Stephen Drotter is Chairman of the Leadership Pipeline Institute and lead author of “The Leadership Pipeline.” Stephen has worked on succession planning and the related disciplines of organization design, executive assessment, and leadership development for over 50 years. He has helped over 100 companies in 37 countries with succession planning as a management discipline.
In his newest book, “Pipeline to the Future: Succession and Performance Planning for Small Business,” Stephen captures the learnings for meeting the challenges of small business. Steven explains the importance of the simplicity that comes on the other side of complexity. This episode is jam-packed with advice for leaders at all levels – an episode not to miss!
[1:44] Jim tells about Stephen Drotter’s background, including his latest book, Pipeline to the Future: Succession and Performance Planning for Small Business, and welcomes him to the show.
[2:46] Stephen likes to dig to the bottom of things and does not accept superficial responses or thinking. He goes for simplicity on the other side of complexity. He tells about firing companies and why he does it. He works with companies that want outcomes. Process matters but outcomes matter more!
[4:56] A good leader creates leaders for succession planning. Stephen tells why it is hard for some companies. Many companies don’t choose to do the work for succession planning. Every position needs to be accounted for in the planning.
[6:47] If you can’t produce a good first-line manager, you can’t produce a CEO. There’s a lot to know and a lot to do, and it’s a lot of work. That’s the complaint Stephen hears. Most executives work more with their numbers than they do with their people.
[7:21] Managers are working at the wrong level. For example, promoting a top salesperson to a leadership position does not make the salesperson a good sales trainer. If sales numbers rise, it is misleading. The other salespeople aren’t developing if the first-line manager isn’t measured on leadership. Working at the wrong level is the most common problem Stephen sees.
[9:19] Stephen tells how to pick leaders and measure their performance, not their sales figures. Leadership performance is about developing leaders under you. Is your team better this year than last year? A leader sets the direction. You need to provide leaders with what they need to be able to lead, including the knowledge of how the company is doing and where it’s going so they can support it.
[11:19] Jack Welch liked to skip all the layers of management that he could and engage people at lower levels by going to their training courses at Crotonville and engaging the students directly. A mechanism for communication is a huge piece of building leaders.
[13:20] Are your criteria for picking leaders fair? First, distinguish between performance and potential. Judge potential by how people think and how they are viewed by their peers. What kinds of questions do they ask? If they ask questions at a higher level than their role, they must be thinking about it. Who are the people who think beyond today’s task? They’re the ones who become more efficient.
[16:02] Stephen talks about the responsibility of the employee for development. The company has the key because they assign the jobs that will develop the employee. The employee has their interest, their questioning, their learning, and the way they complete assignments. Are they learning the business and the company or just their job? An employee has to be willing to stick their neck out and take some risk.
[18:15] Stephen tells why he calls competency models nonsense. He says they are not relevant to the work.
[20:42] Training should be differentiated by the student. Students at different management levels need different training. The training needs to apply to the company and what improvements are needed.
[22:00] HR is not tuned in to what is needed at the business level; it focuses on the people, not the business. HR should be creating an agenda they use to drive the business.
[24:47] Stephen tells about his passion for small business and why he wrote his latest book. He tells how he moved from large companies to consulting for large companies, to studying small companies for lenders. About 90% of Americans work for small companies. But nobody writes management resources for small companies. So Stephen wrote a book for them.
[29:48] The management needs of small and large companies are surprisingly quite similar but how you meet the needs of small and large companies is remarkably different. Stephen gives an example and He shares an anecdote from working with a big company. He offended the CEO!
[35:13] Employees want to be fulfilled. Management wants production. Stephen shares thoughts on how people have changed. The important thing is to set goals and accomplish them. That’s what helps you succeed.
[37:59] Stephen shares more about leadership pipelines; it’s how to run the business and set goals. He explains what the technology pipeline is.
[42:00] Jan encourages listeners to listen to this conversation again and take notes. This topic is very different from the usual episodes.
[42:38] Stephen shares his last thoughts. There are the workers, the communication patterns, and the work. Start with the work and the rest will make sense. All businesses have to compete.
Quotable Quotes“I like to dig down to the bottom of things. I have a hard time with superficial responses and superficial thinking, you know, the bumper-sticker-type leadership advice.” Click To Tweet “There’s simplicity and then there’s complexity, and there’s simplicity on the other side of complexity. I go for that simplicity on the other side of complexity. And so, it’s time-consuming.” Click To Tweet “Process matters but outcomes matter more.” Click To Tweet “We’ve known how to do [succession planning] for 50 years, so there’s no longer an excuse. People just don’t want to do the work.” Click To Tweet “Think of a pipeline that’s broken at the point where the pipeline goes into the material you’re going to pump. That very first piece is broken. What do you think’s going to come out the back? Nothing!” Click To Tweet “Most succession systems are broken at the bottom. If you can’t produce a good first-line manager, you can’t produce a CEO. You’re going to have to get him someplace else. It’s not in the culture. People don’t understand that… Click To Tweet “To work at the right level takes a lot of personal discipline to move away from the stuff that you like and into the stuff that you have to do.” Click To Tweet “The top [level] needs to spend more time with the bottom [level]. That’s one of the very big, important disciplines.” Click To Tweet “A mechanism for communication is a huge piece of building leaders.” Click To Tweet “It’s not possible to define the potential for someone to go higher than you are.” Click To Tweet “You may be entitled to a promotion because you earned it, but you’re not entitled to a promotion because you showed up today.” Click To Tweet “When I started consulting, I stayed with big companies because they can pay..” Click To Tweet “There’s such a thing as management risk. You have the wrong management structure and the wrong management people; you’re putting your business at serious risk.” Click To Tweet “If you want to have development happen, pick a job you don't want, working for a boss who doesn't want you. There will be real development.” Click To Tweet
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- Stephen Drotter
- Leadership Pipeline Institute
- The Leadership Pipeline: How to Build the Leadership Powered Company, by Ram Charan, Stephen Drotter, and James Noel
- Pipeline to the Future: Succession and Performance Planning for Small Business, by Stephen Drotter
- Jack Welch
- GE Crotonville
- David McClelland
- London Fog
- Jimmy Choo
- Fortune 500