Monday, March 5, 2012

Maximizing Returns on Leadership...Competencies That Drive Growth

Greetings,

Many of us are looking for the magic answer to propelling our organization's business strategy. While we all recognize the importance of leadership and talent to that endeavor, we sometimes struggle to identify what we need to do to execute business strategy.

Research by the Corporate Leadership Council titled "Improving Returns on Leadership Investments" identified three places to focus on improving returns. This included:

1. Disconnected Strategy: Leadership Strategy is Not Integrated with Business Strategy
2. Misaligned Outcomes: Leadership Outcomes and Metrics Are Not Connected with Business Outcomes
3. Uncoordinated HR Activities: Leadership Activities are Not Integrated with Other HR Activities

At a high level...these are excellent approaches to improving returns on investment in leadership development activities. I have leveraged these approaches and still believe in their benefits in my new organization. These also align well with the Center for Creative Leadership's think piece on "Developing a Leadership Strategy."

Yet...while these high level pieces help align our thoughts...we have been missing something. What depth and breadth of leadership we need to drive growth?

Enter an interesting study from McKinsey&Company and Egon Zehnder, an executive search and consulting firm, titled "Return on Leadership - Competencies That Drive Growth." In the think piece, McKinsey and Egon Zehnder attempt to answer the following questions...

"There is little doubt that leadership quality is a key determinant of a company’s growth, but the specifics are frustratingly elusive. What matters more – analytics or people leadership? Is growth driven by a small group of stars or a broad leadership cadre? Should executives conform to one corporate leadership profile, or does diversity deliver faster growth?"

Leveraging McKinsey’s Granularity of Growth data from an extensive analysis of more than 750 leading companies worldwide and Egon Zehnder's leadership competency data in it's management appraisals, the report is able to identify areas of leadership development focus.

When companies in the bottom 25% and top 25% are compared against each other, those leaders in the top 25% are more highly rated in leadership competencies.

Specific areas from the think piece draw conclusions that are extremely relevant...

What this means is that companies can build leadership excellence in only a few selected competencies – and even then, this requires considerable time and investment. The companies with executives that excel at the competencies most relevant for growth therefore enjoy a significant competitive advantage that is difficult for others to replicate.

To generate growth, all companies need to build a critical mass of excellent leaders. Setting the bar high does not suffice but must be complemented with adaptations of business systems, talent management processes and high-impact capability building. Hence, companies should:

- ƒƒ Sharpen leadership development, by defining required competencies and skill levels for each job family and hierarchy level; anchoring critical competencies in all talent management processes, including recruiting, deployment, and assessment; and providing targeted support for the transition between senior management and top team roles given their differing skill sets.

-ƒƒ Innovate competency building, by building a “competency factory” to focus existing business processes and talent management practices on critical competencies; using “field and forum” approaches and “action learning” for sustainable change; and embedding leadership development in the company’s talent culture.

ƒ-ƒ Develop and promote “spiky” leaders by assessing the competency spikes of the current leadership team and talent bench; review the company’s existing leadership model and talent management practices for tolerance of spikes; and adapt the leadership model, talent practices, and internal communication to recognize the value added by the more unusual profiles. In addition, the utmost importance should be given to the composition of top and senior management teams. Our findings call for diverse teams with individuals of complementary leadership spikes.



These kinds of think pieces continue to point to the overall importance of leadership to organizational performance and success...but this starts to quantify in ways that can be explained to leaders in companies to drive investment decisions.

Cheers,
Keith

J. Keith Dunbar is a Global Talent Management Leader...Creator of Talent, Leadership Capability, and Culture Change...He can be found connecting and sharing knowledge on Google+, Twitter and LinkedIn.

Twitter: JKeithDunbar
LinkedIn: J. Keith Dunbar
Google+: J. Keith Dunbar
Blog: DNA of Human Capital

The opinions or views expressed here are mine alone and do not represent the views of the SAIC.

Monday, February 27, 2012

Leadership Paradigm Shift Approaching...Rise of Collective Development

Greetings,

In last week's blog post...Leadership Development...What is New is Really Old...I discussed where much of leadership development best practices we are familiar with today really started between World War I and II. While in many respects these leadership development practices are are still highly relevant...we may need to shift the paradigm on what kind of leadership capability we are developing in our organizations and why we need it.

Much of my perspective is driven by the nature of the environment we all find ourselves operating in every day. I have written about it often...the VUCA environment is the new normal. VUCA, coined by the U.S. Army in 2004 as it looked at what junior officers were dealing with on the ground in Iraq and Afghanistan and how it might shift leadership development to account for this, is defined as the following:

Volatile: change happens rapidly and on a large scale
Uncertain: the future cannot be predicted with any precision
Complex: challenges are complicated by many factors and there are few single causes or solutions
Ambiguous: there is little clarity on what events mean and what effect they may have

That new normal places immense pressures on leaders to make sense of the environment and make decisions that will maintain or advance competitive advantage. The Center for Creative Leadership recently issued a report titled "Future Trends in Leadership Development" where it addresses the VUCA environment and what this looks like to managers. The CCL report states research indicates that...

- They contain a large number of interacting elements.
- Information in the system is highly ambiguous, incomplete, or indecipherable. Interactions among system elements are non-linear and tightly-coupled such that small changes can produce disproportionately large effects.
- Solutions emerge from the dynamics within the system and cannot be imposed from outside with predictable results.
- Hindsight does not lead to foresight since the elements and conditions of the system can be in continual flux.

The report also indicates that the skills that leaders will need most in the future are the following:

- Adaptability
- Self-awareness
- Boundary spanning
- Collaboration
- Network thinking

The report also recognizes what may be critical to working in the VUCA environment...

"It appears that the new V.U.C.A. environment is seeing the demand move away from isolated behavioral competencies toward complex “thinking” abilities. These manifest as adaptive competencies such as learning agility, self-awareness, comfort with ambiguity, and strategic thinking. With such changes in the mental demands on future leaders, the question will be, how will we produce these capacities of thinking?"

Where does all of this take us? For starters it will need to shift the way we view and conduct "leader" development. Why do I say leader development? Because we are typically focused on individuals in leadership development. Helping them understand their individual leadership needs and addressing them through the best practices discussed in the last blog post.

The CCL report makes the case, and one that I agree with, is that in order for our organizations to prosper in the VUCA environment, we will need to focus on "collective leadership" development.

"The complexity of the new environment increasingly presents what Ronald Heifetz calls “adaptive challenges” in which it is not possible for any one individual to know the solution or even define the problem (the recent U.S. debt crisis, for example). Instead, adaptive challenges call for collaboration between various stakeholders who each hold a different aspect of the reality and many of whom must themselves adapt and grow if the problem is to be solved. These collectives, who often cross geographies, reporting lines, and organizations, need to collaboratively share information, create plans, influence each other, and make decisions."

Focusing on collective leadership, vice leader development is something we can and should embrace. It will take a different perspective from leadership development practitioners...one to raise up from the "dance floor" and look at it from the "balcony" and how we orchestrate collective leadership development , while supporting individualized leader development. I discussed looking at leadership capability through portfolio management perspectives to identify investments and risk (You Need a Leadership Capability Portfolio Manager)

This will be a new world for some of us, but a necessary paradigm shift. The success of our organizations depend on it.

Cheers,
Keith

J. Keith Dunbar is a Global Talent Management Leader...Creator of Talent, Leadership Capability, and Culture Change...He can be found connecting and sharing knowledge on Google+, Twitter and LinkedIn.

Twitter: JKeithDunbar
LinkedIn: J. Keith Dunbar
Google+: J. Keith Dunbar
Blog: DNA of Human Capital

The opinions or views expressed here are mine alone and do not represent the views of the SAIC.

Monday, February 20, 2012

Leadership Development - What's New is Really Old...

Greetings,

Leadership development is important...in fact...vital to our organizations ability to be successful. For those reasons we spend a lot of resources in money (Upwards of $10B annually), people and time in developing the current and future generations of leaders to fuel business strategies. If you have been involved in leadership development either as the leader and/or provider you have had the occasion to participate in what are considered some of the cutting edge leadership development techniques available to organizations to include:

Job Rotations
High Potential Programs
Management Training Programs
Management and Functional Leadership Tracks
Peer Assessments
Executive Candidate Assessment
Action Learning
Execution Education Programs
Coaching
Mentoring
Running Line Organization

There's only one problem...these aren't cutting edge. Sure maybe they are for you and your organization, but truth be told, all of these leadership development techniques have been around since the start of World War I.

In a piece from Wharton School Professor Peter Cappelli titled "What's Old is New Again: Managerial Talent in a Historical Context," Cappelli looked at the leadership development methods in context of evolving business needs and how our approach was much more complex pre-"lifetime employment" to today's approached. Specifically Cappelli states the following at the outset of the paper:

"We often think of the ‘‘traditional’’ process of management development in the United States as one that produced organization specific competencies, lifetime employment, and what has been described as a psychological/ social contract exchanging security (by the employer) for loyalty (from the employee). In fact this traditional model is a relatively recent, post-World War II development. By the end of the 20th century, most aspects of that model have been scaled back and some have been abandoned. What remains of the planning and development functions pales in comparison to the much more sophisticated models in place in the 1950s."

Some examples of where leadership development methods have evolved from include the following:

- Peer assessments started in the U.S. Navy during World War II
- Forced ranking systems started in the U.S. Army during World War II
- Executive Education like Harvard's Advanced Management program started in the 1940's.

This paragraph indicated that similar leadership development activities had been occurring for the last 50 years...

"The advice the authors of the Harvard Business Review study offered companies for developing their executives draws on the programs at companies like GE and seems remarkably similar to what is offered now 50 years later: rotational assignments, a mix of staff and line experiences, an opportunity to run an operation, attendance in advanced management programs, and psychological counseling or coaching (Janney, 1952)."

Now...there is no reason to throw all of this great work out and start over, but there is a realization that in the VUCA (volatile, Uncertain, Complex, Ambiguous) world that leader's development may need to shift from focusing on the individual leader...

That folks is the topic for my next blog...

Cheers,
Keith

J. Keith Dunbar is a Global Talent Management Leader...Creator of Talent, Leadership Capability, and Culture Change...He can be found connecting and sharing knowledge on Google+, Twitter and LinkedIn.

Twitter: JKeithDunbar
LinkedIn: J. Keith Dunbar
Google+: J. Keith Dunbar
Blog: DNA of Human Capital

The opinions or views expressed here are mine alone and do not represent the views of the SAIC.

Saturday, February 4, 2012

Global CEO Studies...A Broken Record

Greetings,

At the Davos World Economic Forum, PricewaterhouseCoopers unveiled the findings from their 2012 Global CEO Study.

I really like to look through these kinds of studies to get a sense of what CEOs and other C-Suite leaders are thinking. I am always particularly interested in what they see as talent and leadership challenges or priorities they want to address.

The PwC study is no different in that respect.

When asked "Have talent constraints impacted your company’s growth and profitability over the past 12 months in the following ways?" 1,258 CEOs responded with the following:

43% - Our talent-related expenses rose more than expected
31% - We weren’t able to innovate effectively
29% - We were unable to pursue a market opportunity
24% - We cancelled or delayed a key strategic initiative
24% - We couldn’t achieve growth forecasts in overseas markets
24% - We couldn’t achieve growth forecasts in the country where we are based
21% - Our production and/or service delivery quality standards fell


CEOs planned to attack these challenges primarily by three areas...

- We plan to move experienced employees from our home market to newer markets to circumvent skills shortages
- We plan to develop and promote most of our talent from within the company
- We plan to primarily recruit local talent wherever we have market needs


Additionally, not surprisingly, CEOs are looking for better information...this section of the report gives great insight that CEOs are looking for the right information to make informed decisions about their people/talent investments.

"CEOs are seeking a better understanding of the scale and effectiveness of their investments in talent. Productivity and labour costs remain important measurements; these are the tools investors, lenders and businesses use to benchmark progress (or lack of it). They are largely standardised in many industries, and thus easy to implement.

Yet for many CEOs, those tools aren’t enough. They’re very good at telling a CEO how the business is performing today relative to its peers, but not at indicating whether the organisation is investing enough in employees to generate future growth. Such measurements cannot isolate skills gaps, and struggle to identify the pivotal jobs that drive exponential value; they do not measure employee engagement or team performance, both of which are so critical for investments to foster innovation to bear fruit. These measurements are much harder to make, which is one reason why they’ve been neglected and why today, so many CEOs are frustrated with the issue of talent."


As my last post discussed...the people and talent challenges that many organizations face are very similar. That point continues to be driven home in CEO studies like this one from PwC. Year in and year out we see the same CEO perspectives...

If we were doing our jobs...would we continue to see these challenges over and over? Is the world we are in going to always be like this where our profession makes little progress in solving the problems that our leadership continues to see?

I recently had a discussion with HR professionals in an organization and the discussion turned towards business strategy. One person shared they didn't know or understand the business strategy in their organization...so let me be frank...if you don't understand your business strategy and how strategic people and talent capabilities support its success...you shouldn't be surprised to find the same things coming up over and over again...

Cheers,
Keith

J. Keith Dunbar is a Global Talent Management Leader...Creator of Talent, Leadership Capability, and Culture Change...He can be found connecting and sharing knowledge on Google+, Twitter and LinkedIn.

Twitter: JKeithDunbar
LinkedIn: J. Keith Dunbar
Google+: J. Keith Dunbar
Blog: DNA of Human Capital

The opinions or views expressed here are mine alone and do not represent the views of the SAIC.

Sunday, January 29, 2012

People Challenges the Same...Whether Public or Private Sector

Greetings,

I have perspective these days. Not that I didn't have perspective before, but has greatly enhanced itself with time.

As I have engaged with counterparts in our profession of human resources, talent, and learning & development, a common perspective has been created for me. That perspective is this...

The people challenges that organizations face, whether public or private, are the same...the only differences are the context/environment and what levers you have available to mitigate them.

That may seem over simplified, but think about your organization right now. You are probably dealing with new employee integration and retention challenges, strategic people capability needs challenges and talent identification and development challenges. What is different for each of us is the context/environment (risk adverse financial organization or an innovative technology organization) and the levers available to mitigate the challenges (infrastructure, processes, compensation, performance management, etc.).

Why should this matter? A person once shared with me that when they hired people within the profession...they hired for the relationship building/management skill set. They felt they could teach them about the business and they probably had professional experiences in talent, HR, or learning & development...but they needed people that could build and manage relationships with customers.

As our organizations time horizons become less strategic and more dynamic...people that are agile and adaptable in our profession will become more important. It will not be as important (Or shouldn't be anyway) to have industry experience, but the ability to integrate and leverage different solutions for the context/environment we find ourselves and make our organizations successful.

Cheers,
Keith

J. Keith Dunbar is a Global Talent Management Leader...Creator of Talent, Leadership Capability, and Culture Change...He can be found connecting and sharing knowledge on Google+, Twitter and LinkedIn.

Twitter: JKeithDunbar
LinkedIn: J. Keith Dunbar
Google+: J. Keith Dunbar
Blog: DNA of Human Capital

The opinions or views expressed here are mine alone and do not represent the views of the SAIC.

Monday, January 2, 2012

So You Want 2012 Predictions...Not Happening!

Greetings,

Well...here we are. The start of a new fresh and what we all hope is a fantastic year...I know I do. This is typically the time of year where people in a variety of professions...including our own...provide their predictions for the year. We look into our crystal balls, shuffle the Tarot card deck and throw some chicken bones around. We will discuss what the next fad will be, the next new technology or best practice that will shake the foundations of leadership development, talent management, learning or people.

Sorry to disappoint...Not going to happen...

We do these things to try and provide some amount of certainty in an increasingly uncertain world. We are heading into 2012 with the same levels of volatility, uncertainty, complexity and ambiguity (VUCA) that we started ended 2011 with...

When people are involved...what you can do is prepare yourself for it.

The futurist Alvin Toffler once said the following:

"The illiterate of the 21st century will not be those who cannot read & write, but those who cannot learn, unlearn, and relearn."

Our ability to learn makes us more agile and adaptable and ready to enter 2012 and excel even in VUCA conditions. At the end of the year...it is not what we predict, but the opportunities we create for ourselves, our teams and those around us.

All the best in 2012.

Cheers,
Keith


J. Keith Dunbar is a Global Talent Management Leader...Creator of Talent, Leadership Capability, and Culture Change...He can be found connecting and sharing knowledge on Google+, Twitter and LinkedIn.

Twitter: JKeithDunbar
LinkedIn: J. Keith Dunbar
Google+: J. Keith Dunbar
Blog: DNA of Human Capital

The opinions or views expressed here are mine alone and do not represent the views of the SAIC.

Sunday, October 23, 2011

Integrated Leadership Development - Potential Answer to the Importance-Effectiveness Gap




Greetings,

I have written a couple of times about the gap between the importance of leadership development activities and the effectiveness of organization's efforts. Typically a pretty large gap exists...many understand its importance, but have a really hard time with determining their effectiveness at doing it.

Research from Dr. David Weiss and Dr. Vince Molinaro, from their book "The Leadership Gap: Building Leadership Capacity for Competitive Advantage" may present a solution.

In the book, Weiss and Molinaro indicate that "Emerging research links an organization's ability to develop its leadership capacity to it's competitive advantage." this is important as other research cited by the two indicates a linkage between the greater the robustness of a company's leadership capacity and the greater its financial return in critical financial measures such as shareholder returns, growth in net increase, growth in market share and return on sales. Pretty significant linkages as we discussed in an earlier DNA of Human Capital piece on an apparent lack of linkage between leadership and organizational performance titled "Leadership and Organizational Performance...Lack of Linkage."

Weiss and Molinaro discuss the differences and importance of the single-solution and multiple-solution approach to leadership development and that while single-solution is probably the most prevalent...the multiple-solution approach represents a more evolved approach. Because leaders are exposed to a greater number of leadership development options, they are better positioned to develop leadership capacity utilizing a mixture of options around assessment, coaching, learning and experiences.

Weiss and Molinaro discuss several factors creating a new sense of urgency in leadership development activities and driving an integrated approach. These include...

1. The complex business environment - understanding that leaders operate in environments that are more complex and intense than before.
2. The need to deliver results on many levels - pressure is on leaderships development activities to deliver results in transference of skills and ides to leaders, enhance leader performance, reinforce corporate culture and values, drive business results and adapt to changing business realities.
3. The high expectations of leaders - Senior executives want to see their investment in leadership development maximized and deliver on the promise of increase leadership capacity.
4. The need to sort through a maze of leadership development options - Leadership development is big business. Estimated to be as much as $50B per year business. There is much to choose from, but what makes sense?

Because of this, Weiss and Molinaro propose integrated-solution approach to leadership development. This includes the following components:

1. Develop a comprehensive strategy for integrated leadership development - A strategy defines what kind of leader the organization needs. The strategy also ensures development options are relevant, align to business needs, and add value to leaders.
2. Connect leadership development to the organization's environmental challenges - Connecting leadership development to an organization's environmental challenges creates focus and ensures that leadership development is being used to prepare leaders to succeed in the future.
3. Use the leadership story to set the context for development - Organizations need to have and use a compelling story to tell employees what the organizational leadership philosophy and culture is. The story serves as a focal point for development options.
4. Balance global enterprise-wide needs with local individual needs - Organizations must identify development options that are needed by all leaders of the organization such as creating a common leadership culture, enhancing core leadership competencies and responding to changes in the business environment.
5. Employ emergent design and implementation - because the business environment is now so much more complex, this suggests that leadership development must be emergent in that organizations must continually be in touch with what is happening in the business and be ready to respond to it.
6. Ensure that development options fit the culture - Leadership development options must fit in the culture and the organization's readiness.
7. Focus on critical moments of the leadership lifecycle - Leadership development focuses on new ways of thinking specific to leader roles and their transition points. Times when leaders are at their highest risk is when at these leadership transition points between new positions and activities.
8. Apply a blended methodology - Blending various solutions involving assessment, coaching, learning and experience are key to leadership development.

While this approach suggested by the authors is more complex, it has greater potential to create the leadership capacity needed within organizations to succeed. For your leadership development organizations to create and execute an integrated leadership development you will need a team whose leader can take a systems thinking approach in seeing the forest from the trees and the right people to execute their component of the approach.