How top companies breed stars


You couldn’t be blamed for rolling your eyes when the boss says, “People are our greatest asset.” Bosses always say that.  They almost never mean it.  Most companies maintain their office copiers better than they build the capabilities of their people, especially the ones who are supposed to be future leaders, and for decades they’ve been getting away with it.

Of the many powerful forces driving companies to develop leaders more effectively, the most important is the world economy’s long-term shift from dependence on financial capital toward human capital.

Consequently, a fast-growing number of bosses are demonstrating their sincerity.  They are endorsing exceptionally rigorous leadership development programmes packed with metrics, incentives, goals, values, and calendars.

Even given the credit crunch, money for investment is more abundant than ever.  It isn’t the scarce resource in business anymore; human ability is.

Organisations need talented people a lot more than talented people need organisations.
Even if that weren’t true, companies would still be beefing up leadership development for a more immediate reason – the best young employees in the emerging talent pools are hungry for it.  It seems younger people understood the new nature of today’s economy before a lot of bosses did, and they insist on jobs which will keep making them better.

This younger generation cite “job flexibility, development, and community involvement” as the top three factors in keeping them at the company

This younger generation cite “job flexibility, development, and community involvement” as the top three factors in keeping them at the company.   Companies with leadership development strategies centred around an academy are attracting top prospects and that’s a strong selling point on recruitment days.

Companies are finding that the advantages of building a reputation for developing talent are greater than they may have thought – “a first-pick advantage,” as some call it, an edge in attracting the cream of university and business-school students.

Companies which provide people with opportunities to learn and grow become talent magnets, drawing scarce talent in droves.  By continually attracting the most promising graduates and then developing them, these firms become higher-performing organisations, enhancing their ability to attract the best – a self-reinforcing cycle that makes the company more dominant every year.

A closer look at what companies are doing reveals a set of best practices that seem to work in any environment. Here are my top ten.

  1. Invest time and money
    You don’t build leaders on the cheap and you don’t just bolt a development program onto existing HR procedures.  Indeed, the biggest investment involved may be the time of the boss and other executives. Spending 50% of time on people issues demonstrates how committed they are to the future of their company.
  1. Identify promising leaders early
    Begin to evaluate leadership capability on day one of employment.  Spotting leaders early means working on their development early.  Nurturing future leaders earlier than other companies creates a competitive advantage that lasts for decades as their talent pipelines become bigger, better, and more reliable.
  1. Choose assignments strategically
    Leadership development comes from job experience, mentoring, coaching and learning programmes. Mixing job assignments seems obvious in theory, but in practice it’s tough.  Companies tend to assign people based on what they’re good at, not what they need to work on.
  1. Develop leaders within their current jobs
    Many bosses report new tension between the need to develop people by moving them through different jobs and the need to develop their expertise in certain domains by leaving them put.  One reason is a division has a tough time competing when the manager moves on after just 18 to 24 months, a typical pattern.
    Solution? Managers stay in their jobs and they take on an additional assignment outside their field of expertise or interest.
  1. Be passionate about feedback and support
    It’s the most elementary principle of learning: If you don’t know how you’ve performed, you don’t learn and you soon stop caring.  Yet at many companies, feedback is rare, candid feedback even rarer.  Companies which combine frequent, honest assessments with plenty of mentoring and support will support people when they are told what skills they need to improve.
  1. Develop teams, not just individuals
    Sometimes the team approach is cultural.  The Finnish culture at Nokia rejects the concept of stars – the company focuses on leadership rather than leaders, and decisions depend heavily on consensus. In some companies that would be a recipe for low motivation and gridlock, but it works at Nokia.
  1. Exert leadership through inspiration
    Yes, you can make people do what you say by firing and demoting and we all know how well that works!  It works even worse in today’s information-based economy, where most employees are white collar workers using knowledge and relationships with results that may not be easily observed day to day.  Try making them do what you say, or even telling them exactly what to do.  The command-and-control model of leadership just won’t work 99% of the time.
  1. Encourage leaders to be active in their communities
    The advantages are many.  Most companies have enunciated values which include respect for the individual, good citizenship, and integrity.  When company leaders also become leaders of charities, schools, and other nonprofits, they show their commitment to those values, encouraging and inspiring employees.  Other benefits are more pragmatic.  Most employees will never serve on the company’s board or on any major corporate board for that matter.  But many of them can serve on a local nonprofit’s board, and the experience is an excellent leadership developer.
  1. Make leadership development part of the culture
    Bosses and executives alike will talk about their leadership development programmes.  But surely a programme on its own is more likely to have the potential to become something which stands alone or is perceived as separate from normal, daily working life?  What better way is there than to integrate development into the culture.  Culture though does demand certain attributes and will influence all around it.
    For example, honest feedback has to be culturally okay.  At many companies it isn’t.  Devoting significant time to mentoring has to be accepted.  Working for nonprofits has to be encouraged, not just tolerated.
  1. Developing leaders isn’t a program; it’s a way of living.
    Good as a company may be, not many seem to be satisfied with the way it develops leaders. They all have plans for improvement, mostly by involving more people, working more with teams, and refining their views of what skills tomorrow’s leaders will need.
    It’s important to realise that circumstances sometimes prevent companies from becoming academies, and some shouldn’t even try e.g. turnarounds in distress, or highly volatile, fluid, creative enterprises, which would suffer from the rigid lines of authority that underlie academies. But even companies in those situations need better leadership and could take at least a few lessons from other companies for Leaders.

In a world economy built on human capital, any company with a hope of thriving will have to learn from these examples.

Develop your corporate culture and the talent will come…


About Author

With almost an entire career working with customers Kelvin has developed the knack of ‘standing in the customers shoes’ and helping organisations, executives, sales and product teams to see, feel, hear, smell and taste things they don’t experience but their customers do.

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