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What do we know about how leaders develop? Corporate Executive Board “Voice of the Leader” Center for Creative Leadership McKinsey & Company Research “War for Talent” “Performance Ethic”
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“Leaders Matter”
What do we know about how leaders develop? Corporate Executive Board
“Voice of the Leader” Center for Creative Leadership McKinsey & Company Research
“War for Talent” “Performance Ethic”
*Corporate Executive Board
“Voice of the Leader”
Sponsored by Corporate Executive Board Designed to provide systematic evidence to help
organizations make decisions on effective leadership development approaches
Web-based survey administered to over 15,000 leaders
Over 8000 Executives from 31 organizations in 6 industries responded
Using conjoint analysis, the effectiveness of leadership development activities was evaluated from the eyes of the leaders
What Drives Effective Leadership?Complete List of Characteristics Evaluated by Respondents
People Leadership Character Leadership Process Leadership Strategic Leadership Clearly communicate
expectations Correctly evaluate the
potential in others Hold people
accountable Inspire others Persuade and
encourage others tomove in a desireddirection
Put the right people inthe right roles at theright time
Recognize and rewardachievement
Strong commitment todiversity
Strong commitment tostaff development
Accept responsibilityfor successes andfailures
Challenge the statusquo
Comfortable withambiguity
Committed to yourcontinuous personaldevelopment
Confident Honesty and integrity Intelligent Negotiate effectively Open to new ideas Original Passion to succeed Perseverance Sensitive to the needs
of others Think analytically Years of experience in
positions ofmanagement
Appropriately handlecrises
Break down a projectinto manageablecomponents
Correctly allocateresources acrosscompeting priorities
Create clear workplans and timetables
Creatively solveproblems
Encourage andmanage innovation
Measure results Properly manage
budgets and timelines Translate a long-term
vision into a step-by-step plan
Adapt to changingcircumstances
Correctly assess therisk and return ofdecisions
Deep understanding ofmarkets, competitorsand customers
Global perspective Identify and articulate
long-term vision forfuture
Properly managerelationships with thirdparties
Understandingstrengths andweaknesses ofcompany
Source: Corporate Executive Board 2001 Leadership Survey.
*Corporate Executive Board
Most important attributes of effective leadership
Leaders consider people-leadership skills as the most important attributes of effective leadership, followed by strategic-leadership skills.
*Corporate Executive Board
Most important attributes of effective leadership People-leadership skills
Clearly communicating expectations Recognizing and rewarding achievement Inspiring others
Strategic-leadership skills Identifying and articulating a long-term vision Understanding markets, competitors, and customers Understanding the strengths and weaknesses of the
company
*Corporate Executive Board
What leadership development activities do leaders value the most?
Feedback and relationship-based development programs are viewed as more effective than on-the-job experiences, which in turn are viewed more effective than education-based programs.
The amount of decision-making authority given to leaders, however, is the single most important factor in leadership development.
*Corporate Executive Board
Feedback and Relationship programs
Creating Leadership development plan Interacting with Peers Meeting with an executive coach Meeting with a mentor Feedback
*Corporate Executive Board
Most important development activities to leaders
1) Amount of decision-making authority2) Creating a leadership development plan3) Interacting with peers4) Meeting with an executive coach5) Meeting with a mentor6) Feedback7) Turning around a struggling business8) People-management skills courses9) Working in new functional areas
*Corporate Executive Board
Greatest weakness in leaders
Though considered very important to effective leadership, identifying and articulating a long-term vision is the single greatest weakness of the leadership bench(Strategic Leadership)
*Adapted from McKinsey & Company
Bottom Line Impact
Evidence suggests that stronger leadership teams can positively affect company economic performance.
Companies that are the best at managing talent deliver far better results for their shareholders, up to 22% better
High performing employees generate: 40% more productivity from Operations performers 49% increase profits from General Management
performers 67% increased revenue from Sales Representatives
*Adapted from McKinsey War for Talent Study
“War for Talent”
McKinsey & Company groundbreaking study on Leadership Development
77 companies involved in the study at CEO level and the top 300 in the company
Top 300 people studied extensively 11 different industries represented All 6,500 executives were asked to complete a 45-minute survey on
what they have done in their career, and what drives and keeps them at their current company
Unknown to the 6,500 executives, they were split into three buckets: high potential, good performer, below average
The companies were split into quintiles by financial performance in their respective industries
*Adapted from Corporate Executive Board
Research Findings
There is a direct link between a company’s ability to provide leaders with the development opportunities they most value and the overall strength of the leadership bench.
*Adapted from McKinsey War for Talent Study
“War for Talent” Findings
The strongest performing companies don’t necessarily have the strongest formal leadership development processes.
They DO have a talent mindset at the top of the organization and a culture that supports candor and risk taking when discussing people
*Adapted from McKinsey War for Talent Study
Build a talent mindset
A belief that talent impacts business results A belief that “A” players will outperform “B”
players, regardless of the challenge Executives know what an “A” player is, and the
“A” players have been identified Executives are accountable for people
leadership and development The best will be rewarded
*Adapted from McKinsey War for Talent Study
Culture that encourages candor and risk taking when discussing people Executives talk about people frequently in a candid
and probing way…they differentiate people on performance and potential
Take risks on people and move them into jobs before they are ready (stretch assignments)
Executives talk candidly about their own and others’ development
Executives are expected to ask for and give insightful feedback
Shared set of values around people development
*Adapted from McKinsey War for Talent Study
Build solid leadership development processes
Performance Management Feedback & Coaching Education & Development Recruiting Assessment
*Adapted from McKinsey War for Talent Study
“War for Talent” Findings
Need to have the culture and the talent mindset first, in order to support a strong leadership development program (are we developing a good crop of “B” players?)
High potential and high performing individuals want challenges Stretch people and build capability through aggressive job assignments Provide feedback and rewards to reinforce culture, performance and
development Need to have a model in place for when and why professional coaches
are brought into the organization - the times when it is most critical for an employee to learn the skill, then the return on the investment will be high
Focus on people-leadership and strategic-leadership skills for all people leaders
*Adapted from McKinsey War for Talent Study
“First Break all the Rules”
Gallup Organization’s research 80,000 managers in 400 organizations
“First Break all the Rules”
What the World’s Greatest Managers Do Differently… Select the right talent Correctly coach for the right outcomes for direct reports Maximize strengths Place the right person in the right job at the right time Create heroes in every role Reward performance Frequent interaction regarding performance Focus on future and the next level
*Adapted from McKinsey Performance Ethic Study
“Performance Ethic” Study
McKinsey & Company - 6,900 managers in 56 organizations
*Adapted from McKinsey Performance Ethic Study
“Performance Ethic” Study
These are the things high performing companies do consistently: Mission / Inspiration Highly aggressive short- and long-term goals Flat, atomized, accountable organizational units Transparent performance feedback Consequence management Coordination and control Levers Motivation levers
*Adapted from Center for Creative Leadership
Great leaders share similar backgrounds
Raw MaterialIntellect, Character, Ability to Relate, Motivation to Achieve and Lead
Experience- Variety - Intensity - Adversity - Diversity
Ability & Willingness to Learn from Experience- Responsive to Feedback vs. Repeating Past Mistakes
+
x
How do leaders develop?
Experience and
Feedback!
*Adapted from Center for Creative Leadership
How Do Leaders Develop?
Assignments Full job change Job restructure based on development needs Special projects and assignments
Coaching and Feedback Multi-rater feedback and evaluation Coaching by a skilled manager
Training Motivated self-development Coursework (“just in time”)
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