Tuesday, February 17, 2009

The 2008 Best Companies for Leaders

From a February 2, 2009 press release:
The world’s Best Companies for Leaders—among the world’s most respected—are focused on developing leaders who will not only survive and thrive in the current financial crisis but will be well positioned for growth once the economy improves.

The 2008 Best Companies for Leaders survey—conducted by management consultancy Hay Group and Chief Executive Magazine—identifies the top 20 best-in class companies (see below) as well as the attributes that make these companies known for great leadership. The research suggests a number of best practices to help organizations and their leaders navigate the significant challenges brought on by the economic downturn as well as key tips to prepare for the upswing.

Surviving the downturn
When asked what organizations value the most in leaders, 83 percent of the best in class organizations as compared to others said “execution.” Organizations value leaders who can achieve results through others. These leaders create a climate in which people know exactly what is expected of them. In ideal times, the survey results showed, people value authoritative and democratic styles of leadership in comparison to the other four styles of coercive, affiliative, pacesetting and coaching. In tough economic times, employees’ desire more communication and clarity around goals. They want their leaders to become more visible and to be leading from the front. Typical leadership styles which accomplish this include authoritative with some coercive and pacesetting when needed.

During tough economic times, best-in-class companies create clarity, encourage development, drive accountability and recognize successful leaders. 65 percent of the top twenty companies on the list hold senior managers accountable for commitments versus 36 percent for all others. 63 percent create a sense of purpose for employees by communicating values versus 43 percent for all other companies. 45 percent honor leaders within the organization versus 32 percent for all other companies.

In addition, 62 percent of respondents indicated that matrixed roles are increasing in their organizations. Managing in a matrix poses its own set of challenges, including the need for collaboration, creating a cohesive team, not having authority over resources, managing conflicts over differing agendas, goals or priorities, and minimizing confusion over roles, decision-making and accountability.

Hay Group says that there will be an increased emphasis on the skills needed to work in a matrix environment. Relationship building, influencing, adaptability, interpersonal skills and collaboration skills will all be more important in the future workplace.

“The conventional top-down chain of command is yielding to decision-making that’s spread across business units, executive teams with far-reaching authority and other activities that reflect a brave, new, flat business world,” said Rick Lash Hay Group’s national practice leader for leadership and talent.

Preparing for the upswing
The Hay Group/Chief Executive survey reveals that the top 20 best companies for leaders make leadership development a priority. 70 percent of the top 20 companies say they have a formal process to identify individuals for leadership roles, versus 37 percent of all companies. 65 percent of companies say that talent management is driven by a clear business strategy versus 39 percent of all other companies. 55 percent have formal programs to accelerate leader development versus 34 percent of all other companies.

“What we have been seeing in these uncertain times is that organizations are not pulling back on their development of leaders, primarily because organizations recognize they don’t have the depth of leadership they need to meet future demands,” said Lash. “This year we have seen the best in class organizations become more focused, investing their assessment and development on their best leadership talent, rather then providing across the board development for everyone”, he said. “The Best Companies for Leaders are making serious investments in leadership development,” said Lash. “Development opportunities include special projects, assignments, and online training programs.”

2008 Best Companies for Leaders
1. 3M Company (15)
2. Procter & Gamble (2)
3. General Electric (1)
4. Coca-Cola (5)
5. HSBC Holdings (14)
6. ABB
7. Southwest Airlines
8. IBM
9. Hewlett-Packard (10)
10. PepsiCo (7)
11. Nokia
12. Accenture Ltd.
13. FedEx
14. Infosys Technologies Ltd.
15. McDonald's Corporation (18)
16. Caterpillar
17. American Express
18. Cisco Systems
19. Oracle
20. Intel Corporation

Numbers shown in ( ) indicate rankings from 2007


Anonymous said...

This is great. How many of us have had "leaders" not be accountable for their commitments, and everybody wonders why the team is performing so poorly. It's fine to delegate tasks as long as results are produced. That involves everyone understanding and honoring their individual commitments, a tone that is set from the top down.

Anonymous said...

I have a problem with this survey. How can it possibly be valid if 12 of the top 20 firms are new to the list. Is it realistic to believe that ABB (6) and Southwest Airlines (7) and IBM (8) were not good enough to make this list last year? Or that the company that was number three last year was suddenly not good enough to be in the top twenty?

Dan McCarthy said...

Wally -
I see your point; you would expect to see more YOY consistancy.

Anonymous said...

Yes, Dan, it's year to year consistency, but it's also volatility. I went back and looked at who was number 3 on this list last year. It was Johnson & Johnson. As near as I can tell there's no reason in the real world for them to fall off the chart. Maybe they didn't send back the survey this year.

susieandrew said...

A possibility is that the criteria for determining the best companies changed slightly from the last study. I'll be interested to see the results of the Fortune/Hewitt/RBL Top Companies for Leaders results when they come out. The survey is going on right now and the results should be released this fall.

Dan McCarthy said...

susieandrew -
could be. I'll be publishing that one too when it comes out.

Anonymous said...

Where is Johnson & Johnson in this list?

If not there for a particular reason - can you please elaborate as to why?

Thank you!