CEOs: We Want Coaching, But We Don't Receive it.

Stanford has collaborated with the Miles Group to release its 2013 Executive Coaching Survey.   The findings are quite interesting.  According to the Stanford website, the report indicates that, "Nearly two-thirds of CEOs do not receive coaching or leadership advice from outside consultants or coaches, and almost half of senior executives are not receiving any either."  However, it seems that almost every CEO responded that they welcomed outside coaching and advice, and they thought it was worthwhile.   Huh?  So, you think having an external sounding board would be a good thing... what exactly is stopping you?  Is the board prohibiting you from reaching out to get this outside advice and counsel?  Can you not afford it?   It seems that the CEOs are telling us what they think we want to hear, but when asked about actual practice at their firms, they reveal the truth - many of them are not reaching out to make sure that they receive the kind of feedback, advice, and external input that could be very helpful. 

Now interestingly, most of the CEOs who do receive coaching made this happen on their own; they were not forced to do so by their boards.  Thus, some CEOs do see the benefit, and they have reached out to find coaching that can help them. 

In what areas did the CEOs indicate that they need the most help?  Conflict management ranks very high for them.  Since I do a ton of work in this area, I was quite pleased to see that executives value this competency.   I would hope, though, that they recognize that sometimes the key challenge for CEOs is the lack of conflict in key decision-making processes; too often people do not raise dissenting voices in the presence of a powerful chief executive.

Finally, the survey responses indicated that boards of directors are very concerned about talent development practices within firms.  They want their CEOs focused on developing future leaders, and putting good succession plans in place.  That's good news, as we see too many companies left searching externally for a CEO when a sudden need emerges because they have not put a good talent development and executive succession process in place.   

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Leadership Development Technique: Board Interaction

Adam Bryant recently interviewed Ilene Gordon, CEO of Ingredion, for his New York Times "Corner Office" column (an excellent weekly feature).   Gordon explained one technique she has used to further the development of young emerging leaders in her organization:

I use one dinner a year with my board to bring in young, high-potential managers. We have everybody give an “elevator speech.” You have three minutes to tell the board and other people in the room where you came from, the challenges you’re facing and how you’re trying to create value for the company. Everybody might want to take 15 minutes, but you have to be succinct.  This is part of what we’re looking for in people who have potential; it’s all about communication. What are the challenges you have, and you have three minutes to explain them, because there are 40 of you and we’re going to be here all night otherwise. And if you take somebody else’s time, that’s not respectful. It’s all about being succinct and articulate. 

Why do I like this technique?  First, it provides the board an opportunity to interact with people who may become senior leaders in the organization in the future.  They can begin to develop a relationship with these individuals.  Second, it challenges these young leaders' communication capabilities.  Can they be succinct, interesting, and engaging?   Can they create a powerful conversation based on their three minutes of remarks?  Third, it fosters the establishment potentially of some key mentoring relationships.   Not only may the young leaders gather advice and counsel from board members, but the board members may learn a great deal by hearing from young people who come from a different generation and may be more similar to the firm's actual core consumers.   Fourth, the invitation to present, in and of itself, offers a wonderful reward and recognition for these high performers.   Yes, they would love to be paid well.  However, these folks also care about their future career path.  Having this opportunity certainly will be welcomed and may help retain top young talent.  Finally, the board hears from voices other than senior managers about what is going on at the company. That can be important.  Senior managers naturally filter information as they present updates to the board.  Senior executives present information through their lens and perspective.  Having a different voice and perspective talk to the board can be helpful. 

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Engaging Your High Performers

Forbes reported this week on a startling new study by Leadership IQ, a company that does a great deal of work on the assessment of employee engagement.   The firm examined data from 207 companies on employee performance as well as employee engagement.   According to Forbes,

"In 42% of the companies, the employees who do the worst job are the ones who feel the most “engaged.” At the same time, the middle and high performers in those firms feel disconnected from their jobs and not very motivated to come to work every day."

\The article, by Susan Adams, does a very nice job of explaining many of the reasons for this result.  Adams, drawing on a conversation with Mark Murphy (Leadership IQ CEO), argues that the lack of a true meritocracy causes disengagement among high performers.   Company leaders aren't having the difficult conversations with low performers, and they are not properly recognizing the best employees.  I cannot argue with that finding; it seems quite reasonable.

I would argue, however, that one other cause may exist for this alarming finding.  Many companies simply are not investing effectively in leadership development for their top performers.  Notice that I did NOT say that they are not investing ENOUGH.   Many companies are spending a great deal of money on leadership development programs and processes.  However, many organizations are not spending that money WISELY.   We see a litany of problems in many companies:  Too many one-off events exist.  Too many programs lack cohesion.   Too many leadership development events lack clear criteria for determining who should be involved or invited.   Far too little follow-up exists after programs are delivered.  Until firms start designing more effective leadership development activities, and begin spending their resources more effectively, we won't see engagement rise significantly for the highest performers. 

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Rethinking the Action Learning Project

Many executives push hard for leadership development programs to deliver a strong return on investment.  They want the programs to be "practical" and "applied" in nature.  As a result, many companies have embedded action learning initiatives in their leadership development programs.  They sound like a great idea.  Bring a group of highly talented managers together for a leadership development program led by faculty members, consultants, and/or company executives.  Then, put the participants in teams and have them work on real projects back at work for the next few months.  Those projects provide an opportunity to put their learning into action, to apply the principles and techniques that they discussed during the program.   After several months, the teams present to senior executive sponsors of these projects, and hopefully, some of their recommendations become reality.  Hooray - we have demonstrated ROI!

Ok, that's the ideal...what's the reality?  The reality is that many of these action learning initiatives do not deliver the intended results.  Why?  It begins with the fact that you have overburdened some of your best talent.  You bring them off-line for a week, perhaps several weeks, for a leadership program.  They are now already feeling behind about work.  Then, you ask them to take on this new project on top of everything else they are doing.  Moreover, you ask them to collaborate on a team with members who may not even be co-located with them.   Executive sponsorship often doesn't materialize as promised either.  Senior leaders commit to serve as champions for the projects, but then they offer little guidance, support, or resources.   I have seen this scenario play out on numerous occasions.   Yes, applying what you have learned on a project can be a powerful development opportunity with tangible results for the business.  However, these types of projects require far more preparation, support, and resources than we usually find in companies.   For that reason, I would argue that many companies should re-think their action learning initiatives.  

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Leadership Development is for Top Executives Too!

Building on the last post, I think it's important to address one other problem with leadership development programs.  In many firms, high potentials and mid-level executives attend leadership development programs, receive 360 degree feedback, work with mentors, and receive coaching.   Companies invest a great deal at times to groom these mid-level executives for more senior positions.  However, they do not make a similar investment in members of the top management team. 

What's the problem with that approach?  First, it presumes that people do not need further learning and development once they reach the top level of the organization.  It suggests that they "know it all" at that point.   In fact, members of the top team often can use a break from their day-to-day work to think about broader strategic and leadership issues.  Investing in their development may not only improve their skills and capabilities, but it may help shake the conventional wisdom and groupthink that can emerge from an intact and cohesive team that has worked together for a long time in a particular company.  

Second, mid-level executives receive the wrong message.  They see top executives as not "walking the talk" regarding leadership development.   Somehow, what's good for the troops is not good for the top team.  That can't be the right message to send to future leaders of the organization.  

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Retaining Top Talent by Making People More Attractive to Outside Firms

Elizabeth Craig, John Kimberly, and Peter Cheese have written a good column for the Wall Street Journal about how to retain your top executive talent.   They argue that we ought to be investing in leadership development, even if it means that our people become more attractive to other companies.  We might lose some people because we've made them more employable by outside firms.  However, in many cases, that type of investment in our people will actually increase retention.  Here's an excerpt:

That's why it's crucial that companies get serious about retention now. And that means giving executives opportunities to take on greater responsibility, broaden their skills and cultivate a network of relationships with their peers. These are the things that executives we have surveyed consistently say they want most from their jobs.  Of course, executives want these opportunities largely because the skills, experience and relationships they acquire make them more valuable on the job market. So there is always the risk that a company may invest in building its executives' talents only to see some of them take those talents elsewhere.  But our research shows that executives intend to stay longest with those companies that offer the greatest opportunities to enhance their employability. On balance, a company will keep more talent by helping its executives grow than it would by denying them these opportunities. And as a bonus, its executives will be more valuable to the company itself.

I agree wholeheartedly. I would simply stress that companies cannot simply put efforts into leadership development without actually delivering exciting opportunities that come with increased responsibility.  If someone gets mentored, sent to executive education programs, and assigned a coach... but has to wait and wait for that chance to take on new responsibility... well, then they are likely to leave.   People want to know that their efforts at self-improvement are going to yield opportunities to practice their new skills and capabilities.   They want to learn by doing.   Moreover, employees don't just want more responsibility.  Promotions alone won't do the trick. They want exciting opportunities.  They want to tackle new challenges and explore new aspects of the business or of their discipline.  Meaningful work is key, not just a new title and more direct reports. 

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The Protege Effect: Lessons for Leadership Development?

You often hear the adage, "The best way to learn something is to teach someone else... If you can teach someone about a subject, you really have to understand the material."  New research, described by Annie Murphy Paul in Time magazine, reinforces the accuracy of this nugget of wisdom.  Scholars have used a "teachable agent" - a computerized animated figure named "Betty's Brain" to examine what they call the "protege effect."   Betty's Brain behaves like a real-world student.  Children are encouraged to "tutor" Betty's Brain.  The studies find that, "Student teachers are motivated to help Betty master the material, so they study it more conscientiously. As they prepare to teach, they organize their knowledge, improving their own understanding and recall. And as they explain the information to her, they identify knots and gaps in their own thinking."  Moreover, scholars have found that, "The agent’s questions compel users to think and explain the material in different ways, and watching the agent solve problems allows users to see their knowledge put into action." 

Is there a lesson here for leadership development?  I believe so.   Leadership development professionals, professors, and consultants always struggle with how to get managers to actually change their behavior based on what they might learn in a classroom-type environment.   We might think about putting high-potentials in the role of teacher, not just the role of student.  If we put high-potentials in the role of mentoring and teaching new hires and other junior employees, then perhaps the high-potentials will learn new skills and capabilities more effectively.  Perhaps behavior will change more significantly and more quickly. 

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Leadership Development: Why Not Across Levels?

I'm always struck by the fact that most leadership development programs consist of people who work at the same level of the organizational structure.   I understand the rationale for this structure, but I think it has some limitations.  After all, to get work done, people need to lead and work on teams consisting of people from multiple levels of the organization.  To be effective, people must manage up and down.  Nevertheless, formal leadership development programs typically select a cross-section of high performers from one particular level.  I understand why, of course.  The programs seek to foster a cohort of peers who can learn from and network with one another.  Moreover, putting more senior folks in the room can stifle dialogue at times. 

Many programs bring senior executives in to speak to the group, conduct question and answer sessions, and the like.  This senior executive involvement is very important and should definitely take place.  However, I believe a more substantive involvement in the actual programs can be beneficial.   Such cross-level involvement would enable development on key issues such as communication, teamwork, project management, giving and receiving feedback, and the like.   Mentoring becomes a hands-on activity that becomes embedded in such a program too.  Not only can senior folks mentor more junior managers, but reverse mentorship can take place as well.  Younger, talented high potentials can educate and inform senior executives on key social, technological, and market trends.   In sum, leadership development shouldn't be taking place in isolation.  Leaders need to engaging in some development work along with the subordinates and superiors with whom they must cooperate and collaborate to get things done.

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GE: Changing the Vaunted Leadership Development Model

GE appears to be making a significant shift in its leadership development philosophy.  According to the Wall Street Journal,

The conglomerate that once groomed jack-of-all-trades generalists is now betting on deep industry experts instead. The shift is a change in philosophy at a corporation that for decades had made a rigorously applied but generic management tool kit central to its identity. Like all companies, GE wants some of both traits in its leaders, but the balance has tipped toward expertise. For years, GE wanted its top managers to be experts in managing. Now, it's increasingly looking for them to be deep experts in their fields. Rather than purposely relocate its senior leaders every few years to expose them to more of the company, GE now is leaving them in their business units longer than it used to, in hopes their deeper understanding of products and customers will help them win sales.

Susan Peters, head of leadership development at GE, explains the need for the change: "The world is so complex. We need people who are pretty deep." Interestingly, this shift in philosophy has occurred as the firm continues to face critiques of its corporate strategy. As this article on Forbes.com suggests, GE may be trading at a conglomerate discount because of its complex unrelated diversification strategy.   For years, GE remained an exception to the rule when it came to unrelated diversification.  Its whole was worth more than the sum of the parts, in contrast to many conglomerates that have since broken up.

When a firm pursues a conglomerate strategy, it strives to achieve governance economies.  Governance economies emerge when a firm shares management systems, processes, and talent across a variety of businesses.  Most related diversified firms, such as Disney, strive for scope economies - i.e. synergies through the sharing of intellectual property, manufacturing plants, distribution channels, and the like.   A conglomerate often does not have these types of synergies, so governance economies become critical to justifying the fact that so many seemingly unrelated businesses are being kept together.   However, if GE isn't sharing management talent across the businesses as much any longer, then it seems as though governance economies will shrink.  Of course, the units will still share many excellent systems and processes.  Those processes can be a key source of governance economies.  Will that be enough to convince investors that the parts are worth more together than apart?  That will be the key question moving forward. 

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The Problem with Competency Models

Fortune magazine recently published its list of the top firms for developing leaders.   The magazine works each year in conjunction with The RBL Group and Aon Hewitt to develop this list.  IBM topped this year's list. The report identifies a number of characteristics of these top companies.  For instance, it notes that the best firms have clearly defined competency models that identify what the organization expects of its leaders.  Specifically, the report indicates that, "Top Companies have a defined competency model that describes a unified theory of what leaders at their organization should know, be, and do. And they use their competency models in all phases of talent and leadership development."

I agree wholeheartedly that firms should construct well-defined competency models, and then use those models to guide talent management and leadership development processes, including performance evaluation, coaching, and succession planning.  However, in my experience with many large organizations, I have witnessed many highly flawed competency models.  What's the major weakness of these models?  Complexity!  Too many firms have developed a giant laundry list of competencies.  Leaders throughout the organization cannot even remember the list, never mind alter their behavior appropriately.   People need to understand clearly the organization's expectations.  Senior executives have to boil down their expectations to a simple list of behaviors and capabilities that they value and wish to cultivate in aspiring leaders.  Simplicity and brevity will breed behavioral change much more quickly and effectively than complexity and comprehensiveness.

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Developing your people: Lessons from NFL Quarterbacks

Karl Moore and Devin Bigoness have a good column at Forbes.com about developing your people.  They draw lessons from the development of National Football League quarterbacks.  As they point out correctly, teams tend to take one of two contrasting approaches with their young quarterbacks.  Some teams take the "immediate testing" approach - i.e. they throw them in the pond and challenge them to learn to swim.   These quarterbacks often will struggle mightily in their rookie year.   It's trial by fire.   Other teams will adopt a "learning to win" model.  These quarterbacks sit on the sidelines for some time, perhaps even several years, watching a veteran quarterback lead the team.  

Each of these models has had its successes and failures.  Aaron Rodgers succeeded using the "learn to win" approach.  He spent four seasons as a back-up before becoming the starting quarterback for the Green Bay Packers.  He went on to become a star and a Super Bowl champion.   Peyton Manning, on the other hand, went the immediate testing route.  His team lost many games during his first year, and he did throw many interceptions.  However, we went on to craft a Hall of Fame career, won multiple MVP awards, and became a Super Bowl champion too.   Of course, both models also have their share utter failures as well.

Moore and Bigoness do not advocate one model over another (appropriately, I might add).  Instead, they propose that you should really understand your people, so that you can determine which model might be best for each individual.  At the same time, you have to assess your organization's needs.  You must balance what's best for individual against what is best for the firm.  Some times, you might have to "rush" someone's development, despite some risks, because of a pressing organizational need.  In other cases, you may determine that the organization can afford to give an individual a bit more time to "learn to win." 

Importantly, if you do adopt at  the "learn to win" model, you do need to still make sure that you present that individual with sufficient challenges and development opportunities.  One risk, with this model is that a talented person will leave because they are not receiving the opportunity that they desire.  In the NFL, teams have control over young players for several years.  In companies, people can depart at any time.  Thus, leaders must share their development strategy with the individual being groomed, and work with them to co-create a development plan that works for them and the organization. 

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Part 2 - Interview with HR Expert Jane Perdue

Here is Part 2 of an interview I conducted recently with Jane Perdue, CEO and founder of Braithwaite Innovation Group.  Perdue has extensive experience as a human resource executive, and now a consultant, at Fortune 500 firms. 

Many changes have been made in employee evaluation and merit review processes in the past decade or so. What are some of the most significant problems that still remain with those evaluation processes?

There are many days in which I wish I had a magic wand and could transform the entire performance appraisal process into something practical and meaningful! In my perspective, many of the changes have been in process. An organization can have the most extraordinary online appraisal systems and still fail to move the needle on developing employee performance.

There’s too much focus on the form and too little on the content. While a lunch once with a boss, he wrote a few development notes on a napkin – that’s truly the most effective performance feedback I ever received.

Performance assessment and evaluation must transcend being simply a document completion process to a corporate-wide mindset and dedication to continuous improvement. A mindset that’s embedded in multiple systems: strategic planning, business metrics, staffing, leadership and succession development, just to name a few.

What are 2-3 key success factors with regard to developing sound management succession processes?

For management succession development to be effective and successful:

•  An organization must have identified the requisite knowledge, skills and abilities – both from a quantitative and qualitative perspective – that are crucial to running the business and are embedded in a leadership development program based on measured outcomes
•  Succession development is practiced, recognized and rewarded as business fundamental, just like strategic planning and budgeting
• The process is simple and straightforward, having been pared down to the core essentials with reams of paperwork avoided.

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