Why companies overlook their own talent - June 1, 2006

Link: Why companies overlook their own talent - June 1, 2006 - CNN Money

Companies that don't make cultivating talent a top priority can hobble the executive succession process. Rakesh Khurana, an associate professor at Harvard Business School, recently coauthored a study of 20 large companies and found that the ones that failed to groom talent from within neglected potential leaders and, in turn, didn't attract job seekers who saw opportunities to advance at competing firms.

Instead, talent-identification programs need to be woven into a company's overall strategy.

John Tyson, CEO of the nation's largest meat processor, Tyson Foods, learned that lesson after taking the reins of the family business in 2000. At first Tyson tried ad hoc solutions, starting a mentoring program and sending promising managers on retreats. But because the leadership programs weren't evaluated in managers' performance reviews, Tyson executives had no incentive to invest in them. When it came time to fill positions, Tyson still didn't have enough qualified leaders.

The CEO's next move: making leadership planning a core responsibility of every manager. Now managers directly beneath Tyson submit regular reports on potential leaders working for them and allow these candidates to rotate through other divisions in the company, thus preventing division heads from hoarding talented employees. The Emerging Leaders Program now boasts 150 members. Tyson, Khurana says, found that leadership cultivation needed to be "embedded in the very fabric of the business." That philosophy stretches all the way to the top: Though John Tyson doesn't plan to retire anytime soon, the company already has an internal CEO succession plan in place.