Leadership Development - An Organisational Perspective

During the past year, many organisations have had to downsize, reduce expenditure, cut back on development and generally try and achieve more with fewer resources. To do this successfully requires effective leadership, and yet how many MDs or CEO’s can really claim that they are making the most of the leadership talent within their organisations? Or, to put it another way, how many can claim to have a comprehensive, cohesive, and effective leadership development strategy? Even prior to the recession, many organisations acknowledged that they were poor at leadership development. For example, in 2008, Bill Hester, Head of Consulting at DDI reported the results of a survey that showed that only 3% [of chief executives] thought that they were doing an excellent job on talent management and 55% of them described themselves as ‘fair or poor’ at identifying talent. Furthermore 70% of chief executives “felt that their business was suffering because of a lack of leadership talent (The Sunday Times March 30, 2008).

So a major consequence of poor leadership development is a lack of organisational effectiveness. This is significant in itself, but there is also the direct cost of providing ineffective leadership development activities. A survey by Saïd Business School at the University of Oxford, suggested British businesses waste up to £75 million a year on leadership programs that fail to meet company objectives. (The Times June 28, 2007).

So why is it that so many MDs and CEOs are dissatisfied with the quality of leadership development within their organisations? In order to investigate this issue, the authors carried structured interviews with more than twenty senior HR professionals from both the public and private sectors, including FTSE 100, and FORTUNE 100 companies to examine their approach to leadership development. The results provided some illuminating insights into this issue. Some of the more typical responses were as follows:

· Leadership development within the organisation consisted of a number of isolated events and initiatives rather than as part of an ongoing, coherent development strategy.

· The focus tended to be on individuals, or small groups (e.g. high potentials, senior executives, or newly appointed managers).

· The emphasis was on improving individual competencies rather than collective effectiveness.

· Leadership learning was based on generalised leadership theory rather than a focus on what was required by the organisation at the present time, or in the immediate future.

Thus, for a number of organisations, their approach to leadership development could be summed up as consisting of a number of individual piecemeal initiatives. What appeared to be lacking was a comprehensive, coherent, consistent, company-focused strategy.

So what should a Leadership Development Strategy look like? A review of the relevant literature indicates that there are many different components to leadership development, but they can be clustered into ten main areas:

Strategic purpose – The extent to which the organisation is clear about the purpose of leadership and the values associated with it.
Strategy – The extent to which the strategy is clearly documented, refined and communicated.
Sponsorship – The extent to which there is top tem support for the strategy
Organisation structure and culture – The extent to which there is a clear leadership structure, clearly identified career paths and devolution of authority.
Planning – The extent to which leadership development is planned both at the individual and organisational level.
Roles – the extent to which role definitions encompass leadership.
Direction & personal objectives – The extent to which objectives across te organisation are aligned.
Selection & assignment – The extent to which leadership appointments are in line with the leadership development strategy.
Training & development – The extent to which leadership development is part of an ongoing process.
Assessment/Evaluation – The extent to which leadership and leadership development are monitored and assessed.

Most organisations could probably provide evidence to show that they are active in a majority of the ten areas, but how many can claim to be effective in all of them?

It seems that for a leadership development strategy to be truly effective it must be holistic, encompassing every facet of organisational structure, culture and people processes which impinges on leadership development. Furthermore it must support the organisation’s leadership needs in support of its vision.

We believe that there are three main actions required to develop a comprehensive leadership development strategy.

Firstly, we do not suggest that MDs/ CEOs and HR specialists should stop what they are doing and start again from scratch. Instead they should identify the good things that they already have in place and build upon these whilst, at the same time, instigating work in the areas where they are less advanced.

Secondly there is a need to prioritise. It is impossible to work on every area at once, but some of these areas appear to take precedence over others. For example, is the leadership community going to support the leadership development strategy, if the CEO seems less than enthusiastic about it? And do people actually know what the leadership development strategy is?

Thirdly, enhancing leadership development strategy is a change programme and needs to be managed as one. The leadership community needs to be engaged in the development of the strategy and its execution.

According to the Centre for Creative Leadership (Developing a Leadership Strategy, White Paper, May 2009) “Very few organisations have an explicit leadership strategy. Is it any wonder that without one, CEOs find that they don't have the leadership talent they require?" and yet improving talent is one of the top three priorities for executives (CIPD - Global leadership forecast 2008-09 - UK highlights). Leadership Development Strategy should be a key priority for every organisation and is becoming increasing urgent as challenging economic conditions demand greater agility and effectiveness.

Ten questions to think about regarding the leadership development strategy in your organisation

1)     Are people clear as to what the overall purpose of leadership development within your organisation is?

2)     Is there a clear strategy in place?

3)     Does the CEO and top team invest time and effort in supporting the strategy?

4)     Does the structure of the organisation support the type of leadership required?

5)     Are leadership development initiatives properly planned and implemented?

6)     Is it clear what is expected of leaders within the organisation?

7)     Are leaders given objectives that support the leadership vision and strategy?

8)     Are the right people selected to become future leaders?

9)     Do leadership development initiatives result in an improvement in leadership skills in the work place?

10) Is leadership development assessed and evaluated properly?

Gordon Watt and Dr. Chris Smewing are authors of the Leadership Development Strategy Audit, which is available online and can be trialled at no cost by pressing ctrl and clicking here. Gordon Watt was an executive leader in international blue chip organisations and is now a leadership development consultant, specialising in leadership development strategy. Dr. Chris Smewing is an occupational psychologist, specialising in organisational analysis and assessment. Both are Associates of Adair Leadership Development, who work with John Adair to promote good leadership practice.