Drive Strategic Value A report by Bersin in October 2008 reinforced that it is more important than ever for organizations to invest in leadership. Why? Because the investment is strategic:
…not all training drives the same level of strategic value. What companies need most vigorously today is …talent-driven learning programs, particularly leadership development.[i]
The competitive environment of today’s global venues provides a strong reason to develop leaders. The speed at which competitors rise requires an agility that can only be accomplished by exercising a range of leadership skills across organizational functions.
In addition to the competitive landscape organizations today stand at an unprecedented generational crossroad. The retirement of Baby-Boomers and entry of Millennials into the workplace presents organizations with a trillion-dollar question mark according to the Seattle Times.[ii] Many Boomers expect to continue working well into the traditional retirement years – a fact that provides a false sense of security for some organizations who feel they can put off developing new leaders. The sheer number of Baby Boomers that will leave the workplace places many organizations in jeopardy of losing key leaders at a time they need them most.
So how ready are organizations to make a leadership transition? Only 36 percent of companies surveyed in 2008 felt prepared to immediately fill leadership positions – See Figure 1.
Three challenges standout: (1) the need to define leadership clearly and strategically; (2) the need to find qualified candidates to fill current and future leadership roles; and (3) the need for a comprehensive leadership program to cultivate and develop the leaders of tomorrow.
Leadership and the Competitive Environment – A Changing Terrain
Developing leaders the leaders of tomorrow is not a simple extension of the styles and values of yesterday’s leader. Programs entrenched in yesterday’s ideas of leadership will be left behind in the competitive dust of lost opportunity. Why?
Universally, it seemed that people had grown frustrated by a world dominated by codes of what they saw as traditionally masculine thinking and behavior: codes of control, competition, aggression, and black-and-white thinking that have contributed to many of the problems we face today, from wars and income inequality to reckless risk-taking and scandal.[iii]
The change identified by Gerzema and D’Antonio’s research quoted above cannot be ignored. A global shift is happening in how leadership is defined. Leadership in tomorrow’s world must be able to break gridlock through reason and not ideology or sheer aggression. The leaders of tomorrow must be intuitive as well as empirical, think long-term as well as short-term, and bring about sustainable solutions and not posturing for expediency. Another way to describe this kind of leadership is servant leadership.
Servant leadership is interconnected and interdependent perspective on the act of leading. It works from a win/win not a zero sum game. Servant leadership is decisive and resilient and is so out of an orientation that is neither controlling nor stubborn. Instead servant leadership operates from a clear value base that informs a leader’s decisions, reactions, plans, and ethics.
A servant leadership approach appeals to the intrinsic motivations if people to carry out organizational goals. Does it work? According to Alan Mulally, president and CEO of Ford Motor Company it does. When Mulally took the helm in 2006, Ford was losing billions of dollars and was on the brink of bankruptcy. Since Mulally stepped in, Ford has posted a profit every year since 2009. When asked about his leadership style, Mulally responded,
At the most fundamental level, it is an honor to serve—at whatever type or size of organization you are privileged to lead, whether it is a for-profit or nonprofit…. Starting from that foundation, it is important to have a compelling vision and a comprehensive plan. Positive leadership—conveying the idea that there is always a way forward—is so important, because that is what you are here for—to figure out how to move the organization forward. Critical to doing that is reinforcing the idea that everyone is included. Everyone is part of the team and everyone’s contribution is respected, so everyone should participate….A big part of leadership is being authentic to who you are, thinking about what you really believe in and behaving accordingly. At Ford, we have a card with our business plan on one side and the behaviors we expect listed on the other. It is the result of 43 years of doing this.[iv]
Leadership is changing – the world is changing. What does a leadership development plan look like that aims at developing servant leaders?
Seven Design Components of Effective Leadership Development Programs
One: Determine the Leadership Culture and Life Cycle Position of Your Organization
What is the leadership culture of your organization? The concept of culture is wildly popular if not always understood. The significance of starting with a view to what makes up the way your organization actually works is that all leadership action is done in a context and must be appropriate to that context. To initiate a leadership development plan without understanding the culture of the organization is like insisting that the operational norms of a McDonald’s drive through should be the basis for developing leaders at Ruth Chris’ Steak House.
Organizational culture can be defined as:
…a pattern of shared basic assumptions learned by a group as it solved its problems of external adaptation and internal integration, which has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems.[v]
Identify your organization’s culture. What are the implicit rules of operation, relationship to power, the nature of vendor relationships, the rules for relating to stakeholders, and the rules to promoting up, etcetera? Will your organization’s culture support servant leadership?
Define your organization’s life cycle place. Organizational needs and focus shifts depending on the life cycle age of the organization. Younger organizations tend to be creative, aggressive, sales focused, et cetera. Prime organizations are disciplined, opportunity drivers, attentive to policies designed to maximize resources, et cetera. Aging and stuck organizations tend to be autocratic, highly formal, and characterized by a lost sense of mission other than profit. The skills and traits required of leaders in each life cycle stage are different. So, not only is it important to know where the organization is at today in its life cycle but also where it expects to be in tomorrow.
Evaluate the gaps between your current organization culture and a culture of servant leadership. Gaps show a shift is needed in how leaders are developed and socialized into your organization. What does a servant leadership culture look like? Here is an insight from Greenleaf:
…today is the urgent need, around the world, for leadership by strong ethical persons – those who by nature are disposed to be servants (in the sense of helping others to become healthier, wiser, freer, more autonomous and more likely themselves to be servants) and who therefore can help others to move in constructive directions. Servant –leaders are healers in the sense of making whole by helping others to a larger and nobler vision and purpose than they would be likely to attain for themselves.[vi]
If you find gaps be honest about them. Look, no organization is perfect – but everyone wants to work for an organization that is improving the way it sees itself. Pull your people into the process and help them own the changes that will make your organization world-class in its culture as well as its performance.
Two: Identify Current and Potential Leaders within Your Organization
Start by identifying the competencies your organization needs. When developing leaders look at the whole picture. Use dynamic management as well as leadership skills.
Identify the competencies that are needed in both poles of leadership (i.e., management and leadership). Leadership Praxis measures these competencies using a statistically reliable and validated 360 leadership assessment. These include:
- Spirituality: the ability to define a sense of ultimate (or immaterial) reality. Spirituality enables yourself and others to discover the essence of being, their deepest values, and meaning by which they make decisions.
- Vision Casting: the ability to define a preferred future, communicate it to others in a way that inspires commitment, confidence, conviction and contribution in others.
- Ensure Long-term Results: the ability to think strategically by integrating industry knowledge with organizational knowledge and knowledge of your customers.
- Build Strong Teams: the ability to help the members of your work translate strategic goals and initiatives into specific responsibilities and priorities.
- Managing Outcomes: the ability to set up measurable outcomes and create systems for monitoring progress toward them that includes ethical evaluation and specific activities.
- Developing Others: capacity for building the strength and continuity of the organization by recognizing individual potential and acting to developing them through training, coaching, and performance evaluation.
- Delegate: readiness to explain expectations, give appropriate resources, and assist with regular and unscheduled coaching.
- Decision Making: ability to stay strategic, results oriented, and productive without losing sight of the complexity of issues and the diverse views of others. Capable of making implicit assumptions explicit prior to acting and anticipates potential outcomes to all actions.
- Courage: the ability to speak out in the face of opposition, acknowledge conflict, and work openly toward strategically aligned solutions.
- Resilience: ability to solicit and act on constructive feedback, challenge yourself with tough assignments, and demonstrate resilience and courage in the face of setbacks and opposition.
Do the work needed to correlate these competencies to the job skills needed at every level of your organizational leadership structure. The objective in any leadership development program is not just to find whether these competencies exist and how to introduce them as effective behaviors but to build a capacity for complexity in the exercise of these competencies.
Test your leaders for these competencies via your performance appraisal process and the use of the Leadership Praxis 360 degree leadership assessment. Then assess the goals to development and the length of time it will take for a leader to be ready to assume a position.
The criterion for assessing potential leaders also includes values. What are the values that show a leader understands the concept of service in behavior? These values determine how a leader relates to their environment and people and offer the foundation for sustained performance.
- Conceptualization – the act of looking empirically and symbolically at how things work and an ability to forecast changes in future behavior as a result. The opposite behavior is vanity metrics i.e., using numbers to make one look good rather than make decisions.
- Awareness – entering every situation and personal interaction with one’s full attention and emotional intelligence. The opposite is an appeal to rationalism characterized by unilateral control, minimization of loosing and maximization of winning, and suppression of negative feelings or feedback.
- Differentiation – the recognition of one’s unique contribution both direct and indirect and a commitment to help others discover and use their unique skills and abilities as well as holding others responsible for their own emotional well-being. The opposite is a victimization posture that yields personal responsibility for wellbeing and performance to forces outside oneself.
- Stewardship – a commitment to use resources with the recognition of their cost both real and symbolic. The opposite is an arrogance that assumes the source of all available resources is the direct result of one’s own efforts – results in competition, one-upmanship and brinkmanship.
- Foresight – the commitment to work to understand the lessons of the past to change activity in the present to altering the consequences of the future. The opposite is the failure to learn from experience so that work patterns are simply engaged with greater intensity without regard to outcomes.
- Healing Community – a commitment to building an organizational culture and work environment where people can be their best selves who are rewarded and not castigated for their creativity and innovation. The opposite is a culture of one-sided task demand that fails to recognize the impact of employee engagement, commitment, and direct and indirect contribution.
- Persuasion – the realization that power is the least effective means of sustained performance and reliance upon building systems that leverage intrinsic v extrinsic motivations. The opposite is the use of power to cajole, threaten, and suppress opinions or data sources that do not find its source in the person with power or contradicts the mental models of the powerful.
- Service – a commitment to the holistic development of others in work. The opposite sees employees as expendable resources to be controlled and discarded when their immediate usefulness is exhausted.
Developing internal talent is an advantage. Internal talent achieves productivity almost 50 percent faster than external candidates. This is particularly true for organizations in which the knowledge of internal politics and structures is required to get the job done.
Developing leadership competencies does not occur from a singular source. A world-class leadership development process takes deliberate advantage of serendipitous as well as formal and informal development methods as is illustrated in Figure 1. [vii]
Start identifying leaders in your recruitment process. Pre-hiring assessments can be used to drop candidates that do not pass a minimum threshold score in the pre-hiring assessment screen that includes assessments, resume review, and reference reviews. Focus your time on the more promising candidates. Automated pre-screening can offer up to 42% increase in recruiter efficiency if the right tools are in play. Use recruiting to build your bench strength of future leaders.
Three: Identify Leadership Gaps
Identifying leadership gaps is a function of individual and organizational readiness. It considers the life-cycle stage of the organization, the competency development of candidates, and the cultural behavior of the organization’s leaders.
- Determine current and future leadership requirements
- Compare those requirements with the current leadership team
- Identify current leaders who may be at risk of leaving
- Identify succession plans for those at risk of leaving or planning to leave
- Look at leadership development pipeline
- Identify gaps in skill and the time required to fill those gaps
- Identify gaps in values i.e., the degree to which servant leadership values are exhibited in future leader behaviors
Look at the sample gap analysis below. This type of summary is helpful in surveying the potential talent pool.
If your organization uses a Human Resource Information System (HRIS) to catalogue performance appraisals and development plans/activities this summary takes little time. If your organization has not leveraged a HRIS this information should be on file in your personnel office.
Four: Develop Succession Plans for Critical Roles
Succession planning is not a luxury – it is a necessity even in organizations that simply do not anticipate a change in any of its critical leadership roles. Life is unpredictable and no organization escapes the disruption and employee trauma that occurs when key leaders leave the organization. Succession planning is an insurance program that admits the unpredictability of the future and prepares to thrive in spite of the potential for the unexpected. Succession planning should be a company policy, dealt with openly and deliberately by corporate boards and corporate officers and leaders.
Succession planning should not be limited to executive roles. As part of a leadership program, organizations should test all critical leadership roles. One survey found that whereas more than 70 percent of large companies have succession plans at the director level, only 41 percent have them at the manager level, and just 11 percent included first-line supervisors.
Enduring great organizations carry out succession planning across all levels of the organization – they are proactive and deliberate at getting the right people. In contrast the lack of bench strength in other organizations creates significant vulnerabilities in the neglect of mission-critical roles.
Coaching and mentoring has gained in usage as a critical element of succession planning. The American Management Association (AMA) reported that of the 1,000 business leaders surveyed nearly 60 percent use coaching for high-potential employees. These leaders used primarily outside versus inside coaches because outside coaching brought greater objectivity, fresh perspectives, higher levels of confidentiality, and a broad base of experience in many different organizations.[viii]
Increase efficiency in succession planning by using technology systems to support the succession planning process. The best technology systems provide the ability to:
- Create back fill strategies that use data captured in the recruiting and performance review processes, coupled with individual career plans
- Add multiple candidates to a succession short list and view all the best options – with necessarily adding them to the plan
- Displace multiple talent profiles – from C-level to individual contributors – side by side to quickly identify the best fit
- Track candidates readiness based on skills, competencies, and performance; promote top candidates based on relative ranking and composite feedback scores
Five: Develop Career Planning Goals for Potential Leaders
Companies that support career planning for their employees gain in retention, engagement, and protection of the leadership pipeline. 61 percent of employed college graduates surveyed by Taleo Research in 2008 said they left their first employer because there was no potential for career advancement or organizational opportunities. Career planning is not just the responsibility of the person any more if companies want to keep top talent.
If companies do not offer employees with career planning and advancement opportunities, their competitors will. 77 percent of workers ages 36-40 (right in the middle of the pipeline for leadership) last in new jobs less than five years. This rate of turnover represents a high cost and loss to organizations that fail to offer career planning.
Combining employee development and career planning enables employees to explore potential career paths and to watch and progress through the development activities necessary to meet them. Competencies tied to relevant development activities can be incorporated into the performance review process and thus support succession planning.
This kind of approach to employee development recognizes that people are intrinsically motivated and that this motivation possesses three critical elements: (1) Autonomy, the desire to direct our own lives; (2) Mastery, the urge to get better and better at something that matters; and (3) Purpose, the yearning to do what we do in the service of something larger than ourselves.[ix] As a result of using leveraging intrinsic motivation, the engagement and commitment levels of employees rises significantly. This makes it far more likely that the organization will retain its investment and capitalize in significant returns through talent retention and performance.
Six: Develop a Skills Roadmap for Future Leaders
A skills road map provides the direction high potential employees need to direct their learning. Connecting competencies to a skills map and identifying the type of training needed (formal as in academic work, non-formal as in seminars, and informal as in coaching) allows the employee and the company to track progress.
See Table 2 following as a sample skills map. In one organization the COO mounted this as a poster outside his office and used it to conduct ad hoc coaching and mentoring sessions encouraging key employees to pursue more competencies that potentially positioned them for future open positions. Notice that this skills map includes all levels of this organization’s leadership.
Seven: Develop Retention Programs for Current and Future Leaders
Monetary and non-monetary rewards can be used to improve retention of any employee. Recognize excellent performance through tools like: salary increases, bonus plans, promotions, additional paid vacation or sick days, public recognition, acknowledgement through private praise, and stock options. Retention is critical not only because its cost is high but because top performance dive best business performance.
A well designed leadership development program is the key to identifying, attracting, filling, and retaining world-class organizational leadership. The benefits of an optimized leadership develop program include: a pipeline of leadership talent, talent aligned with corporate goals, improved morale, increased retention, improved leadership skills, and consistent measurement through development and performance management. (To request a PDF copy of this article email email@example.com.)
[i] “Driving Performance: Why Leadership Development Matters in Difficult Times.” Source: http://www.ccl.org/leadership/pdf/landing/DrivingPerformance.pdf. Accessed; 18 Mar 2014.
[ii] John Gallager. “Retirement of baby boomers may reverberate in the workplace.” Source: http://seattletimes.com/html/nationworld/2002185894_boomers21.html. Accessed; 18 Mar 2014
[iii] John Gerzema and Michael D’Antonio. The Athena Doctrine: How Women (and Men Who Think Like Them) Will Rule the Future. (San Francisco, CA: Jossey-Bass, 2013), 7.
[iv] Rik Kirkland. “Leading in the 21st Century: An Interview with Ford’s Alan Mulally,” McKinsey & Company, November 2013.
[v] Edgar H. Schein. Organizational Culture and Leadership 4th ed. (San Francisco, CA: Jossey-Bass, 2010), 18.
[vi] Robert Greenleaf. Servant Leadership: A Journey into the Nature of Legitimate Power and Greatness 25th Anniversary Edition. (New York, NY: Paulist Press, 2002), 240.
[vii] Raymond L. Wheeler. An Inconvenient Power: The Practice of Servant Leadership. (Claremont, CA: Unpublished Manuscript, 2014), 357.
[viii] “Coaching: A Global Study of Successful Practices.” AMA, 2008. Source: http://www.opm.gov/WIKI/uploads/docs/Wiki/OPM/training/i4cp-coaching.pdf. Accessed: 19 Mar 2014.
[ix] Daniel H. Pink. Drive: the Surprising Truth About What Motivates Us. New York, NY: Riverhead Books, 2009), 204.