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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

Leadership has never been an easy proposition. Throughout history observers have wondered if there were enough capable leaders to manage the challenges facing all types of organizations. Today, business and governmental organizations face something of a "perfect storm" of problems that have profound implications for current and future leaders.

Some Problems of Current and Future Leaders

·         Competition is now coming from unexpected quarters. Because the rules of the business game are changing with this competition, current leaders represent what the business needed in the past not the present or the future.

·         The talent pipeline often lacks sufficient numbers to replace leaders that are or soon will be leaving—often due to the increasing “war for talent” that increased competition has sown.

·         The organization's expansion goals outstrip the amount of internal talent needed to support them.

·         Globalization and increasing technological demands make the leader's job more difficult than ever.

·         Problems with strategic direction, organizational alignment, and employee commitment (e.g., unclear direction, poor alignment, and little commitment) continue to exist and are exacerbated in the current competitive environment.

·         Human resources and those responsible for leadership development feel increased pressure to demonstrate value, particularly in terms of return on investment for leader development, and other education and training initiatives.

·         Leadership development initiatives are not integrated with business needs, and consequently, are of questionable value to internal customers.

The "perfect storm" of organizational challenges and leadership pressures has prompted study after study hoping to determine a key to survival. And in study after study superior financial and organizational performance (or otherwise) have been linked to insights and inspiration of effective leadership. This comes as no surprise to those who have worked with or for a great leader. Good results follow good leadership. We are motivated by good leadership, guided by good leadership, and even held accountable by good leadership. In fact, employees who are led by strong leaders are more satisfied, engaged, and loyal than employees with weak leaders.[1] Most of all, we are often developed into good leaders ourselves as a result of being taught by and following the example of leaders who were role models, mentors, and teachers.

These findings have been confirmed across different dimensions of leadership development. For instance, the Corporate Leadership Council found that organizations with strong leadership bench strength have approximately 10 percent higher total shareholder return than their weaker peers.[2] Similarly, companies with above average financial returns have more comprehensive succession planning processes and are more committed to developing future leaders.[3]

What brings these results? Previous research in leadership development has yielded five guiding principles for leadership development in general. Companies have shown that by following these principles they can effectively improve their leadership development results and streamline their organization's focus on leadership development.

These principles are:

1. Start with the Top
2. Link Leadership Development Directly to the Business—and Deliver Results
3. Build an Integrated Leadership Strategy
4. Drive Consistency in the Execution of Leadership Programs and Practices
5. Hold Leaders and the Organization Accountable for Results—Both Developmental and Business

The research has shown that individually each of these principles will yield positive results; however, practiced together, they can propel an organization to new heights in leadership development.

1. Start at the Top

The engagement of CEO support for leadership development is often what separates the top performing companies from the rest. In a study of the top 20 companies for leaders, Hewitt found that 100 percent of these top companies involved the CEO in leadership development and many initiatives were sponsored directly by the chief executive, compared with 65 percent of other companies studied.[4] Similarly, board level involvement also makes a difference in leadership development. A majority of top companies (65 percent) involved the board in leadership development activities and processes, compared to only 31 percent of other companies.

However, involvement of senior leaders does not just stop with endorsing and sponsoring programs. A current trend is to use top leaders as teachers in developmental programs as well as coaches and mentors to high potentials. In fact, 75 percent of leading learning and development organizations identified the use of senior executives as faculty in programs as the leading trend in the near term. In addition, just over half of the respondents from this same group noted that the use of executives as coaches would also be a significant trend.[5]

GE's Crotonville became a household name because of the importance placed on it by Jack Welch. And not only did he espouse the strategic importance of learning and development, but he modeled it by staying deeply involved in the company's efforts. Other examples of executive involvement at the very highest levels include PepsiCo's Roger Enrico in the past decade and Caterpillar's Jim Owens in this one. Both these leaders have been intimately involved in their organization's leadership development strategies and have seen great results from their efforts.

To avoid frustrating senior executives and disillusioning developing leaders, coaching should be given to senior executives to allow them to improve their teaching and mentoring skills.

2. Link Leadership Development Directly to the Business—and Deliver Results

Leadership development should begin and end with the business objectives as well as personal development needs in mind. Hewitt found that the top 20 companies in the U.S. in leader development closely linked development strategies with business strategies.[6] Alignment with business strategy and priorities was seen to win out over a hodgepodge of benchmark programs.

As companies become more concerned with measuring the impact of leader development activities on business success, they are developing better methods of assessment. For instance, 70 percent of corporate universities measure improved product/service quality as well as improved customer service. And 59 percent measured reduced operating costs as a result of leader development. Other measures include increased revenues (51 percent), improved sales efficiency (49 percent), and increased profits (48 percent).[7]

Yet with solid measures available (such as savings generated by actions initiated as a result of program learning) , less than one company in five currently tracks business results from leader development activities[8] as compared to over three of four companies that measure participant satisfaction and learning.[9]

The difficulties associated with measuring business impact explain much of the difficulty of the task. These include creating a common language that defines value, gaining access to appropriate business data, and finding matched samples to contrast against leader development participants.

>> continued on page 2 >>

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[1] P. Bernthal, R. S. Wellins. Leadership Forecast: 2003-2004, (Bridgeville, PA: Development Dimensions International, Inc., 2004)

[2]Corporate Leadership Council. Driving Performance and Retention through Employee Engagement, (Washington, D.C.: Corporate Executive Board, 2004).

[3] S. Greenslade, M. Salob. How the Top 20 Companies Grow Great Leaders 2005 (Illinois: Hewitt Associates, 2005).

[4] Ibid.

[5] J. Bolt. Executive Development Trends 2004: Filling the Talent Gap, (San Francisco: Executive Development Associates, 2004).

[6] Greenslade, Salob.

[7] Sixth Annual Benchmarking Report, (New York: Corporate University Xchange, 2004).

[8] Bolt, Executive Development Trends, 2004.

[9] Sixth Annual Benchmarking Report.

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

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