Wednesday, January 26, 2011

Sixth Annual Hay Group Study Identifies Best Companies for Leadership

Speaking of rewards and recognition, I always look forward to Hay's annual Best Companies for Leadership Study. It's a leadership development practitioner's version of the Academy Awards. Yes, you can spend a lot of time disputing the research methods and looking for flaws in the "winning" companies, but I'd rather just learn from it and look for some usable nuggets. Here's the press release, along with the full list. Take a look, and leave a comment with your reaction.

PHILADELPHIA, PA – January 25, 2011Hay Group, a global management consulting firm, today released its sixth annual Best Companies for Leadership Study and Top 20 list. The study ranks the best companies for leadership around the globe and examines how those companies develop current and future leaders. This year, General Electric topped the list, followed by Procter & Gamble, Intel Corporation, Siemens and Banco Santander.

According to Hay Group’s study, all of the Top 20 companies report that everyone at every level of the organization has the opportunity to develop and practice the capabilities needed to lead others, compared to less than 70 percent of all other companies in the study. In addition, 90 percent of the Top 20 companies report that people are expected to lead regardless of whether they have a formal position of authority, compared to only 59 percent of other companies.

“The Top 20 Best Companies for Leadership are at the forefront of a significant shift away from hierarchical organizational operating models,” said Rick Lash, Director in Hay Group's Leadership and Talent Practice and co-leader of the Best Companies for Leadership Study. “Leadership in the twenty-first century is about leading at all levels; not restricting it to title. As organizations become flatter, the best leaders are learning they must check their egos at the door and become increasingly sensitive to diversity, generational and geographical issues.”

Hay Group’s study also found that the shift in organizational culture away from top-down leadership extends beyond employees at headquarters. All of the Top 20 companies encourage local leaders to participate in decisions made at headquarters, compared to 72 percent of all other companies. Similarly, 95 percent of the Top 20 companies report that ideas coming from subsidiary leaders are just as likely to be implemented as those from headquarters, compared to 76 percent of all other companies.

“This year’s Top 20 is a group of companies that are moving quickly to improve their efficiency and competitive positioning by flattening their business structures and diversifying their workforces,” added Lash. “They are adapting development tools and reward structures to equip managers with the changing global leadership skills the business environment demands, and incentivizing leaders to use these capabilities effectively.”

Other major findings from Hay Group’s Best Companies for Leadership Study include:

Innovation is formally sought and disseminated through the organization:
My company has a global steering committee that harvests local best practices and sets HR policies
Top 20: 90 percent
All Other Companies: 60 percent

Best practices for leadership development are collected from subsidiaries and then shared across this organization
Top 20: 90 percent
All Other Companies: 56 percent

Diversity is valued as a business asset:
My company actively recruits cultural minorities
Top 20: 90 percent
All Other Companies: 48 percent

Cultural diversity has helped my organization to be more effective
Top 20: 95 percent
All Other Companies: 56 percent

My company has a high proportion of women in senior leadership
Top 20: 58 percent
All Other Companies: 40 percent

Effective leaders are increasingly collaborators:
We have programs designed to develop leaders who can creatively bring together resources across different parts of this organization
Top 20: 100 percent
All Other Companies: 66 percent

Our leaders cannot avoid cooperating with each other across functions/silos
Top 20: 90 percent
All Other Companies: 69 percent

Our incentive system rewards collaboration across the business
Top 20: 90 percent
All Other Companies: 66 percent

Leadership development continues to be a priority:
This organization actively manages a pool of successors for mission critical roles
Top 20: 100 percent
All Other Companies: 66 percent

There are a sufficient number of qualified internal candidates who are ready to assume open leadership positions at all levels in my organization
Top 20: 100 percent
All Other Companies: 55 percent

Work-life balance is encouraged:
Helping employees achieve work-life balance is a priority for this company
Top 20: 95 percent
All Other Companies: 63 percent

My company has a 'family friendly' corporate culture to support employees raising children
Top 20: 95 percent
All Other Companies: 52 percent

It is easy for people to work from home in this organization
Top 20: 84 percent
All Other Companies: 43 percent

Here's the full list:

The top 20 Best Companies for Leadership
1. General Electric
2. Procter & Gamble
3. Intel Corporation
4. Siemens
5 Banco Santander
6. Coca-Cola
7.McDonald's Corporation
8. Accenture
9. Walmart
10. Southwest Airlines
11. ABB
12. Microsoft
13. PepsiCo
14. Goldman Sachs
15. Hewlett-Packard
16. Unilever
17. Cisco Systems
18. FedEx
19. Pfizer Inc.
20. BASF

About Hay Group’s Best Companies for Leadership Study:
Hay Group has researched the Best Companies for Leadership since 2005. The 2010 survey included responses from 3769 individuals and 1827 organizations worldwide. The survey was based on the organization’s response to an online questionnaire and peer nominations. Respondents that completed the survey were from 96 countries, with 26.6% from North America, 23.4% from Europe, 3.6% from the Middle East, 19.7% from Asia, 23.7% from South America, 2.6% from the Pacific, and .5% from Africa. To see the Top 20 list from 2005 through 2010, please visit the Best Companies for Leadership microsite at

About Hay Group
Hay Group is a global consulting firm that works with leaders to transform strategy into reality. We develop talent, organize people to be more effective, and motivate them to perform at their best. With 85 offices in 49 countries, we work with over 7,000 clients across the world. Our clients are from the private, public, and not-for-profit sectors, across every major industry and represent diverse business challenges. Our focus is on making change happen and helping people and organizations realize their potential.


Tina Smagala said...

Thank you for sharing the results, Dan. It's always exciting to see companies recognized for their leadership development results. These studies provide credibility to the business impact of developing current and future leaders.

Unknown said...

Dan, Thanks for sharing this article. Overall, this is a great article. For a beginner in management like me, this article is an eye opener of the 21st century. I would look forward to working for such organizations in the future. I think every organization should think towards this behavioral change to self motivate their
employees. It is nice to see the sampling data include the employees from all levels of the organization, and diversified across the globe. However, there is no way to validate the levels of those 3769 individuals in an organization.

Dan McCarthy said...

Tina -
Agree, it's a good tool for building the business case for leadership development. Plus, CEOs and execs tend to be a competitive lot.

IIango -
Thanks for your comment. while there may ne no way to validate who filled out surveys, at least this "award" seems to be based on data.