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Corporate University Xchange (CorpU) recently wrapped up the Leadership 2012 research study on trends and best practices for developing leadership talent. The study included approximately 80 Global 2000 organizations, 12 of who participated in a follow-up interview to share their best practices and/or leadership challenges.
McKinsey’s Lowell Bryan and Claudia Joyce wrote in “Mobilizing Minds, Creating Wealth from Talent In The 21st Century Organization” that leaders must address the challenges confronting complex structures and processes if they want to stay in business. Research, however, indicates that models for selecting, developing and retaining these leaders need to be fixed or updated as a first step.
Additionally, Bryan and Joyce found that “thinking-intensive” companies – those with a large percentage of employees who must think subjectively and solve problems rather than perform well-defined tasks – are delivering staggering income, profitability and market capitalization. These firms are more proficient at creating an environment where knowledge workers can translate their mind work into high-quality, high-return, intangible benefits.
Bryan and Joyce’s research is focused on 30 companies that represent 2 percent of the 1,500 companies they studied; they delivered 22 percent of the increase in net income, and 22 percent of the increase in market capitalization for the entire group between 1994 and 2004. “Profit-per-employee” in the organizations was $30,000 more than competitors in the same industry. Based on their findings, Bryan and Joyce argue that a company with 100,000 employees could increase revenue by tens of billions of dollars by more effectively mobilizing knowledge, skills, and relationships to deliver superior service to customers.
Bryan and Joyce strongly encourage companies to make new investments in organization design in order to unlock the inherent value in talent, and create a new business structure that can effectively overcome external threats.
The research conducted through CorpU’s Leadership 2012 study highlights significant challenges that organizations face today in developing much needed leadership talent. While Bryan and Joyce clearly establish the future potential value of such a strategy, the first step must be to build a leadership team that can carry out the required change.
This recent CorpU study focused on trends and best practices for developing leadership talent. Results uncovered the idea that models for developing leaders seem to be falling short of delivering adequate leadership talent, which organizations need to execute their business strategies. A small selection of the survey results indicates the degree of the current problem. For example:
Many participants in the study voiced concerns regarding their ability to support their firm’s business plans and strategies by delivering key leadership talent when and where it’s needed. Their concern is not yet translating to a substantial change in action at the top of their organizations. A full 68 percent of survey participants said their firm’s commitment to leadership development is either weak or is not backed up by appropriate levels of financial investment.
Additionally, participants noted that the focus of leadership competency models is requiring leaders to coach and mentor employees, but the day-to-day actions of leaders do not match the organization’s rhetoric. Leaders often do not release people for stretch assignments or give them adequate time to complete their development plans as corporate training policy may dictate.
The research also discovered that many companies have adopted the Jack Welch playbook, but are receiving mixed results in their firms. For example, only 32 percent say their leaders-as-teachers programs are highly effective. This is likely caused by the subtle cultural nuances that make them effective programs in one organization, and a wasted effort in another.
Survey participants know that their challenges to attract, grow, and retain good leaders will only become more difficult as the projected shortage in leadership talent becomes reality in the next few years. During telephone interviews, some reported that their businesses have already bungled growth opportunities because they did not have the right leaders or any leaders to drive them.
Ultimately, results of the Leadership 2012 research study indicate that HR, Learning and Talent Management professionals are concerned that:
These concerns demonstrate the amount of change currently surrounding the way organizations grow and develop their leaders. For example, study participants describe leadership development programs that are in an almost constant state of flux. Participants from one automotive company withdrew because they were unraveling a previous merger and realized they would need to rebuild significant aspects of their programs as a result. Others reported changes at the CEO level that were driving philosophical shifts in their firms’ overall approaches to leadership development.
Data collected shows that 41 percent of the 226 participants in CorpU’s 8th Annual Study said that Executive Development programs have completely or significantly changed in the last 18 months.
In addition, the degree of change in programs for other leaders and high potentials is even more dramatic, with almost 50 percent of respondents reporting significant or complete change.
As pressure mounts in all organizations to attract and retain top talent, leadership development challenges will require more attention than ever before. The Leadership 2012 research project, which included a survey of more than 200 data points on leadership and talent practices as well as telephone interviews with 15 leading organizations, uncovers the trend that changes are essential for ensuring leadership and talent are ready to support an organization’s initiatives.
In general, leadership talent processes are not managed as an integrated set of activities in the way that other organization core processes are. Leadership activities often are managed as discrete and separate activities owned by a variety of groups within the HR, Learning & Development, Organizational Development, Talent Management and other support functions.
Organizations should consider the “integrated supply chain” as a more appropriate model for structuring leadership and talent processes. The model must streamline the flow of information among the owners of the process steps and improve the efficiency for moving leadership talent through its development evolution.
Morgan McCall, author, professor and thought leader on the topic of leadership development, says the key to the development of successful executives has little to do with formal training and more to do with increasingly challenging work experiences. The majority of participants in the study revealed that developmental assignments are often performed in an ad hoc manner based on gut-level feelings from supervisors about the experiences they “think” potential leaders require. In addition, participants indicated that there is little or no science behind how stretch and rotational assignments are used to round out a leader’s developmental experiences.
As it becomes increasingly important for organizations to develop good leaders who are capable of working on a global stage, new ideas are emerging about how to improve current leadership practices including:
These and other new ideas are discussed throughout the report, and illustrate the first steps along a path of innovative approaches to developing leadership strength.
This CorpU research survey included 55 questions representing more than 225 data points related to leadership and talent management practices. The survey was promoted through the CorpU subscriber database of nearly 27,000 organizations, worldwide. The survey opened at the end of August and by September 24, seventy-two organizations (including 26 global companies) had completed the survey.
Read the complete Leadership 2012 Executive Summary.The complete report is available to Corporate University Xchange members in the online collaboratory located at www.corpu.com.
Click here to request more information about CorpU Membership.
