LEADERS FOR THE FUTURE

From the desk of Marcia Dresner...

When we first looked at the results of CorpU's Leadership 2012 Study, we were all struck by the finding that just 3% of study respondents felt that their companies had the bench strength (i.e., the leadership talent) needed to meet the strategic business challenges of the next five years. Yet when we looked at the programs and experiences they were offering executives, senior leaders and high potentials, these very same companies were doing what the industry would consider all the “right things.”

Since many of the leadership programs were, according to the study, either updated or totally changed in the last year or so, I thought that perhaps the problem was simply that they hadn’t been doing it right long enough. Certainly some of the most successful companies at developing leaders have been at it a lot longer.

However, I’m beginning to think that the standard succession planning process ignores two critical facts when developing competency models and development programs.

Different Companies, Different Leaders

It is going beyond stating the obvious to say that companies are not the same. They differ in stage of growth, hierarchical style, industry, and current stage of success, and each of these factors may signal the need for a different kind of leader.

I’m not alone in thinking this way.

Daniel Goleman, of Emotional Intelligence fame, spoke in his book Primal Leadership of six distinct styles – visionary, coaching, affiliative, democratic, pacesetting, and commanding. In his book, Goleman details the corporate situations in which each style is most effective.

Ken Blanchard and Paul Hersey’s concept of Situational Leadership, which is a foundational learning program at many companies, is based on the idea that people have to understand the context of an encounter and change their behavior accordingly.

One particular vendor of leadership assessments informs the companies using its assessment centers that the evaluation will relate to “targeted organizational level, industry/functional segments (e.g., health care executives, sales executives) and changing business paradigms (e.g., turnarounds).”

There are also indications that some of the leading business schools are thinking about what it takes to lead in different industries and circumstances. In mid-March, the Harvard Business School (HBS) held a Centennial colloquium titled "Science-Based Business and the Business of Science" that had, as its premise, the fact that the businesses of the 21st century will increasingly revolve around science and science-based companies require a different kind of leadership. HBS professor emeritus Kent Bowen, organizer of the colloquium, explained what is needed: “Since the investment and R&D decisions you make today are often not easily quantifiable and not coming to fruition for fifteen to twenty years, special intuition and judgment are required.” He further observes, “Compared with operations, marketing, and strategy, we don't really know as much about how to manage research or value it, especially when it has long time horizons.”  

In another presentation at the same colloquium, HBS professor Gary Pisano, who has researched and written about the biotech industry, pointed out that the Harvard Business School, when it was founded 100 years ago, was “occupied with understanding—and imparting the skills to manage—the challenges posed by the emergence of large, complex business enterprises, particularly railroads.” He went on to say that the science-based businesses “straddle two worlds with very different expectations, time horizons, risks, and norms. New management skills, new organizational forms, new institutional and financial arrangements, and a new breed of leadership are all essential.”

MIT’s Sloan School of Business seems to understand the need for leaders with specialized skill sets. The school has joint MBA degree programs with other MIT schools in Biomedical Enterprise, Leaders for Manufacturing, and System Design and Management. They also have a dual program with Harvard’s Kennedy School of Government “for those students who plan to pursue careers in international management or economic development, or who plan to work in industries or regions with a high degree of government partnership or regulation.”

The Future Is… The second concern with traditional succession planning is that none of us has a crystal ball. We don’t know what the major issues will be and what skills the leaders of the future will need. What skills did the leaders of failing financial institutions need that they couldn’t possibly foresee when times were good? There was some suggestion that the head of one investment bank didn’t have the ability to change with the times and simply wouldn’t accept less than “top dollar” for his ailing institution, while someone at a rival managed to at least save many of his company’s jobs (and his own to some extent) by being more flexible.

“Compared with operations, marketing, and strategy, we don't really know as much about how to manage research or value it, especially when it has long time horizons.”

Maybe that’s an extreme example. But there are examples of other, less dire situations that call for changes in leadership:

• A company with an insular view that innovation can only happen internally developed a completely new strategy under a new, visionary CEO. All the leaders trained to think the old way were no longer going to be leaders in the new company.
• The leader that grew a company through mergers and acquisitions may not be the right leader for the “one company” consolidation phase of that company’s growth, and neither will the leaders trained by the merged companies.

The Leadership Development Challenge

The goal of any leadership development effort should be to have the right people with the right skills and experiences ready when the occasion arises. This will not be done in today’s world by sticking to a few, albeit well-chosen, attributes and having all development keyed to them. Instead, the need for different skill sets and ways of approaching a company’s issues implies that leadership development efforts may have to be revamped to assure a range of skills, talents and world views in the available talent pools.

Here are some changes that I propose:

• While it may be important for high potentials and leaders at all levels to be engaged in team projects based on current challenges of a company, they should also be looking at scenarios that break the mold of what the company is and could become.
• There needs to be more emphasis on being change-ready. This is not quite the same thing as “managing change," but instead is a key attribute that has to be nurtured and developed.
• The opportunity to manage in a “turn-around” situation should be afforded to developing leaders as soon and as often as possible. This doesn’t have to be a major effort; even the improvement in the activities of a single small business unit is a start.
• Succession planning should take into account the developing leader’s natural talent and inclination along the lines suggested by Goleman, and match those with the leadership role required for an open position. 

I know that many of you have been thinking long and hard about how to develop the talent you need for the future. We welcome your comments and suggestions, and would be happy to share them with our readers. Send me an email at research@corpu.com.

Marcia Dresner, CorpU Senior Research Analyst