Hay Group is often asked about what we’ve learned from the World’s Most Admired Companies. When it comes to fostering and developing leadership, my answer tends to be that it’s just a part of what WMACs do; it's engrained in their DNA. That's not to say that these companies are not conscious of leadership. In fact, I mean quite the opposite. WMACs are always conscious of and investing in the development and leadership of their people. Leadership is the "glue" that connects the WMACs' business strategy, operations and program changes, and ultimately, their commitment to human capital.
We've been researching the WMACs for 15 years and throughout that time, they have consistently made the development of their future leaders a top priority. In fact, executives at the WMACs say they devote as much as 30% of their time to “developing the next class of leaders.” As such, it’s no surprise that the WMACs score higher than their peers on “quality of management,” report greater satisfaction with the quality and breadth of leadership at both the executive and senior management levels, and are twice as satisfied with their high potential talent pool.
The question, however, is why?
First, the WMACs place a greater emphasis on their leadership development programs and processes for identifying future leaders, when compared to their peers. They invest in planned career assignments and individual or one-on-one coaching, rather than formal, in-house training programs. And most importantly, their collective development efforts are critically aligned with the organizations strategic goals. So, its development “fit for purpose”, it’s dynamic, thoughtful and planned, as opposed to “one size fits all”.
Second, the WMACs believe "social and emotional" skill development is twice as important as "technical" skill development. So, they use "competency models" (identified behavioral traits and underlying characteristics of an individual which cause or predict effective and/or superior performance in a job or situation) more frequently than their peers to help them identify and develop leadership talent. As a result, when compared to their peers, WMACs report that greater proportions of their executives demonstrate emotional intelligence, especially in the areas of self-awareness, self management and social awareness. These characteristics are particularly critical when considering that the WMACs cited an “inability to work in teams” and “insensitivity to others” as the most likely factors, behind “lack of vision/strategic thinking”, that contribute to high potentials derailing.
To further emphasize the distinction between leadership at WMACs when compared to peer companies, Hay Group studied a group of 23 high-potential candidates in a well know WMAC. Of the 12 that succeeded and moved up in the organization, all demonstrated self control and empathy 7 times and 3 times, respectively, more frequently than those who were passed over - reinforcing the importance WMACs place on "social and emotional" skills.
While the WMACs' well-defined approach to leadership and development provides a "best practice" for other organizations to follow, it's important to note that, at the end of the day, the key to successful leadership often lies with the individual. Leaders must develop self awareness, and be mindful of how they engage others and the outcomes they produce.
What practices does your organization implement to develop the next generation leaders?
Mel Stark is a Vice President and Regional Reward Practice leader at Hay Group.