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Wednesday, December 19, 2007

Fortune’s Extensive Leadership Study


The October 2007 issue of Fortune contains the results of one of the most extensive leadership surveys I've seen in years. The purpose was to identify world-class, leadership-focused companies and best practices. To evaluate the methodology see page 116 of the issue. I was impressed with the rigor.

Before listing some of the results, you might ask, "Why is leadership development so important?"

Robert Gandossy, global practice leader for Hewitt (world’s largest HR consulting firm), puts it best in this article: " ' Organizations need talented people a lot more than talented people need organization.' "

Clearly the economy is becoming talent-based and trying to recruit and retain the best requires appealing to their motivators. Every survey I've ever seen indicates development and leadership development heads the list of what people want. As cited in the article, at CapitalOne (rated among the top companies in the world for leadership development) they cited that new employees list " ' job flexibility, development and community involvement' " as critical elements that keep them at the company. To be an employer of choice--the one talented people will work for over another--companies must address leadership development head on or risk becoming underpowered and worse, irrelevant.

Here's what they found in a nutshell, though I suggest you read the entire article:

Nine best practices of world-class leadership development companies:

  1. Invest time and money. Leadership development isn't fast or cheap. Just tacking on some program to the side of an existing HR program won't work long term. Also, the CEO and the senior execs have to embrace the concept or it won't work. CEO's of leadership-focused companies spend large chucks of time on this issue. For example, Medtronic's CEO Bill Hawkins devotes 50% of his time on people issues alone. And when other leaders see that the CEO takes leadership serious, I think you can predict what happens to their schedules!
  2. Identify promising leaders early. The leading companies work at starting to identify promising young leaders on day one. Traditionally, leadership training comes years down the road and follows a triangular model that narrows as you go up the ladder. More leadership-focused companies keep the pipeline much more open and broader based--to give more people the leadership experience and discover their strengths. This effort provides them with a huge competitive advantage.
  3. Choose assignments competitively. Providing different critical assignments for developing leaders helps the company and the individual. According to the CEO at Lilly, John Lechleiter, a good leadership development model gets formed as follows: Two-thirds of such development comes from job experience, one-third from mentoring and coaching, and a dash from classroom training. Moving people out of their comfort zones and into critical skills areas is vital but not easy.
  4. Develop leaders within their current jobs. The single opposition to moving people around (as suggested above) is it that company divisions have a tough time adjusting from the loss as leaders move on. To counter this, successful leadership-focused companies are keeping people in their leadership assignments while having them take on new responsibilities outside of their comfort zones.
  5. Be passionate about feedback and support. The best employees are the most engaged ones. To stay engaged, people have to learn. Learning involves feedback, honest and regular, and follow-up mentoring. The most successful companies have people who get both feedback and mentoring, whether formal or not.
  6. Develop teams, not just individuals. It takes a village to raise a good leader. Well run teams outperform individuals in almost every circumstance. Don't ignore this when developing leaders. One company leader I know thinks of all his employees as leaders—a pretty smart way of thinking.
  7. Exert leadership through inspiration. People don’t like an autocratic boss—no surprise here. The old command and control, top down model of leadership, doesn’t work now—in fact, never did. But with the talent shortage—exacerbated by the large number of baby boomers leaving the workforce every day (some estimates are as high as 11,000 a day are leaving!), there will be a huge talent war to attract and retain the best. And if people aren’t inspired, they’ll walk away. And the best leave first, because they can.
  8. Encourage leaders to be active in the community. The fastest way to get the exact kind of leadership experience you need is to locate a nonprofit who needs help—which describes just about every nonprofit I’ve ever known. Getting involved on boards of non-profits, for example, can teach an emerging young leader what it means to get involved in corporate governance—something very important to learn, but likely never going to happen for many without getting it from a nonprofit experience.
  9. Make leadership part of the culture. Culture is the air you breathe in an organization. It’s like the water fish swim in…it’s so much a part of their world that they almost don’t know it’s there. Great leadership—expects things like community involvement, direct feedback, job enhancement, mentoring and coaching and all the things mentioned in this article. If great leadership is to thrive, it must be an expectation of everyone in the company. It must be pumped into the corporate oxygen!
(Source “Leader Machines," Geoff Colvin, Fortune, October 1, 2007, Vol. 156, NO.7, pp 98-106.)

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