Saturday, August 16, 2008

What’s Up with All of This Leadership Development, Anyway?

I was recently interviewed by The Research Board regarding some work they are doing on talent management. (The Research Board is a membership-based IT think tank serving a select group of CIOs and their direct reports of the Global 100 and 200 companies.)

I found it interesting that talent management, specifically leadership development, was by far the number one topic of interest coming from their member company executives. A lot of the “research” on the growing strategic significance of talent tends to come from the same companies that sell leadership development software, coaching, and training programs, so I’m always a little skeptical of these reports. So this one seemed to be a bit more credible.

I asked him why, and he really wasn’t sure. He was working on a hypothesis, and suspected it was due to globalization and demographics (retirement of the baby boomers).

While I’ve heard this before, and know its true, I wondered if it’s more than that. One of the things I try to do with this blog is to personalize leadership development and leadership, and to write about my own experiences. In other words, to make it real.

The demand for leadership development hits me right in the face every day! I’ve been swamped at work these days (well OK, running off to the beach a couple times may have contributed to that). But it’s not just me – my entire team is stretched to the max, and always has been for the three years I’ve led them. My friends in the executive coaching business seem to be doing well, and I get regular calls from recruiters, sourcing openings for leadership development. And the “Business & Leadership” section of Borders and Barnes & Noble seems to get bigger every year.

So where’s all this demand coming from? Here’s what I’m seeing:

1. Growth. I’m fortunate to work for a company that’s growing every year. Growth creates new leadership opportunities, and those openings have to be filled.

2. Promote vs. buy. We’re a “promote from within” kind of company, so many of our managers have never led before. They need to learn. Buying is risky and expensive, so development provides for a better ROI.

3. A development culture. Training is a key part of our business model and culture – it’s a big reason why we can sell credibly and service our clients. Everyone is expected to learn and teach in order to maintain our success. The best companies get this.

4. Change and complexity has created the need for new leadership competencies. What got us here won’t get us there. Leadership is hard! People want to perform well, to be successful. It’s human nature. When they struggle, they look for help.

5. Leadership positions are often difficult to fill because top talent doesn’t want to relocate. So in many cases benches are thin, and we end up “over-promoting”.

6. Yes, demographics play a part. I’m seeing a “graying” of our top executives. But I’m not ready to call this a “crisis” yet. An entire generation won’t retire overnight. There's also the impact of "Gen Y". There's no need to convince this new generation of the need for continuous development - they expect and demand it.

7. Intense competition. Every year gets harder and harder. Sharp leaders make a huge difference and provide a tremendous competitive advantage. In fact, I’d say it all comes down to leadership. Great leadership gives you great products, service, financial returns, and engaged employees.

8. Employee expectations for development. We’ve all watched our parents, neighbors, friends, and coworkers get laid off when a company decides they need to trim its workforce. Decades of this has created a “free agent”, “take responsibility for your own development” mindset in employees (as it should). We no longer depend on our company or union to take care of us in sickness and in health – it’s survival of the fittest! Employees demand opportunities for development, and they’ll leave (especially the A players) if they don’t get it.

9. There’s a shortage of good, really good, leadership development practitioners. While there may be a lot of candidates out there that say they “love working with people”, ex-managers, teachers, and aspiring social workers, there’s not many that have a solid background in leadership development, talent management, and succession planning. It’s not something you can learn from a book, and takes years (at least 10) to get really good at it and be able to sit across from a CEO or VP and be involved in decisions that can make or break your company. There’s also a lot of charlatans out there, selling all kinds of crap, trying to capture a share of this market.

10. Globalization. While I don’t see too much of this at my current U.S. company, I sure did at my last one (a big multi-national). Most of my attention was focused on developing talent in greater China and other developing markets. There was just an incredible appetite for leadership and management development, with most of the expertise coming from the U.S. and Europe. The same for the top executive education business schools. More and more of these programs are being filled by aspiring leaders from around the world.

How about you? If you’re in HR, is leadership development at the top of your priority list, and if so, why? If you’re a consultant or coach, are you experiencing an increased demand for your services? And if you’re a leader or aspiring leader, is your own development as a leader important to you, and if so, why?


Mary Jo Asmus, President, Aspire Collaborative Services LLC said...

Hi Dan,

Thanks again for your great blog.

It does seem to me that there is an upswing in the need for executive coaches. My colleagues and I are enjoying this welcomed need during this tough economy. It seems that the increase in acivity is due to an upswing in "high potential" leadership development programs. I think you've hit the nail on the head with the reasons for what appears to be increased focus on leadership development.

The American Management Association has published a new study on executive coaching. They seem to expect a continued increase in the executive coaching industry. Their report can be found here (and due to it's length, I'd suggest reading through the introduction for an executive summary of the content):

Dan McCarthy said...

Mary Jo -
Thanks, I'll take a look at it!

Anonymous said...

Leadership development I believe is the silver bullet. During the ten years I ran Walt Disney World Resort my main focus was leadership developement. I created a document in 1995 titled, Disney Great Leadership Strategies. This document became the foundation for my new book: Creating Magic...10 Common Sense Leadership Strategies From a Life at Disney. We must develop our leaders because it is great leadership which creates the right environment for their team who then take care of their customers because they want to and not because they have to. Business results follow. I wrote an article once titled, "Inspiration-the real work of leaders.: My next one will be "Manage Like a Mother. Mothers are tough and sensitive.....Lee Cockerell:

Anonymous said...

Hi Dan,

Thanks for the wonderful blog post. You can also include topics related to corporate games which can be used in corporate training too. As a corporate trainer I would like recommend a book called No props which should be used while conducting corporate training session.

Dan McCarthy said...

Lee -
Thanks, I look forward to your new book!

Wally Bock said...

Congratulations! This post was selected as one of the five best business blog posts of the week in my Three Star Leadership Midweek Review of the Business Blogs.

Wally Bock

Dan McCarthy said...

Wally -
Thanks! It's always an honor to make your bbbpotw list.