If you work in a big company, it seems logical that Wall Street cares about your talent management practices. Or do they? According to a new study by DDI, 36 of 50 Wall Street analysts surveyed said they rarely, if ever, look beyond the succession plans for the CEO when evaluating the company’s prospects. In other words, the CEO is the only executive that matters to them. Given that performance requires the coordinated efforts of many leaders, it’s surprising how little Wall Street is paying attention to your broader leadership pipeline.
I used to ask my CEOs this question: “if I could magically pull out x number of leaders from our company, how many would I have to remove before we’d feel real (significant) pain?” Most of the CEOs I worked for loved this question – it got them thinking about specific people, and how much they really contributed to the success of the company. Some would answer with a very small number – say 10 or 15. One CEO told me: “If you removed them randomly, the number might be pretty high. But if you picked the right CRITICAL leaders, I’d get pretty worried after about 5 or 6 names.”
That seems right to me. Maybe Wall Street doesn’t need to know all you’re doing to develop a deep bench of leadership capability throughout the organization. But it seems like they ought to take an interest in the entire senior team, and maybe the high potential top talent that’s being groomed for that team.
If you’re responsible for talent management in your company, you probably should add this question to your list: “What are we doing to help the analysts that cover us know our top talent?” If they don’t care about anyone beyond your CEO, perhaps you need to give them a reason to!