About This Report Summary of Key Findings The State of Leadership Development Today

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1 High-Impact Leadership Development 2009 TABLE OF CONTENTS About This Report 11 Practices and Measures Studied 14 Study Demographics 17 Organization Size 17 Organization Type 17 Industries 19 In-Depth Survey Data 21 Summary of Key Findings 2 Case in Point: Executive Engagement at NY Mellon 25 The State of Leadership Development Today 31 Defining Talent Management 31 What Is Leadership Development? 32 The Difference between Management and Leadership 32 The Difference between Development and Training 35 Leadership Development Defined 36 The Leadership Pipeline 38 What Is High Potential? 39 Case in Point: How Textron Inc. Defines High Potential 41 Key Business Drivers for Leadership Development Improve Internal Candidate Pools / Bench Strength Reduce Skills Gaps / Build Competencies Grow More Leaders More Quickly Business Growth Increase Employee Retention Rate Prepare for Retirements of Existing Leaders or Other Turnover 54 Benefits of Leadership Development 55 The Role of the Leader s Leader 57 Generational Leadership 58

2 High-Impact Leadership Development Bersin & Associates Leadership Development Maturity Model 61 Level 1 Inconsistent Management Training 63 Level 1 Summary Description 66 Case in Point: Inconsistent Management Training 68 Level 2 Structured Leadership Training 68 Level 2 Summary Description 72 Case in Point: Structured Leadership Training 72 Moving from Level 1 to Level 2 72 Level 3 Focused Leadership Development 75 Level 3 Summary Description 78 Case in Point: Focused Leadership Development 80 Moving from Level 2 to Level 3 80 Level 4 Strategic Leadership Development 82 Level 4 Summary Description 86 Case in Point: Strategic Leadership Development 86 Moving from Level 3 to Level 4 88 Moving from Level to Level 89 Top Industries at Each Maturity Level 90 Does the Size of the Organization Impact Maturity Level? 93 Does Revenue Impact Maturity Level? 94 Human Resources and Leadership Development Perspectives 97 The Best Practices of Leadership Development Maintain Strong Executive Engagement 99 Impact of Executive Engagement on Leadership Development 101 Executives Must Own Leadership Development 106 Case in Point: Creating a High-Performing Culture at NSLIJ 106 How Can Executives Be Involved? 108 Case in Point: Talent Development at Textron Inc. 111 Business Drivers Impact Executive Engagement 112

3 High-Impact Leadership Development 2009 Executive Engagement by Maturity Level 112 Organizational Impact of Executive Engagement 113 Executive Practices That Drive Organizational Impact 116 Gaining and Maintaining Executive Engagement 118 Maturity Model Assessment Define Tailored Leadership Competencies 121 Selecting Leadership Competencies 124 Case in Point: Developing a Competency Model at Informatica 125 Case in Point: Developing a Competency Model at NSLIJ 126 Competency Vendors 128 How Many Competencies? 129 Leadership Competency Models 130 Case in Point Hewlett-Packard s Catch-All Model 130 Case in Point: Focused Leadership Development at Aetna 131 Leadership Competency Management 132 Benefits 134 Maturity Model Assessment Align with Business Strategy 137 Importance of Executive Engagement 138 Case in Point: Leadership Development at NY Mellon 139 Impact by Maturity Level 140 Culture, Vision, Mission and Values 140 Ways for Ensuring Alignment 141 Business Impact of Strategic Alignment 145 Driving Improved Business Results 146 Increasing the Quality and Bench Strength of the Leadership Pipeline 147 Increasing the Engagement, Retention and Teamwork of Leaders 148 Improving Overall Employee Retention 150 Summary 151 Maturity Model Assessment 151

4 High-Impact Leadership Development Target All Levels of Leadership 152 The Importance of Targeting All Levels of Leadership 152 Targeting All Levels of Leadership 153 Leadership Pipeline Revisited 154 Leadership Curriculum Model 157 Case in Point: Identifying Leaders at Alcatel-Lucent 158 Maturity Model by Targeted Audiences 160 Measuring the Effectiveness of Leadership Development 162 Benefits 162 Five Considerations for Getting Started 163 Same Quality for Different Levels of Leadership Is Key 166 Summary 167 Maturity Model Assessment Integrate with Talent Management 168 Talent Management Integration by Maturity Level 170 Performance Management 172 Learning and Development 174 Succession Management 176 Talent Strategy, Planning and Recruiting 177 Case in Point: NSLIJ Prepares Its Employees for Leadership Roles 178 Sourcing and Recruiting 179 Compensation 179 Competency Management 182 Impact of Executive Engagement on Talent Management Integration 182 Impact of Talent Management Integration on Business Measures 183 Maturity Model Assessment Apply a Comprehensive Program Design 186 Learning and Delivery Approaches 186 Case in Point: Hewlett-Packard (HP) 193 Case in Point: Exult 200

5 High-Impact Leadership Development Case in Point: National Basketball Association (NBA) 220 Case in Point: Sasktel 223 Leadership Development Program Models 226 Case in Point: Digitas Inc. 228 Case in Point: Leadership Development at Alcatel-Lucent 230 Case in Point: Developing Leadership Excellence at Textron 235 Case in Point: Quiznos 238 Case in Point: Philips Medical Systems 243 Case in Point: Implementing a Coaching Model at Informatica 245 Case in Point: Air Products 248 Implement Ongoing Feedback and Evaluation 253 How Often Do Companies Evaluate Leadership Programs? 254 Measurement and Maturity 255 Case in Point: Cisco Systems 257 Business Planning and Measurement 259 How Does a Company Measure for Success? 260 Bersin & Associates Impact Measurement Framework 262 Challenges of Leadership Development 64 Business Impact of Leadership Development 267 Impact of Executive Engagement 271 Impact of Leadership Development on Talent Management 272 The Changing Landscape Leadership as Part of Talent Management A Stronger Focus on Succession Management Coaching as a Valuable Means for Developing Leaders More Comprehensive Solutions for Learning An Increased Focus on Retention of Leaders An Understanding of Generational Differences 277

6 High-Impact Leadership Development Market Size and Vendor Analysis 78 The Vendor Landscape 278 What Kinds of External Resources Are Available? 278 For What Types of Services Are Vendors Used? 280 Market Map: Scalability Versus Breadth of Leadership Topics 282 Market Map: Breadth of Services Versus Scalability 284 Market Map: Market Experience Versus Breadth of Services 284 Market Map: Targeted Audience 286 Features and Capabilities at a Glance 288 How Do You Select a Vendor? 288 Conclusion 96 Bottom Line 300 Appendix I: Leadership Development Maturity Model Grid 302 Appendix II: Case Study 306 Leadership Competencies as the Foundation for Talent Management: Whirlpool Corporation Sets Performance Standards to Drive Sustainable Growth 306 In This Case Study 306 Company Overview 307 Business Environment 308 Talent Management Organization 310 Leadership Competencies 312 Whirlpool Leadership Competencies 313 Competency Evolution 313 Competency Selection Process 313 Leadership Competency Model 315 Change Management / Implementation Process 318 Leadership Competency Management 319 Talent Management Integration 319

7 High-Impact Leadership Development Leadership Development 320 Workforce Planning and Recruiting 320 Performance Management 323 Succession Management 326 Looking Ahead 327 Lessons Learned 328 One Size Does Not Fit All 328 HR Should Not Create Programs in a Vacuum 329 Employees Need to Understand Talent Management 330 Approach to Talent Management Influences External Market 331 Conclusion 331 Appendix III: Case Study 333 Aligning Leadership Development and Corporate Growth: Textron s Leadership Program Helps to Grow New Leaders and the Bottom Line 333 In This Case Study 333 Company Overview 334 Business Environment 335 Learning Environment 339 Case in Point: Strategic Leadership Development 343 True Business Alignment Leads to an Innovative Learning Solution 345 From Marketing Training to Growth Leadership 346 Case in Point: A Platform for Partnering 347 The Growth Leadership Program: Design and Development 350 The Growth Leadership Program: Implementation and Change Management 352 The Growth Leadership Program: Measuring Business Impact 354 A GLP Testimonial 356 The Growth Leadership Program: Looking Ahead 356 Best Practices 357

8 High-Impact Leadership Development Integration with the Business 357 Executive Support 357 Partnership with Higher Education 358 Lessons Learned 358 Conclusion: Growing the Business Is Cross-Functional 359 Appendix IV: Cases in Point 362 Summary of Case Studies and Best Practices 362 Case in Point: Aetna 364 Case in Point: Air Products 367 Case in Point: Alcatel-Lucent 371 Case in Point: Business Services Firm 378 Case in Point: Cisco Systems 384 Case in Point: Digitas Inc. 387 Case in Point: EquiFirst Corporation 391 Case in Point: Erie Insurance Group 399 Case in Point: Hewlett-Packard 406 Case in Point: Informatica 410 Case in Point: National Basketball Association 414 Case in Point: Philips Medical Systems Ultrasound 417 Case Study: Quiznos 422 Case in Point: Sasktel 426 Case in Point: Textron Inc. 429 Appendix V: Vendor Profiles 34 AchieveGlobal 436 American Management Association (AMA) 439 BlessingWhite, Inc. 443 Bluepoint Leadership Development 448 BTS 452 Center for Creative Leadership (CCL) 455 Development Dimensions International (DDI) 460

9 High-Impact Leadership Development ecornell 464 Fierce, Inc. 468 Forum Corporation 472 Harvard Business Publishing 476 Human Capital Institute (HCI) 480 Impact Achievement Group, Inc. (IAG) 484 Ken Blanchard Companies 488 LeaderPoint 491 Lee Hecht Harrison (LHH) 494 Linkage Inc. 499 Ninth House, Inc. 503 Omega Performance 507 Personnel Decisions International (PDI) 511 SkillSoft 516 Targeted Learning 520 Vangent, Inc. 524 Appendix VI: Glossary of Terms Appendix VII: Table of Figures About Us 542 About This Research 542