LEADERSHIP ROI - DEVELOP MORE LEADERS

Over the years, we have all heard any number of executives complain about an over supply situation. Over supply of widgets, office space, certain skill sets, etc. Balancing supply and demand is hard work and often is not perfect.

But have you ever heard anyone say, we have an over supply of good leaders? I have not. So it seems there is more demand then supply of good leaders. Most would agree that investing in a high potential leader is a good investment with a high ROI. The catch is you only get the return on your investment if you retain them. I will come back to this later.

Imagine how high the ROI would be if your investment in one good leader produced several good leaders? The ROI multiplies. Well, if your definition of a good leader includes that they create other leaders, you will always get that multiple. Also, your odds of retaining some, if not all, of those leaders is better then putting all your returns on retaining one individual.

So how do we accomplish this? Start with that as part of the definition of leadership. Next, create a culture that values leadership development. Fortune Magazine did a study in 2007 How Top Companies Breed Stars. The article conclusion is that no matter what industry you are in, you are in the business of making leaders.

A good friend is quoted in the article, Professor Jeff Sonnenfeld, Associate Dean of the Yale School of Management. He first coined the phrase "academy companies". He noted that these companies offer more internal training to their executives and their alumni populate the leadership of other firms. The article identifies firms that are serious about leadership development as "talent magnets". If your company is a talent magnet, you will not need to be as concerned about the loss of those in whom you invest. They will want to stay. Talent begets talent.

The article highlights the traits these companies have in common. There is a list of nine practices they believe combine to create world-class leadership development:

1) Invest Time and Money
2) Identify Promising Leaders Early
3) Choose Assignments Strategically
4) Develop Leaders Within Their Current Jobs
5) Be Passionate About Feedback and Support
6) Develop Teams, Not Just Individuals
7) Exert Leadership Through Inspiration
8) Encourage Leaders To Be Active In Their Communities
9) Make Leadership Development Part of the Culture

There are a few issues to consider in an environment in which great leadership talent is the scarcest resource. Leadership development efforts need to improve in several areas including:

1) Developing teams vs only individual development
2) How to lead global businesses
3) Virtual leadership- the days of walking down the hall are over
4) Candid and constructive feedback- Too often stars are told- you had a great year, keep it up. That is NOT development. This is particularly an issue for women. See a later post on this under Women Leaders.
5) Teaching leaders how to develop other leaders

Until next time,
Gail