Gaps persist despite $3-billion leadership development industry
Developing Leaders: In September, the Strategic Capability Network hosted Marianne Hasold-Schilter, senior vice-president of leadership and talent at Scotiabank, and authors Liane Davey and Vince Molinaro at its monthly breakfast event in Toronto to talk about leadership development. For more information about SCNetwork, visit www.scnetwork.ca.
Holistic approach to developing leaders best
Building leadership critical, yet few employers do it well
SCNetwork’s panel of thought leaders brings decades of experience from the senior ranks of Canada’s business community. Their commentary puts HR management issues into context and looks at the practical implications of proposals and policies
Holistic approach to developing leaders best
During an independent assessment of the current leadership skills of Scotiabank’s top leaders and discussions with the bank’s executive team about future leadership needs, Scotiabank discovered some of its organizational practices were impeding leadership development.
Despite the fact development plans were an integral part of performance reviews, leaders weren’t having regular development discussions with their reports or coaching them. This was in part because the leaders themselves weren’t coached as they climbed the ranks and didn’t see it modelled in the organization, said Marianne Hasold-Schilter, senior vice-president of leadership and talent at Scotiabank, at a Strategic Capabilities Network meeting in Toronto last month.
To change that, Hasold-Schilter and Liane Davey, who conducted the assessments, talked to chief executive officer Rick Waugh and helped him set up more formal development discussions with his direct reports — the most senior executives at the bank.
“By Rick role modelling that, it set the tone for the organization,” said Hasold-Schilter.
During one-on-one discussions with Davey, who is a principal at consulting firm Knightsbridge in Oakville, Ont., members of the leadership team opened up about various cultural aspects and organizational practices that affect leadership, including the coaching piece. She also uncovered what kind of leadership would be needed in the future to execute the bank’s strategic plan.
“It was really the first time we linked everything — the individual leader, the culture and the organizational practices,” said Hasold-Schilter.
From the leadership assessments and discussions with the executive team, Davey and Hasold-Schilter created a chart of the various leadership competencies — at the individual, culture and process level — needed to meet Scotiabank’s strategic goals and identified which ones were being met and which ones needed improvement.
Building leadership capacity — ensuring an organization has the right talent to fill future leadership roles — is critical for businesses these days, Vince Molinaro, principal at Knightsbridge, told those gathered at the Strategic Capabilities Network event.
“It’s no longer an HR priority, it is a business priority,” he said. “Organizations have to get good at building their leadership capacity.”
Despite the fact leadership development is a $3-billion a year industry, many businesses report the gap between current leadership talent and future leadership needs still exists, said Molinaro. Part of the reason is the focus on individual leadership behaviours.
While organizations need leaders who are holistic and can think about the business broadly, leadership capacity exists beyond the individual leader and includes organizational practices and culture, said Molinaro.
One of the traditional approaches to leadership development has been to send leaders on development retreats, away from the demands of the organization. They return energized and ready to lead their teams in new and innovative ways, said Davey.
But when they return to work, they quickly notice they’re the only ones who have changed and everyone else is stuck in the same old, inflexible patterns.
“The individual leader, even with the best of intentions and newly developed skills, doesn’t have the strength, or the critical mass or the energy to overcome what are very, very strong forces in the organization,” said Davey. “It’s not that we shouldn’t invest in individual skill development, it’s that it’s not enough.”
If an organization’s policies and culture don’t support the type of leadership the organization wants individuals to display, than no amount of individual leadership development will improve the situation, said Molinaro.
When developing leaders to meet future needs, organizations tend to focus on specific leadership activities, such as succession planning, performance management, training and career development. But these activities, because they’re not tied directly to business outcomes, tend to get sidelined, said Davey.
But if organizations focus on the indirect impact of organizational practices (such as customer service and business planning) on leadership capacity, they can have a much bigger impact, said Davey.
For example, if a key leadership skill is involving employees in strategic planning, but the organizational practice is to take the senior leaders away on a retreat to hammer out the strategic plan and then have them present it to their reports as a fait accompli, then the organizational practice is impeding the kind of leadership the organization wants to develop.
“If you really want to build leadership capacity, start thinking of these things as your key organizational practices to change,” said Davey. “You will get so much more impact if you can change these practices.”
An organizational culture that best supports leadership development is one where there is a strongly embedded holistic leadership culture where teams work across departments and leaders are focused on customers and engaged in executing the business strategy, said Molinaro.
When building leadership capacity, organizations need to figure out what kind of leadership is needed to be successful in the future. To do this, an organization needs to determine what the future environment will be like, what kind of strategy will be needed to be successful in that environment and what kind of leadership skills (including organizational practices and culture) will help the organization execute that strategy.
Once that’s done, organizations need to compare those leadership requirements to what already exists in the organization and identify the gaps between current talent and future needs, said Davey.
Once those gaps have been identified, the organization needs to look at individual leadership development, organizational process changes and cultural changes to create the kind of leadership needed to be successful in the future. However, all these elements need to remain flexible so they can change if the future conditions change, said Davey.
“You have to keep evolving,” she said.
Coming soon
Want to attend one of the upcoming Breakfast Series in Toronto?
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Building leadership critical, yet few employers do it well
SCNetwork’s panel of thought leaders brings decades of experience from the senior ranks of Canada’s business community. Their commentary puts HR management issues into context and looks at the practical implications of proposals and policies.
Meeting the demand for future leaders
By Dennis Cook
The first paragraph of Leadership Solutions: The Pathway to Bridge the Leadership Gap, the book written by Vince Molinaro, Liane Davey and David Weiss, states: “Building leadership capacity is mission critical… unfortunately, many organizations have significant leadership gaps… undermining their ability to succeed.”
I don’t need to be convinced of this. I — and probably you, too — have never worked in an organization where current and future leadership capability was less than a pressing issue. The question is, “What can we do about it?”
As Molinaro points out, we know far more about what not to do. North American companies pour a whopping $3 billion per year into the leadership development money pit, and yet the leadership gap persists.
Davey gives an example of the waste: “Imagine you’re focused, energized and inspired after a three-day leadership development program…” You know where this is going. After two days back in the office, your seminar-induced glow has waned, and within two weeks you are again resigned to the dismal limits of your workplace and a career of quiet desperation.
We definitely know from experience how not to develop and deliver a sustained supply of future leaders. Expensive workshops, regular injections of textbook business theory, promoting the people who are strongest functionally or technically, patiently waiting for that charismatic natural leader to emerge and fast-tracking newly minted grads who studied business administration — none of this works reliably.
So what’s the solution? The authors propose “a comprehensive and compelling answer to this critical business issue,” and I believe they delivered. Their SCNetwork presentation only scratched the surface of the depth, breadth and powerful practicality of the framework and methods outlined in great detail in their book.
Some key points:
• A leadership gap must be addressed as an organizational phenomenon. An organization’s aggregate leadership capacity comprises three dimensions: the capabilities of individual leaders; the prevailing leadership culture; and seven specific organizational practices. To be successful, work is required in all three dimensions, and weakness in any will inhibit leader development.
• Leadership must be holistic. Fortunately, holistic leadership is thoroughly defined — and in retrospect appears to be the keystone for the entire framework, ensuring employees “have an integrated view of the enterprise and can focus the organization’s resources on creating customer value”.
• A more powerful force than the countless learning programs that shape leaders is the leadership culture that surrounds them. Either consciously or not, would-be future leaders emulate the behaviours of more senior and powerful people around them.
• Leadership Solutions recognizes leaders learn best in real time and in real life. The book specifies seven everyday organizational practices that, when properly institutionalized, can be leveraged to provide intensive real-world, high quality, on-the-job learning and development for emerging leaders.
• Metrics can be applied to quantify an organization’s leadership capacity and leadership gap. I expect our incumbent holistic senior leaders will embrace the authors’ overall approach without fussing unduly about measurement. Those who resist while obsessing on metrics haven’t bought into the authors’ approach anyway and might be best left unsold.
The authors have capably tackled a complex and pervasive mission critical challenge that has eluded clear understanding, effective implementation and crucial outputs. The book is no less than a detailed handbook for crafting near-term solutions to produce longer-term results.
Dennis Cook is an SCNetwork commentator on organizational effectiveness and has held senior roles in industry, government, and professional practice. With 27 years in HR and executive recruiting, he is executive vice-president, people portfolio and total experience for Northwater Capital Management, an employee-owned company founded in 1989 with offices in Toronto, New York and Chicago.
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Fear is the root cause of leadership gap
By Dave Crisp
Why the leadership gap? That’s the question. In their new book, Vince Molinaro, Liane Davey and David Weiss take us closer to practical answers and solutions.
In short, fear is the reason for the leadership gap. I used to object when people said organizations are full of fear, but it’s true. Not the type usually thought of — some bully shouting at or firing you, though that still happens far too often — but a deep-seated, ingrained fear we won’t get better results quickly enough and you can’t deviate from the “hurry up” party line without jeopardizing your career. It’s a subtle pressure derailing anything that might “take too long” — the usual complaint about coaching, planning or leadership development. We need space for a longer view when it comes to developing people.
We know effective leaders backed by decent HR practices can more than triple results, usually in less than four or five years. There’s tons of evidence in the form of data, research and case studies. But tell someone it takes this time to achieve effective leadership in your organization and eyes glaze over, people reach for the daily sales report and change the subject. Four or five years isn’t in their mandate, not when a CEO’s average tenure is under three years, meaning most executives likewise spend less than that in any given job. We have to start rewarding executives for coaching and developing people despite the fact it doesn’t bloom overnight or always solve every problem for the next day, week or month.
These authors point out a huge leadership gap still exists in almost all organizations, which means those that close it gain tremendous competitive advantage. More complex organizations and challenges require more complex, broadly skilled leaders. Three elements are required to achieve those leaders: individual skill development, strong leadership-friendly policies and practices and a leadership-friendly culture of positive habits. We have tons of programs for the first, but few well-constructed efforts have been made in the latter two, which makes this advice valuable.
At the core they propose a series of options and mechanisms for rotating executives through real jobs with increasing responsibility over time. This exposes them to a broader range of challenges — most of all creating policies and behaviors that enable them to try calculated risks, make sensible mistakes and learn with coaching support from everyone.
If it’s easy to describe the solution here, why doesn’t every organization do it? Answer: Habit or, as we like to call combined group habits, culture. Most organizations start and get by via a handful of experienced, insightful executives who intuitively learned to manage complex decisions. We need to change that so most organizations consciously support more, even all, of their key people in experiences and coaching that helps develop such broad skills. What are we afraid of? It doesn’t take any longer to do it right versus muddling along and the pay-offs are enormous.
Dave Crisp is SCNetwork’s lead commentator on leadership in action. He shows clients how to improve results with better HR management and leadership. He has a wealth of experience, including 14 years leading HR at Hudson Bay Co., where he took the 70,000-employee retailer to “best company to work for” status. For more information, visit www.CrispStrategies.com.
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This year’s model
By Matt Hemmingsen
The SCNetwork session on leadership couldn’t have come at a more opportune time, given the current financial meltdown. The senior executives of such well known and respected organizations as Bear Stearns, Morgan Stanley, AIG, Merrill Lynch and Lehman Brothers have all been forced out of office. Once considered exemplary business icons, they now stand in the ruins of a crumbling empire.
So what happened? Have we learned nothing from the technology bust of the early 2000s and from the disastrous Enron episode? Where has the investment in corporate governance, stewardship and leadership development gone?
Three decades ago, Warren Bennis lamented the disappearance of leaders in his book Why Leaders Can’t Lead. He wrote: “They’re just hired guns following the money.”
The focus became the “bottom line” with quarterly results the scorecard. Leaders and visionaries have all but disappeared from the landscape, replaced by managers and bureaucrats who look to the constant barrage of new leadership theories and management models in the hopes of gaining that elusive competitive edge. The phrase often credited to P.T. Barnum, “There’s a sucker born every minute,” seems appropriate in terms of the money spent annually on leadership development. Yet, as far as I can see, nothing seems to have changed.
Leadership Solutions: The Pathway to Bridge the Leadership Gap presented by Vince Molinaro and Liane Davey (and co-authored by David Weiss) follows on from their earlier work, The Leadership Gap. I applaud the practical approach taken by the authors, and the inclusion of leadership culture, organization practices and leadership behaviour as key cornerstones of their holistic leadership model. As noted, the primary focus has traditionally been on leadership behaviours. The model represents a more balanced approach for transformational change and sustained results.
From my perspective, however, one issue still remains — if we continue to rely on observed leadership behaviours, we only focus on what a leader does, and not why. Successful leaders understand what’s important to themselves and others. They effectively influence and gain commitment. In other words, they build productive relationships that achieve real and sustainable results. As James Kouzes and Barry Posner so well articulated in their book, The Five Practices of Exemplary Leadership, “Leadership is a relationship. Success in leading will be wholly dependent upon the capacity to build and sustain those human relationships that enable people to get extraordinary things done on a regular basis.”
Call me a cynic, but this year’s model will quickly fade from sight, relegated to the book shelf, hidden behind next year’s business budget and last year’s financial results. So until leaders have taken the time to gain an awareness of themselves and the effect they have on others, nothing will change. And in the immortal words of Alphonse Karr – “plus ça change, plus c’est la même chose” — or, the more things change, the more they stay the same.
Matt Hemmingsen is SCNetwork's lead commentator on strategic capability. He has held senior HR leadership roles in global corporations. He is a managing partner with Personal Strengths Canada, a member of an international company focused on improving business performance through relationship awareness. For more information, visit www.personalstrengths.ca or e-mail [email protected].
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