Trends in Executive Development

Transcription

1 Trends in Executive Development 2016 A Benchmark Report Executive Summary

2 The Future Is Not What It Used To Be There are two things we can say with certainty about the future: it will be different, and it will be surprising at times. Now, more than ever, leaders are having to navigate the unfamiliar. There is a quickening pace of change and a rising tide of rapidly evolving conditions causing organizations to shorten their planning timelines or to add more and often costly options in order to adjust quickly as the landscape shifts. These rapidly evolving demands include everything from climate change to demography, shifting customer requirements and expectations, the rise of technology, globalization, new markets, and new attitudes toward work. Leaders must now operate in a way that inspires and engages people, while simultaneously addressing changing customer requirements and delivering results. And if that is not enough, all of this needs to be achieved with a sense of urgency, as the experienced leaders of the Baby Boomer generation continue to retire at a pace of 10,000 per day. This somewhat unnerving time of change is challenging most leaders to find new ways to lead their organizations and achieve sustained success. More and more leaders fundamentally believe that there is more that they don t know than what they do know about leading through the coming years. All of these circumstances have created a thirst for leadership. People need leadership and the diverse and escalating demands on leaders are reflected in 2016 Trends in Executive Development: A Benchmark Report. Our in-depth assessment is based on survey results from 466 organizations worldwide, with contributions from Presidents, Senior Vice Presidents, Chief Learning Officers, and Heads of Executive and Leadership Development. Creating a Powerful, Engaging Vision: Still #1 Respondents highlighted the ability to create a vision, convey it to others, and inspire and engage people around that vision as the single most important capability needed for the emerging generation of leaders. Executive and leadership development programs often focus on helping leaders develop or improve in these competencies. The development programs typically require leaders to invest significant time and energy to develop and hone their skills. In addition, this new learning must take place while the leader is continuing to fulfill his/her job responsibilities, meet customer demands, and deliver results. The leaders who master these competencies typically produce better results on almost every measure of effectiveness: financial, productivity, goal achievement, customer satisfaction, employee engagement, etc. This level of development is demanding. It takes hard work, but the payoff is significant. At the same time, there is a recognition that leaders must build and implement these and other capabilities in an unstable business environment; one that makes it difficult to see and steer a clear path to success with any certainty. This ability to navigate is a challenge and vital skillset not only for current but also for future generations of leaders. Indicating an ongoing trend, creating a compelling vision and engaging others around it also ranked as the #1 priority for leaders in the 2014 Trends Report, second in 2012, and third in 2010.

3 A Disconnect Exists Between the Priority (Visioning) and Reality Although creating a compelling vision and engaging others around it remain the most important skills for next generation leaders, when it comes to setting priorities for development programs, these skills were not prioritized at the same level of importance. In fact, among Top Priorities in Executive Education in the next 2 3 years, it ranked #5, and among Hot Topics in Executive Education in the next 2 3 years, it ranked #25. The level of importance doesn t correlate with the level of priority. This disconnect may be created when senior executives who view the organizational needs broadly clash with the more focused leadership priorities identified by those over executive development. As each organization benchmarks itself against the current trends, this information can help inform the decisions that need to be made concerning what is being prioritized, why, and whether priorities should change or broaden. Given the continuing appearance of visioning at number 1, 2, and 3 over eight consecutive years, an emphasis on developing these skills may need to take priority going forward. Creating a vision and engaging others around that vision is one of the most important and hence, most difficult CEO challenges. The engagement around a vision does not happen in a vacuum, but only within the context of a defined and widely understood culture. Creating culture is hard work and takes time. Without adequately understanding the culture, a leader is challenged to be able speak to the heart of the Company. Creating a vision that engages is much more than finding the right tagline. It must not only be aspirational but also speak to the passions and aspirations of the workforce. This is particularly applicable to the younger generations who engage around the notion of providing a benefit to society or in some way improving the lives of the customer. Leadership is personal, as is engagement. These skills are not innate. Organizations must invest in developing leaders who can set a vision, create the right culture, and engage the employees around the vision. Peter B. Delaney President and Chief Executive Officer, Enable Midstream; Retired Chairman and CEO, OGE Energy Corporation

4 Customers Changing Requirements In this year s Trends survey customers changing requirements are increasingly influential in the way they are shaping executive development activities, moving up in significance from the 2014 Trends Report from #4 to #2. Additionally, for the first time reflected in Trends data, executives plan to address customer focus as one of the top priorities in executive education. Noticeably, addressing customer needs and focusing on customers is top of mind for these executives. Given its appearance near the top of both the influence and hot topics rankings, executive development leaders are very likely to be searching for creative ways to ensure development efforts focus on meeting customers changing requirements. Preparedness for a VUCA World Leading in a world that is Volatile, Uncertain, Complex, and Ambiguous (VUCA) not only provides a challenging operating environment for both leaders and executive development programs to have an impact, but also requires a much-needed range of new and different capabilities in order to succeed. In particular, leaders today must deal with: l l l l Volatility in economic conditions, including a slowly recovering economy and looming interest rate increases, and changing customer requirements. Uncertainty brought about by increasing globalization, as well as regulatory and legislative changes. Complexity driven by revolutionary technology changes impacting organizational products and ongoing demand for increased innovation amidst a climate of rapid technological evolution. Ambiguity brought about by the generational shift accompanied by Baby Boomer retirements and Next Gen Leaders rising to take more and more senior roles. All of these factors combine to create an extremely dynamic climate that puts pressure on leaders to excel. VUCA: What It Means And Why It Matters VUCA is an acronym that emerged from the military in the 1990s. It describes the fog of war the chaotic conditions that are encountered on a modern battlefield. Its relevance to leaders in business is clear, as these conditions are highly descriptive of the environment in which business is conducted every day. Leadership as usual, including creating a vision, is not enough in a VUCA world. Volatile: Things change unpredictably, suddenly, extremely, especially for the worse. Uncertain: Important information is not known or definite; doubtful, unclear about the present situation and future outcomes; not able to be relied upon. Complex: Many different and connected parts: multiple key decision factors, interaction between diverse agents, emergence, adaptation, co-evolution, weak signals. Ambiguous: Open to more than one interpretation; the meaning of an event can be understood in different ways. In a VUCA world what is needed is Cognitive Readiness: the preparedness and agility to handle the situation at hand and still prevail.

5 Cognitive Readiness Chief among the new VUCA-related competencies that leaders need to develop is a high level of Cognitive Readiness, which is the mental, emotional, and interpersonal preparedness for uncertainty and risk. Critical Thinking, the more common and tactical of the thinking skills, involves strategic thinking, creative thinking, problem-solving, and decision-making. It has been a hot topic for the past six years. This is the first year that respondents also identified the importance of developing Cognitive Readiness in order to be able to effectively think critically. Organizations are prioritizing Cognitive Readiness as the #3 priority for 2016 executive development programs. This may reflect recognition of its importance for current and emerging leaders and a serious commitment to developing these mental capabilities, or it may simply reflect curiosity about the latest leadership development topic and a desire to avoid being left behind. Either way, two issues are present. First, organizations will need to think creatively about the processes they employ to accelerate the development of Cognitive Readiness in High Potential Leaders. Second, organizations may want to explain why, in practice, Cognitive Readiness is important to their success and then define in much greater depth their expectations of perspective. Critical Thinking vs. Cognitive Readiness Traditional Critical Thinking is the ability to recognize assumptions, evaluate arguments and draw conclusions. The mental tool set typically includes the following: strategic thinking, creative thinking, problem-solving and decision-making. Cognitive Readiness, on the other hand, is the mental, emotional, and interpersonal preparedness for uncertainty and risk. It complements Critical Thinking by emphasizing non-rational, non-logical skills. It is tool set typically includes: situational awareness, attentional control, metacognition (thinking about your thinking), sensemaking (connecting the dots), intuition, learning agility, adaptability, dealing with ambiguity, and managing emotions. Overall, heightened Cognitive Readiness allows leaders to maintain a better sense of self-control in stressful situations.

6 Lack of Bench Strength From , lack of bench strength (have leaders who are prepared, skilled, and ready to stop into key positions as needed) was in the top five of the most influential internal and external factors driving executive development. In 2015, lack of bench strength was rated as the #6 influencer on executive development, yet it was rated as the #13 key priority for executive development. As with vision, the situation with a lack of bench strength suggests that some issues are being recognized as major influences on business and leadership, but these issues are not being addressed at the same level of importance. Additionally, while 48% of survey respondents noted that their leadership talent pipeline was Stronger, 49% said their pipeline was About the Same or Weaker. When we look at the overall picture, we can identify two possibilities for the slow progress to bridge the bench strength gap: l One, the demographics are not in our favor as the Boomers exit and Gen Xers move up because there is a math problem. There are 11% fewer Gen Xers than there are Baby Boomers, so there are just not as many people to choose from as there were for the Boomers. Not to worry though, it won t be long until the massive Gen Y generation gives the Xers a push or a little healthy competition for the suite seats. l Two, senior executives are not convinced that bench strength is at the foundation of organizational success. Progress may be made in this area as executive development professionals educate senior executives on the trends, the current state of their organization, and work together to establish bench strength targets as key business objectives. A Holistic Approach Many of the organizations surveyed for this Trends Report appear to be aware of the importance of some of these individual skills and indicated they have plans to address them. But like the blind men who, when asked to describe an elephant, resorted to describing the bits and pieces of the elephant they could touch and feel, many have not yet connected the dots and become aware that it is an elephant a much larger, more complex beast than they initially thought, and one that requires different care and feeding than what they have been providing to date.

7 What Can Be Done Executives who participated in this study reported that the development activities for the next generation of leaders are most likely to include mentoring and developmental job assignments. Other development activities noted were assessment and feedback, executive coaching, and customized training programs developed by internal staff. All of these activities have strong developmental value as components of an overall executive leadership development strategy. However, as noted in the 2014 Trends Report, they do not specifically focus on teaching leaders how to create a vision and engage others around it. Additionally, it is unlikely that these activities target the Cognitive Readiness skills needed for sustained success and effectiveness in a VUCA environment. As previously advocated in the 2014 Trends Report, several development approaches are effective for enabling high potential leaders to create a vision and engage others around it, when used in combination. These approaches include: coaching and mentoring, training, tapping the vision of Gen Y, and changing the culture. These remain the recommended approaches today, and the challenges they will have to deal with in the future include recognizing the impact of VUCA and developing the Cognitive Readiness skillset needed to lead effectively in that environment. Global Implications: From the 2016 Trends Survey results, it is evident that conventional leadership development practices are no longer adequate. Organizations globally need to incorporate the next generation leadership competencies in order to address the development needs of their rising leaders. This expanded group of upcoming leaders need to have a broader skillset, one that equips them to think and act globally in a VUCA business environment. They must do so while embracing cross-cultural diversity and cultivating collaborative relationships within and outside their walls. These are the hallmarks of the mindset needed to develop effective global leaders. Professor Sattar Bawany Managing Director, Asia Pacific Executive Development Associates (EDA)

8 Recommended actions: Ensure the career paths of all high potential leaders require a job experience directly involved with customers and the marketplace, such as sales management, marketing, or some other position with direct customer contact (and ideally in more than one part of the business). Put more emphasis on ensuring that young leaders who already have customerrelated experience are included in the high potential development program/process to accelerate their development, and are also moved into other parts of the business where that customer experience is most important/valuable. James F. Bolt Founder, Executive Development Associates, and Co-Founder, FRED Leadership (Selected by the Financial Times as one of the top experts in executive/leadership development) Career Development for High Potential Leaders Because customers changing requirements are so significant and customer focus is a hot topic, investing an appropriate amount of time, energy, and other resources to develop the capabilities of high potential leaders in these areas will be very important. Programs can use marketplace trends such as integrated customer solutions as an opportunity for customer-centric learning and innovation. Likely development activities are action learning combined with creative thinking sessions that offer both career development and the potential to deliver real and meaningful business results thus capturing the attention of senior executives. This in combination with a systemic approach to proactive career pathing for the high potentials will provide these up-andcomers with both the focus and exposure necessary for advancing. Training Executive and leadership training programs may be strengthened, broadened and deepened to include inspiring and engaging others, as well as Cognitive Readiness and Critical Thinking skills. These capabilities can be addressed by incorporating specific activities and exercises designed to increase awareness of their impact and importance in familiar techniques, such as case studies or applicable business simulations. Additionally, opportunities for application and practice can be provided in experiencebased approaches where participants work to apply the concepts and skills directly to real business issues, while colleagues and facilitators provide feedback based on behaviors they observed during their work together.

9 Action Learning and Structured Facilitation Action learning provides an ideal setting for practicing new skills in a relatively safe environment. When faced with one s own failure to learn from experience or to handle ambiguity in a live interaction with colleagues (and when feedback from colleagues makes it clear that it was noticed), leaders are more likely to identify and prioritize those needs for further development in these areas than if they are directed to work on it in a classroom setting. With Action Learning, the learning comes directly through subject matter experts and discovery as the new skills are practiced in a protected environment that simulates a real life business scenario. Structured, facilitated reflection also significantly enhances participants awareness of their own behaviors followed by providing feedback to their colleagues on what they have observed to further reinforce what the skills look like in real life. Another option is to have participants work in small breakout groups to create a vision for their department or product, while applying the skills of situational awareness, attentional control, and sensemaking, thus integrating and broadening their perspective. Finally, participants could stress test their approaches and draft visions from a customer perspective, and attempt to inspire and engage customers in the vision in a role play/ skill practice scenario. Mentoring and Coaching The skills of creating a vision and engaging others around it can be developed through mentoring and coaching. The hands-on approach of mentoring can enable leaders to observe what someone who has mastered these important skills does, and to solicit advice, input, and coaching on how to transfer what they have observed into their own work. It may be more challenging to find a mentor who also has highly developed Cognitive Readiness skills, so being mindful of the mentor s skill set will be a key factor to achieving success. Executive coaching also has significant potential for developing leaders capabilities around creating a vision, engaging others around it, and the Cognitive Readiness skills needed to succeed in a VUCA environment. This type of coaching could focus on all of the skills in an integrated manner. The executives, human resources partners, mentors, coaches, and others involved in the development program can agree on specific goals, and the effort should be followed by regular meetings to discuss progress.

10 Deliberate Practice Executive and leadership development programs may want to adopt and integrate the concept of deliberate practice into their developmental suite of techniques. Deliberate practice means just that. If you want to become credible or potentially great at anything, it takes a lot of practice. Not just any practice, but the kind of practice that is focused on improving the skill, like a golfer who hits from the driving range for hours trying to get the perfect swing, the perfect stance, the perfect follow-through. It is a personal commitment to excellence, to perform at the highest level possible and to continuously improve. Executives and those aspiring to be executives probably need to spend more time deliberately practicing their vision and influencing skills rather than their golf skills, though a case could be made for integrating the two. Deliberate practice as a development activity for the current trends could include devising structured, pragmatic ways to help leaders practice creating a vision and engaging employees and customers around it. Doing so is likely to have a direct impact on how quickly they acquire expertise and improve results for the organization. The 2016 Trends in Executive Development Report highlights how these issues and trends have emerged and are progressing over time. In addition, the report has been written to help you benchmark your organization, as well as evaluate and enhance your own executive development activities. The world needs exemplary leaders. It needs them in families, schools, communities, corporations, government agencies, NGOs, non-profits in all types of organizations. It needs them at all levels and in all functions. And it needs them now more than ever. That is one of the major lessons learned from reading the newest 2016 Trends in Executive Development Report from Executive Development Associates. I ve relied upon this study to guide the leadership development work that I ve done ever since it was first released, and I look forward to its publication every other year. It s insightful, reliable, and practical an invaluable resource. I highly recommend that you take it to heart. Jim Kouzes Coauthor of The Leadership Challenge and the Dean s Executive Fellow of Leadership, Leavey School of Business, Santa Clara University

11 About Us The Authors Bonnie Hagemann, M.Ed. C-Suite Coach and CEO of Executive Development Associates (EDA), a global leadership consulting firm that specializes in custom executive development, C-Suite and executive coaching, high potential development, and succession planning. To date, Bonnie Hagemann has coached 11 high-level CEOs, 225+ additional leaders, delivered over 300 presentations, published over 30 articles and research papers and one book, Decades of Differences: Making It Work. She is often called upon by respected media outlets as a leadership subject matter expert and quoted in publications including Forbes, Fast Company, The Wall Street Journal, The Economist, CNN, Career Builder, U.S. Business Review, Human Resource Executive, U.S. News and World Report, and Investor s Business Daily. Heather Ishikawa, M.A. National Director for Pearson TalentLens, a leading publisher of scientific assessments and personnel development programs used globally to hire and develop 21st century leaders. Heather Ishikawa is known throughout the training and development industry for her extensive knowledge of leadership and management development, behavioral performance, talent assessment, and online training. She has delivered workshops to hundreds of leaders on the topics of Critical Thinking, leadership, team building, communication, and change management. She is also the co-author of the book, Now You re Thinking!, published by FTPress (2009). Professor Sattar Bawany, EMBA Managing Director as well as C-Suite Master Executive Coach with Executive Development Associates (EDA) Asia Pacific. Professor Sattar Bawany has over 30 years of international business management experience and has assumed various senior management roles including that of Managing Director and Talent Management & Executive Coaching Practice Leader for DBM & Business Leader for Mercer HR Consulting, The Hay Group and The Forum Corporation. He is currently Adjunct Professor with Curtin Graduate School of Business (CGSB) and member of the International Advisory Board of Curtin Business School, Curtin University, Western Australia. Professor Bawany is an astute advisor to executives who need to know how they are perceived and want to focus on what is most important in their professional and personal lives. He has coached a range of leaders, from CEOs, to senior vice presidents, and high potential managers. His current work in organizations focuses on encouraging individual initiative and leadership from a systemic perspective in order to achieve clearly defined business results. His specialty is effectively linking people processes to business outcomes.

12 About Us Louise Korver, Ph.D. Executive development practitioner, certified assessor, and coach with Executive Development Associates (EDA). Dr. Louise Korver brings to her executive coaching work experience across multiple industries with views informed by her distinguished career as head of global enterprise executive development at Bank of America, EMC Corporation, and AT&T. She coaches a range of leaders, from CEOs to Senior Vice Presidents and high potential Vice Presidents, and has a specialty in coaching high potential women and global leaders. She is a graduate of the executive programs at both Harvard Business School and Wharton, and has a doctorate in Human & Organizational Development. She has served on the boards of Aresty Institute (Wharton), chaired the Executive Coaching and Leadership Development committees of the Conference Board, and served on the advisory board of the Human Capital Institute. She is a Judge for the Chief Learning Officer Magazine Learning in Practice and Learning Elite awards, serves on their Business Intelligence Board, and is a frequent guest speaker at their conferences, and contributing author to the magazine. She serves as a Gold Award judge for the Girl Scouts (Eagle Scout for girls) to help shape the next generation of female leaders. Steve Terrell, Ed.D. Executive leadership development consultant with 30 years of experience in improving organizational and human performance. Dr. Steve Terrell possesses deep and broad capabilities in virtually all aspects of executive leadership development, and has held significant, senior-level roles in a range of Fortune 500 organizations, as both an internal and external consultant. He works with clients to build leadership capabilities needed to execute strategy and achieve organizational transformation. He designs, develops, and implements high-impact leadership development programs and processes that produce lasting individual and organizational growth and change. Steve is a trusted practitioner with deep knowledge of leadership development who also advises internal executive/ leadership development professionals on the development of development strategies, curricula, and programs.

13 About Us EDA, Pearson TalentLens, and PAN Executive Development Associates is a leader in creating custom-designed executive development strategies, systems, and programs that help organizations build the capabilities needed to achieve their strategic objectives. Our specialty areas include: l C-Suite and Executive Coaching l Executive and High Potential Development l Executive Assessment l Succession Planning EDA leads the way in the use of executive development to help organizations successfully address their marketplace challenges and accelerate the execution of their business strategy. With our proven ability to achieve results, we create measurable improvements in both individual executive performance and business outcomes. Executive Development Associates toll-free 866.EXEC.DEV ( ) 4 NE 10th, #171 phone Oklahoma City, OK fax USA info@executivedevelopment.com executivedevelopment.com Pearson TalentLens publishes scientific assessments that are used globally to hire and develop the 21st century workforce. Our instruments measure Critical Thinking, problem solving, and a range of job skills to deliver data-driven insights that inform and clarify an organization s human capital decisions. Pearson TalentLens phone Bulverde Road fax San Antonio, TX TalentLens.com USA Performance Assessment Network (PAN) is the talent measurement platform built for the new world of work. Flexible, on demand, and configured to be as unique as your jobs. With content from 50+ publishers just a click away, you get the world s best talent assessments & technology in one platform so you can create the perfect hiring or development process in less time, at less cost, with greater results. Performance Assessment Network (PAN) phone North Meridian Street, Suite 200 fax Carmel, IN info@panpowered.com USA PanPowered.com

14 How to Obtain This Research Additional copies of the full industry report are available for purchase at We will be presenting highlights of this research via webinars and other events throughout the coming year. For more information, please contact Executive Development Associates at (866) EXEC DEV. A collaborative effort by: