Two paths to a leadership role

Are you aiming to grow into a leadership role?

A role leading more specialized streams of work, new initiatives, larger scale of work, or teams?

There are two paths to get there.

1.       Build a solid track record and incumbency with an employer

2.       Be very specialized and known for the ability to lead success in a field of work.

As per LinkedIn data, between May 2023 and April 2024, 42% of the first level managers were promoted from within and 58% recruited from outside.  

Aiming for a leadership track, the expectations of the employer and of the team / co-workers who will work with this leader are both important.

Attributes which management looks for in potential leaders

1.       A track record of consistent good performance.

2.       Relevant functional specialization to be effective in the role

3.       Someone who the organization can trust.

4.       Understanding of the organization and a good cultural fit.

5.       Assurance of commitment to the employer.

Attributes which teams and co-workers look for in potential leaders

1.       Competency and also the ability to be a coach - someone who they look up to.

2.       A spokesperson for the team.

3.       Can network internally to ensure that organizational resources required are made available.

4.       Will have their back, someone they can trust.

5.       Will treat team members with respect and share credit for good performance.

6.       Promote performers and also take action to upgrade or cull laggards.

The incumbency advantage

In the two lists, 7 criteria are in italics.

These are “experiential criteria”. The best way to judge someone on them is to have worked or observed them in the setting of the hiring organization and working with the teams there.

Herein comes the incumbency advantage. Current employees have greater opportunity to demonstrate performance on these 7.

This gives them a leg up when an organization is looking to fill leadership positions. This is more so in industries like financial services, manufacturing, oil & gas and utilities (Source - LinkedIn data May 2024)

We hear that “If an existing employee is 70% ready, employers prefer to promote him/her than bring someone from outside”. This is why.

As an outsider, how to land an elevated role?

If the odds favor incumbent employees, how can an outsider land a leadership role?

In the two lists outlined earlier, there are attributes which can create this opening.

1.       Functional specialization, competency, ability to coach

2.       A track record of consistent, good performance

Here are two situations where these can help lead a leadership role

1.       The company lacks the skill/specialization in-house.

Whenever an organization is looking to build new competencies, enter new markets, or add new streams of business, the expertise is very likely lacking within the firm.

In this situation, talent will be sought from outside as well - including for leadership roles.

When IT services companies expanded into new geographies in the 1990’s, there was no in-house talent which had led growth in those markets. A focused effort was then made to recruit sales leaders local to those markets.

More recently, traditional auto manufacturers looking to add digital, navigation, and autonomous features to their vehicles, found that this expertise lacking internally. They then sought and brought in leadership and teams from Silicon Valley who had the expertise in these.

And read any business news feed today and one sees the aggressive pursuit to acquire leaders and experts in AI.

2.       Company performance in a stream of work is lagging its peers

When a company has a line of business (or function) which is struggling, it is often attributed to the lack leadership talent within the existing team.

This assessment neutralizes the incumbency advantage and opens doors for leaders from outside.

The performance of a large IT services company was trailing in its financial sector market unit. Assessing that promoting someone from within would only lead to similar performance, the firm cast a net outside and recruited a leader from a peer firm which was a much better performer in the financial services sector.

In the last decade, PE firms have purchased may IT services companies. Their thesis was that the companies had greater potential which the existing management was unable to harvest. Unsurprisingly them, new leadership was recruited from outside to lead these firms.

When reading a press release saying, “Widget Company hires key senior leader”, one of the above situations is the likely background which led to it.

In Summary

Two paths which can lead to a leadership role are:

Demonstrating consistency of performance with your current employer while building capability to stand out as an expert in a functional area. Add reliability and the ability to work well with co-workers and you are making the case for elevated responsibility.

Being a standout performer in an area of work. and ensuring visibility in networking and industry forums to enhance your visibility. Being seen as someone who can build or raise the bar of performance in the area or work you excel in – and hence a leadership candidate for a company looking to hire that skill from outside.

And in both situations, tenure with an employer is key. Leadership roles are critical and hiring firms want leaders who have demonstrated loyalty and commitment to their employer(s).

Keep swinging!