Eighth Annual Hay Group Study Identifies Best Companies for Leadership

has the Oscars, Television the Emmys, publishing has the Pulitzer prizes, and
leadership development has its own annual awards.
There are
a few of these annual leader rankings, and quite frankly, it’s difficult to
keep them straight. There’s Chief
Executive’s 2012 40 Best Companies for Leaders
, Fortune’s
25 Top Companies for Leaders
, and the just published Hay Group
Best Companies for Leadership Study and Top 20

It’s no surprise that the same
companies appear on these lists year over year. That’s because, unlike many of
the high tech sexy companies that dominate the business headlines, companies
that develop great leaders just quietly go about it and deliver great results
year over year. Yes, Google and Zappos may be cool places to work, and Apple develops
great products, but when it comes to leadership development, they may be still
relatively immature. Although, I was surprised to see that Facebook made the
Hay list this year. Could Mark Zuckerberg be the next Jack Welch when it comes
to talent development? I’ll need to talk to Hay and find what they’ve been up

Here is the press release from the
Hay study:

The 8th annual Hay Group
study ranks the best companies for leadership around the globe and examines how
those companies nurture talent and foster innovation in their ranks. This year,
Procter & Gamble topped the list, followed by Microsoft, General Electric
and Coca-Cola.

According to Hay Group’s study, the
Best Companies for Leadership are purposeful and strategic in developing,
enabling and motivating leaders throughout the organization to do their best.
In fact, 73 percent of the Top 20 companies reported giving everyone at every
level of the organization the opportunity to develop and practice the
capabilities needed to lead others, compared to only 47 percent of all other
companies. These future-focused companies also look ahead to what roles are ­–
and will be – mission-critical to their success, and then intentionally
identify and develop leaders with the right skills to fill those roles. To
facilitate this process, the Top 20 companies reported doing more to develop
their population of new and mid-level managers, with higher usage rates of
web-based leadership modules (72 percent vs. 39 percent at all other
companies), classroom-based leadership training (80 percent vs. 55 percent) and
mentoring by a senior manager or executive (68 percent vs. 39 percent).

“The Best Companies for Leadership
recognize that many of the skills once required solely for senior leadership
roles — high levels of emotional intelligence, commitment to continuous
learning, analytical thinking — are now critical at every level of the
organization,” said Ruth Malloy, global managing director of Hay Group’s Leadership
and Talent practice
and co-leader of the Best Companies for
Leadership Study. “To excel in today’s highly complex and competitive business
environment, the Best Companies are taking deliberate steps to develop and
reward these competencies to enable their organizations to achieve operational
excellence today, while driving innovation for tomorrow.”

In fact, 82 percent of the Best
Companies for Leadership use rewards or reprimands that are based on rigorous
measurements of performance against goals, compared to only 58 percent of all
other companies. Similarly, 89 percent of the Top 20 companies encourage
employees to set challenging or aggressive goals, versus only 69 percent of all
other companies.

At the same time, the Best Companies
for Leadership foster cultures that encourage innovation. Seventy-six percent
of the Top 20 companies reward and stimulate cross-business-unit collaboration
to develop new business lines, compared to only 54 percent of all other
companies. The Top 20 companies are also more likely to encourage employees to
learn in areas outside of their areas of expertise (70 percent vs. 48 percent)
and to recognize and reward employees for really new and different business
ideas (77 percent vs. 58 percent).

“It’s becoming harder to create and
run profitable businesses in traditional ways,” said Rick Lash, director in Hay
Group’s Leadership and Talent practice and co-leader of the Best Companies for
Leadership Study. “Organizations have to think differently about how they
relate to their markets. The Best Companies are adept at anticipating and
meeting client needs at multiple points along the consumer spectrum. They’re
shifting from selling products and services to becoming integrated business
partners that can help their customers solve for pressing needs.”

In fact, 78 percent of the Top 20
companies reported that their organization encourages employees to spend much
time discussing customers’ future needs, compared to only 55 percent of all
other companies.

Correspondingly, 90 percent of the
Top 20 companies reported that senior leaders communicate that the firm’s survival
depends on adapting to evolving market trends, compared to 70 percent at all
other companies.

“In times of rapid change, many
companies lose their focus, failing to adequately engage and enable their
current workforces as the organizations shift to achieve short-term or
immediate objectives,” added Lash. “Those companies that simultaneously execute
on immediate priorities while aligning their employees with a shared sense of
purpose, and develop leaders at all levels to contribute and act on innovative
ideas, have a better chance at financial success.”

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

The Best Companies
develop, motivate, engage and enable employees
Top 20
All Other Companies
Actively manages a pool of
successors for mission-critical roles
85 percent
55 percent
Leadership development programs
better enable employees to deliver on my company’s goals/strategies
84 percent
62 percent
Leaders work hard to connect
people with projects that are personally meaningful to them
82 percent
61 percent
Senior leaders personally spend
time actively developing others
74 percent
48 percent
Provides employees access to
resources for innovation, even though success is not guaranteed
68 percent
47 percent
Leaders have the ability to
generate personal and organizational loyalty
84 percent
67 percent
The Best Companies
emphasize innovation
Top 20
All Other Companies
Provides structured opportunities
for younger employees to promote innovative ideas to senior leaders
71 percent
54 percent
Treats failure (after a good
effort) as a learning opportunity, not something to be ashamed of
72 percent
59 percent
Views employees in new start-up or
innovation areas as having equal importance to those driving operational improvement
80 percent
56 percent
Provides employees with creative
challenges rather than narrowly defined tasks
78 percent
62 percent
The Best Companies are globally
aware and respect diversity

Top 20

All Other Companies
Requires an appreciation of global
issues as a key job requirement
79 percent
46 percent
We actively recruit cultural
71 percent
34 percent
Leaders are culturally savvy and
have the skills to work effectively with diverse teams
84 percent
64 percent
Has a high proportion of women in
senior leadership positions
59 percent
40 percent
The Best Companies emphasize
environmental and social responsibility
Top 20

All Other Companies
Leaders are advocates for
environmentally responsible business practices
89 percent
61 percent
Our leaders are change agents who
initiate change toward higher environmental standards
86 percent
59 percent
Actively applies sustainable and
energy-efficient policies
83 percent
56 percent
Uses corporate social
responsibility to recruit employees
68 percent
48 percent

For more information on Hay Group’s
Best Companies for Leadership, please visit the microsite www.haygroup.com/BCL, or
join the conversation about #BCLeaders on Twitter at http://twitter.com/HayGroup.