How not to lose your next CEO

Jeff is incredibly gifted. He joined a tech company straight out of college and spent the first eight years of his meteoric career rising to positions of increasing complexity and responsibility. Jeff became known as a “fixer,” someone who could be thrust into any role where the team or the business needed transforming and find a way to make it happen.

“On my last assignment, they sent me to do a turnaround in one of our largest territories. It was expected to take two years, but I determined what needed to be done and completed the project in six months,” Jeff shared. “It wasn’t long after that when the boredom set in.”

Accustomed to running at a fast pace, Jeff now found himself maintaining something he’d built. However, this piece of the business was running so efficiently that he had few challenges to focus on. Jeff had built a high-performing team that was now capably at the helm, and any of them could step into his role immediately. He knew it was time for a career conversation with his boss.

Their discussion didn’t go as expected. Jeff learned that the company was putting a freeze on all promotions and pay hikes for the foreseeable future. When he inquired about his career progression, Jeff was asked to “wait it out for the next couple of years.”

“Just tell me, am I in the succession plan?” Jeff inquired. “I don’t need to see the list. I want to know if I am on it.”

“I can’t tell you that,” his boss replied. “It’s not our company practice to reveal such things.”

Within 30 days of their conversation, Jeff formulated a plan for starting his own business. Four weeks later, he had contracts with his first set of clients. Given his past performance, it should have come as no surprise to his boss that Jeff was resigning, yet the news produced shock waves across the executive team.

“You can’t resign,” his boss said with an edge of desperation in his voice. “We need you!”

“You’re too late,” Jeff replied. “I needed to hear that two months ago.”

A better approach

High-potential employees need a special kind of “care and feeding” to remain engaged and retained. The very capabilities that your company admires in them mean they have myriad options, both inside your organization and externally. Competitors will certainly feel the same if their performance record is attractive to you. Or, these talented people may choose the entrepreneurship route, as we saw with Jeff.

While all businesses experience cycles of expansion and retraction, you’re most vulnerable to losing top talent during times of budget cutbacks. If you’ve practiced transparency and candor in your communications with your most valued people, the benefits become evident at such times. Here are a few tips for guiding those conversations so you retain individuals who can lead at the highest level:

  • Share their place on the roster. It should come as no surprise to a high-potential person that they are in the succession plan and highly valued by the organization. Communicating such news is not akin to a promise, which should be clearly stated. It does, however, confirm that the employee is seen as someone in whom the company will invest so that they grow to their fullest potential.
  • Be honest about timelines. If the business is in a retraction cycle where budgets will be slashed or a freeze on hiring and promotions is imminent, don’t leave your high-potential employees guessing about its expected duration. Translate that news into what it means for them, their position and their career progression. Give them specifics about when they can expect to move to the next level.
  • Acknowledge accomplishments. Suppose you have budget constraints that prevent promotions or hiring. In that case, this is the time to exercise special award and recognition programs to demonstrate appreciation for the results your high-potential employees have delivered. Apply financial and non-monetary approaches to emphasize the employee’s value to a team, project or business challenge. Help them feel their contributions have not gone unnoticed by being specific about how they’ve made a difference.
  • Keep them learning and challenged. One of the greatest retention tools you have at your fingertips is expanding an employee’s access to learning. In one study, 48% of workers said they would switch to a new job if it allowed them to build new skills. Highly talented people are sponges for growth, so provide them with abundant opportunities to develop and hone their skills. You can accomplish this through training and education programs or by providing them with assignments that are challenging. Then, give them the autonomy to show you what they can deliver.
  • Not all budgets are created equal. Practice protecting as much of the development budget for top talent as possible. It’s tempting to demand across-the-board cuts to be fair to all business areas. But when you do, you risk cutting into the muscle needed to grow the organization’s future leaders.

This week, identify the “Jeff” on your team and ensure they know they’re valued.

This article was first published in SmartBriefs, August 2023.

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