Leadership pipeline: Stepping stone to startup success

Can failures create leaders?
The kind who challenge the norm, who experiment. Who innovate and adapt. Leaders who learn?  
It did for Qualcomm. The wireless technology firm uses an unconventional means to nurture leaders by fabling the failures of its employees. For them, each blunder is not a missed opportunity but an insightful teacher. So why not share the lessons with all?   
Through a company link on the firm’s website, the employees share stories of slips and misses with the learning and development team, which circulates them along with lessons with other employees. This has built a community of coworkers (co-learners) and nurtured risk-taking: ingredients to make a leader.   
Thanks to its battery of agile leaders who believe in taking “meaningful risks”, Qualcomm could invent the underlying technologies that made 5G work and is now researching 6G.   
Most mature companies encourage risk-taking to grow leadership capability, suggests a Deloitte study. Further, cultures that enable it are five times more likely to anticipate change and respond to it effectively. They are seven times more likely to innovate than others.   
In fact, Andrea Derler in ‘High Impact Leadership’ suggests that assessing and taking appropriate risks is a personality trait associated with leadership potential.   
Classroom training? That’s too mainstream  
Such norm-defying techniques to create leaders, can they help startups, and small and medium enterprises weather the looming uncertainty? The COVID-19 pandemic has upended lives and the Ukraine war choked global supply chains. Moreover, Industry 4.0 begs an approach that goes beyond classroom teaching to create leaders.   
But more pressingly, the leadership conundrum is unnerving startups founders as they scale businesses. No more can they remain on the frontline fighting every battle. They must delegate tasks, identify leaders and assume the function of a planner – they must prepare for the future.   
Although sales may seem to be the greatest growth challenge for a growing venture, organizational issues often eclipse it , the Harvard Business Review Entrepreneur’s Handbook points out.   
“You and your startup team must periodically reinvent your organization to cope with changing circumstances…change your mode of working from doing things yourselves to doing things through other people”. A robust leadership pipeline is the answer.    
But how to pick the ideal candidate to groom as a leader? Do technical skills matter more than empathy? Who to trust? Can David, the diligent employee, also be David, the inspiring leader? Is situational learning better than formal training?  
In the next five to 10 years, a majority of startups will engage in leadership development programs, suggests research in Journal of Business Venturing Insights.  
To remain sustainable, capabilities of the firm have to be developed, suggests Amar Bhidé of the Fletcher School at Tufts University.     
These can include:   

More qualified personnel    
Increased specialization of functions   
Decentralized decision making   
Systems to cope with a larger and more complex organization  
Orientation of employees towards a common long-term purpose.  

Yet leadership development is still given a short shrift. Only a third of 14,000 leaders and HRs felt their organizations’ leadership development programs were highly effective, a 2011 study found.   
What’s more? Deloitte’s 2016 Human Capital Trends study has shown that 30% organizations had weak or very weak leadership pipelines and 90% percent viewed this as a critical business challenge.  
The north star(s) you need  
As the guiding light, entrepreneurial leadership is able to foster the performance of IT small and medium enterprises firms via critically organizational factors like team creativity, dynamic capabilities and competitive advantage, according to a study in Heliyon , a peer-reviewed journal.   
There are few traits in a leader that attract followers, according to Ben Horowitz in ‘The Hard Thing About Hard Things’. Do you or your managers have them?  


The ability to articulate the vision  


 Steve job best exemplified this trait, writes Horowitz, who is a technology entrepreneur-turned-venture capitalist. At Apple, Steve offered a compelling vision to employees, made them stay and work relentlessly despite the company being weeks away from bankruptcy.   


The right kind of ambition  


 Bill Campbell, a businessman who’d coached Jobs and Jef Bezos among others, demonstrated this. He created an environment where employees felt he cared more about them than about himself. And he actually did, Horowitz believes.   


The ability to achieve the vision  


Will I follow them into the jungle with no map forward or back and trust that they will get me out of there? asks Horowitz. Former Intel CEO Andrew Grove, despite reservations of many employees, pivoted the memory business firm to the microprocessor segment. This became possible as the company trusted him and his ability to realize his vision.   
What do leaders think the most important qualities are? The Society for Human Resource Management has listed the most important traits based on the information gathered from more than 3,00,000 business leaders by consultants Jack Zenger and Joseph Folkman :   

Inspires and motivates others  
Displays high integrity and honesty  
Solves problems and analyzes issues  
Drives for results  
Communicates powerfully and prolifically  
Builds relationships
Displays technical or professional expertise  
Displays a strategic perspective  
Develops others   Innovates  

More crucially, research by psychologist Daniel Goleman suggests that most effective leaders are similar in having a high degree of emotional intelligence. However, this doesn’t discount the role of IQ and technical skills which matter, but majorly as entry-level requirements for executive posts.   
Change style as you grow  

What’s the best way to manage a st artup? None! according to the Harvard Business Review’s Entrepreneur’s Handbook.   
It’s best to pick the style(s) that suits your organization at a given point in time. Michael Roberts , professor at Harvard Business School , has identified four different approaches to leading a startup faced with rapid growth:   
1. Managing content  
This usually suits young, small and simple firms. It involves the manager on the frontlines, directly involved in tasks themselves or directly supervising others. Subordinates are incapable of making decisions independently. With expansion of operations and challenges, a transition in leadership style may be needed. Roberts cautions that a failure to recognize the need for a transition may cause a business to fail.   
2. Managing behaviors  
 The leader here specifies how employees should behave and codifies this. They may employ rules, procedures and auditing systems to drive results. And employees work independently within a prescribed framework. For example, at a KFC restaurant, each employee is bound by a set of procedures.   
3. Managing Results  
The leader of a large, complex organization may outline results for employees to achieve. She may focus on upskilling and motivating workers to reach their goals.   
4. Managing context  
Leaders here focus on results but create an enabling culture or environment for their achievement. The mantra is – the right people in the right environment with the right mission will succeed. This involves leadership by example and wide communication.   
Roberts points out that as the volume and scope of work grows, the leader has less time for hands-on involvement. “Be alert to your current needs, and understand how they are changing,” the handbook says.  
But what is the ideal roadmap for potential management? Based on a global study, Claudio Fernández-Aráoz , Boris Groysberg and Nitin Nohria , associated with Harvard Business School, suggest three sets of activities:  

Establishing clear strategic priorities.  
 Careful selection of high-potential candidates—and communicating who they are to others in the organization.  
Management of talent including developing, rewarding and retaining them.   

Pick buds not flowers   
Just 15% of firms in North America and Asia felt they had enough qualified successors for key positions, claims research in Harvard Business Review.   
In addition, the Boston Consulting Group has revealed 56% of executives see critical gaps in their ability to fill senior managerial roles in the future. This points to a lack of efficient leadership development systems.   
Picking the right – and the courageous – candidate is crucial but challenging. B.S. Cooper, L.D. Fusarelli and V.A. Carella in research point out that the public perception of organizational leadership positions is that of a daunting job that just a few individuals desire to pursue the challenge.   
Perhaps, you need to redefine how you identify talent.   
Fernández-Aráoz   believes as businesses become more volatile and complex, organizations must transition from identifying talent on experience, knowledge and competencies to spotting it on potential.   
“The question now is not whether people have the right skills; it’s whether they have the potential to learn new ones,” he writes.   
‘Potential’ is a person’s ability to grow and to handle responsibilities of greater scale and scope, describes Harvard Business Review.  

In order to assess executive potential, Egon Zehnder international, a management consultancy firm, has developed a model. There are multiple indicators of potential:   

Motives: These generally don’t change and individuals are not always conscious about them. A Harvard research has illustrated that the motivation for ‘socialized influence’ (having a positive impact on others for the good of the larger organization) signifies potential.   
Curiosity: Eagerness to learn new knowledge and experiences and seek feedback, and adjust behavior accordingly.  
Insight: Making sense of a variety of information, draw unique linkages and suggest creative ideas.   


Engagement: Employing both logic and emotion to persuade people and connect with them.  
Determination: Going forward relentlessly despite challenges.   

Further, it’s essential to identify potential candidates based on their alignment with the company tradition, vision, strategy and story. This can be built into the employees at an early stage itself by involving them in strategic deliberations (until now a domain of senior leaders only), as suggested in the book ‘Open Strategy’.  
Locate ‘opinion leaders’  
Locating ‘opinion leaders’ is also important. They are the key to everyone else within the organization, and can help influence behaviors. “Listen to their concerns. Build trust with them. Be open to their ideas. Rely on them to share your ideas, and you’ll gain a source of influence unlike any other.” ( Influencer: The power to Change Anything )  
To make the first cut of candidates, you can rely on annual appraisals, supplemented by a subjective view of candidates, advise Fernández-Aráoz et al.   
Next, you must assess potential, but personality tests are not always the best for this owing to low validity. Rather, you may use references, behavioral interviews and external assessments.   
The paper in Journal of Business Venturing Insights suggests small and medium enterprises will now aim to develop the leadership abilities of all employees, not only budding leaders. Yet identifying potential candidates can help hand over the helm to the right people in the future.   
But be wary of nurturing ‘laissez-faire leaders’, first described in 1938 by Kurt Lewin, Ronald Lippitt and Ralph White in Journal of Social Psychology . Such leaders are uninvolved with their followers and make no policies or group-related decisions. “Instead, group members are responsible for all goals, decisions, and problem-solving.” This leadership style works only under very narrow circumstances, the authors claim.   
If you’re young and an entrepreneur, the Young Entrepreneur Council , an association of entrepreneurs, has listed key traits to look for in potential leaders in interviews with Forbes:  

Independent development   
Responsibility  
Bringing solutions to the Conversation  
Keeping cool in a tough situation  
Active listening  
Initiative  
Introspection  
Going beyond what is necessary  

The Google Way: spot a leader in 5 minutes  
As part of Project Oxygen, which began in 2008, Google has identified 10 behaviors that are common to the best managers.  And based on a few questions to team members, the firm can identify efficient leaders. Members are asked to answer questions on a scale of 1 to 5.   
The 13 questions, as reported by Inc., include: My manager does not “micromanage”, they show consideration for me as a person, they have had a meaningful discussion with me about career development in the past six months and their actions show that they value the perspective I bring to the team, even if it is different from their own.  
Just one question asks the member to rate the technical expertise of the manager. “Communicating, delegating, creating a sense of autonomy and purpose…that matters a lot more for Google,” Inc says.   
A pipeline