Linkage Inc's Best Practices in Leadership Development Handbook

Case Studies, Instruments, Training

David Giber, Samuel M. Lam, Marshall Goldsmith, Justin Bourke, David Giber, Samuel M. Lam, Marshall Goldsmith, Justin Bourke

• Publisher: Pfeiffer
• Year: 2009
• Print ISBN: 9780470195673
• eBook ISBN: 9780470451427
• Edition: 2
• Topic: Business
• Subtopic: Leadership
• Index: Business

Leadership development is a planned effort that enhances the learner's capacity to lead people. Building on the success of the first edition, Linkage conducted a study of over 300 top organizations and their needs in organizational change and leadership development that identifies approaches to leadership development that have proven to be successful. The work offers practical "how-to" instructions developing leaders and engaging in leadership development. It provides current in-depth models, assessments, tools, and other instruments that can be used for immediate application within a variety of organizations.

PART ONE

DEFINING LEADERSHIP DEVELOPMENT

CHAPTER ONE

CONTEXT, CULTURE, AND COMPLEXITIES

Best Practices Versus Best Fit

This chapter outlines the most proven approaches to leadership
development and shows how to maximize the use of these approaches
by identifying the future needs of the organization and its
leaders and leveraging this context to create an overall
strategy that is “best-fit,” not just “best-practice.”

When it comes to developing the leaders within an organization, the stakes are high, and the potential payoff is enormous. This chapter focuses on the creation of a systemic approach to leadership development that is aligned with an organization’s strategy, culture, and the critical initiatives required for future competitiveness.

An effective leadership development system is crucial to the long-term success of any organization. It can build sustainable competitive advantage for organizations that take the time and make the effort to design and implement the system.

Since developing leaders takes years, the leadership development system needs to be built around the future leadership needs of the organization and appropriately adjusted to reflect changes in strategy. At the macrolevel, a systemic approach to leadership development is based on four strategic questions:

1. What capabilities will our leaders need to have in three to five years?

2. What capabilities do our leaders currently have? What gaps do we need to fill between our current capabilities and those required in the future?

3. What do we need to do to develop our leaders?

4. How do the components and processes of our overall human resource (HR) system need to be aligned with our leadership development system for maximum return on investment?

Based on these questions, those who are designing a leadership development system need to:

1. Identify future leadership requirements

2. Assess current leadership capabilities to identify the gaps

3. Build and reconfigure the tools, activities, and processes of leadership development, talent management, and performance and succession management in order to develop the necessary leadership capability for the future

Figure 1.1 illustrates the step-by-step process for designing leadership development as well as the key HR processes that need to be aligned with the leadership development system.

FIGURE 1.1. ALIGNING LEADERSHIP DEVELOPMENT WITH
STRATEGIC HR COMPONENTS

Business Strategy

The design of a best practice leadership development system must begin with an assembly of the “right people” who are critical stakeholders in the overall architecture of the system. In best practice organizations, this “leadership development council” is typically made up of key members of the executive team, business unit and functional staff leaders, members of the board of directors, and in some instances key customer or supplier representatives. By involving these key stakeholders from the beginning, these organizations face fewer difficulties with issues of “buy-in” and senior leader support that can plague organizations. In addition, involvement at this level leads to much easier adoption of another leadership development best practice: leaders teaching leaders.

The first job of the leadership development council is to conduct a thorough review (if it already exists) or lead the construction (if it does not exist) of the organization’s future strategy. Although this chapter does not go into the details of creating a well-crafted strategy, the leadership development council should address the following questions in analyzing the organization’s future “business strategy”:

• What is the organization’s most desirable future state? (vision)

• Why does the organization exist? (mission)

• What will the organization do better than any other organization in the world? (strategy)

• How will the organization achieve its strategy? (business and operating plans)

• What future expectations exist among key stakeholders? (goals)

• What common factors guide all employees of the organization as they execute their work? (values)

Once there is clarity and agreement among the key stakeholders with respect to these questions, the leadership development council is ready to proceed to the next step in the process.

Future Leadership Requirement Analysis

The future leadership requirement analysis determines the critical capabilities required of leaders to deliver on the organization’s future strategy. Once these leadership capabilities are identified, they serve as the foundation for the relevant HR processes that must be aligned with the leadership development tools and processes in order to deliver the leaders required to execute future strategy. Only if the analysis of the future leadership requirements is accurate will the rest of the leadership development system be built effectively and contribute to the future success of the organization.

The involvement of the leadership development council is critical in the future leadership requirement analysis. Research has shown that top-performing organizations are 35 to 50 percent more likely to have CEO and board-level involvement than average-performing companies.

The work of conducting the future leadership requirement analysis can be summarized in three steps:

Step 1: Identify organizational opportunities and challenges based on a thorough review of the future strategy.

Step 2: Identify the future outputs that leaders will need to produce in order to capitalize on the opportunities and overcome the challenges.

Step 3: Identify the future leadership competencies and capabilities required to produce these outputs at the highest quality levels.

In today’s best practice organizations, the identification of critical leadership outputs and competencies is always oriented toward future business strategy rather than backward to the outputs and competencies that distinguished superior leaders in the past.

Depending on the amount of time and resources, both personnel and financial, that the organization can allocate to the identification of the outputs and competencies, there will be a continuum of options to choose from. On the relatively inexpensive end of the continuum, you can facilitate a deductive process using a card deck or generic output dictionary to efficiently and effectively identify the core outputs the leaders will need to produce to execute the business strategy. On the other end of the continuum, you can assemble a team of industrial/organizational psychologists or other skilled professionals to use a combination of interviews, observation, surveys, external benchmarking, and other data-gathering tools to produce the required outputs. There are numerous examples of best practice organizations that have used the full continuum of options to generate the list of their leader’s future outputs.

The same continuum of options is available to build the leadership competency model. Again, we have identified best practice organizations that achieved their success using any of the various approaches. Nevertheless, all had a leadership competency model as the foundation of their leadership development system. If you choose to develop a leadership model internally, we recommend using an experienced and effective facilitator, members of the leadership development council, and a competency dictionary or card deck (which represents a number of common competencies) as a starting point. The process typically unfolds as follows:

Step 1: Based on the previous identification of the leader’s future outputs, whittle the complete card deck or competency list (through a card sorting process) down to the core seven to ten competencies that the team concludes are the most critical in enabling leaders to deliver these outputs.

Step 2: Define the organization-specific knowledge, skills, and behaviors associated with each competency. This step ensures that the accompanying competency definitions and descriptors accurately capture how a superior performer exhibits that competency in the organization.

Step 3: Create a rating scale for each competency that distinguishes the various proficiency levels in which the competency is observed. The key in this step is to develop clear, specific, reliable, and one-dimensional behavior anchors to describe each point on the rating scale.

Step 4: Create a matrix worksheet. List the outputs (one output per row) in the far-left column and the competencies (one competency per column) across the top.

Step 5: Starting with the first competency, discuss with the team how critical this competency is to producing each of the outputs. Rate its criticality on a scale of 1 to 5, with (1 = unnecessary and 5 = critical). Repeat this process for each of the competencies identified.

Step 6: When the matrix is completed, each column should contain at least one 5, and each row should contain at least one 5. (If not, review the selected outputs or competencies and reconsider those choices.)

Step 7: Once you are confident that you have identified the competencies that are most critical to delivering the superior quality outputs required to execute the future business strategy, the final step is to graphically depict the competencies in a model that will be shared throughout the organization.

The future business strategy has been clarified and the corresponding leadership outputs and competencies that are required to successfully execute that strategy have now been identified. Next is conducting an accurate assessment of the organization’s current leadership capabilities.

Current Leadership Capability Analysis

The current leadership capability analysis evaluates the capabilities of the organization’s leaders against the identified future leadership requirements. The resulting assessment is used to identify the strengths and development opportunities that exist between the current leadership capabilities and those required in the future.

Typically organizations tend to focus their leadership assessment work at the level of individual leaders. They do this by designing or purchasing assessment tools that in the best practice organizations tie directly to the leadership competency model. Among the many individual leadership capability assessments are these:

• Multirater leadership assessments or 360-degree feedback assessments

• Personality, style, and motive assessments

• Specialized inventories (e.g., decision-making assessments, IQ/EQ tests, potential derailers)

• Assessment center data

• Internal observations and interviews with peers, managers, subordinates, customers, and relevant others

• Past performance reviews and appraisals

Although individual leadership competency assessments are an important component of the current leadership capability analysis, they should not be the only focus. A systemic approach to leadership development requires an analysis of leadership capability and performance from both an individual and an organizational perspective.

Best practice organizations use a variety of tools to analyze current organizational performance to inform their assessment of current leadership capability—for example:

• Culture assessments

• Employee satisfaction surveys

• Customer surveys

• Employee turnover and exit interview analysis

• Financial analysis of actual performance versus goals

• Aggregate utilization rates of development opportunities

• Impact analysis of developmental experiences versus results

A thorough and objective analysis of current leadership capability allows the leadership development council not only to identify the critical gaps that need to be closed through a well-integrated leadership development system, but also to highlight the shortfalls, if any, that the previous developmental experiences have produced in terms of improved results. The best practice organizations are constantly monitoring the return on investment of their leadership development tools and processes and the results that leaders produce. In addition, they work extremely hard to ensure that the other critical HR processes are aligned so that they are successful in accomplishing their overall objective of increasing the quantity and quality of existing and future leaders.

Leader Selection and Retention Tools and Processes

In order to efficiently and effectively develop the quantity and quality of the organization’s leadership cadre, best practice organizations ensure that their leader selection and retention tools and processes are fully aligned with their leadership development, performance, and succession management tools and processes.

The first step in this phase of the design is to identify which leadership competencies are easier and more cost effective to hire than to develop. Practitioners with experience in this domain recognize that although it is debatable as to whether certain competencies are innate and therefore cannot be developed, few (if any) would debate that those same competencies are acquired fastest and cheapest by hiring leaders who are already highly proficient. As a colleague once said, “You might be able to train a turkey to climb a tree, but why not just hire a squirrel?”

Although the distinctions made in the first step are important, the next step is to ensure that all key stakeholders in the hiring process are aware of the newly created or revised leadership competency model. This also implies that there must be a coordinated approach to support all stakeholders involved in the assessment of leader candidates against that competency model. To save time and money, we recommend using the same tools and processes that were developed or tailored in the assessment of the current leadership capability to inform leader selection decisions.

In addition to the organization’s own ...

Table of contents

• Table of Figures
• List of Tables
• Table of Exhibits
• Title Page
• Copyright Page
• Foreword
• Introduction
• PART ONE - DEFINING LEADERSHIP DEVELOPMENT
• PART TWO - BEST PRACTICES IN LEADERSHIP DEVELOPMENT
• APPENDIX: GLOBAL SURVEY—HOW ORGANIZATIONS PRACTICE LEADERSHIP
• SOURCES
• INDEX
• ABOUT THE EDITORS