Internal Promotion Rates Low for Senior Management

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According to our most recent study, the Leadership Development Factbook 2009, we found that over 60 percent of first- and mid-level managers were promoted from within their companies.   When we looked at senior level and executives, this number decreased to 57 percent and 52 percent, respectively.  We were surprised by this considering that, in this same study, first-level leaders received lower ratings on their skills and capabilities than senior-level and executives. So why are promotion rates lower for senior level managers?  We believe there is one primary reason – Far too many companies ignore executive development – to their detriment.

  • Less than half of executives have development plans
  • Only 34 percent companies offer formal development to executives
  • 20 percent of companies offer no development – formal or informal – to executives

Companies provide more formal development at lower leadership levels.  Over 60% of companies offer formal development to first- and mid-level managers. Slightly less than half offer formal development to senior leaders, and just one-third offer formal develoment to executives.  

Why the lack of focus on executives?  We found four reasons:

  • Business Comes First – Executives tend to delay their own development to focus on pressing business issues.
  • Lack of Relevant Development – The executive population is much smaller than other levels and, therefore, individual development becomes much more common and often requires more informal approaches.  
  • Development No Longer Necessary – Perhaps they believe that executives no longer require development – a big mistake!  
  • No Accountability – The CEO’s participation in his / her individual development demonstrates a commitment to learning.  We found that the engagement of the board of directors also has a strong influence.

Executives should be developed to improve performance in their current roles as well as to prepare them for future roles.  Businesses change, people change, technologies change – the whole world changes – and so an executive must continue to evolve and grow. Companies that have strong executive-level development (and succession management programs) are able to manage transitions between top executives quickly, providing calm and stability to shareholders, employees and customers. 

Does your company have solid plans in place to develop executives?  Are your executives held accountable for their development?  If your CEO left the company today, is there a successor ready to move into that role seamlessly?

For more information on approaches companies use to develop their executives, check out our Leadership Development Factbook 2009.

Andrea Derler

Andrea Derler, Ph.D., joined Bersin by Deloitte in March 2015 and leads the Leadership & Succession Management research practice. She brings international work experience as leadership trainer & coach and a solid academic background to this role. Prior to joining Bersin, she collaborated closely with organizations in the USA as well as Europe in order to pursue practice-oriented leadership research. Andrea studied international management, organizational culture and integral leadership and facilitated leadership development efforts in a variety of industries. She holds a doctoral degree in Economics (Leadership & Organization), and a Master’s degree in Philosophy. Her work about leaders’ Ideal Employee recently received wide-spread media attention in Europe and was published in the Leadership & Organization Development Journal

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