MOTOROLA SA and British American Tobacco have emerged clear winners in terms of leadership supply practices in SA.

Capital One finished third, Absa fourth and Vodacom fifth in a recent survey conducted by global consulting and Bain & Co.

The survey, in which the 10 largest companies in eight sectors were invited to participate mining and resources, industrials, consumer, financial services, parastatals, international companies, small companies and medium enterprises—assessed the quality of leadership supply practices among SA business and multinationals operating in SA.

Participating companies were rated in terms of recruitment, career planning, performance management remuneration and talent management. Talent management encompasses the projection of supply and demand of potential high performers and the identification and the creation of opportunity. Remuneration—the design of packages to encourage performance—is in tended to retain top performers by paying them significantly more than weak performers.

Career planning was also identified as crucial. Companies were required to show that they had established a regular and disciplined process based on performance review output and to provide sufficient opportunities for employees to address needs.

Recruitment, the final dimension, required companies to show they had determined recruitment targets based on current and future needs, had found a way to identify the best sources of talent and co-ordinated the processes across the organization.

Motorola and British American Tobacco excelled due to the involvement of their CEOs in their leadership supply programmes, with clear commitment from the top to develop and implement processes to drive performance and achieve results.

Both companies achieved high scores on processes, particularly recruitment, performance management, remuneration and talent management.

Absa scored the highest in terms of the fifth process—career planning—with British American Tobacco second and Capital One third.

The financial services sector performed best overall. Multinationals tended to perform better than purely domestic firms. Larger firms outperformed midsized firms.

Leadership supply is a key factor in achieving an organization that really performs well. The acid test of a successful leadership supply programme is output. The best people in the organisation must be in critical leadership positions, leaders must motivated to crate maximum value and the future supply of leadership must be assured.

We have found that firms should focus on top-level management first. Strong leadership supply practices at this level have the greatest effect on company results. Firms that focus on middle and lower-level mangers, letting their executives off the hook, undermine whatever development programmes are in place at lower level.

Almost all organizations do something to develop people but few manage to follow best practice. Both international and SA companies with strong leadership supply practices earn significantly greater returns on equity, the firms in the top third surveyed yielding returns nearly 10 percentage points above their cost of capital Firms in the bottom third barely make their cost of capital.

Survey participants were required to prove that they measured performance and skills separately, that they had transparent, regular and disciplined review processes, ensured the process was objective and consistent across the organization, and that they took clear action based on performance reviews.