These are the thoughts and takeaways from the latest Talent Think Tank (TTT) held on Thursday 11th December 2014 hosted by ERM’s Jenny Broughton (Leadership Development Programs Manager) and Alison Sayers (Global Leadership Development Director) titled ‘Leadership Development to Support the Business of Tomorrow’.
The following summary has been prepared to reflect a segment of the discussion held amongst senior HR and Talent professionals from leading national and international businesses. Specific company details, experiences and examples have been omitted from this summary as all discussions are held under ‘Chatham House Rules’.
Good leadership within companies could not be more crucial in this day and age. With the current candidate driven market and the recent popularity of the phrase “employees don’t leave a company they leave a boss” effectiveness of leadership is facing serious scrutiny.
There is still no definitive definition for the term leadership. Some state that leadership is something that is more contextual and therefore what leadership is and should be varies amongst different industries and companies. However, it is common for a clear distinction to be made between leadership and management. Historically leaders were developed from great management of their current employees. However, in this day and age the style of top down management is far less effective and can lead to attrition. Instead good leaders should know how to allow people to stimulate their ideas and work best. This can be difficult for longer standing leaders who are set in their ways. Leaders should have more than just management skills, such as a vision for where the business is going and an ability to see their part in it. Leaders are now expected to be able to think strategically about what’s best for the business and act in response to this. They also need courage to deal with disasters, communicate them to employees and possess an ability to come up with solutions in a collective manner. Ultimately the difference between managers and leaders is that a leader should be able to clearly state exactly what they bring to the business other than just management of employees.
Business Drivers / Triggers
As with many initiatives in a company, it is vital to outline the business drivers for leadership development programmes and communicate these with the rest of the business. Leaders often need to be shown a burning need for a new leadership programme and the below points can be used to communicate this.
- Leadership is crucial in the journey of a company becoming what it wants to be (in terms of other aspects rather than just profit)
- Defining opportunity cost – a business may well be profitable but could it be even more so if leadership was developed and costs, due to possible bad leadership, could be eradicated
- Regulation changes affecting the company
- Competitive advantage in a candidate driven market – how can you distinguish from your competitors if you are making similar profit?
- Smooth and consistent globalisation of a company
- Assessment of long-term health of the business / sustainability of the company in the future / growth – companies focused solely on profit and monetary value do not often last as long
- Market changes / adaption – change in customer and organisation due to market change e.g. paper companies having to move online due to new technology
- Retention of staff / attrition rate – looking at how much money is being spent on recruiting new people who may be leaving due to leadership style and showing how this money could be saved and fed back into the business on other things
- New entries into the market
- Definition of strategy, visions and values – do the leaders fit in with these?
- Lack of engagement – feedback from engagement surveys.
When developing leadership programmes it is essential to know what a good leader looks like for the particular business. This means understanding exactly what the business needs to drive it forward and support its vision, values and long-term goals. This may change dependent on the life cycle of the business – for companies to be truly successful they need to be supported by ‘great’ leadership teams that compliment what the business is trying to achieve.
Leadership comes from the top of an organisation and therefore the CEO and senior leaders need to demonstrate the behaviours that are expected of great leaders throughout the company. Therefore, getting them on board with developing leadership programmes and defining what is a great leader is crucial. If they do not demonstrate these behaviours how can they expect others in the organisation to? Leaders need to be of the right mind-set as well as taking responsibility for their own behaviours and the success of programmes.
It is important to understand the current standard of leadership before implementing a leadership development programme. Exit interviews can be a good way to determine if there are aspects of leadership that are causing attrition. These can then be used to decide on behaviours that should try to be eradicated.
How to develop a good leadership development programme:
- Define what leadership is
- Let the business ‘own’ the programme and get input from senior managers – sometimes it works better to grow leadership development organically on what works and what is needed rather than going in with a pre-developed plan
- Offer managers the opportunity to implement the programme themselves
Some companies find that those who have grown within a company tend to be more successful than bringing in leaders from outside of the business. However, this is not always the case and the manager’s ability to change needs to be considered.
Not only do top level managers need to buy in to programmes but they then need to lead and endorse the initiative with support and help from HR. Sometimes it works best when the top of the organisation takes responsibility and own leadership development, and even become mentors and help people grow to where they need to be rather than just being seen as an HR initiative.
How to roll out leadership programmes
How do you decide who is eligible for which development from current leaders to potential new leaders?
Once the leadership programme has been developed, set criteria can be assigned to programmes based on the desired behaviours and cognitive capacity. Things such as judgement, drive and influence can be measured when assessing leadership potential. This list of desired criteria can also be used within succession planning. However, rather than just picking who should be put into leadership programmes some businesses ask employees if they would be interested in a certain type of leadership role and then ask them to make a business case for what they will do. Something that is important to bear in mind is that it is often important for the leader to be so technically excellent that the people below them want to follow them as they see how well they are doing and how much they know.
At a senior level, people tend to feel more comfortable choosing where they are coached rather than necessarily being taught in classroom style. Leadership programmes often follow the 70:20:10 model, which teaches the philosophy that 70% of lessons learnt by successful managers are from tough jobs, 20% are from people and 10% are from courses / workshops. Workshops would include learnings on the role of leaders, how they can support individuals and then how this would fit back into the workplace. A good style of teaching is often peer learning by discussing issues and outcomes with each other.
The type of leadership development programme needed may well need slight changes dependent on the sector or level of the role within the organisation it is being used for. However, for consistency in large, and especially global organisations, there needs to be one clear strategy for leadership selection, development and implementation. Programmes and processes need to be globally integrated to make leadership development seamless for an individual working their way up the company.
Often companies and HR teams find they know how they want to implement a leadership development programme but have barriers such as the below, many from top level management, that need to be overcome in order for programmes to be successful.
- Behavioural change is hard. People find it challenging to change their innate behaviours. Trying to get a collective group of, often extremely bright and successful, individuals to change and recognise a need for change can be incredibly arduous
- People see a large cost attached to learning and development, however, this does not have to be the case
- Any new initiative or programme faces analysis from the workforce of what HR are doing and whether they think it is right
- Disruption factor – if leaders see that the business is currently profitable they often do not want this to be disrupted. However, just because the business is making money doesn’t mean it’s successful on all accounts. What about the sustainability of the business in the long term? And how much more money could be made if leadership was more effective? These are things that need to be communicated by HR to the top of the business when getting backing for leadership programmes
- If leaders are currently being rewarded with bonuses due to financial success it is hard to get them to see the need for change. It is also hard for others in the company to understand this need when they see leaders being rewarded for behaving how they currently do
- Making leaders see past the right now and to the company’s long term success – it’s likely that they may not be thinking further than two years ahead as most FTSE 100 CEOs do not stay longer than this
Measuring success of leadership development programmes
Monitoring the success of the programme is a crucial way to gain buy in from top level managers. If support is low, it is suggested that companies start by trialing leadership development programmes in certain areas of the business that are more willing to take on changes. They then measure the success of these to help get other less willing managers on board with the development programmes’ initiatives.
Methods for measuring success include both tangible and more intangible aspects such as;
- Level of business leader support and ownership of programmes
- Strength of relationship between business and HR
- Internal net promoter score – are employees advocates of the brand?
- Employee engagement survey – measuring the success of leaders
- Employer brand / culture of organisation
- Appraisals – how many employees are meeting personal development metrics? If a large number of staff who sit under the same manager are not performing, the training of this leader may have not been successful
- Attrition rates
- Surveys – taking feedback following workshops and development programmes
- Assessing the number of people in leadership development programmes and then calculating how many of these become leaders, in what amount of time and how long they stay in the company after this
- Kurt Patrick evaluation theory – this can be high cost but has some useful principles for evaluation when followed more simply
- Outcomes of measuring performance management in an employee’s appraisal
- Developing bonus strategies that are dependant on good leadership factors such as high employee engagement and low attrition
- Constantly stating ROI on learning development is crucial.