MT GUIDE TO BUSINESS EDUCATION & TRAINING: At the Leading Edge - It's axiomatic that great companies need great leaders, but where do they come from? How are tomorrow's brightest prospects to be identified, and what principles should govern their training?

Last Updated: 31 Aug 2010

It's axiomatic that great companies need great leaders, but where do they come from? How are tomorrow's brightest prospects to be identified, and what principles should govern their training?

There was a time, not long ago, when we were all too squeamish to talk about leadership. Perhaps this was due to the social revolution of the 1960s and the rejection of authority figures. As a concept, leadership sounded a bit too heavy and old-fashioned for the modern, team-based workplace.

Today, we've lost these inhibitions. The sluggish economy and fiercely competitive business environment demanded it. The corporate scandals at Enron, WorldCom et al, and the failure of so many 'leaderless' businesses during the bursting of the new-economy bubble, have reminded even free-wheeling managers that leadership matters.

But now that we all agree leadership is back on the corporate agenda, what are we going to do about it? Here the picture is a little murky.

'A lot of leadership training misses out the most difficult bits, the underlying values of the leader,' says Dr Robert McHenry of OPP. 'Some leadership development has led people to be more concerned with their status than results. They have assumed that the techniques they are being taught will help them achieve higher status, as though they will do so just by being there on an expensive, prestigious course.'

Julia Middleton, who runs Common Purpose, the leadership development organisation, agrees that there has been confusion over what effective leadership development might look like. 'I meet a lot of people who have been on other leadership courses. They say to me: 'Every management course I've been on I keep getting told how terrifyingly fast the world is changing!' Training shouldn't be about speeding you up; it should give you a place to reflect. I sometimes think we are winding our leaders up into a state of frenzy when they should be stepping out of the melee and looking at their world again.'

Then there is the question of who is delivering the training. Adds Middleton: 'I get a consistent message from people who tell me that they are being sent on courses where, for example, they are told that creativity is crucial, but the people running the course are staggeringly lacking in it!

'Peter Tatchell (the gay rights campaigner) came and spoke on a course recently, and someone asked why he was there. I said: 'Did you really come on this course to listen to people like yourself?' We have to escape group-think, and learn to spot the talent in the organisation, even if it looks nothing like you. Few development courses give you a chance to look at the world that is emerging. They show you the world as it was. Tomorrow's leaders will need to be much more comfortable with diversity.'

Serious thought is needed about the practice and delivery of leadership training before committing to strategic development. There is also the key question of who should be getting the training. As leadership reasserts itself as a priority, there is much talk in businesses and organisations of identifying the talented 'high potentials' or future leaders and singling them out for special attention.

Here, too, it is easy to go astray. Says Dr Bill Byham of consultants DDI: 'Organisations are unbelievably unscientific in how they spot people. Sometimes they spend a lot more time and effort hiring people lower down in the organisation than they do spotting future leaders.'

Byham advocates a systematic approach, based on the intelligent use of data. 'Companies don't always have good criteria (for spotting future leaders),' he says. 'Too often they look for early achieve- ment, which is important, but that's often a function of chance. Two people might be equal in terms of competencies, but one happens to get bounced around and have good things happen to them, while the other one stays narrow.

'And organisations are often not doing a serious evaluation anyway,' he adds. 'It's usually just a bunch of people sitting around saying: 'Well, everybody nominate one.' 'Joe's my pick, how about you?' Some people may be away on foreign assignment and get forgotten, and so on.'

Byham believes the situation couldn't be more serious. 'It used to be if you lost a few good people it didn't matter. Now there's not so much talent out there, and so you have to find it and use it.'

Firms sometimes come up with a list of competencies, based on interviews with the current leaders. Byham doubts this is the right way to proceed.

'The current leaders may not be a perfect fit for the future strategy. What you ought to do is forget about the current leaders, and develop criteria against the company's strategy going forward.

'Future leaders will not necessarily be the best and brightest people,' he adds. 'They are the people who will benefit the most from accelerated development. Stretch them a whole lot.' (It's an argument he develops in his book Grow Your Own Leaders.)

Byham estimates that about 1% of the management community - it may be around 250 people in a big business - might constitute a sensible size for a cadre of 'high potentials'. 'You can't get management to focus on a wide group. It takes a lot of effort to develop these people; you've got to work with them, move them around, think about them a lot.'

Effective leadership development will include a range of activities such as on-the-job learning in demanding situations. OPP's McHenry sees practical experience - action learning - as a crucial part of leadership development. 'Around 80% of corporate learning takes place in business units,' he says.

If common sense didn't tell us that leadership matters, the data confirms it. International Survey Research (ISR), the global consulting firm, has been studying high-performance organisations throughout its 27-year history.

Dr Patrick Kulesa, head of global research at ISR, believes that effective leadership distinguishes sector leaders and high-performing organisations from the rest. Crucially, good leaders make the difference in winning employee engagement, which itself underlies stronger corporate performance.

ISR has defined the framework of effective leadership interventions under the heading DRIVER:-

D - direction: providing an overall sense of company goals and objectives

R - respect: respecting employees' concerns and wellbeing, being seen to be making fair decisions

I - inform: keeping employees informed on company plans and performance

V - values: articulating clear values and showing integrity in day-to-day management

E - energy: moving quickly and flexibly, responding to the market and energising the corporation

R - role-model: leaders are watched more than they realise. They need to be positive role models

Leadership in the end has to be about execution, about actually doing things. Alistair Russell, programme director of executive education at Durham business school, says there are different types of leadership appropriate to different levels of the organisation: 'big' leadership at the corporate level, and day-to-day leadership of a team or division. The challenge is recognising what sort of leadership is required where. 'Leadership is about choices, and action,' he says. 'Once you've got in, checked your e-mails, had a coffee, sharpened your pencils, what are you actually going to do?' That is the question leaders face every day. Effective leadership development will help suggest some answers.

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