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For more than four decades the Pfeiffer Annuals have presented thought-leading ideas and cutting-edge practices in training, consulting, and human resource management. A new title has been added to the impressive collection of Pfeiffer’s yearly publications, The 2007 Pfeiffer Annual: Leadership Development. This important book explores one of the most pressing issues facing organizations across the globe—how to successfully identify and develop current and future leaders. This comprehensive resource includes an ...
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For more than four decades the Pfeiffer Annuals have presented thought-leading ideas and cutting-edge practices in training, consulting, and human resource management. A new title has been added to the impressive collection of Pfeiffer’s yearly publications, The 2007 Pfeiffer Annual: Leadership Development. This important book explores one of the most pressing issues facing organizations across the globe—how to successfully identify and develop current and future leaders. This comprehensive resource includes an international panel of contributors who are leading academics and practitioners in the field. Their combined wisdom has created the most authoritative and up-to-date source for new ideas, tools, models, and contemporary practices in leadership development. Year-after-year this unique series will build into a world-class resource for all practitioners, teachers, and students of leadership development.
James F. Bolt
Professionals in executive development, leadership development, organizational learning, and human resources have achieved increasing visibility, stature, and influence in recent years. More than ever, they work as full partners with CEOs and senior executives in designing strategies to meet the strategic challenges companies face in today's highly competitive, rapidly changing global environment. And more than ever, CEOs and senior leaders realize that leadership talent is a significant competitive advantage. Yet challenges still remain-and learning is a constant imperative. As chairman of Executive Development Associates, Inc. (EDA), I have long believed that one of the best learning resources for professionals in leadership development is the knowledge and experience of their peers. Approximately every two years, EDA conducts an extensive survey of trends in the field of executive and leadership development to uncover best practices, emerging needs, top priorities, and new approaches. The purpose of this article is to summarize this information to help those in the field advance togetherand stay abreast of critical trends in executive and leadership development.
In EDA's 2005 Survey, we sought to gather information on how companies are faring in meeting the bench strength imperative, which was identified in our 2004 Trends Survey as the top executive development challenge companies would be facing in the near future. (For background on the 2005 survey, see the box: Inside EDA's 2005 Executive Development Trends Survey.) The 2005 survey (sometimes referred to as the Pulse Survey here) was also designed to gather information on several closely related topics, such as succession management, integrated talent systems, the leadership pipeline, and leadership for emerging markets. We also zeroed in on strategies executive development professionals are using to identify and accelerate the development of high-potentials. In addition, we wanted to find out how companies are using key executive development tools and approaches, such as leader-led development, action learning, on-the-job development, and on-boarding. Finally, we inquired about the use and importance of measurement in executive development and patterns of expenditures on development programs.
Throughout this article, we will present highlights from the original survey, then show what we learned in the update (pulse) survey a year later in terms of progress being made by organizations, and finally present new information on topics not covered in the original survey, such as on-boarding.
The Bench Strength Imperative
As we had in previous surveys, in our 2004 survey, we asked respondents to identify the objectives that would be most important to their executive and leadership development efforts in the next two to three years. In 2004, the top priority for nearly 80 percent of companies-by far the most prevalent goal for survey respondents worldwide-was to increase their bench strength and ensure replacements for key jobs or people. This was the first time in the history of the Trends Survey that this issue has ranked as companies' number one objective. Table 1 shows the top responses to the questions from our 2004 survey.
The Continuing Importance of Bench Strength
In our 2005 Pulse Trends Survey, we followed up with a question asking whether respondents continue to see increasing bench strength as a top priority, specifically whether it had increased in importance, stayed the same, or decreased in importance. Nearly 72 percent of those surveyed said that increasing bench strength increased in importance, and 97 percent said it increased or stayed the same. This is simply amazing and clearly indicates that this issue continues to dominate the collective consciousness of organizations today. Not only was it the most important and most dominating issue identified in the 2004 survey, but also it has increased in importance more than any other issue a year later!
In comments on this question, respondents offered a variety of explanations for the continued and increasing importance of bench strength. Based on our analysis of these comments, two key drivers of this trend stand out: (1) the "age bomb" (as one respondent put it) as the Baby Boom generation nears retirement and (2) the increasing complexity, competition, and pace of business companies face today, which have combined to "raise the bar" in terms of executive performance. In other words, companies are facing a one-two punch: just as their most senior executives are contemplating retirement, the demands on their replacements will be greater than ever.
Since the leading edge of the boomer generation will just turn sixty this year, it seems obvious that increasing bench strength will remain a top priority for years to come.
Integrated Talent Management Systems
An Integrated Talent Management System brings together key programs and processes that identify, attract, appraise, develop, reward, and retain talent; ensures those activities work smoothly together; and aligns them with the organization's strategic goals. In our 2004 survey, 70 percent of respondents agreed that such an integrated system would be a top priority; yet only 40 percent said that their organizations excelled in this integrated approach. As Figure 1 reveals, out of twelve best practices in executive and leadership development, integrated talent management ranked eighth, just behind succession management, in the percentage of respondents identifying it as a program in which their organization excelled.
For our 2005 survey, we decided to dig deeper into how companies saw the issue of integrated talent management. We asked respondents how they thought their companies were performing in this area, whether they had specific goals for an integrated talent management system, and what those goals were.
The results showed progress by 40 percent, while 51 percent reported that their systems were about the same. While I suppose we should be pleased that the vast majority of respondents think that their organizations are holding their own or improving, it is not encouraging that, from this entire survey, this is the lowest rating of "improvement" of all of the questions. It seems we are least satisfied with our progress in the area of creating an integrated talent management system. This jibes with my personal experience working as a consultant with many leading companies around the world-most seem to feel they are making some progress, but still are quite a way from where they would like to be.
On the positive side, one respondent commented, "We have a very integrated system with much more attention to rewarding our high performers with developmental assignments. We are linking strategic executive education to specific company and business strategies. Our system is better integrated today then it ever has been." Others are struggling: "The pieces are in place. Creating a mindset of how one relates to another and that together they are a system is a new idea for our organization." Still others are hopeful: "Integration of current stand-alone processes is our focus for going forward. We've made good progress on independent processes and now need to bring them together."
Goals for an Integrated Talent Management System
Fully three-quarters of respondents indicated that they have a set of goals they are working toward in the area of talent management. The goals cited tended to separate into two kinds: those who are presumably still in the process of trying to implement an integrated talent management system cited process-oriented goals involving setting up such a system; those who presumably have a relatively robust system in place cited goals involving the results they expected the talent system to achieve.
In the former category, typical goals include integration of talent management systems with succession planning; subsequent development of leadership competency models, integrating both talent management and competency models; use of technology to track talent; and better alignment of talent acquisition, development, and assessment.
Goals that relate to the results talent management is expected to achieve include an increase in bench strength and flow of talent across the enterprise; attraction of more diverse talent; retention and accelerated development of high-potentials; and enhanced leadership continuity. The breadth and scope of these results-oriented goals clearly demonstrate that many respondents have high expectations for their talent management systems. They expect real and demonstrable results that make a strategic business impact-and they clearly see a talent management system as an effective means for increasing bench strength.
An effective succession management process is the foundation of an integrated management system. Therefore, it was dismal news indeed when the 2004 Trends Survey indicated that only 40 percent of respondents thought their organizations excelled in succession management. Our 2005 survey followed up with this question: How would you rate your organization today in your progress on Succession Management?
The good news is that fully 60 percent of respondents see their companies as improving in succession management. This bodes well not only for succession itself but for the possibility of having an integrated talent management system, since you can't have an effective total system if the core processes like succession are not strong. However, their comments on this question indicate that many still think they have a long way to go. As one person commented, "We ... targeted this practice area five years ago and continue to work on this." Another respondent, much further along, observed, "We are getting better year by year. The use of assessment centers, objective data, high-potential discussions, and the difference between assessing performance and potential have all helped in this endeavor."
The Leadership Pipeline
Another way to assess the bench strength issue is in terms of the leadership pipeline. The good news is that 44 percent of respondents see real progress in filling their organizations' leadership pipelines with capable talent. Less encouraging is that 38 percent see no progress, while 16 percent actually think their leadership pipeline is less strong than it was two years ago. Of all the questions in the survey, this is the one on which respondents indicate the most backtracking, that is, where they have somehow managed to do worse than a year ago. It doesn't quite fit with the other survey findings in that we seem to be saying we are making great progress in all of the systems needed to fill the leadership pipeline, but it is not getting better as fast as we might expect. Of course, the programs and processes that we are considering here take time to take hold.
The perception of those who see their leadership pipeline as weaker may reflect the "raising of the bar" in terms of leadership needs we discussed above. As one respondent observed, "We have excellent content knowledge and excel at doing what we have always done. This may not be the skill needed to take us forward. The leadership being weaker is a reflection of growing awareness. The new CEO is expecting and demanding (rightfully) a different type of leader. This is very different from what was rewarded previously. Those who thought they were strong leaders a year ago may not be perceived that way in the future." This comment doesn't necessarily reflect a broader shift in perceptions, but it is suggestive. In fact, several articles in this Annual discuss the changing skills and capabilities of leaders in the global marketplace. See, for example, "Preparing Leaders for the New Competitive Landscape: New Mindsets for New Games" and "Developing Global Leaders: The Critical Role of Dilemma Reconciliation."
And what are those needs going forward-and what gaps in meeting those needs do organizations foresee? We asked respondents, "As you look down in the organization at the next generation of leadership talent (the ones who are most likely to fill executive level positions in the next three to five years), what capabilities, skills, knowledge, attitudes, competencies, etc., are most lacking?" Table 2 provides their responses.
More than half the respondents cite all of the top four next-generation gaps. And they all involve abilities that might be described as complexes of skills, capabilities, and attitudes, many of which are soft rather than technical-abilities that are not easily taught. Respondents across the board showed less concern about more technical aspects of executive performance-indeed just 4 percent were concerned that the next generation of leaders understand the technical side of the business.
Leadership for Emerging Markets
As globalization becomes ever more dominant, companies face the need to fill their leadership pipelines on an international basis. Respondents were asked to choose the two or three countries/areas where they had the biggest need to develop leadership talent to support the company's strategy. The results are shown in Table 3.
It is not surprising that China is far above any other country or region in its need for developing leadership talent. The potential size of China's market, and hence the potential opportunities for companies that invest in that market, dwarfs all others.
We also inquired about the strategies and methods companies were using to develop leaders for emerging markets. Judging from the responses, companies take a wide variety of approaches in responding to this need. Many companies have taken leadership for emerging markets very seriously, given a lot of thought and attention to the issue, and developed specific programs designed just for emerging market leaders. Others bring emerging market leaders into the regular executive development process and programs. Some have customized their regular executive development programs for specific areas. And a few companies have not really addressed the issue.
Rotational assignments were the most commonly mentioned approach. Of those companies that have developed programs specifically for executive development in emerging markets, some examples include:
Using leader led training with action learning (we could argue that this isn't unique or specific to emerging markets, but it was mentioned as such)
Hiring of in-country nationals who are developed through an international development program
Assigning executives to roles in headquarters and smaller emerging markets prior to significant emerging markets
Creating a comprehensive leadership development plan modeled on the firm process, but geared culturally to their needs
Preparing for expansion in China by recruiting Chinese students in China and other worldwide universities, including the United States, and placing them in thirty developmental positions around the world
As Table 1 at the beginning of this article shows, the second-highest priority for executive development revealed in our 2004 Trends Survey was "accelerate the development of high-potentials." Identifying and developing high-potentials (executives who seem to have the potential to fill positions on the top management team reporting to the CEO) is clearly a key piece of the bench strength imperative.
Progress in the Development of High-Potentials
For our 2005 survey, we asked, "How would you rate your organization today in your progress on High-Potential Identification and Development?"
Although 35 percent said that their progress had remained about the same, a clear majority (62 percent) of those surveyed think that they are making good progress in this area. Comments that accompanied this question indicated that many companies take the development of high-potentials very seriously. One responder indicated his company's level of commitment by saying, "Elaborate processes [are] in place and all senior leaders are actively involved, daily." Another observed that high-potentials are a "major focus" of the CEO.
Excerpted from The 2007 Pfeiffer Annual: Leadership Development by James F. Bolt Copyright © 2007 by John Wiley & Sons, Ltd. Excerpted by permission.
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Section One: Forces and Trends in Leadership Development.
Mapping the Future of Leadership Development (James F. Bolt).
Section Two: Leadership Development Strategies, Systems, and Programs.
The UBS Leadership Institute: A Case Study in Strategic Alignment (Robert W. Mann).
Linking Senior Leadership Development to the Mission of the U.S. Navy (Barry Frew).
Success Begins with Senior Management: Case Study of Innovative Leadership Development Design (Warren Wilhelm).
Creating an Integrated Talent, Leadership, and Organization Development System for Maximum Impact (Julie Staudenmier).
Leadership Development as a Driver of Shareholder Value Creation (Raymond Vigil).
Building Strategic Leadership Capabilities at Rexam PLC: A Case Study (Alice Heezen).
Section Three: Learning Methods.
Leaders Teaching Leaders (Ashley Keith Yount).
Level 4 Coaching: Everyone Has a Role (Marshall Goldsmith).
Creating a Customer-Centric Culture: “Walking a Mile in the Customer’s Shoes” at Texas Instruments (Dan Parisi and Jeff McCreary).
Optimizing Developmental Job Assignments (Betty Kovalcik).
Lessons from the Battleground (Mark Whitmore and Harold W. Nelson).
The Role of Peer-to-Peer Networks in Personal and Professional Development (Michael Dulworth and Joseph A. Forcillo).
Section Four: Special Challenges and Opportunities.
Getting Management Buy-In.
Engaging the Board and Executive Team in Talent Development (Annmarie Neal and Eve Dreher).
Gaining Management Buy-In: Responding to Unspoken Needs (Charles Presbury).
Developing Global Leaders.
Preparing Leaders for the New Competitive Landscape: New Mindsets for New Games (Gordon Hewitt).
Developing Global Leaders: The Critical Role of Dilemma Reconciliation (Fons Trompenaars and Peter Woolliams).
Identifying and Developing High-Potentials.
Evaluating Leadership Potential: A Practitioner’s Guide (Val Markos).
Identifying and Developing High-Potentials: An Executive Perspective (Nicole Drake).
On-Boarding, ROI, Learning from Experience, and Putting Learning to Work.
Successful On-Boarding (William J. Morin).
ROI Comes in Many Forms: Leadership Development at Baker Hughes Incorporated (Barbara Reyna).
Learning from Experience: Easier Said Than Done (Vijay Govindarajan and Chris Trimble).
Put Learning to Work (Andrew McK. Jefferson).
About the Editor.
How to Use the CD-ROM.
Pfeiffer Publications Guide.