Whose
responsibility is it to ensure your organization will have the great leadership
it needs to succeed far into the future? Too often, this responsibility is
essentially ceded to Human Resources, to each individual manager-or it’s simply
ignored. Ultimately, of course, as today’s business leader, the responsibility
is yours. And meeting it is more urgent than ever before, because your
organization may be at greater risk of facing a critical leadership void than
ever before.
Chances
are you know some of the reasons. As is often the case, they begin with
demographics. With baby boomers heading for the exits, half of all companies
surveyed recently by RHR International say they expect to lose 50 percent or
more of their senior managers by 2010; nearly one-sixth expect to lose at least
70 percent of those seasoned leaders. Of course, with so many companies
competing for the same leaders, hiring from outside is becoming increasingly
difficult and expensive.
Demographics
isn’t the whole story. Today’s "right-sized" and "flat" organizations have
fewer ready replacements. These dynamics are already having enormous impact. As
Johnson & Johnson CEO William Weldon put it, "Leadership is the single
biggest constraint to growth at our company, and it is the most critical
business issue we face."
Simply
put, many enterprises face a deepening leadership void. Shortages of effective
leaders are preventing them from leveraging new market opportunities, responding
to competitive threats, or executing successfully on mergers, acquisitions and
key initiatives. Without enough quality leadership, they cannot effectively
drive needed change or handle the growing complexity of their businesses.
(There is a crucial, under-recognized link between superior leadership and the
ability to handle complexity. High performers outperform average performers by
only 20 percent in assignments of low complexity, but they outperform by 50
percent in assignments of higher complexity.)
That’s the challenge. How do you overcome it?
If it’s
your responsibility to keep all this from happening to your business, the
question becomes: How?
This
article introduces an approach that has succeeded at leading-edge organizations
ranging from COSTCO Wholesale to Milgard Manufacturing. It’s called Leader-Led
Leadership Development (LLLD). While LLLD is a specific process developed by
Quest Consulting & Training after decades of research, companies can apply
its core components or integrate them into existing leader development plans.
Using
LLLD, you can develop your leaders of the future as you focus them relentlessly
on performance and results. You can give your people the knowledge, skills and
tools they need to excel in your unique organization, marketplace and
environment-something typical "leadership development" doesn’t do. And, at the
same time, you can align emerging leaders behind your key strategic
initiatives: plans they might otherwise ignore or try to "wait out."
LLLD: How it works; why it’s different
In an
LLLD program, an organization’s most successful leaders teach what makes their
enterprises successful, and why. They demonstrate what’s expected of leaders in
their unique organizations. They show how to leverage their specific,
patiently-learned best practices.
LLLD
reflects an inescapable reality that too many organizations have tried to
escape: today’s best leaders are the only ones who know the essence of what
tomorrow’s leaders need to learn, and they are singularly positioned to ensure
the credibility of leadership development.
In
LLLD, your organization’s most effective leaders "take the wheel" and
personally own and drive the learning process. This can’t be sugarcoated: the
process requires a portion of your time, personal commitment and more than a
little passion.
Given
the proper HR support, senior leaders can become increasingly committed to LLLD
over time. Rather than viewing "development" as a distraction, they find it
surprisingly gratifying and critical to the organization’s success.
A closer look at LLLD
With
LLLD, current leaders present the best way to handle specific situations in
their own organization, using specially prepared learning materials generated
from their own organization’s goals, methods and measures. These customized
materials include "real" examples and cases, use familiar terminology and
systems, and reflect their organization’s own philosophy, processes and forms.
In
preparing the program, leaders must identify and illuminate the critical
business knowledge and best practices, resulting in a "performance model." This
process of exploration-first with current leaders, then with emerging leaders-is
indispensable. As senior and junior leaders analyze key business challenges and
desired outcomes together, younger leaders learn decision making from the best
teachers and role models: the people who’ve built the organization.
A case study: COSTCO Wholesale
LLLD
has been implemented at companies in diverse markets and industries, from
manufacturing to retail-and consistently achieved exceptional results. LLLD can
be used to develop leaders at any level, and each implementation is unique.
Nevertheless,
a case study helps understand the types of problems LLLD can solve and how it
is implemented. For that, we turn to one of North America’s most respected and
innovative retailers, COSTCO Wholesale.
COSTCO’s
490 warehouses provide carefully chosen brand-name and company-branded products
at low prices to its 47 million members. Notwithstanding its relentless focus
on exceptional value, COSTCO has earned a worldwide reputation for being a
great place to work, with a culture that values employees and offers them real
career paths.
When
COSTCO set an aggressive five-year goal of opening 175 new warehouse stores, it
necessitated 6,000 additional managers. They knew from experience that hiring
from outside simply didn’t work. COSTCO’s leadership development program at
that time, which consisted of sending managers to community colleges to learn
leadership skills and principles, wasn’t leading to improved workplace
performance. Even worse, it was taking much too long to "grow" a COSTCO
warehouse manager, a store’s senior operating leader, to meet this growth.
The
company recognized it needed an entirely new approach-one that would develop
far more talent, reflect COSTCO’s unique culture and realities, and start
delivering results immediately.
In
implementing the program, Quest began by seeking as much input as possible from
managers who’d mastered the job and were delivering outstanding results. With
extensive personal involvement from COSTCO senior leadership-including CEO Jim
Sinegal-we worked with 20 exceptional warehouse managers from across the
company. Together, we identified what a warehouse manager needs to know and do
to operate a successful COSTCO warehouse, and the best ways to transfer that
knowledge and skills to new leaders. COSTCO’s curriculum ultimately ranged from
philosophy and values to best practices and critical thinking skills.
At the
same time, we recognized that warehouse managers would be the program’s best
teachers: more than anyone else, they understood the real-world challenges
their peers would face. Moreover, as COSTCO came to recognize, if responsibilities
were shared equitably, enough senior managers were available to facilitate the
program successfully without compromising their other responsibilities.
We then
developed case studies addressing each aspect of COSTCO’s store operations,
with a focus on "people" issues involving members, employees, vendors and other
stakeholders. These cases created a comfort zone for facilitation by the COSTCO
Warehouse Managers, enabling them to lead in-depth, candid discussions of a
wide range of business issues. Like any leader asked to facilitate learning,
the Warehouse Managers received their own training, coaching and support from
HR.
After a
pilot program was enthusiastically received, COSTCO formed COSTCO University
and within 12 months rolled out LLLD programs company-wide. Ron Rothman, VP of personnel,
said "it exceeded our wildest expectations." LLLD has enabled COSTCO to staff
its growth entirely from within and reduced in half the time needed to prepare
managers.
Faster implementation, easier measurement, exceptional
results
It’s
possible to have a fully-customized pilot running within 120 days, and to start
gaining quantifiable business value from it within months after that.
Once
LLLD is running, its effectiveness is easier to measure than conventional leadership
development programs. Because it’s built around strategies and goals you’ve
already established, you may well be able to use existing performance
metrics-for example, scorecards, dashboards, or KPIs. Last but not least, LLLD
is flexible enough to be extended in virtually any direction: up or down,
laterally to other businesses or functions, or in response to new strategies
and change initiatives. Whether you’re concerned about long-term succession or
you’re already running short of high-quality leadership, LLLD may well
represent your highest-value solution. iBi
Dr. Eric Herzog is founder and president of
Quest Consulting & Training Corporation, a leading organizational
consulting and development firm. His innovative programs on change management,
strategic planning, team building and leadership development have resulted in
dramatically improved performance for hundreds of companies in various
industries. Herzog received his doctorate from the MIT Sloan School of
Management. He is also author of the recently released book, Future
Leaders.
