3 Ways to Find Next-Gen Leadership (Who May Be Hiding in Plain Sight)

An alarming 77% of organizations report they are experiencing a leadership gap. However, this deficit is not due to a shortage of potential leaders, but rather because many companies lack the technology infrastructure and leadership development practices to identify and nurture top talent within their own organization.

A recent Brightmine survey revealed nearly two in five companies (40%) are admittedly not effective at detecting employees with leadership potential. Meanwhile, only about half of organizations (47%) have formal leadership development programs in place. This critical oversight comes at a high cost, particularly in today’s competitive labor market plagued by skills shortages and retention issues.

By neglecting to harness the leadership capabilities inherent within their workforces, organizations forfeit opportunities for growth and innovation. Moreover, a lack of recognition and low internal mobility can drive top employees to seek more fulfilling career opportunities elsewhere, exacerbating the challenge of talent attrition and further hindering organizations’ ability to cultivate future leaders and achieve sustained growth.

It’s imperative that organizations bolster their technology stacks to enhance their methods for identifying and nurturing their next generation of leaders. This can be achieved by establishing a formal leadership succession plan grounded in data and analytics, implementing a technology-enabled internal mobility program and harnessing the power of generative AI for upskilling initiatives.

Those that effectively utilize technology and data in their leadership development strategies will not only excel in today’s talent market but position themselves to adapt to emerging workplace challenges and opportunities, ensuring long-term business success.

Establish a Data-Driven Leadership Succession Plan

To effectively identify and nurture future leaders, organizations should implement a leadership succession plan that leverages data at every stage of the process. This strategic framework allows organizations to make informed decisions about leadership, optimize talent management practices and cultivate a company culture that is agile and responsive to future workforce challenges.

A Bersin by Deloitte study also indicates that organizations with mature succession management practices can expect to be twice as effective at improving overall employee engagement and 1.7 times more effective at retaining high-performing employees.

The initial stage of establishing a successful leadership succession plan involves using data to forecast future leadership needs and pinpoint gaps in talent development through the data found within their talent management, recruitment and HRIS systems. This analysis enables organizations to gain valuable insights into how workforce trends align with overarching strategic business objectives, establish clear guidelines for leadership progression, and ensure succession planning remains objective and transparent.

Once goals for leadership are established, organizations can use data to identify and nurture top performers. This involves analyzing a variety a qualitative and quantitative employee performance metrics – including indicators like team and individual performance, project completion rate, absenteeism rate and employee engagement – to spot potential strengths in current employees and plan their career trajectories.

Organizations can also leverage data from job readiness assessments to track the growth of their leaders. Through assessments of skills and competencies, companies can assess the preparedness and capabilities of potential leaders and identify strengths, weaknesses and developmental areas. Whether conducted through employee self-evaluations or evaluations by peers, supervisors or external stakeholders, these assessments provide organizations with a systematic method to evaluate and cultivate top talent.

Further, data serves as a valuable tool for ongoing improvement throughout the leadership succession planning cycle. In addition to evaluating current and emerging leaders, organizations should also regularly assess their own processes and the results of their leadership development programs. This ensures that their methods are continuously refined and enhanced over time.

Utilize Tech to Uncover Clear Pathways for Advancement

Data-driven leadership succession plans provide organizations with critical visibility into potential leadership gaps and insights into how their top performers are progressing in their growth journeys. While this level of visibility is crucial for organizations to identify and nurture their next generation of leaders, it’s important for employees to have access to the same level of transparency to support their development and growth.

Today’s employees place high value on leadership development. However, many face challenges in finding internal mobility opportunities or understanding how their current skills and career aspirations align with other roles within their organization. According to LinkedIn research, just 20% of employees believe they have the right conditions for career growth opportunities within their current organization.

This lack of visibility and support for career development is not only stalling employees’ progress toward leadership roles but also adversely affecting overall organizational retention rates. When employees cannot see clear pathways for advancement, they may become disengaged and seek job opportunities elsewhere.

In fact, McKinsey research revealed a lack of career development and advancement was the most common reason for quitting a job. Conversely, LinkedIn data shows that employees who work at companies with high internal mobility rates end up staying with that organization 60% longer, on average.

Organizations that value continual career development should invest in tools that are built to facilitate it – and more importantly, these tools must be easily accessible to employees and enable them to take inventory of the potential career paths that suit them.

Internal talent marketplaces are one of the most common tools used by organizations to help employees envision the possibilities for career advancement. These marketplaces can match employees to job openings across an organization based on their unique skillsets and interests. This enables employees to explore diverse career options that may have otherwise escaped their notice and provides targeted growth paths.

For companies, these internal marketplaces not only help leaders identify high-potential individuals ready for future leadership roles, but also enable them to demonstrate a commitment to career advancement and growth opportunities, resulting in increased employee satisfaction and long-term retention.

Leverage Generative AI for Leadership Upskilling

Once organizations equip their employees with the technology and resources to discover internal career paths that align with their goals and passions, the next step is to focus on upskilling to bring these opportunities to fruition. Generative AI can play a transformative role in this process, providing tailored support to enhance employees’ skills and advance their careers.

According to D2L research, 83% of employees consider skills development to be crucial to their overall job performance and career growth, and many recognize technology as a vital tool in streamlining this process. Notably, almost half (42%) of employees say they prefer online training over traditional in-person options, yet only 29% of organizations currently leverage education technology for training initiatives. This gap represents a significant opportunity for organizations to innovate their upskilling approaches with gen AI and dramatically shift the way employees learn and develop in their roles.

Unlike traditional learning and development methods, which generally offer more uniform content without regard to individual learning styles, goals or abilities, gen AI technology enables organizations to offer more personalized, immersive and adaptable learning experiences at scale.

For instance, with natural language processes, gen AI can analyze individual learning patterns, preferences and competencies to build customized training materials that meet the unique needs of each employee. This personalized approach to skills development enables organizations to cultivate their top performers by tailoring growth opportunities to their unique strengths and aspirations, effectively shaping them into next-gen leaders.

In addition to providing more individualized learning opportunities for top talent, generative AI plays a key role in democratizing access to upskilling initiatives, thereby helping organizations to broaden their leadership pipeline.

Traditionally, upskilling initiatives have been directed toward specific managerial or specialized roles. According to Brightmine’s survey, most organizations (76%) utilize assessment tools, such as skills assessment tests, to help their current leaders diagnose their strengths and weaknesses, while 29% use online learning platforms.

However, organizations should ensure they’re extending similar upskilling efforts to their broader workforce to avoid overlooking emerging leadership talent. AI learning platforms are crucial for achieving this, as they enable cost-effective, rapid reskilling across the entire employee base. This ensures that all employees, not just those in specific roles, benefit from personalized upskilling opportunities.

Leveraging Tech to Empower Your Next-Gen Leaders

Many organizations fail to recognize their next generation of leaders due to inadequate practices for identifying and nurturing talent. However, to retain top talent and remain competitive in the future of work, changes are necessary. Companies need to invest in the right technology and processes to identify and develop future leaders, including utilizing technology to establish clear pathways for internal advancement and fostering a culture of continuous upskilling with generative AI.