Choosing, retaining and nurturing the right talent means everything for any company.

In the early days, your company needs people able to wear many hats and execute rapidly in an ever changing environment. As you scale, and your needs evolve, you will need people that are able to focus on specific areas. You will likely be putting some processes in place to get everybody on the same page, and as you go from one team to multiple teams, you may also need to add leaders and managers to coordinate the different efforts and disciplines.

For most startups, the future leaders are likely going to be the individual contributors that joined early – that sound like an obvious call. They know the business and product(s) inside out, they know how to get stuff done, and are usually very direct in the way they approach and advise founders. Promoting internally is also a great way to retain top talent – as they’re an integral part of your company culture – and shows a progression path for others.

But moving from an individual contributor role at a company with 10 people to a leadership role within the same company when at 100+ people, and managing one or more teams and say 5, 10 or more people, is not exactly the same thing.

Not all individuals are born leaders or are challenged by the nature of that role. The transition from individual contributor to a people manager is not a trivial process.

According to Gallup, companies fail to hire the right talent 82% of the time. What’s even more interesting though is that their data shows that only 1 in 10 people possess the right skills to manage.

How do you identify early on the people on your team with the potential to lead your organisation as it grows? And how do you provide them with the necessary tools to become great leaders?

Identifying ICs with leadership potential

Before you start training staff for future management roles, you first have to identify those with leadership potential. There are two ways you could do this.

The first is to make it part of your hiring process. That way, you know that the employees you hire have the right competencies to work with. At this stage, you can also assess if the potential candidates have management aspirations. Not everyone is looking to be a leader.

Second, you need to assess your current talent pool. This is not just about what competencies they have. The right personality traits are critical to success.

Whether you’re hiring or evaluating your current staff, you’ll want individuals who possess specific characteristics. Strong decision-making skills, motivation, ability to build good relationships and demonstrate accountability, are solid transferable skills to start with. But you also need to look for:

  • Assertiveness – managers need to guide their team towards common goals, making sure they stand up for what they feel is best.
  • Empathy – everyone needs to feel valued and that their opinion is respected. If you are not able to read your audience, you won't be able to understand nor influence it.
  • Ability to generate trust – being dependable, supportive and transparent is not something that comes with ease. But unless you can demonstrate you are trustworthy, it will be difficult for anyone to follow your lead.
  • Ability to delegate – you can't expect trust unless you give trust. And this means being able to handover responsibilities, respecting that not everyone will act exactly like you. This will also enable the new leader to shift their focus from short term execution to long term strategy.
  • Outcome focused not output focused – related to the delegating part of the execution, the focus of a leader should be around achieving specific milestones. This needs to take into account that everyone has a different pace and preferred methods. Acknowledging this and letting someone perform at their best can unlock success.

Providing the “right” mentorship

Once you have identified the candidate with the leader’s traits, it’s time to provide them with the guidance needed to get them where they need to be.

Those initial characteristics that you were looking for, allowed you to identify which individual contributors would be ideal for a management role. Now it’s time for those skills to be developed into leadership material.

You’ll want to have some sort of (informal) training in place. This doesn’t have to be a huge undertaking. It can be created to suit your company’s individual needs. The most important thing is that anything taught should be possible to be implemented along the way. Don’t just tell them, immerse them in it. For example, when I was a young leader getting more visibility around strategic business decisions, and connecting with stakeholders across different departments, helped me get a holistic business view that enabled me to improve my team outcomes.

Understanding when to make the transition

Success will depend on the propensity of the individual to master specific skills but also on the company’s ability to make a smooth transition. The mistake that many organisations make is that they often throw someone in a management position prematurely. Either because there’s an immediate need that has to be filled or because they fail to provide a transition period.

Here are some effective ways you can make the transition:

  • Make them a project lead – spin off a team for them to lead a low risk short term tactical initiative, rather than having them manage a department or a team with higher business impact. This will allow you to see certain skills at play. Is the new leader making the decisions that are best for the project? Are they managing it appropriately? Allowing them to manage for a short period will give you good insight into their abilities to manage, and also see if they enjoy the role.
  • Have them mentor new staff – by allowing the IC to coach new staff, you’ll get a real sense of their interpersonal skills: are they patient? Are they providing constructive feedback? Are allocating time wisely? Observing how they interact with others in this dynamic will allow you to see their communication skills and relationship building skills at play.
  • Enable them to delegate – one of the main differences between a manager and an IC is delegation. You’ll find that some individual contributors have a hard time giving anything up. They feel like if they want something done right, they have to do it themselves. A good leader knows that you can’t do everything alone. They have to feel confident that the people they’re delegating to are capable.

These are just some examples I found valuable. There are certainly other scenarios that will allow you to assess whether or not an employee is ready to make the transition. The idea is to put the IC in situations where he or she can demonstrate propensity to lead. You’re providing an opportunity while still being able to assess their skills. You can use these experiments as a way to identify strengths and weaknesses and to determine if there are areas that need to be further developed.

Hiring internally vs externally

I will keep this brief, as we could write a full piece on hiring, but it's important to touch base on this to better contextualise what is described above in order to wrap things up.

Promoting internally has definite advantages. It allows you to grow a company culture where employees feel valued, while also promoting employee retention. When an individual contributor is promoted to manager, there’s already a relationship established with the existing staff. This means that a layer of trust is already built-in. With an external hire, this isn’t the case.

At the same time, if that’s your primary or only way to go, this could set unrealistic expectations that anyone within the company is fit to manage, creating dynamics that won’t necessarily benefit the environment.

Hiring externally can be beneficial to. Perhaps your company has an immediate need for a manager and none of the current ICs are ready to take on the role, or you need to bring in an individual with a fresh and diverse perspective, or a specific skill set that can unlock new opportunities for the business.

Ultimately, your decision should always be made based on what’s best for your company at different stages. The key is to always keep the lines of communication open, with a degree of transparency with your team, and have a long term view while working on short term needs.

How is your company going about moving individual contributors into leadership roles? I'd be curious to hear your thoughts and learn from your personal experience. Drop me a note on Twitter @giovanniluperti or share with us your story @HumaansHQ.

Today is Friday. So have a great one 👋

Ps: Tl;dr? I have shared a quick summary of this story on Twitter.


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