Knowledge Center: Article

Leadership Development

Realizing business value from leadership investment



Realizing business vaue from leadership investment

In recent years, most private sector organizations moved from savage downsizing and consolidation to a period of growth requiring innovation and change. The public sector across many of the world’s economies braced for a tough time with sharply reduced resources and rapidly increasing expectations of performance.

In the midst of this whirlwind of change, we convened a dialogue with 20 leading practitioners on the topics of talent, leadership development, and organizational change. We explored a number of issues over the course of eight weeks. One theme jumped out. It can best be described as realizing business value from leadership investment. Of course, this has always been important. Trainers have always searched for ways of measuring impact, coaches have never ceased to attempt to evaluate improvement, and organization development efforts have been characterized by striving for evidence of results. However, the economic crisis really upped the ante. Of the 20 colleagues we talked with for this research, 18 rated this topic as the number one item that was top of mind.

Digging a little deeper, the drivers were threefold:

The war for talent is back

Corporate growth and innovation have to be fueled by individual growth and innovation.

Building is better than buying

Our research participants recognized that while buying talent from other companies will always have a place, it is a much more haphazard and expensive process than building a coherent talent pipeline.

Leaders must be able to lead in a far more complex world

Radical change, acquisitions on a scale previously unknown, development of global footprints, and moves into rapidly emerging economies all require leaders who are as able as possible to meet the needs of their organization.

These three drivers have led to a flurry of thinking and innovation on the topic of realizing hard, tangible business benefit from investment in leadership development. So. the million- dollar question is, What are the leading practitioners doing? What characterizes the leadership strategies of the winning players and allows them to deliver sustainable impact?

We surfaced 7 big ideas from our conversations and research:

Don’t do training

Our participants recognize that the half-life of training is horribly short compared to the investment in both time and money to deliver it. Embed all learning activities in the flow of work. Of course, this doesn’t really mean that no training occurs. It means that all training is delivered in a field and forum approach, just in time, and consistent with real-life challenges. Classroom-based learning programs, short and specific master classes, in-the-role learning activities, coaching, web-based inputs, social networks, action learning, and more can all be blended to increase the impact and effectiveness of development activities.

Insights trump information

Leadership development activity often overloads on information but really hits home for us all as individuals when moments of real insight are achieved. Insight is so much more powerful for learning as a leader than acquiring knowledge. Often described as ‘peak’ or ‘ah ha’ moments, they have the power to switch our whole ways of leading and being. For insights to occur, the whole individual needs to be examined – inside out and outside in. One of the key tools to achieving this is the use of coaching, both within classroom events and as a standalone activity. Leadership is a lonely place and leaders find it invaluable to have reflection, feedback, and challenge from an unbiased observer.

Revenue up, cost down, cash in, risk out

If a leadership development effort doesn’t have a red thread to one of these business drivers then you may as well not bother. Money is precious, time even more so, and the opportunity cost of a leadership development effort that doesn’t produce business value is priceless. Getting leaders to be comfortable with and skilled in driving value is where leadership development can really pay off. A key area of focus is on how to link strategy to finance and to everyday business behaviors and being able to align everyone in the organization to create value collectively. All leadership development activity should derive directly from how it helps to create an increase in the future returns of the enterprise.

A fish rots from the head, but actually it’s the guts that rot first

Developing talent and skills is often focused on at the senior- to mid-tier leadership levels. Despite the very well-known proverb, this is in reality where a fish actually rots from first, so it makes sense. However, the rest of the fish needs to be attended to as well. Work with the executive committee to ensure role modelling, openness to being influenced by the new ways their managers are behaving with them and others, and active encouragement and performance management of leaders undergoing leadership training are all key levers to enabling people to shift the way they work. The formal systems and processes that encourage and enable the change in behavior are just as relevant as the training intervention itself.

Push, push, push – Into the danger zone

Learning occurs when people have been awakened and are taken to the delicate point between stretch and stress. This is where the natural energy and appetite of individuals comes into play. Learning occurring at this boundary doesn’t happen by happy coincidence. For this to happen challenge is more important than support. We are not saying there is a need to be aggressive or dismissive or constantly focused on the negative to create this danger zone. Challenging leaders to learn, means, however, challenging them to rethink their self-concepts, to try new things, to learn through getting it right and not getting it right, to take their long-relied-on strengths and see how they can take them even further and use them even more widely.

Leading is a 24/7 contact sport

Like it or not, leaders are on 24/7. It is easy to lose sight of this as a leader busy managing multiple priorities and juggling to fit ever more in the schedule. Leading happens through everything we do, say, don’t do and don’t say – to other people. Leadership development really gains traction when leaders learn not by thinking, not by doing, but by reflecting on the impact of what they do on someone else. This requires an orientation towards and the skills of reflection, emotional intelligence, and seeking of continuous feedback. Without that, learning happens in a vacuum and long-lasting learning that has an organizational performance impact just doesn’t occur.

Make it count – Learning should be part of the performance process

Providing a safe learning environment where the learning happens ‘off to the side’ in a classroom context (whether off site or on site) increases the chances it won’t be value added to the organization. An individual’s engagement with his or her learning, enthusiasm, and willingness to try should all be taken account in the talent management processes of an organization. This is being achieved in an increasing number of ways. Confidentiality of content may be key, for example, in a one-on-one coaching relationship, to build trust but the level of energy and enthusiasm for their development and ensuring performance-enhancing development activities are focused on comes through the vast majority of organizations using ‘three-way’ meetings of the leader and his or her manager and coach. More and more talent managers are becoming an integral part of the development activities they are procuring as true ‘partners’ with their suppliers.

These aren’t the seven steps to heaven. Every one of the colleagues who have participated in our dialogue would adamantly claim that they have not yet cracked the code on this difficult topic. But these seven ideas seem like a good place to start. Apply them to your own efforts. How do you stack up? Where should the effort go?