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Strategic Leadership

Part 1: Applying Lessons Learned from Research about Strategic Leadership Development

Robert M. Fulmer, PhD, and Jared L. Bleak, EdD

Graziadio Business Report, 2007, Vol. 10, Issue 2
This article is copyrighted and has been reprinted with permission from Pepperdine University

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3. Build an Integrated Leadership Strategy

Perhaps the most significant, overarching trend in leader development is the pressure and need to organize development activities and initiatives into an integrated strategy. In a 2004 study, 69 percent of respondents noted that the "creation of an integrated strategy and system for all executive development" was the leading priority of their learning and development organizations.[10] This result replicated a 2000 study as well.[11] Of course, these results show that this is a key priority of learning and development organizations, and that it is difficult to measure and to show causality to the recurring results.

Many organizations see leadership development as a bunch of puzzle pieces representing initiatives and programs that somehow fit together but do not seem to come together in the right way. These pieces include competency models, 360°s and other assessments, developmental job rotations, experiential and action learning, talent management, succession planning, rewards and recognition, and coaching and mentoring.

A leadership development architecture can bring these often disjointed elements together into a consummate whole that has a greater chance of delivering real results.[12] This architecture must be integrated and linked to the strategy and needs of the business in order to increase the potential for real impact and then communicated widely to engender support.[13]

4. Drive Consistency in the Execution of Leadership Programs and Practices

The best companies for leaders consistently execute on the strategies that make for good leadership development. They create enterprise wide standards, practices, and metrics for leadership; cascade programs and processes down through the organization to improve impact and drive cultural change; include flexibility in centralized leader development programs in order to address specific business needs; and customize developmental solutions for business units in order to better ensure senior management support and engagement.[14]

An important leverage point in leadership development efforts is the high-potential leader population within companies. Accelerating the development of high potentials was listed as a key objective by 62 percent of learning and development professionals.[15] However, even with this objective in mind, 46 percent of companies have no systemic process for identifying and developing candidates for key leadership positions, including high potentials.[16] And 37 percent of companies see their ability to identify leadership potential as a serious weakness.[17] Among the top companies in leader development, 95 percent identify high potentials as compared to 77 percent of other companies. Additionally, 68 percent then inform those high potentials of their status and 72 percent track their progress and turnover systematically.[18]

Even greater differentiation in the development of high potentials can be seen in the techniques and methods used. Ninety-five percent of top companies provided increased access to senior leaders for their high potentials as compared to 45 percent of other companies. Similarly, top companies provided internal training (90 percent vs. 51 percent), developmental assignments (89 percent vs. 43 percent) and mentoring and coaching (58 percent vs. 24 percent) at a much higher rate than did companies not considered benchmarks for leadership development.[19]

An equally effective succession management strategy and process must also be in place. Overall, half of internal candidates selected for leadership positions fail when there is no succession management system in place.[20] And, if they had the opportunity, organizations would rehire only 62 percent of their executives.[21]

To increase the odds of success, an effective succession management process should include visible support by senior management and line leaders who are involved in identifying and developing succession candidates, a time frame for achieving planned development actions, flexibility to change in response to strategic needs or competitive pressures, and the sharing of information with candidates.[22]

5. Hold Leaders and the Organization Accountable for Results—Both Developmental and Business

Holding people and the organization accountable for developmental efforts is a trend that continues to gain momentum, especially in an increasingly competitive environment where any investment or outlay is carefully considered and monitored for a return. In fact, 52 percent of learning and development professionals planned to use systematic measurement/evaluation to measure the impact of their development efforts.[23]

Best practice firms anchor their leadership development efforts with lean competency models that are tied to performance and reward systems.[24] A clear, lean set of competencies was heralded as top companies in leadership development integrate their competencies into succession planning (100 percent of top companies vs. 78 percent of others) and make the competencies a baseline for identifying and then developing high potentials as part of succession planning.

In the top quartile of leadership development companies identified by Hewitt,[25] metrics were integrated with succession planning 71 percent of the time, versus only 45 percent of the time in companies in the bottom quartile. These companies also more fully integrated competency measures into formulas for base pay (60 percent vs. 30 percent), annual incentives (60 percent vs. 31 percent), and long-term incentives (65 percent vs. 23 percent).[26]

Top leadership development companies also use competencies as metrics in the performance management processes. They are set as behavior standards for leaders and managers and pay is influenced by performance against them.

Even with these results, many companies do not measure results in learning and development as they should. In a study that looked specifically at European-based multi-nationals, 63 percent reported never measuring return on investment in learning and development[27], even though these same firms reported that the importance of learning and development was higher than ever before[28]. There is clearly more work to be done in holding people and organizations accountable for learning and development results.

Summary

A decade ago, there were only isolated bits of research information available about what makes leadership development successful. Today, a growing consensus is emerging about what is required for success in this arena. Unless senior executives see the potential value of learning and development as a business tool, it is difficult for programs to have enough impact to bring about organizational change. Human resource professionals can often win support by pointing out the contributions to business success that can come from programs that are aligned with and support strategic objectives. Moreover, alignment of various human resources systems (performance management, succession planning with competency models and incentive compensation) helps to increase both the efficiency and impact of these activities. Finally, establishing the link between leadership development and business success is a powerful tool to get the attention of leaders throughout the organization and establish the creditability of leadership development activities. All together, the bottom line seems to suggest that seeing links between components of the business system helps them all work more effectively to accomplish the strategic objectives of the organization. In the next issue, we will explore these insights with five leading exemplars to see what additional insights can be garnered in the search for greater success in leadership and organizational development.

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Robert M. Fulmer, PhD, is an academic director at Duke Corporate Education and a Distinguished Visiting Professor at Pepperdine University. A world expert in leadership development, Dr. Fulmer has designed and delivered executive seminars in 23 countries and on six continents. His research and writing have focused on future challenges of management, implementation of strategy, and leadership development as levers for strategic change. He was named one of the top 50 executive coaches in The 2004 Handbook of Best Practices in Executive Coaching. His writings have been widely read in both academic and professional circles. robert.fulmer@pepperdine.edu

Jared L. Bleak, EdD, is an executive director at Duke Corporate Education, where he works to design and deliver educational programs that meet clients' strategic challenges. He holds a doctorate from Harvard University and has taught across the U.S., Europe, Africa and Asia with clients such as Siemens, Schering, PricewaterhouseCoopers, Progress Energy, Lehman Brothers, Rio Tinto and Lafarge. His research focuses on issues of organizational culture, leadership, and governance and he is currently leading a research project to improve the learning environment in corporations. He is the author of the book, "When For-Profit Meets Nonprofit: Educating Through the Market," published in 2005 by RoutledgeFalmer, and has authored several other book chapters and articles. Jared.Bleak@dukece.com

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[10] Bolt, Executive Development Trends, 2004.

[11] J. Bolt, Executive Development Trends 2000, (Executive Development Associates, Inc, 2000).

[12] "Creating a Leadership Architecture," (internal document) (Durham, North Carolina: Duke Corporate Education, 2005).

[13] Bolt, Executive Development Trends, 2004.

[14] R. M. Fulmer, Corporate Executive Board, Next Generation HR Practices (Houston, TX: APQC, 2005). M. Salob, S. Greenslade, S. Saslow. Current Challenges in Leadership Development, (Institute of Executive Development, 2004).

[15] Bolt, Executive Development Trends 2004.

[16] Bernthal, Wellins.

[17] Ibid.

[18] Greenslade, Salob.

[19] Ibid.

[20] Bernthal and Wellins, Leadership Forecast, 3.

[21] P. Bernthal, S. M. Rioux. Succession Management Practices, (Bridgeville, PA: Development Dimensions International, 2006), 1.

[22] J. A. Conger, R. M. Fulmer. Growing Your Company's Leaders: How Great Organizations Use Succession Management to Sustain Competitive Advantage, (New York: AMACOM, 2004).

[23] Bolt, Executive Development Trends, 2004.

[24] Greenslade, Salob.

[25] Ibid.

[26] Ibid.

[27] Leadership Development in European Organisations: Challenges and Best Practices, (The Danish Leadership Institute and Institute of Executive Development, 2004).

[28] Ibid, 44.

This article first appeared in Graziadio Business Report, 2007, Vol. 10, Issue 2

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