IPOs and Organizational Leadership Capability

The book "The 2020 Workplace" by Karie Willyerd and Jeanne Meister discusses a future where organizational teams are hired intact into new organizations and where you are hired into an organization based upon your social capital. So it was with interest when I got a response from last week's blog on Leadership Capability Portfolio Management from one of my LinkedIn connections...Suranjan Benjamin Soans. He asked the following questions, which were intriguing:

"Keith, do you think sometime in the future, investors are going to have access to Leadership Capability Portfolio Management of companies? Or, is it better if that is treated as a company's secret? Do investment bankers take a good look at this (LCPM) before an IPO is issued?"

It's possible that understanding and measuring the overall organizational leadership capability as a critical component to an organization's financial rating in the future. Why? Let's look at some examples of why leadership capability already matters in organizations...

- Leaders impact the organization through factors such as employee retention and employee engagement. Both critical to organizational performance and financial performance.

- The 2010 IBM Global CEO Study indicates that CEOs continue to see the relevance of having a leadership capability that are creative, act under uncertainty, drive innovation and organizational performance.

While I study the impact of leadership and leadership development on organizational performance at the UPenn Chief Learning Officer (CLO) program, I know that before I invest in companies, I want to know what the company's leadership capability is. Companies leverage their position on such lists as Leadership Excellence's top leadership development programs and Fortune Magazines Best Places to Work when advantageous.

While award winning leadership development programs are good publicity, I reference Dr. Bradley Hall's quote from his book "The New Human Capital Strategy." There he states that "Success is not world-class leadership development but best-in-class industry leaders." If you believe that...we need an ability to measure the best-in-class industry leaders part of Dr. Hall's statement.

With this in mind, wouldn't you want to know whether an organization's leadership capability is having the intended impact on organizational performance...especially before you invest in it?

Cheers,
Keith

Twitter: JKeithDunbar
LinkedIn: http://www.linkedin.com/in/jkeithdunbar
DNA of Human Capital: http://dna-of-humancapital.blogspot.com/

Playing Talent Mad Scientist...

Greetings,

I recently came across a very cool game called Phylo. It was part of an article in Wired Magazine titled "Computer Games Makes You a Genetic Scientist." The intent of the online game is to take advantage of the prowess of the human mind's pattern recognition capabilities. As the article states:

"Phylo players move colored squares representing the four nucleotides of DNA to find the best alignment between snippets of DNA from two different species. These particular sections of DNA, called promoter regions, determine which parts of the genome end up as traits in the organism, whether it be blue eyes or heart disease."

The connection of this game to our role as Human Capital Management (HCM) and Talent Development leaders is interesting...Just as Phylo is leveraging the human ability to see pattern's, we should be doing the same. Looking for patterns in the volatile, uncertain, complex and ambiguous (VUCA) environment is difficult, especially when it is focused on talent that drives our organizational success. Driving to success in this type of VUCA environment, while difficult, is not impossible.

Dr. Charles Dwyer of the University of Pennsylvania and the Aresty Institute's Leading and Managing People Academic Director at the Wharton Business School stated recently at a session I attended, that leaders need to think strategically and systematically. This is no more apparent than it is now in relation to acquiring, developing and retaining talent to drive business and mission results. Effective HCM leaders are able to identify strategic capabilities needed to fuel innovation, agility and competitive advantage. They are able to understand and see patterns in their current workforce capacity in respect to the identified capabilities. With this knowledge, they are able to make informed engagement with organization leadership to recommend the right approaches in enabling Buy, Build, Rent and Partner decisions.

When I visualize this activity...I see a Talent Mad Scientist...identifying the basic talent DNA building blocks for organizational success. Attempting to find the right pattern that will make an evolutionary leap in capabilities for the organization...

When you think of the Talent Mad Scientist...what do you see?

Cheers,
Keith

Twitter: JKeithDunbar
LinkedIn: http://www.linkedin.com/in/jkeithdunbar
DNA of Human Capital: http://dna-of-humancapital.blogspot.com/

You Need a Leadership Capability Portfolio Manager...

Greetings,

So we know that the 2010 IBM Global CEO and CHRO studies identified that both groups believe that leadership and leadership development is important, but 2 of 3 CHROs didn't think their organizations were effective at doing it. Let's start to take a closer look at something that can help change that equation.

Learning can be directed in one of three areas based upon the Unit of Analysis. This is typically focused on individuals or teams, but it can also be at the organizational level. The linkage to today's blog is by taking this same approach in the management of the learning and in this case...focused on an organization's leadership capability.

Disclaimer - I am NOT a financial investments expert. That is why I pay for the service from the pros to help me manage my resources. So what I am about to say is my simplification in terms for today’s blog.

In the financial services sector, it is fairly well known that as individuals we can make investments in a number of different financial instruments like money markets, bonds, stocks, etc. Each of these involves a strategy to maximize the return on investment, but each carries a form of risk. Investment strategies are intended to develop a portfolio of financial instruments that can weather periods of volatility, uncertainty, complexity and ambiguity…like today’s global environment…for both short-term and long-term gains.

Now look at the investment your organization is making in leadership development. As discussed in previous blog posts, it is estimated that within the United States, that over $9.5 billion is invested in making leaders better. However, that investment is typically focused at the individual level. By investing in the individual’s leadership development, it is assumed we will reach a tipping point in the organization that will lead to maximizing the overall organizational leadership capability.

This doesn’t account for risk though. In the current global environment that is volatile, uncertain, complex and ambiguous…the VUCA environment plays havoc with the development of an organization’s overall leadership capability. In order to maximize short-term and long-term investments and returns on leadership development…a different approach is not only recommended, but required…that is portfolio management. Like a mutual fund manager, organizations need someone that can act as the Leadership Capability Portfolio Manager or LCPM.

To do this requires a strategic perspective by understanding the business strategy and the leadership capability needed to execute that strategy…so that is a no brainer. However, we know that most competency models that leadership development programs are based upon are focused on what leadership capability you need now and not building the kinds of leaders you need for future competitive advantage. Additionally, if you take a strengths-based approach to leadership development like me, you know that there are going to be some capabilities within your competency model that no matter how important they are…not everyone is or will be a 5 (On a 1-5 scale) in every competency. The law of diminishing returns kicks in and increased investment in developing a tactical execution focused leader into a strategic vision leader will be wasted.

Now enter the realm of the LCPM…Because this person or group in your organization understands the business strategy, HR/HC strategy, leadership competency model, future leadership needs to execute, etc. your team is better positioned to manage for risk in the leadership pipeline and make targeted investments in areas where more risk can be taken or areas where less risk is advisable. This approach also allows you to manage individuals as a true capability. For example, if you know that the business will need frontline leaders that are collaborative and with high emotional intelligence in the next 2-3 years and reduced change management because your future looks stable (OK…this is probably WAY unrealistic)…then you can afford to “divest” change management investment in the leadership development program in order to “invest” in more leader capability in collaboration and emotional intelligence.

Taking this approach shows a direct understanding of the business and future HR/HC needs o enable its continued success AND a prudent approach to human capital investment. So the only thing left is one question…

How are you managing your leadership pipeline?

Cheers,
Keith

Twitter: JKeithDunbar
Linkedin: http://www.linkedin.com/in/jkeithdunbar
DNA of Human Capital: http://dna-of-humancapital.blogspot.com/