Tweet

Leadership Development Your Company Can Afford…Even This Year!

Written by: Clarke Peterson

Article Overview: Do you need to be developing leaders for the future? Do you think it must cost a fortune, and it's just plain out of reach for this year, given budget constraints? Learn how one company built it's bench to prepare for baby boomer retirements with an inexpensive, no-travel, highly effective leadership development process. And after strengthening their leadership team using this approach, learn about the great results they produced during the last five years.

Leadership Development Your Company Can Afford…Even This Year!

It was the mid-90s, and we were in an economic slump; not nearly as bad as right now, but enough to tightly restrain corporate budgets. I was the VP of Human Resources for a financial services company of about 1300 with ten offices around the US. One day, I was looking at demographic data with our organizational chart in hand, and what it told me was that we were in trouble. We had way too many baby boomers in managerial and executive roles who would all be retiring at about the same time, with few apparent successors in the pipeline.

I knew that I needed to start building a solid pipeline of future talent, and I quickly learned that while I had “support” for the effort, there would be very little money to spend on it. Sound familiar?

Of course it does. It’s the challenge HR professionals always face, especially when the expected payback from an investment is down the road a ways.

Back then, most companies used commercially-available training programs to develop their managers. I knew there were lots to choose from, and that some were pretty good, but also pretty expensive, which was going to be a problem.

At about that time, an article appeared in the Wall Street Journal about another financial services company that was doing development quite differently. They were building improvement plans that had their managers trying new behaviors on the job, using their teams as learning labs. Unlike most other companies at that time, they weren’t sending managers away to expensive week-long programs in distant cities, hoping they’d return “fixed.”

As I talked with that company, I learned that their model was based on some research conducted at the Center for Creative Leadership in Greensboro, NC. The research revealed that extraordinary managers believed that the things they learned along the way came from three sources, in these proportions:

1. Schools and Seminars - 10%
2. Other People - 20%
3. Things They Learned On The Job – 70%

The developmental approach this other company was taking was patterned after the research finding, and it didn’t cost a lot of money.

Soon thereafter, we were underway, using facilitated 360-degree feedback to heighten self-awareness and provide motivation based on performance gaps. We identified those gaps by looking at the raters responses to two questions:

1. How would you rate or describe the Learner on this competency?
2. How important is this competency to success in this position?

The feedback process grouped the answers in thirds, so that a competency would be considered top-, middle- or bottom-third as to Performance and Importance. Gaps were apparent when a competency was viewed as top third in Importance, but only middle or bottom third in Performance.

Managers selected three competencies for development during the subsequent two years and were provided with resources that showed them just what to do to get better at each. Accountability is important, and these managers had to report on their progress quarterly, with 20% of their bonus at risk for failure to do the work in their plan by the end of the two years.

From the first round of feedback, we were able to capture the competencies most important for success in all of our managerial positions, so in subsequent biannual feedback sessions, we could compare how a manager was doing on the competencies most important for success for the current position, as well as those most important for potential future roles. That allowed for “building the bench” by creating the strengths that a manager would need to succeed in the future.

How do you measure the results of such a program? With programs like this it can be tough to get good measures, but I think the best indicator is organizational performance. During the last five years, that organization posted the best results of its 95-year history. While I can’t put an exact number on it, I have no doubt that having an effective leadership development program that produced a management team well-prepared to take on the challenges it faced contributed to those results in a meaningful way.

This strategic HR solution to one company’s bench strength problem had affordable costs, required no travel, and produced great results. It was ideal for those tough times a few years ago, and it’s just as practical and effective in 2009.

Related Articles
  Learning at the Frank Sinatra School of Leadership
  Integral Leadership - A Useful Model for Leadership Development
  The Future of Leadership Development
  Leadership Development is Key to Organizational Success
  Leadership Bottlenecks Kill Companies

Article Tags: 3 things, available training, baby boomers, corporate budgets, creative leadership, demographic data, developmental approach, distant cities, economic slump, executive roles, greensboro nc, hr professionals, improvement plans, learning labs, mid 90s, organizational chart, payback, proportions, successors, wall street journal



Related Forum Posts
How to valuate a business - Hi Garth - here is how we did it at Northern Crown Capital when I was helping them raise venture capital for Toronto-based entrepreneurs. Assume the start date is 2003 so 2008 projections are 5 years out: How Northern Crown Capital Valuates a Business 2008 Financial Projections Earnings Before Tax $5,865,000 Tax Rate 42% Taxes $2,463,300 Net Earnings $3,401,700 Amount Seeking to Raise Today $3,500,000 Discounted Value of Future Opportunity, 5 Years Out 2008 P/E Ratio 15 Value of Company in 2008 $51,025,500 Discount Rate Applied 30% Year 2008 $51,025,500 Year 2007 $35,717,850 Year 2006 $25,002,495 Year 2005 $17,501,747 Year 2004 $12,251,223 Value of Company at Investment in 2003 $12,251,223 Less: Investment Amount $3,500,000 Present Value $8,751,223 Discount for Risk & Private Company 40% Less: Discount for Risk & Private Company $3,500,489 Private Company Value $5,250,734 Present Value (What the Owner Keeps) $5,250,734 60.00% Financing (What the Investor Gets) $3,500,000 40.00% Total $8,750,734 100.00% I hope this helps!
Different Hats - CEO Sales & Marketing & Leadership Development Company Strategic Vision 10 Alliances & Growth Strategies 10 Hiring & Managing People 8 Mentoring 8-9 Strategic Planning for Clients 10 Execution of Marketing Campaigns 9-10 (i have great people who do the nitty gritty) Financial Management 9 Bookkeeping 3 (outsourced as I really hate the fine details like GST0 Administrative Follow Up 6-7 (again have great staff) Writing & Publishing 9 (getting better all the time!) Speaking 10 (so I have been told) Self Promotion 9-10 Web development & Promotion 6-7 (learning more and have brought on players who are 10+) Babysitting Employees (1 - wont do it, that's why I work so hard to hire and motivate the people I have) Great topic Kevin!! Jude
Seek Venture Capital & Funding - Hello, Greetings from India. I am Seeking Venture Capital for Offshore Software Company Start-up. Need advise along with Business Model Sample. I have a basic outline for an offshore company. 1. Technology - like Microsoft Dot Net, Java, LAMP 2. Talent Team - Found Good Technology Developers. 3. Where I can get the leads/potential customers - Leads have been identified who are willing to move forward offshore projects. 4. I do not have resources like funding. It is a very critical factor to me Industries: Manufacturing, Real Estate, Retail, Insurance, Distribution & Logistics, Healthcare, Industry Associations and Software Product Development, Agricultural Industries and Etc. Services: Offshore Software Development Company. Offices to be located: Hyderabad, Andhra Pradesh, India and USA. Products/Services/Applications in areas like POS & Billing, Sales & Distribution, Production Planning, Material Management, Inventory Control, Plant Maintenance, Purchasing, Accounting and Logistics. Dynamic Web Programming with Database Driven Content Management Systems, Online Stores for E-Commerce, B2B Solutions, Community Portals, Website Redesign and Development, Custom ERP with Enterprise Wide Functional Modules such as Marketing, CRM, Accounting, Inventory Control, Sales & Distribution, Production Planning, Purchase & Stores, Logistics and Supply Chain. Seek your further questions and help. Thank you, Best Regards, Jayapratap.
New Member: Kavin Paulson - Hello to everyone, I'm Kavin Paulson, an Internet Marketer by profession, working with Ipraxa Web Development Company, a CA based firm. I am here for exchange of ideas, information and knowledge. I would like to share my knowledge and ideas with others and learn from others too.
Re: what position to request? - Hi Michael, Great suggestion from David, or you could try something around a design consultancy, How about Website Design Consultant, Design and Development Manager, Website Support and Development Manager or maybe Internet Business Development Consultant. Ultimately whatever you are comfortable with and good luck for the future, Mal.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Four Secrets to Earning Income as an Author

Anger Solutions at Work: Why Customers Get Angry

The Biggest Domain Name Myth

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.