbon Commission on Talent Development: A Boardroom Imperative Gregory Lau, managing director of the board of directors practice at RSR Partners, and Mary Pat McCarthy, director of Mutual of Omaha and Tesoro, to discuss the commission’s findings and examine the “next” practices in executive talent development.

Why Talent Development?

The reasons for the board to prioritize talent development are obvious. Over 50 percent of a company’s expenses are related to talent and people. “With the right talent,” observed McCarthy, “you can take on more risk than you might otherwise be able to do.” And yet, for the first time in decades, the talent pool is shrinking. When companies do find themselves at an inflection point, they may not easily have the necessary talent on deck.

Both chairs observed that traditionally, the board has focused on CEO succession. One of the report’s recommendations, however, is to have a multi-level, multi-year talent pipeline overseen by the full board. “Directors,” according to McCarthy, “need to think beyond the CEO and the current year.”

Building vs. Buying Talent

Directors need to take a critical look at the organization’s hiring philosophy. Does the company develop and promote from within, or hire from outside? Although there are situations that may require a significant external recruitment strategy—for example, a turnaround situation—internal hires are often less expensive and on average more successful.

Further, oversight of the talent pipeline should not be a “start and stop” process. The chairs recommended that the board continuously monitor the talent pipeline. Directors should spend time as a board thinking about strategy and the skills the company is going to need, and actually allocate time to do a deep dive. Going beyond the company, Lau recommended looking at competitors’ talent to figure out how they are developing their pipeline. A red flag for directors should in fact be that their competitors are consistently recruiting talent from them.

Strategic Human Resources Function

At BRC meetings, a significant portion of the debate was where the authority of talent development should rest in the company. The commission came to the conclusion that the human resources function should serve as a “strategic architect” to the company. The chief human resources officer or equivalent position, in fact, should make sure that the talent development process is “constant, moving, with good results,” according to Lau. “That person should have time on the board agenda, throughout the year, talking to the directors on talent.”

The Report of the NACD Blue Ribbon Commission on Talent Development: A Boardroom Imperative is available at the NACD Bookstore and free to download for all NACD Full Board Members.