All organisations need strong leaders. And, as research continues to support, organisations with formal leadership development programs in place are far more likely to have the highest caliber talent at the helm in the future. Other benefits of such programs include higher retention rates, significant cost-savings and better financial outcomes. Nonetheless, broader industry data from Bersin by Deloitte, Aberdeen Research and the Center for Creative Leadership, among others, has revealed that many organisations still struggle in developing and executing leadership development programs.
In fact, nearly half of those who participated in newsletter survey in April 2013 on this very issue (see below), reported that a lack of a formal leadership development program is the biggest challenge their organisations face to identifying and developing leaders.
In response, here are six elements that organisations can consider when building effective leadership development programs:
1. Define what leadership looks like in your organisation.
The best place to start this evaluation is with your current “successful leaders.” Determine the specific characteristics that make certain individuals stand-out in terms of their skills, behaviours and performance. Define a core set of competencies and determine what gaps may exist between the abilities you will need in a leader and what you currently have. Any subsequent leadership development program needs to be built around the skills and behaviours related to those competencies.
2. Consider the company culture.
Leadership is just as much about skill as it is about “fit.” After all, one of the main reasons more than half of new CEOs don’t make it to their fourth anniversary is poor organisational fit (Oracle, 2010). Therefore, organisations with superior leadership development programs dedicate as much time analysing internal people and cultural dynamics as they do the external environment.
3. Build the infrastructure.
Determine what tools, processes and people you will need in place to help identify, develop and retain future leadership talent. The use of psychological and behavioural assessments for instance, has been statistically linked to current and future success in leadership roles (Oracle, 2010). Other considerations should include how development and training will be delivered (e.g. formal programs, on-the-job “stretch” assignments, etc.) and the potential expenditures. Understand which existing leaders and decision-makers need to be involved in the process, and at what stages. Finally, set forth a plan for evaluating and measuring program effectiveness.
4. Identify high potential talent inside the organisation.
Who demonstrates the greatest potential for future organisational impact? Insight from performance management appraisals, behavioural assessment data and direct conversations with employees can help identify these individuals. Be sure to look at all levels of the organisation. As a Bersin study notes, “leadership development is not about developing one leader at a time or even one leader level at a time. Rather, it is about looking across all leader levels and creating a strategy to build leadership capabilities across that population and often across multiple geographies.”
5. Make leadership development the business imperative.
Identifying and cultivating leaders, closing talent gaps and succession planning must be viewed as a corporate-wide initiative. Aberdeen’s Leadership Study found that Best-in-Class organisations abide by a culture and mindset where the development of a strong leadership pipeline is the responsibility of everyone in the organisation, not just something that HR must do in a vacuum. Without support at all levels, the foundation built to accelerate leadership development will collapse.
While most organisations recognise the importance of establishing a leadership development plan, those that take the necessary steps to create a formal process will benefit from a keen competitive advantage in the future marketplace.