Seven Practices for Effective Leadership

Development rganmtional change and lead- 0 ershp development are con-

cerns for most firms-but rarely are accountants the champions of such issues. However, Motorola’s worldwide finance unit (whose two-day monthly closes are a benchmark for hundreds of com- panies) saw that its continued pre- eminence depended on i d e n e n g , cultivating, and retaining the next generation of leaders.

“The cycle-time and other process improvements we’ve made in the last 10 or 15 years have given us time to think about what kind of finance organization we want to be in the next 10 or 15 years,” says Ann Simms, senior manager of Corporate Financial Reporting and Services. “To maintain our edge, we’ll have to continue to do things differently. We can’t just hope to be lucky and end up with the kind of leaders we’ll need.”

In a joint study released last Octo- ber, Motorola’s Finance Leadership Council and Arthur Andersen’s

Global Best Practices group iden- tified 40 business, government, and nonprofit organizations with effec- tive leadership-development pro- grams. Based on site visits to four of these-Levi Strauss & Co., Royal Dutch Shell, SmithKline Beecham, and the U.S. Military Academy at West Point-and in- depth interviews with 15 others, the researchers identified seven practices common to all:

1. Link the leadership development process to larger change initiatives with- in the organization. Each company developed its own approach, but all explicitly tied their strategic change initiatives to the growth of future leaders. For .example, Levi Strauss’s reengineering of its cus- tomer supply chain revealed that some bottlenecks in the system were occurring at senior levels of the organization. The successful

executives and influence the direction of the company. Companies found ways to bring together up-and- comers and senior executives to collaborate on important issues. But that requires both the current and future leaders to open them- selves to honest feedback. To en- courage such interaction, Shell Malaysia created an online Leader- ship Development Network, open to all employees, for discussion of leadership practices and strategies. Every member is required to con- tribute a leadership learning each month, and is encouraged to bring others into the network.

3 . Create a provingground forpoten- tial leaders. To grow professionally, people need to be challenged. At Shell, for instance, future leaders selected for the company’s “value creation teams” undertake de- manding new projects in addition

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Bring together up-and-comers and senior executives.

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revamping of the supply chain fo- cused the company on the need for leaders to push decision mak- ing down to the appropriate level.

2. Give high-potential managers an opportunity to interact with senior

to their ongoing duties. This forces them to learn time management and delegation-essential leader- ship skills-as well as to produce results. Researchers found that ef- fective development efforts allow people to:

54 1,eoder to Lcadcr

Lead others, especially in team settings.

Meet stretch targets.

Defend their views and develop their communication shlls.

4. Use leadership diversity to address the challenges of running a global business. Successful organizations accom- modate a wide range of leadership styles and S ~ L U S , rather than trylng to

opportunities to climb the corpo- rate ladder, lateral assignments are increasingly the development strat- egy of choice. High-potential em- ployees at Levi Strauss, for instance, have a career plan that develops needed competencies through job rotation and global assignments.

6. Insist that current leaders’ behav- ior be consistent with espoused corpo- rate values. Almost by definition,

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Lateral assignments are increasingly the development strategy of choice.

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predlct what types of leadershp wdl be effective in the future. To help identlft. talent throughout the com- pany SmithKline Beecham (whose senjor team includes British, Amer- ican, French, Greek, Danish, and Japanese executives) gives managers access to a database of high-per- forming employees and their lead- ership skills. This has led to more diverse, creative, and effective job assignments.

5. Use “development moves” to build leadership competencies. High-per- forming enterprises emphasize on- the-job learning, not just classroom instruction. But as many organiza- tions become flatter, with fewer

organizations undertaking major change initiatives are led by peo- ple committed to new ways of doing business. But some man- agers at every level also have a stake in the status quo. Many of the organizations studied follow the example set by Jack Welch of General Electric, who has said that managers who deliver results but adhere to inconsistent or destruc- tive values and behaviors will be asked to leave.

7. Strive to make the leadership devel- opment process more clear. At most companies, the researchers suggest, both the criteria used to promote people and the people tagged for

future promotion are more a mat- ter of rumor than announced pol- icy. But successful companies, they find, are making job rotation, pro- motion, and training or develop- ment decisions more open, and are involving employees in their own (and others’) assessment. By clari- fying their performance standards and selections processes, these organizations win greater under- standing and support for their decisions.

s a result of these findmgs, the A Motorola team is now ex- ploring two ideas that could have the most immediate impact, says Simms-giving potential leaders greater access to senior executives, and finding ways to better share information about its widely dis- persed and decentralized talent pool.

“All the organizations we studied face different challenges,” says Ruth Wilhams, research director in the Arthur Andersen Global Best Practices Group, and a principal author of the report.“But we were struck by the enthusiasm that their senior leaders have for the subject of change and development. There is a surprising consensus that the ‘soft stuff’-creativity, empathy, the ability to build confidence, to cooperate, to form networks and sustain relationships-will trans- form their organizations.”

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