It’s often easy for companies and their leadership to be so caught up in the day-to-day challenges of running the organization that they overlook long-term planning—and we’re not just talking about annual, 5-year, or even 10-year plans. Even companies that are thinking long term are often thinking long term through the lens of their existing personnel.

The Inevitability of Transition

Whether it’s the founder of a rapidly growing start-up or a long-serving C-suite leader, companies can’t assume their key staff will be around forever. Shifts can be driven by retirement, competitor poaching, or even illness and death.

Eventually, everyone who works for you today will move on, regardless of his or her role or position in the company. That can be a sobering consideration, but it’s a practical one. Even if internal shifts are due to promotions or new assignments internally, these shifts drive the need to fill a position.

Companies that fail to adequately plan for future leadership position openings can find themselves in an unexpected crisis. Hiring externally is always an option, but the ability to promote from within brings the obvious advantage of leaders who have a history with the organization and understand the key responsibilities and functions of different roles within the company.

We spoke to industry experts to combine their insights with our own regarding best practices for identifying, developing, and retaining potential leaders.

Recruitment

Companies may get lucky and find great leadership potential among existing staff, and often, great leaders emerge relatively unexpectedly. But it would be foolish for companies to rely on existing staff alone in their leadership development program.

Instead, the process really needs to start with recruitment. “Companies have traditionally hired for aptitude (reasonable assurance that the person could do the immediate job) and attitude (is there a cultural fit),” says Randy Pennington of the Pennington Performance Group. “The best companies will add an additional criteria—altitude—the reasonable assurance that the individual can grow into the future. This will be especially important for recognizing and grooming young leaders.”

There are five competencies that suggest someone has room for growth in the workplace of the future, says Pennington: curiosity, creativity, collaboration, coachability, and courage. “The successful leaders of the future will have to groom and grow a workplace that thinks, communicates and collaborates differently. Leaders must model the behaviors they seek to develop in others.”

Keep in mind not everyone you hire can or should be a future leader. Leadership potential doesn’t need to be a requirement for new hires, but it should always be a factor when you consider the best people to bring on board.

Identify the Potential among Current Staff

Some candidates are recruited and hired with the expectation that they have leadership potential. Others may not have been. Either way, once they are part of the staff, managers can see them in action; leadership development firm Linkage’s CEO Jennifer McCollum and Chief Research Officer Mark Hannum point to what they refer to as five “imperatives” when identifying leadership ability among staff:

1. Find great goal setters. Which leaders can set a clear direction and focus energy toward it? They can inspire those around them.
2. Find leaders who best engage and impact their peers and teams. Which leaders bring out the best in others, individually and collectively? This is also about inclusion, seeking out a range of diverse perspectives and experiences. The latest Linkage data prove effective leadership and inclusive leadership are inextricably linked.
3. Find leaders who have good ideas about the business and can execute them. Which leaders drive new thinking in constant change? Today’s pace and complexity require an ability to not only innovate rapidly but also create structure, process, and clarity to execute just as rapidly. These leaders challenge others to be better.
4. Find leaders who are self-aware and committed to becoming better. Which leaders are open to self-discovery about their strengths and impact on others, as well as how to compensate for weaknesses? These leaders also have integrity and are compassionate and respectful of others.
5. Find leaders who are a good fit with the organization’s values and culture. Young leaders are often accused of a lack of loyalty and of being willing to jump companies for greater pay or experience. In reality, young leaders are even more concerned about alignment to a higher mission and values. Provided they are given the opportunity to grow in their roles, a good fit increases the likelihood they will stay engaged.

Leadership Development

Leadership potential is just that: potential. It doesn’t automatically or necessarily develop into leadership ability. The leadership potential of any employee can waste away if not properly nurtured and developed.

Greg Barnett, PhD—Senior VP of science with The Predictive Index—recommends six key strategies for leadership development:

1. Hire for leadership potential. We’ve discussed this above.
2. Conduct high-potential talent reviews. Create an independent talent review process that involves a different set of standards by which to compare talent.
3. Build clear lateral career paths. Sometimes referred to as “high-potential rotations,” these are designed to help talented individuals grow beyond their current roles, learn from other people, and gain more exposure across the organizational footprint.
4. Offer early career mentorship opportunities. Connect more seasoned leaders (not necessarily direct managers) with junior talent.
5. Provide stretch assignments. These stretch assignments are about skill and experience-building, as well as increased visibility in the organization. In many ways, they are an excellent job tryout for potential future leadership roles.
6. Make high-potential programs available. Strong high-potential programs offer a variety of learning and growth opportunities. They often start by providing high potentials with specific leadership training designed to shape their raw talent, the use of stretch assignments, mentorship, and job rotations.

In addition to development, of course, organizations must be concerned with retaining their top employees.

Retaining Leaders

Retention is a key concern for any leadership development program. No company wants to spend extensive time, energy, and resources training a leader who goes on to have a big impact somewhere else, potentially with a competitor.

Particularly for those with high potential, your retention strategy must involve a focus on growth and development and a visible path forward to keep these employees engaged, motivated, and appreciated.

Great potential leaders are out there, and companies need to know how to find and recruit them to be successful in the long run. Additionally, virtually every organization has employees at the lower levels of the hierarchy with the potential to be future leaders.

The key for existing leaders is to keep succession planning and leadership development top of mind, to recruit well, to identify potential leaders, and to effectively coach and develop them for future leadership responsibilities.