06 Mar How to Identify Your Critical Leadership Roles
In my last blog post, I talked about the need to align your leadership development strategy with your business strategy. And that means identifying the leadership roles that will be critical to success. That’s what this blog post is about.
While every role in your company is important, not every role is critical or strategic. Critical roles will vary by company and aren’t always high profile. A little digging will reveal them in your company.
Consider a coffee-shop chain. You might assume the leadership roles with the biggest influence on performance would be those responsible for recruiting, managing and developing the baristas. And you’d be partly right if a key part of the business proposition is customer service. But if the company proposition is more focused on price than service, the leaders of the buyers who negotiate coffee bean prices will play an equally important role.
In P&G, for example, the business proposition is heavily focused on product performance. One of the key differentiators for a new product is its perfume. You might wonder why fragrance is such a big deal, but human psychology is a funny thing. The perfume of a detergent doesn’t just influence whether a consumer likes the smell, it affects their perception of how well the product cleans and softens the clothes. Two identical formulations with different perfumes can perform significantly differently in consumer tests. In the highly competitive detergent industry, the Head of Perfumery role is a critical one.
There are three kinds of roles that exist within every company.
Organisational leadership roles are concerned with the future, with big decisions, the shape and scope of the business and the culture.
About 10–15% of roles within an organisation are strategic. Obvious roles are the CEO, the Chief Financial Officer or the Chief Technology Officer of the company. There may also be less obvious strategic roles within your organisation. Explore your business proposition and you might just find some surprises.
Functional leadership roles are concerned with optimising core processes. They may be your manufacturing roles if you are manufacturing technology products. They may be software developer roles if you sell an online solution. They may be your project management roles if you are a consultancy selling solutions.
These roles are vital to the organisation, yet their importance is often secondary to the more organisational leadership roles. Functional leadership roles make up around 60% of all leadership roles.
People leadership roles make up 20–25% of the organisation and are concerned with making it work better. Again, these roles are vitally important to the success of the organisation, but they are not strategic.
These levels of leadership are not synonymous with business function. A single function (Finance, HR, Sales, etc.) will likely have a mixture of all three levels.
Understanding these roles in any organisation is central to building a leadership development model. You recognise immediately where you need to put your energy. You are clear on where you need your best people. You know which roles are most important for the organisation. And you can assess whether the people you have in those roles are the best people for the organisation.
Here are five important questions to ask to identify the pivotal roles in your company:
Where does it matter most for the organisation to have better quality leaders? As much as you may want ‘A players’ in every position, that’s simply not realistic. Not every role needs an A player, nor can every company afford to pay for one for every role. Identify which roles really need to have the highest quality talent.
Where is the organisation most constrained by a lack of leaders? Sometimes the issue may not be that your organisation needs leaders with better or different skills. It may have processes in place that work well to develop skills. But organisations are sometimes challenged to identify the feeder pool. Or they may struggle to find enough leaders to fill pivotal positions.
What specific business drivers or strategies does a pivotal role impact? Identify what makes a role pivotal. What strategies or competitive differentiators are at risk if the company doesn’t have enough of these leaders? What if these leaders do not perform at a high enough level?
How or why is one leadership role more pivotal than others? Sometimes, even for roles at the same level, some positions are more pivotal. For example, if the company’s growth strategy involves expanding into specific countries, the managers of those countries may be more pivotal than other countries’ managers.
What is the expected turnover rate and headcount growth needed for pivotal roles? It’s important to know the anticipated talent flow through pivotal roles for workforce planning. Do people become frustrated with their roles and often leave? Are they easily recruited by competitors, or do they stay in their roles for years?
Answering these questions can help you decide the extent and urgency of business risk. Then you can decide whether to build or buy the talent you need.
You can find out more about adopting a strategic approach to leadership development in our ebook, LEADER – ow to Develop Remarkable Leaders Who Deliver Amazing Results.