Leadership development – Tool for the company’s growth and competitive advantage
Leadership around the world has different meanings to different people and means different things in different situations. On a company level, strategy execution by building alignment, enhancing the capacity of others and effective teamwork are facilitated by the leadership role, and it refers to the capacity of employees to perform in leadership roles within the company. The leadership roles can be formal or informal. For company success, leadership development is key. In the context of leadership development, succession planning plays a vital role in the development of high potentials to take over leadership roles when the time comes to the current leadership to leave their positions. It requires a sharp focus on the company future and vision in order to align leadership development with the future that the company aspires to create. In order to have a competitive advantage and growth, companies need to focus on leadership development not only on the executive level but on all level of the company.
“65 percent of companies with mature leadership development programs drove improved business results as compared to 6 percent of companies without such a program. Similarly, 86% of companies with leadership development programs responded rapidly to changing market conditions whereas only 52% of companies with immature programs were able to do so”A study by the Center for Creative Leadership)
To plan leadership development activities or program company need to ensure that such programs and activities align with the needs of the company For this purpose, the company need to conduct need assessment on employees and organization level finding out what exactly the company should initiate to address the challenge effectively. There are some important variable in planning, designing, and execution of successful leadership development programs which include; needs assessment of the employees and organization, individual learner characteristics, quality and nature of the leadership development program, organization support for the behavioral change from the leaders’ supervision and evaluation of the program and its success Along with these key variable there some important element that helps companies accelerate leadership development programs are;
- Aligning leadership strategy with business strategy
- Segmenting key leadership roles
- Defining leadership role requirement
- Assess leadership gaps
- Design leadership development plans
- Measure, monitor and close gaps
For companies, it is always challenging to identify leadership gaps and develop leadership development programs for matching leadership needs to the situation. Leadership and talent development is no longer limited o top talent or top management. Following are some of the key questions that can help the company come up with a clear plan while planning for leadership development programs;
- What is your the company current business situation?
- How does this differ by business units, geography and product line?
- What are the key skills and capabilities for each workforce segment?
- What leaders have had experience in each of the four quadrants?
- Where will the company focus on your talent development investments?
- What criteria will the company use to priority levels or roles?
- Where do you have current leadership gaps or surpluses?
- What roles are most critical to business and must have a?
- Will these be the same or different in the next1-3 years?
- Where will the business be in 1-3 years?
Technological development, the rapid expansion of the market and internationalization have been challenging the companies in developing future leaders. Leadership development should continue to evolve and adapt in order to meet the constantly changing condition and challenges of the global market. Some of the most important challenges for the companies are;
- Informational overload due to knowledge expansion, research, and innovation
- Systems and business communities interconnectedness
- Dissolving traditional company boundaries – the traditional mindset of the company
- Disruption of old practices by new technologies
- The expectations and value of new generations
- Globalization and inter-companies collaboration
- The changing nature of the work
US companies alone spend almost $ 14 Billion annually on leadership development programs. Leadership development is based upon critical dimensions which include; skills and knowledge, roles perception and degree of acceptance of the leading role, and Self Efficacy. Leading in the digital economy companies needs to focus on new competencies of the leadership roles such as agile leadership, leading virtually, embracing diversity, leading innovation, digitizing the business and communication channels, customer-centric approach and culture, and leadership through the challenge of the change. The key skills set required for leadership development – which companies focus on, are; adaptability, system thinking, self-awareness, collaboration and teamwork, effective change management, creativity, and innovation, effective decision making and learning attitude. To develop effective leadership development programs to meet the company objectives different tools are used which are; Assessment Centers, Personality Inventory, 360 Degree Feedback, Informal Feedback, External Leadership Assessment and Performance rating/Business results achieved.
Leadership development has been ranked top first priority by the executives of world-leading companies. Numerous in-depth studies have reached the same conclusion: Organizations that invest in leadership development perform better than those that don’t. Studies show investments in leadership development Improve bottom-line financial performance, attract and retain talent, drive a performance culture and Increase organizational agility. A recent report on leadership training by the independent research firm Bersin & Associates put it this way: “The message is clear – leadership development matters. It is hard to find a company which has survived many economic cycles that do not have a [sophisticated] leadership development strategy in place. While it may take many years to develop and refine, the results clearly pay off.”
Thus if a company wants to grow more and gain a competitive advantage, it should focus more on leadership development through leadership development programs. Its a challenging work for the companies but they are investing in their leadership development and such relevant programs. Not only the big companies focus on it but also the small companies are given equal importance to leadership for their growth and competitive advantage.
“Today, the management team is better at handling difficult questions about people and their development. They’ve increased their productivity goals and created a more open environment”Mary Beth Farrell -EVP, Service Delivery – AXA Equitable On CCL’s organizational impact at AXA