A critical task in the succession planning process of any organization is identifying candidates. Traditionally, candidates have been identified based on past performance. While this seems logical, it is problematic in practice.

Past performance always measures success in a lower-level position. What is needed in succession planning is a system to identify potential for success in a future higher-level position. The best predictive model I have found is the Leadership Pipeline Model by Charan, Drotter, and Noel.

The Leadership Pipeline provides a model that describes the skills, time applications, and values required to succeed at different levels in the organization. While most leadership models and theories describe characteristics of leaders in general, the Leadership Pipeline describes specific criteria for success in transitioning from one level to the next.

The Leadership Pipeline Model helps us to see the importance of identifying candidates for positions throughout the entire organization. The pipeline must be continuously filled with leaders who have been identified for development for the next higher level. A pipeline clog at one level will clearly harm leadership development and succession throughout the entire organization. What is needed is a carefully monitored system for developing in-house talent from front-line supervisors to CEOs.

At GE and Citicorp, two companies using the Leadership Pipeline Model, leadership passages from one level to the next are seen as “turns” in the leadership pipeline. These turns (or passages) provide significant developmental experiences. If these turns are skipped the individual may not be prepared for higher-level leadership positions. The focus for development should be the lack of critical skills and values for the next higher level, not past performance.

I am often asked “Is it better to recruit from outside the organization or to develop leaders from within?” The safe, but rather uninsightful answer is, “It depends.”

Recruiting from outside the organization makes sense when a major change in corporate culture or direction is needed. But, I would caution about the over-dependence on outside recruiting of leaders. Desperate attempts to recruit leaders from outside the organization suggest an inadequate leadership pipeline.

Recruiting leaders from the outside of the organization can be very expensive. As we all know, there is a talent shortage in the marketplace. This can lead to paying high premiums (or even outright price wars) for promising talent.

The Leadership Pipeline Model offers a common language (terminology) and specific criteria for what to look for in leaders at the next higher level. The Model provides a description of the skills, time applications, and values required of leaders at each successive level. This criteria is critical not only for identifying candidates but also for their subsequent development.

The key to identifying candidates for higher levels of responsibility is to predict their potential to succeed in attaining and using the skills, time applications, and values of the next higher level. Past performance is often a poor predictor of future success. Remember that the skills, time applications, and values of each successive level of leadership are dramatically different.

The challenge in succession planning and identifying candidates is making sure people are assigned to a level that is appropriate for them. The challenge is complicated by the fact that people change (hopefully for the better) over time. An appropriate position for someone today may not be appropriate three years from now.

Identifying candidates for the organization’s future leadership positions is a critical task. Do you have a system for identifying candidates that considers not only their current skills, but also their willingness to adopt new work values and time applications?

Dr. Mike Beitler is the author of "Strategic Organizational Change." Get a free 7-part mini-course and learn more about the book at http://www.strategic-organizational-change.com/

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