Developing the Next Generation:

Transcription

1 Developing the Next Generation: Investigating Key Success Factors of Leadership Development Programs Prepared by Michael Murphy, MBA Candidate 14 under the supervision of Dr. Chris MacDonald (June 2014)!

2 Executive!Summary! As demographics shift and executives plan retirement over the next fifteen years, a new generation of leaders will be asked to take the reins. Global survey data suggests that only a small percentage of companies are making adequate preparations to fill the leadership pipeline for the future. This report uses thematic analysis to identify the key success factors that companies can implement to design and execute more effective leadership development programs to train future leaders. The five key success factors feed into a larger framework for program components that focus on candidates relationships, experiences and competencies, reinforcing the company s overall business strategy. The top factor emerging from this analysis is that any program should have a strong foundation in situated learning or on-the-job experiential application of theoretical knowledge. Next, the relevant literature emphasizes the importance of coaching and mentoring as a way for candidates to receive and share advice as well as critical feedback throughout their development. Third, many authors pointed to the need for an improved process for identifying high potentials in ways that were not based on past successes, and suggested that failure to do so often doomed programs no matter what the later components comprised. The final two success factors connect back to the idea of development as a catalyst from organizational culture that will ultimately feed back into the company s business strategy. Where the first three success factors focused heavily on relationships, experiences and competencies, the final two highlighted effective programs that align closely with the firm strategy and cultural environment. 2

3 Table!of!Contents! Executive Summary... 2! Table of Contents... 3! Introduction... 4! Methodology... 5! Overview of Findings... 6! Key Factors... 7! 1. Situated Learning... 7! 2. Mentoring Relationships... 8! 3. Smarter Identification of High Potentials... 9! 4. Rooted in Organizational Culture... 10! 5. Feed into the Business Strategy... 11! Conclusion & Identification of Future Research Areas... 12! Works Cited... 13!!! 3

4 Introduction! Q: What happens if we invest in developing our people and then they leave us? A: What happens if we don t, and they stay? This scenario shared on LinkedIn provides the perfect counterargument to companies that aren t developing their high potentials. It seems to have gained traction as a meme on that popular professional networking site because members have heard similar complaints about costly talent drain coming from executives or managers. Conversations regarding the necessity of developing employees with leadership potential are increasingly important as workforce demographics head toward a major upheaval. Best estimates suggest that by 2030 millennials will represent 75% of the North American workforce, as the bulk of baby boomers reach retirement age over the next decade and a half (Mitchell, 2013). This wild swing of the pendulum will leave companies scrambling to fill executive and managerial roles with experienced and qualified replacements. In fact, Deloitte s 2014 report on Global Human Capital Trends cites leadership development as the most urgent need based on its worldwide survey of over 2500 business leaders in over 90 countries. Demographic shifts are not the only reason cited for the increased demand for quality leadership. This continuous need for new and better leaders has accelerated. In a world where knowledge doubles every year and skills have a half-life of 2.5 to 5 years, leaders need constant development (Deloitte, 2014). Leaders are being asked not only to keep pace with technological innovations but also to set the tone for ethical decision-making, socially responsible corporate practices, and an engaging organizational culture. With all of these demands, the need to develop and nurture new high-potential leaders has never been greater. Recognizing this, many firms have started the conversation about how to better develop leadership talent. Before the development process can begin, companies need to assess the readiness of their leadership pipeline. Of the companies interviewed by Deloitte, only 12% of non-hr business leaders feel confident that their company is ready to handle its future leadership needs, as illustrated below in Figure 1. 4

5 Figure 1. Business and HR Leaders perceptions of readiness for leadership gap (Deloitte, 2014). Companies that feel they are unprepared to meet the leadership gap would benefit from knowing what factors are most critical when creating a leadership development program. Through an examination of academic and industry literature on this topic, a thematic analysis was undertaken to categorize the common themes that emerge concerning effective development programs. That analysis aimed to answer the overarching research question: what are the most commonly identified key success factors for a corporate leadership development program? Methodology! Thematic analysis was used to survey over 25 different peer-reviewed journal articles, trade reports and industry publications to better understand the core elements of successful leadership programs. Thematic analysis was chosen as a methodology because it offers an accessible and theoretically-flexible approach to analysing qualitative data (Braun & Clark, 2006). The documents examined were chosen after a much more exhaustive survey of the general leadership field. Some were chosen because they are seminal and often-cited works, while others were chosen from alternative sources to add heterogeneity to the research sample for a more robust set of perspectives. Articles that were tangentially relevant but did not specifically address key success factors were discarded, leaving 15 relevant publications for analysis. Themes were tagged for frequency and given a weighting to represent the relative importance of that factor. For instance, if an author identified three must-haves for a leadership development program, each factor would receive the maximum weighting of +++, whereas an author who gave a top ten list would receive one + for each listed theme, to a maximum of ten possible points. Other conventions to allocate weighting were if an author ranked a list of factors 5

6 from most to least important they were allocated a declining rating, and when an author presented a central thesis with corollaries to support it, the thesis was given heavier weighting than the supporting points. Though thematic analysis is by its nature a very subjective process, this analysis was conducted by one researcher over a concentrated timeframe to apply as much rigour and consistency to the evaluation and weightings as possible. This methodology is rough and subject to the researcher s own biases, both in selection of material and analysis of themes. Despite its roughness, this method is useful and adequate for purposes of identifying recurring themes and commonalities. Overview!of!Findings! Paul Yost and Mary Mannion-Plunkett are authors of Real Time Leadership Development (2009), a fairly comprehensive overview of the leadership development field. The following year, the same authors published a paper (which was included in the present thematic analysis) that describes specific qualities they believe are integral to a development program. But their book provides a helpful framework for thinking about the success factors that emerge. Yost and Mannion-Plunkett argue that it is important to begin with the organization s business strategy at the core of any program, and from that starting point include a balanced mix of relationships, experiences and competencies to produce a successful development program. This lens composed of relationships, experiences and competencies successfully captures the broad strokes of the key success factors that emerged from the thematic analysis survey. The thematic analysis showed a strong cluster of themes each of which appeared in four or more articles and a wider array of less frequent factors that only appeared in one or two papers. The top themes in order of both frequency and weighting are that a development program should focus on. They are: situated/experiential learning, mentoring relationships, better identification of high potentials, establishing roots in the whole organization s culture, and connecting back to the firm s business strategy. The full analysis is summarized 6

7 below in Figure 2. Effective(leadership(development(should Browne'Ferrigno+&+Muth,+2006 Buckingham,+2012 Conger+&+Fulmer,+2003 Day,+2001 Deloitte,+2010 Fernandez'Araoz+et+al,+2011 Goleman+et+al,+2013 Kouzes+&+Posner,+2006 McCall,+2010 Pemick,+2001 Ready+&+Conger,+2003 Silzer+&+Church,+2009 Solansky,+2010 Yost+&+Plunkett,+2010 FREQUENCY WEIGHT involve+situated+learning focus+on+mentoring+relationships focus+on+how+to+better+identify+high+potentials involve+the+whole+organization+&+culture link+initiatives+to+cross'organizational+strategy be+an+ongoing+process+not+single+instance,+consistent measure+progress+regularly/measure+the+right+things have+dynamic+and+adaptive+curriculum assess+candidate+skills+at+the+outset give+candidates+visibility,+recognition+&+promotions make+the+process+transparent+for+employees rotate+people+jobs+that+match+goals+w/+experience begin+developing+leaders+for+key+positions+early+on identify+education+outcomes+before+beginning delegate+authority+to+increase+individ.+accountability change+the+language/attitudes+org.+uses+around+leadership include+personal+reflection+by+the+candidate have+a+formal+learning+element balance+the+technical,+conceptual+&+interpersonal be+formed+around+candidate+development+plans Figure 2. Summary of thematic analysis frequency and weighting Key!Factors! The top factors each appeared in at least four of the articles under consideration. They are explained in detail below to illustrate how they fit together in the leadership development process. 1.!Situated!Learning! Situated learning appeared in six of the works under consideration. For four of those authors, situated or experiential learning topped the scale in terms of weighting. McCall suggests that, To the extent it is learned, leadership is learned from experience (2010). He observes that in studies looking at leadership success, only 30% of candidates success can be predicted through heredity or personality and that 70% of success is determined by the breadth of leadership candidates experiences and the quality of those experiences. For McCall, this is the only element worth looking at from a training perspective and 7

8 every other suggestion he puts forward is in support of the immense importance of situated learning. Deloitte places similar emphasis on situational learning. According to Deloitte, 70% of the program is focused on on-the-job experiential and activity-based learning; 20% on mentoring, coaching, and performance feedback; and the remaining 10% on formal learning programs (2010). Both Deloitte and McCall cite experiential learning as overwhelmingly dominant in its strategic importance to development programs. Approaching the concept from the perspective of training future school principals, Browne-Ferrigno and Muth also see experiential learning as connected to the development of formal competencies: Situated learning places aspiring school leaders in authentic situations, under the guidance of leadership mentors, where they can apply theories, procedures and skills learned in classroom (2006). Ready and Conger offer specific instances of how experiential learning has proved invaluable within IBM s high potential training program. Examples of critical leadership skills learned on the job include managing a turnaround, initiating a startup, managing cultural diversity and executing cross-border partnerships (2003). The variety of experiences as described at IBM speaks to the breadth that McCall also emphasizes in his work. It may seem obvious to state that to become a strong leader, a candidate must be able to practice the craft and skills of leadership. However, many programs fail to connect theoretical learning with day-to-day business practices. The aforementioned authors emphasize that experiential learning is a crucial component to achieving success. 2.!Mentoring!Relationships! The next most common success factor cited in this literature was the importance of mentoring or coaching relationships as part of any effective development program. 8

9 In her 2010 study of the importance of mentoring, Solansky tracked participants over the course of a leadership training program, evaluating candidates before and after in order to measure their progress. She found that both the amount of coaching time and number of contact points or mentor/mentee interactions had positive and statistically significant effects on candidates development program outcomes. Kouzes and Posner, whose book The Leadership Challenge is a popular handbook for would-be leaders, emphasize monthly coaching opportunities between a mentor and a mentee. According to these authors, such consistent touch points nurture the honest relationship and foster a safe relationship for frank feedback. To stay honest with themselves, what leaders need are loving critics people who care deeply enough to give honest feedback. The problem, as shown by research, is that most leaders don t want honest feedback, don t ask for it, and don t get much of it (2006). Kouzes and Posner also note that being a coach is an excellent way for the mentor to reinforce their own learning as they impart knowledge and advice to the mentee. The mentoring relationship should not end at the conclusion of a development program either, suggest Browne-Ferrigno and Muth. Lifelong mentoring requires relationships that are explored and reconstructed for new understanding (2006). In essence, the mentee should eventually take on new recruits and transition into a coaching role to close the feedback loop. 3.!Smarter!Identification!of!High!Potentials! Of all of the key success factors that emerged as most common, the improved identification of high potentials seems the least intuitively connected to the rest of the factors at play. At its core, the idea connects back to Yost and Plunkett s concept of capabilities or as Conger and Fulmer put it, getting the person with the right skills in the right place (2003). Silzer and Church point out that failing to invest in this process up front can be problematic for the subsequent steps of the program. In essence, their suggestion is that with poorly selected inputs (e.g., whomever has curried favour with management), leadership programs cannot succeed in producing effective 9

10 leaders. Silzer and Church argue that an objective approach to identifying potential is the key to program success: The prediction process is not matching an individual to specific known positions and responsibilities but rather predicting how much potential an individual has, with additional growth and development, to be a candidate in the future for a group of possible positions (2009). Fernández-Aráoz et al. agree that too often past successes in job functions are taken as strong predictors of future potential performance. He and his colleagues claim that how an employee tackles problems trumps the outcomes. Approaches that put long-term firm health ahead of short-term gains display better characteristics of leadership potential as well as interpersonal skill. The desire to have a positive impact on others for the good of the organization, they argue, is a key predictor of executive potential (2011). As much as the first two factors have focused on relationships and experiences, this third factor emphasizes the need for candidates to come to the process with the right capabilities, ones that can be grown and shaped accordingly. 4.!Rooted!in!Organizational!Culture! Daniel Goleman is the leadership guru behind the popular concept of emotional intelligence as a characteristic of successful leaders. But in addressing the process by which leaders can cultivate that emotional intelligence, he and his colleagues describe an ideal program as one that is deeply intertwined with an organization s culture. Goleman explains that if a program attempts to change an individual without changing the working conditions that person operates in on a daily basis, then that individual cannot hope to succeed. A program cannot be effective if it ignores the real state of the organization, assuming that if people learn what they should do and be, systems and culture will automatically support them in the change process (Goleman et al., 2013). Ready and Conger highlight a different problem with not building a leadership program on a strong foundation of organizational culture. They cite companies 10

11 who try to implement cookie cutter leadership development programs or out-ofthe-box solutions that may not be aligned to that specific organization s cultural values, nor to the pertinent business problems that company is facing. Firms can align their programs with company culture, by securing top team commitment, line management engagement and first-rate professional staff support in a system of shared ownership and accountability (2003). Ready and Conger suggest that embedding programs into the fabric of the organization positions them for better long-term and sustainable success. 5.!Feed!into!the!Business!Strategy! In Yost and Plunkett s overarching model, business strategy is the raison d etre for any successful program. If grounding the program in the organization s culture represents the beginning of the cycle, this fifth success factor that the program should drive and align with business strategy is the closing of the cycle and a completion of the development loop within the organization. The LDP [leadership development program] should fit within the organizations strategic goals, notes Pemick. Organizational directions determine current and future leadership needs. The succession plan ensures an adequate supply of capable leaders is available to carry out strategic intent throughout the organization (2001). For a more tangible explanation of what that means in practice, Fernández- Aráoz et al. suggest that A firm focused on emerging markets needs flexible people who can handle the unfamiliar; a low-cost firm needs disciplined people (2011). The development program should be geared to producing the kind of leaders that an organization needs. For instance, producing innovation-centric leaders in a non-innovative business environment would both frustrate the individuals and be grossly misaligned with the business goals. Day (2001) points out that this approach dovetails nicely with situated learning by linking initiatives across organizational levels and in terms of an overall development purpose within the context of a strategic business challenge. As might be expected, many of the authors discussed here connect elements of 11

12 each success factor to one another, describing a process whereby all of the pieces fit together for greater efficacy. Conclusion!&!Identification!of!Future!Research!Areas! The five key success factors that emerged from a thematic analysis of the leadership literature represent a balanced approach to designing and executing leadership training programs. The literature makes clear that none of these factors can operate in isolation. Companies must embark on creating a leadership program by beginning with a strong foundation and giving careful consideration to candidates capabilities, mentoring relationships and the desired experiential learning outcomes. Future research in this field could explore a number of possible directions. By no means was this thematic analysis exhaustive a larger sample of literature that is more global in focus could provide insightful context if these same success factors are found to be salient in other regions of the world. As well, though subjects such as mentoring were identified as key within this context, no consideration was given to the different tactics within a mentoring program that specifically contribute to candidates success. The same holds true for differing types of situational learning: are simulations of experiences as effective as actual on-the-job dilemmas? Finally, the focus of most literature in the field is on leadership development in a work environment. Additional research would be helpful to understand if these same success factors hold true in an academic environment, specifically for business school students. But luckily, interest in the area of leadership studies on the part of both scholars and business authors appears to be holding steady. Hopefully the literature in the field will help companies to better plan and execute leadership development programs to meet their ever-evolving workforce needs. 12

13 Works!Cited! Braun, V., & Clarke, V. (2006). Using thematic analysis in psychology. Qualitative research in psychology, 3(2), Browne-Ferrigno, T., & Muth, R. (2006). Leadership mentoring and situated learning: Catalysts for principalship readiness and lifelong mentoring. Mentoring & Tutoring, 14(3), Conger, J. A., & Fulmer, R. M. (2003). Developing your leadership pipeline. Harvard business review, 81(12), Day, D. V. (2001). Leadership development:: A review in context. The Leadership Quarterly, 11(4), Deloitte LLP & Bersin by Deloitte. (2014). Global Human Capital Trends 2014: Engaging the 21st-century workforce. Insight Report. Retrieved from Deloitte LLP. (2010). The new business imperative: Seven trends in leadership development. Insight Report. Retrieved from Fernandez-Araoz, C., Groysberg, B., & Nohria, N. (2011). How to hang on to your high potentials. Harvard Business Review, 89(10), Goleman, D., Boyatzis, R., & McKee, A. (2013). Primal Leadership: Unleashing the Power of Emotional Intelligence. Harvard Business Press. Kouzes, J. M., & Posner, B. Z. (2006). The leadership challenge (Vol. 3). John Wiley & Sons. McCall, M. W. (2010). Recasting leadership development. Industrial and Organizational Psychology, 3(1), Mitchell, A. (August 15, 2013). The Rise of the Millennial Workforce. Wired Magazine. Retrieved from Pernick, R. (2001). Creating a leadership development program: Nine essential tasks. Public Personnel Management, 30(4),

14 Ready, D. A., & Conger, J. A. (2003). Why leadership development efforts fail. MIT Sloan Management Review. Silzer, R., & Church, A. H. (2009). The pearls and perils of identifying potential. Industrial and Organizational Psychology, 2(4), Solansky, S. T. (2010). The evaluation of two key leadership development program components: leadership skills assessment and leadership mentoring. The Leadership Quarterly, 21(4), Yost, P. R., & Plunkett, M. M. (2009). Real Time Leadership Development. (Vol. 38). John Wiley & Sons. Yost, P. R., & Plunkett, M. M. (2010). Ten Catalysts to Spark On-the-Job Development in Your Organization. Industrial and Organizational Psychology,3(1),