Sheila is exhausted. The CHRO of a mid-sized biotech company, she’s spent the past couple of years running program after program to support the growth and development of hundreds of globally distributed employees. Despite these efforts, she’s facing mounting problems: Retention numbers are dipping, and the representation of underrepresented groups in senior leadership remains stubbornly low.
Sheila is a composite, drawn from the experience of the HR leaders we speak to regularly — well-intentioned practitioners working hard to support their workforce and improve diversity, equity, and inclusion across the organization, but not seeing the results they want. So what’s going on?
We argue that many organizations have the right programs, but they’re being implemented the wrong way, sometimes exacerbating problems they’re meant to fix. This is especially clear when it comes to leadership development programs, such as mentorship programs or leadership coaching. According to research, employees that have access to these kinds of professional development opportunities have 34% higher retention than those who do not. What’s more, a nationally representative study found that companies with mentoring programs saw an 18% increase in Black women managers over five years.
But leadership development is only effective if it’s implemented equitably. This is where we see many organizations falling short, starting with the selection process.
In a study of 200 people leaders, which included a survey and qualitative interviews, we found that while 79% said identifying high-potential leaders (often for development programs) was a high priority, only 16% have a formal process in place to do so. A staggering 85% of leaders told us they relied on informal manager feedback to make decisions about who should get a leadership development opportunity.
Most HR professionals sense that this is a problem: 51% admitted that the way they currently select leaders gave some employees an unfair advantage. They are onto something. According to McKinsey’s 2021 Women in the Workplace study, white men make up 35% of entry-level employees but 62% of the C-suite. The reverse pattern is true for women and especially women of color, who make up 17% of entry-level roles but only 4% of the C-suite.
The takeaway: As employees ascend the career ladder, representation in the leadership pipeline increases for those in majority groups, but decreases for underrepresented ones. This pattern hasn’t budged in decades.
We argue that a major reason for stalled progress in leadership representation is the inequitable way leadership development opportunities are allocated in many organizations. When informal means are used to select employees for opportunities like mentorship, leadership coaching or other high-potential programs it’s all too likely that our biases about who has potential (according to research: tall, attractive, white, men) come into play. Since leadership development opportunities tend to beget other opportunities, the problem of inequitable selection compounds over time.
By primarily relying on informal feedback, organizations are impeding their ability to make the best decisions about who may benefit from powerful development programs. Research also suggests approaching selection in this way limits their potential impact. In their new book, Getting to Diversity, for example, professors Frank Dobbins and Alexandra Kalev write, “mentoring has the biggest payoff for the people who aren’t on the executive’s radar.” They share the example of Sun Microsystems, which found giving mentors to “non-star workers” resulted in the biggest performance improvements.
The most equitable and effective solution to the challenge of leadership development selection is to offer opportunities to all employees who are part of the broader target population. For instance, if you currently offer leadership coaching for “high-potential” new managers, why not open it up to all new managers?
Dobbins and Kalev report that this is akin to the approach taken by Sodexo, which saw its best results — increased retention and a sustained pipeline of underrepresented talent — from democratizing development opportunities.
If fully democratizing leadership development isn’t currently a possibility at your organization, we urge you to implement the following four steps for a more equitable selection process, while keeping in mind an important prerequisite: Since processes only work if people follow them, it’s essential to build buy-in from managers and leaders from the very beginning.
1. Clarify the opportunities.
First, identify all the formal and informal leadership development opportunities that exist in your organization. Include all opportunities — everything from doling out stretch assignments to job rotations to mentorship programs — that help employees improve the skills needed to advance and gain visibility. This exercise often brings to light just how many opportunities are currently being filled informally.
2. Define the qualifications.
Next, define what qualifies an employee for each of the different opportunities you listed. Your definitions should include clear, measurable evaluation criteria. As a general rule, criteria should be based not on an employee’s “potential,” where there’s lots of room for bias, but on demonstrated performance.
For instance, if the opportunity is for leadership training, criteria could be demonstrated behaviors that show the employee builds trust with team members, is curious, and takes initiative.
3. Communicate opportunities to all.
In our research, we found that definitional knowledge decreased alongside organizational power: Respondents told us that 49% of senior leaders knew what it meant to be a high-potential leader, but that only 25% of employees were also aligned on that definition.
Make sure everyone across the organization, including employees and managers, understands the leadership development opportunities and necessary qualifications. One simple way to do this is to ask all managers to send out an email (based on a template prepared by HR) one week after performance reviews, when career growth and development is especially top of mind for employees, that lists all the leadership development opportunities available, the qualifications needed, and how to apply. This gives managers something concrete to offer to advance career conversations post-reviews and ensures everyone knows about the development opportunities available.
4. Formalize the selection process.
Create a formal selection process that encourages fair and transparent comparisons of employees to increase accountability. It’s not enough to simply have criteria for selection if managers only apply that criteria selectively to one or two people they already have in mind for an opportunity. Research shows a comparative approach, where managers see how each of their reports is performing before making a selection decision, reduces bias.
For example, one Peoplism client (the DEI firm where Liz is co-founder), a legal tech company, recognized that providing stretch assignments is a key growth opportunity that leads to promotions, but that managers were distributing these unevenly. Peoplism recommended that once an employee receives an average score of 3.5 (out of 5) on a bi-annual performance review they should be assigned a stretch assignment in the next quarter. We built a simple form where managers could quickly see who was ready for a stretch assignment, rather than relying on their gut. The form provided an added layer of accountability. HR business partners can be enlisted to review forms and coach managers on this new behavior.
Many leaders acknowledge that representation gaps at the top are hurting employee engagement, recruitment, and retention. We argue that the solution is hiding in plain sight: redesigning the way existing leadership development opportunities are distributed. Instead of perpetuating a system that rewards those we are biased to believe have “potential,” leaders can leverage development programs to reduce bias and fairly advance underrepresented leaders.