ideas@work vol.2

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ideas@work is a collection of whitepapers published by UNC Executive Development.

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ideas@work vol.2

  1. 1. VOLUME 2 BUSINESS INSIGHTS FROM UNC EXECUTIVE DEVELOPMENT WHITE PAPERS FEATURED: Charting a Course During Uncertain Times Focusing on Employee Engagement: How to Measure It and Improve It Closing the Gaps in Leadership Development Developing Real Skills for Virtual Teams Rethinking Generation Gaps in the Workplace: Focus on Shared Values How to Help Leaders Succeed: A Guide to Successful Executive Career Transitions
  2. 2. A message from the President and Associate Dean of Executive Development at UNC Kenan-Flagler Business School Hello once again from the University of North Carolina a purpose-driven enterprise, as detailed in their recent at Chapel Hill. I am pleased to present our second edition Harvard Business Review article, “The Power of Collective of ideas@work, a journal designed specifically for Ambition”. Another paper tackles measuring and improving business leaders who are involved and interested in talent employee engagement, offering examples and best practices development issues. from different organizations. A third paper examines the advantages, characteristics and challenges associated with We created ideas@work in order to share the executive the virtual team environment. Other topics in this edition development knowledge and expertise that we’ve gained include tips for managing the multi-generational workforce, from working with our client partners around the world, enabling successful career transitions and overcoming gaps and to highlight best practices from other organizations. in your leadership development efforts. We’ve received great feedback and encouragement about ideas@work, as well as ideas and suggestions for future I hope that you enjoy the latest edition of ideas@work white paper topics to explore. Some of these suggestions and that you find some useful, actionable ideas that you are represented in the following pages, and you can expect can apply in your organization. I encourage you to visit our to see others in our next edition... so please keep the ideas website – www.uncexec.com – for our entire library of talent coming, and we promise to do the same. development white papers. You can also subscribe to receive our white papers and executive development newsletters This latest edition of ideas@work features six new white via email at unc_exec@unc.edu. papers, including, ”Charting A Course During Uncertain Times”, a paper that was written by UNC Kenan-Flagler Thank you once again for your interest in UNC Executive Professor, Doug Ready, and Emily Truelove. This paper Development. explains how organizations can harness the power of Consistently ranked one of Our commitment to At UNC Executive the world’s best business developing socially Development, we believe schools, UNC’s Kenan- responsible, results-driven that managing employee Flagler Business School leaders distinguishes our talent is vital to the success is known for experiential programs. We educate of any organization, and we learning and teamwork, people at every stage provide unique learning and superior teaching, of their careers and development experiences innovative research and a prepare them to manage for our partners. collaborative culture. successfully in the global business environment.2 ALL CONTENT © UNC EXECUTIVE DEVELOPMENT 2012 To subscribe, visit www.uncexec.com
  3. 3. Inside this issue Charting a Course During Uncertain Times page 4 Focusing on Employee Engagement: How to Measure It and Improve It page 16 Closing the Gaps in Leadership Development page 28 Developing Real Skills For Virtual Teams page 38 CLASS OF ‘72 ’92 ‘02 ’22 Rethinking Generation Gaps in the Workplace: Focus on Shared Values page 48 How to Help Leaders Succeed: A Guide to Successful Executive Career Transitions page 56 (Note: The information or conclusions expressed in the following white papers are the authors’ review of findings expressed by the organizations. All brand representations are registered trademarks owned by the respective companies or organizations.) 3
  4. 4. Charting a Course During Uncertain Times Douglas A. Ready Professor of the Practice of Leadership – UNC’s Kenan-Flagler Business School Founder – International Consortium for Executive Development Research Emily A. Truelove Director of New Program Development – International Consortium for Executive Development Research This paper is adapted from a December 2011 Harvard Business Review article that Doug Ready and Emily Truelove wrote, entitled “The Power of Collective Ambition”. Introduction A luxury hotel chain emerges from the industry’s We discovered that these organizations (and all truly worst time in its history stronger than ever. A financial great organizations) share a common thread: a well- institution thrives while its peers receive government honed collective ambition, a story that depicts their bailouts, suffer debilitating reputational blows, or cease purpose, vision and plans on how to achieve their goals. to exist. A beauty retailer on the brink of extinction a Companies with strong collective ambitions have a deep decade ago is now highly profitable and opening an understanding of why they exist and what they hope to average of two new stores a week. accomplish. They have developed a path forward that involves working as a team to address their challenges. In many ways, these global companies could not be They align their brand promise with their core values and more dissimilar. They are in different industries and life- use them as guideposts to execute their strategy. cycle stages, yet they share a common trait: they defy the conventional logic that during a recession, morale Companies with strong, well defined collective ambitions and profits plummet. have leaders who realize that a business is more than a group of people chasing a financial target. These leaders We’ve spent the past two years studying these are also highly disciplined when it comes to achieving organizations and dozens of others to understand what and sustaining top performance. They collaborate with makes them different. What allows them to flourish others in their organizations to shape their collective in times when most organizations flounder? How did ambition and to energize their employees. Finally, they they use a crisis as an opportunity to transform their embrace the challenge of managing a powerful duality: business models, to redirect their strategies and to build that of balancing collaborative engagement (what we momentum during a downturn? refer to as the glue) with commitment to disciplined execution and accountability for results (what we call the grease).4 ALL CONTENT © UNC EXECUTIVE DEVELOPMENT 2012 To subscribe, visit www.uncexec.com
  5. 5. C H A R T I N G A C O U R S E D U R I N G U N C E R TA I N T I M E SAs the companies examined in these pages willdemonstrate, developing and executing an organization’s The Seven Elements of acollective ambition requires involvement at all levels. HR Collective Ambitionand talent management professionals play a powerfulrole every step of the way, from helping to shape the Scholars have studied what makes for engaged andcollective ambition to executing it. An organization’s sustainably profitable organizations for decades. Collinscollective ambition can only be successful if there are and Porras wrote eloquently about the importance ofthe right people, in the right places and with the right linking strategy with vision. Schein championed theknowledge, skills and abilities. Simply put, it takes importance of culture and values to an organization’speople to make the glue and to facilitate the grease. success. Many others have written about brands, strategic intent and leader behaviors. Hence, the concept of collective ambition—which touches on all ofPromise these elements of organizational success—is not new. Instead, it provides a frameworkThis white paper: that will help pave the way for• Discusses the seven elements of collective ambition successful, organization- and why they matter. wide change initiatives.• Explains why one of these elements may matter more than the others.• Shows how top organizations collaborate to bring these elements together, enabling employees at all levels (and senior leaders in particular) to work together to provide the glue and the grease to get them where they want to go.• Profiles several companies who have done an outstanding job of integrating these pieces into a powerful whole.• Outlines the HR practices required at every level to ensure success. 5
  6. 6. There are seven elements that comprise an organization’s collective ambition: 1. Purpose: The organization’s reason for being; why it exists; its core mission. 2. Vision: The position or status an organization aspires to achieve in a reasonable time frame. 3. argets and milestones: T The metrics used to assess the extent to which the organization has progressed toward its vision. 4. trategic and operational priorities: S The actions an organization will take (and not take) in pursuit of its vision. 5. Brand promise: The commitments an organization makes to its stakeholders (customers, communities, investors, employees, regulators and partners) concerning the experience it will provide. 6. Core values: The guiding principles that dictate what an organization stands for in good and bad times. 7. Leader behaviors: How leaders will act, day-by-day and in the long term, to implement vision and strategy as they strive to fulfill their brand promise and live up to their values. HR and talent management professionals (indeed, many story of their organization’s future, combine it with a business leaders) often tend to get excited about these collaborative process to build the human capabilities elements without taking the time to place them in a required to achieve that future, and have the discipline broader context, causing them to behave more like to follow that course in what is often choppy and initiative champions than integrative thinkers. It is not perilous waters. uncommon to see business leaders who try to drive change based on a vision that isn’t fully anchored in It is important to be clear about what these terms mean, reality or who attempt to enlist their entire workforce and how they can be used to reinforce one another in a values project without carefully investigating how and execute an organization’s collective ambition. these values interact with the organization’s brand The terms vision and strategy, or values and leader promise or strategic priorities. behaviors are often used interchangeably, which leads to confusion and causes them to become little more Leaders attempting to drive change must take the than meaningless jargon. These terms are not jargon, time to examine the elements that should--indeed however. If understood correctly, they can be used to must--interact with one another if the changes are to identify organizational capability gaps and to launch have any chance to succeed. They must understand initiatives that address those gaps. the importance of shaping a powerful, compelling6 ALL CONTENT © UNC EXECUTIVE DEVELOPMENT 2012 To subscribe, visit www.uncexec.com
  7. 7. C H A R T I N G A C O U R S E D U R I N G U N C E R TA I N T I M E SThe Collective Ambition CompassAfter years of working with organizations across the an organization’s collective ambition and when they areglobe, we believe there are seven elements that really focused, provide a compass that leads to success. We callmatter for organizational success. These elements define it the collective ambition compass (CAC): 7
  8. 8. For any organization trying to harness its collective ambition, HR’s role is clear. HR and talent management The Glue and the Grease professionals are involved by: Shaping an organization’s collective ambition isn’t • Working strategically with other senior leaders to just about telling a compelling story that inspires frame the story that will become the organization’s employees. The process itself--of working together collective ambition. to create the story--can be a powerful engagement builder and as such, is an opportunity to build or • Working with other senior leaders to build employee strengthen an organization’s glue. It can also be a engagement across organizational boundaries for springboard to launch organization-wide change the initiative. initiatives and to execute strategy—the grease. • Communicating to ensure the organization’s message is aligned with its purpose, vision and To highlight the glue and the grease, two companies— strategy. Four Seasons Hospitality Group and Standard Chartered Bank—are examined. These companies differ in • Participating in the development of metrics to many respects yet are strikingly similar in their use measure achievement. of collaboration to realize their companies’ collective • Ensuring that new and existing employees at all ambitions. Standard Chartered Bank’s glue was its levels have the knowledge, skills and abilities, and recommitment to its founding principles which helped cultural fit to achieve the new business model. This it through a difficult period in its industry. Four Seasons’ involves not only talent sourcing and development, grease was the use of its collective ambition to enable but also leadership development and succession transformational change. planning. • Ensuring that the organization’s compensation and benefits systems are in keeping with tomorrow’s business model. • Developing a culture that fosters collaboration and innovation. Example: Standard Chartered Bank – Building the Glue While many of their competitors went bankrupt, received government bailouts or suffered irreparable harm to their brands during the recent recession, Standard Chartered Bank (SCB) emerged stronger than ever. There are several reasons for its success, but one of the most important factors was that SCB used the crisis as an opportunity to recommit to the long-held principles that made it great in the first place, strengthening the glue and binding together its diverse and dispersed stakeholders during the recession.8 ALL CONTENT © UNC EXECUTIVE DEVELOPMENT 2012 To subscribe, visit www.uncexec.com
  9. 9. C H A R T I N G A C O U R S E D U R I N G U N C E R TA I N T I M E SSCB has more than 85,000 employees comprised of 129nationalities who work in 71 markets. Going into the recession,the bank had a strong foundation, a compelling vision (“to bethe world’s best international bank, leading the way in Asia,Africa and the Middle East”), and a robust, well-aligned collectiveambition. Despite this, most of the world—including many keystakeholders—couldn’t articulate what made SCB unique amongfinancial institutions. It had always had “the glue,” but it neededto strengthen it. SCB leaders believed the recession was theperfect time to do this.In 2009, Peter Sands, SCB’s CEO, created a taskforce ofsenior leaders (including their chief human resource officer) thattraveled the world to speak with thousands of SCB stakeholders—customers, employees, regulators, shareholders and the larger communities in which SCBoperates—to get their take on the organization’s vision and collective ambition. They heard asimilar theme among their diverse and geographically disbursed stakeholders; that SCB wasa positive force, an ethical partner, and a company in it for the long haul. As a result, “herefor good” became SCB’s new multi-layered brand tagline.SCB didn’t just want a tagline with a nice ring—it wanted a promise. Senior leaders realizedthat if they were to differentiate themselves from their competitors, they must deliver “herefor good” to every stakeholder in every part of the world. To ensure that the promise waskept, they created a global accountability process.The first step to deliver the promise was to engage all of their employees because theywould be the ones to deliver it on a daily basis. SCB held town hall meetings at all theirlocations, a centerpiece of which was a two-minute “here for good” strategy video aboutSCB’s positive impact on the world. The video inspired employees, who universally felt that“here for good” perfectly captured the values already present in the company. “Here forgood” did not create the glue; it strengthened what was already there.As one senior leader explained:“’ ere for good’ really does reflect who we are. Our local connections are very deep, in H part because we our long-term efforts to develop local talent and because we’ve been in our markets so much longer than other multi-nationals. It is not uncommon for me to meet customers who tell me how we gave their grandfathers loans 50 years ago and have stood by their family businesses in good and bad times. They wouldn’t go to another bank. When the Asian financial crisis hit, many banks pulled out of the region. But we stayed and learned the lessons the West is learning now. Integrity matters. We are not separated from our communities. We are an integral part of them.” 9
  10. 10. “Here for good.” SCB wanted to make sure that “here for good” was a promise not just to employees, but for other its stakeholders (customers, clients, regulators, shareholders and the communities in which they operate): • ustomers: SCB promises that it will treat its customers as partners and offer them fair C deals. Whether lending to cocoa farmers in Ghana (SCB helps more than 70,000 farmers in the cocoa industry in that country) or the big pharmaceutical companies in Europe, SCB’s helps its customers build their businesses for the long term. SCB makes these commitments loud and clear, for all to see in white papers published online. • egulators: SCB does not undermine regulations or cut regulatory corners to make R a quick profit. SCB considers regulators partners in building thriving, healthy business environments. In the UAE, for example, many international banks fail to meet the country’s Emiritization quotas and instead choose to pay fines for not employing UAE citizens. In contrast, SCB views these quotas as a key part in developing the local talent the country needs for businesses to succeed. In Nigeria, because SCB’s policies adhere to the highest ethical standards, the bank has found itself educating Nigerian regulators on best practices. For SCB, these practices as nothing exceptional. Instead, they are a way to conduct its business of building the human and economic capital of a region and paving the way for a brighter future. • hareholders: SCB promises to provide its shareholders with ethical and healthy returns S and to that end, has incorporated “here for good” into its core business processes. For example, when SCB bankers complete loan applications for customers, they must write a paragraph about why that the customer will be a valued long-term customer, or “here for good”. • Community: SCB’s community initiatives are a well-entrenched feature of the company’s brand and culture. SCB is part of the fabric of the communities in which it operates, be it building health centers for the blind in India or having employee “HIV champions” regularly delivering HIV awareness workshops in 50 countries. SCB grants employees three days a year of paid time off to volunteer and does not dictate how or where that volunteer time is spent (a bank manager in London spends time at a stable for rescued horses). SCB has found that community involvement is a powerful retention tool. As one manager observed, “When you have helped build a community center with your SCB colleagues and you walk by and see the lines outside, that’s energizing. It’s these intangibles that make people stay.” In short, it’s the glue. Many companies must plan and execute large-scale changes to shape and execute their collective ambition. For SCB, the challenge was to remember and bolster—not abandon— their roots.10 ALL CONTENT © UNC EXECUTIVE DEVELOPMENT 2012 To subscribe, visit www.uncexec.com
  11. 11. C H A R T I N G A C O U R S E D U R I N G U N C E R TA I N T I M E SExample: Four Seasons – Building the Grease I t may be easy to see how collaboration can be used to tell a compelling story of your company’s future and be the glue that binds. But how can this story provide the grease to enable and drive productive change? Travelers worldwide brighten at the mention of Four Seasons, the hospitality group that literally set the standard for exceptional service in luxurious settings. Founded in 1961 by the iconic Isadore Sharp, the Four Seasons’ reputation is the envy of its peers. The last few years, though, have been particularly tough for the industry as a whole and the company in particular. The recession wreaked havoc on the hospitality industry, especially at the high-end market, Four Seasons’ primary focus. As vacationers cancelled trips and business travelers opted for less expensive hotels, bookings plummet. At the same time, Sharp was ready to retire and enjoy the next phase of his life. In 2010, Katie Taylor, Four Seasons’ chief operating officer, took the CEO helm in the midst of the worst recession in 80 years. In 2008, the Four Seasons found itself at a turning point. In preparation for her new role, Taylor had an important task; to engage 35,000 employees in more than 80 hotels in 35 countries in a collaborative process that would get Four Seasons back on track and poised to lead the industry once again. For decades, the company’s unique service, culture, quality and brand (called “the pillars”) had led to success. The question in 2008 was how to ensure they would continue to do so in an ever-changing competitive landscape. The company had in place three key measures for success—people, product, profits (called “the bold ambitions”). While the bold ambitions had been the same throughout the company’s history, Taylor knew they had to be captured anew and related to the change process in a way that was clear and compelling. To that end, Taylor and her team overlaid the seven elements of Four Seasons’ collective ambition onto such a graphic compass. As Taylor noted after completing the work. “We found that compass was very useful tool because it helped us do two things. First, it allowed us to think about the company and its success drivers in a different framework than we had before. Second, it allowed us to organize all of these thoughts in a way that gave them an actionable direction that was entirely consistent with our purpose and values, but with a new point of view.” Today, the company uses the compass as their framework for action. 11
  12. 12. An actionable path forward was precisely what Four Seasons needed. It needed the grease—a springboard to launch an enterprise-wide change initiative. Taylor then formed a team of five vice presidents (including HR) from different parts of the business. Over a six-month period they held more than 45 site visits in 14 countries and conducted more than 400 interviews with Four Seasons guests, employees and stakeholders. The team used their “bold ambitions” —product, people, and profit—to organize their findings, which helped highlight how they were interrelated. They realized that to have the best product (luxury hotels), the Four Seasons needed to attract and develop the best people and create a culture that retained them. They knew that when they met their “people” goals, their hotels would thrive and the profits would follow. Taylor and the executive team also decided that each bold ambition would have five work initiatives cascading from it. Working in small teams, senior leaders led the initiatives. Each team’s focus was to make that piece of the puzzle align with Four Seasons’ purpose. For example, in the “people” category, one team led an initiative called “who gets to be a leader around here?” The goal was to transition Four Seasons from an informal promotion system to a robust, systematic program that would promote people based on their potential and performance. This was particularly important to Four Seasons because service is their competitive advantage and it is vital to have the right people in the right roles and to ensure that they are developed, rewarded and retained. An important outcome of the initiatives is that they have made strategic and operational priorities real, not just theory. As Four Seasons prepares for its next 50 years Taylor is confident of its success: “ e have 34,000 employees who get up every morning thinking about how to serve our W guests even better than the day before. Our promise to provide the most exceptional guest experience wherever and whenever you visit us is instilled in the hearts and minds of our dedicated employees. They are the ones who fulfill that promise day in and day out, in good times and in bad. Our guests are a central focus of this company, and our commitment to our employees to get them the tools they need to get that job done will remain a focus as well. The combination of strong global leaders and dedicated and caring employees is going to be the recipe for our success going forward.”12 ALL CONTENT © UNC EXECUTIVE DEVELOPMENT 2012 To subscribe, visit www.uncexec.com
  13. 13. C H A R T I N G A C O U R S E D U R I N G U N C E R TA I N T I M E SThe Four Seasons’ Collective Ambition Compass Copyright © 2010 Doug Ready. All rights reserved. Copyright © 2010 Doug Ready. All rights reserved. 13
  14. 14. Putting the Compass Together At the heart of the collective ambition compass or any example, to provide excellent entertainment or banking figure used to create an organization’s story is purpose. services–is just as meaningful as improving healthcare in Purpose is the center around which vision, strategy, emerging economies. It does not have to be about saving brand, values and leader behaviors should be mapped. the world. It just has to be an authentic representation of why your organization exists. A purpose statement is While many organizations want their purpose statements the starting point to differentiate your organization and to address a noble goal, simply having a purpose–for to engage your stakeholders. Example: Sephora – Constructing the Compass Founded in France in 1969 by Dominique Mandonnaud, Sephora is one of the world’s leading beauty retailers. Mandonnaud believed that shopping for cosmetics should be fun, and he designed Sephora stores to be entertaining places where customers could test products before purchase. The concept took off, and so did competitors’ adeptness in copying it. To try to differentiate itself from its competitors, Sephora increased the number of brands it carried, but it soon learned that carrying a wider range of cosmetic, fragrance and skin care brands in addition to its own private label was not enough to stay ahead of the pack. It needed something hard to copy. Sephora is now part of LVMH, the world’s leading luxury products group. LVMH considered selling Sephora in 2003 because of its troubles, but instead brought in a new CEO, Jacques Levy, to turn the company around. Levy believed that saving Sephora was about creating a sustainable competitive advantage. As it turned out, the process of creating a sustainable competitive advantage became an exercise in reinvigorating Sephora’s core purpose. After studying customer preferences, Levy and his senior team realized that Sephora’s competitive advantage wasn’t in the store layout or brands it carried. It was in something closer to what Mandonnaud sought to create: a truly unique shopping experience. Thus emerged Sephora’s newly articulated purpose which was a nod to the past and an acknowledgement of what sustaining success would mean in the future: “To provide customers with the most entertaining shopping experience of the retail industry—giving them a moment of relaxation and discovery, enabling them to experiment and play with their beauty.” With this purpose, Sephora spent the next few years shaping and implementing its collective ambition. As a Sephora board member commented, “The market is moving so fast, but we’re on the crest of the wave. And we’re there because of the energy that Levy gives us. It speaks to the power of purpose. If you are a company that only wants to achieve targets, then you reach those targets and stop. But if you have a purpose like ours, you’re always working to satisfy it more fully. You’re always on the move.” Today, Sephora has 17,000 employees in 1,600 shops spread across 22 countries—and it is opening roughly two stores each week.14 ALL CONTENT © UNC EXECUTIVE DEVELOPMENT 2012 To subscribe, visit www.uncexec.com
  15. 15. C H A R T I N G A C O U R S E D U R I N G U N C E R TA I N T I M E S Purpose may be the spring from which the other elements flow, but it is not the only thing that matters in shaping and implementing an organization’s collective ambition. All seven elements must be integrated into the powerful story that is your organization’s collective ambition. Sephora, for example, determined that if an entertaining shopping experience was its purpose, then its strategy should be to deliver exceptional service. But not conventional great service—service aligned with its core values of freedom, emotional connection, excellence and boldness. Purpose, strategy and values play a role in everything Sephora does. Consider training at Sephora University. When employees learn about how to deliver exceptional service, they are encouraged to use their own means to get to the desired ends. For example, in a booklet that explains Sephora’s management style to employees, each principle is listed with examples of how other employees have successfully achieved each principle and then there is a space where trainees can list how they will do it.ConclusionThe companies showcased in this article continue to Finally, they used the process itself as a springboard tosucceed despite the economic environment because initiate change and execute strategy.they have harnessed the power of collective ambitionto chart a course during these uncertain times. The Harnessing the power of collective ambition isn’t easy,successes experienced at companies like SCB, Four but then again, the path to excellence is never easy.Seasons and Sephora could not happen without a There is no GPS button that will take an organizationclearly defined purpose and genuine commitment at effortlessly to the Promised Land, or an external guruthe senior executive level. As demonstrated throughout who can show the way in an hour’s speech. The goodthis paper, an organization’s purpose is the center of news is that it can be done if the organization pullsits collective ambition. Purpose matters for business together to work for it. This requires the commitmententerprises. Purpose drives and informs employee of HR and talent management professionals to ensureengagement, leadership development initiatives and that the organization has the right people with thebranding. It breeds trust, speeds decision-making and right skills and cultural fit to execute an organization’sis the heard of compelling change initiatives. These collective ambition. HR leaders must also work tocompanies embraced collaboration to shape their prepare employees at all levels so that they are ready forcollective ambition and to energize their employees. the changes to come. 15
  16. 16. Focusing on Employee Engagement: How to Measure It and Improve It Pat Cataldo Managing Director UNC Executive Development Introduction For the past few years now, workers lucky enough to have a job hunkered down to ride out the economic storm. They did more with less and often had to 87 % f C-Suite executives o recognize that disengaged employees is one of the biggest accept salary freezes, time off without pay, or cutbacks threats to their business. in hours in exchange for continued employment. Source: Re-engaging With Engagement, The Economist, 2011. Uncertain about how long the recession would last and not willing to be a victim of “last one in, first one out,” they also stopped looking for that next great job at a competitor down the street. As a result, employee retention rates soared and not surprisingly, employee Promise engagement suffered. This white paper: • Outlines the characteristics of engaged employees According to a 2010 Hewitt survey of companies from around the world, half of the organizations responding • dentifies the traits that engaged, disengaged and I said they had experienced significant drops in employee actively disengaged employees demonstrate engagement, the largest decline Hewitt has seen in • xplores the costs of poor employee engagement to E more than 15 years of researching the metric. organizations • Provides suggestions to human resource and talent Filmmaker, comedian and well-known neurotic Woody management professionals on how to gauge Allen once said: “Eighty percent of success is showing employee engagement in their organizations up.” This may have been true thirty years ago, but today, it no longer applies. In our internationally • ffers employee engagement trends and steps to O competitive business environment, employers need improve employee engagement that HR and talent dedicated employees fully committed to the success management professionals can take of their organizations.16 ALL CONTENT © UNC EXECUTIVE DEVELOPMENT 2012 To subscribe, visit www.uncexec.com
  17. 17. EMPLOYEE ENGAGEMENT: MEASURE AND IMPROVE ITCharacteristics of Engaged EmployeesResearchers for the Institute for Employment Studies Engaged workers:(IES) recently asked about the characteristics common to • Believe in their organizationengaged employees as they embarked on the study,The Drivers of Employee Engagement. They found that • Desire to work to make things betterthere was general agreement among HR professionals • nderstand the business context and the “bigger Uabout engaged workers. picture”A key finding of the IES study was that engagement was • Are respectful and helpful to colleaguesa two-way street. For employee engagement to succeed, • Are willing to go “the extra mile”organizations must work to engage employees; in turn,employees have a choice about the level of engagement • eep up to date with developments in their field Kthey offer employers. 17
  18. 18. Example: Fortune and Employer Engagement Fortune publishes an annual ranking of the Top 100 Best Companies to Work For, and while being on this list does not guarantee employee engagement, it’s a very good indicator of worker satisfaction. Employee engagement can be described as a sense of personal investment where employees want to do whatever they can for the success of the organization. The companies on the Best Companies to Work For list have demonstrated that they are equally invested in their employees, and they do what they can to help their employees succeed. These companies have found that employer engagement can have a positive impact on employee engagement, and when both the employer and employee are engaged, the organization benefits. Fortune partners with the Great Place to Work Institute to identify the Top 100 Best Companies to Work For. Two-thirds of a company’s score is based on the results of the Institute’s Trust Index survey, which asks questions related to their attitudes about the management’s credibility, job satisfaction, and camaraderie. The remaining third of the score is based on the company’s responses to the Institute’s Culture Audit, which includes detailed questions about pay and benefit programs and a series of open-ended questions about hiring, communication, and diversity. Software firm SAS has ranked at the top of Fortune’s list in 2010 and 2011, and has made the list for the past 14 years. SAS believes that focusing on people and relationships leads to more productive, satisfied and dedicated employees. Their focus on building these relationships has driven them to offer their employees a wide range of perks and benefits at their headquarters in North Carolina, including on-site healthcare, childcare, car cleaning, a beauty salon, and a state-of-the-art, 66,000-square-foot gymnasium. Fortune’s 2011 Best Companies to Work For® - The Top 10 1. SAS 6. Zappos.com 2. Boston Consulting Group 7. Camden Property Trust 3. Wegmans Food Markets 8. Nugget Market 4. Google 9. REI 5. NetApp 10. Dreamworks Source: 100 Best Companies To Work For, CNN Money, 2011. Engagement Levels: The Engaged, Disengaged and Actively Disengaged If your CEO asked you today what percentage of your If your workforce is typical, about one-third of your workforce was actively engaged, would you be able to employees are actively engaged, according to a recent give a fair ballpark figure? Gallup poll. The poll found that nearly half, or 49 percent, are disengaged while 18 percent are actively disengaged.18 ALL CONTENT © UNC EXECUTIVE DEVELOPMENT 2012 To subscribe, visit www.uncexec.com
  19. 19. EMPLOYEE ENGAGEMENT: MEASURE AND IMPROVE ITA study by consulting firm Towers-Watson revealed an As the economy recovers, employees at all levels willeven bleaker situation. Their research concluded that emerge from where they were and may begin to look foronly about 15 percent of employees were fully (actively) new opportunities. The biggest concern will be theengaged; 65-70 percent of employees were moderately potential loss of an organization’s most valued talent, soengaged, while 15 percent were totally disengaged. if improving employee engagement has not been on your organization’s radar screen, it should be.Actively Engaged Workers .....................................................................................................................................................The Gallup organization provides a detailed profile of • motional commitment to what they do Ean engaged worker based on its G12 employeeengagement survey. Engaged workers demonstrate: • High energy enthusiasm • onsistently high levels of performance C • Commitment to their organization, work group and job • atural innovation and a drive for efficiency N Engaged workers are the ones you look forward to• ntentional building of supportive efficiency I seeing on Monday morning because their enthusiasm is catching. They have likely been identified as high-potential• lear understanding about the desired outcomes C employees and feature prominently in their organization’s for their roles succession planning process.Disengaged Workers ...................................................................................................................................................................Disengaged workers, on the other hand, view their jobs Disengaged workers may have been actively engagedas an exchange of time for a paycheck. They arrive and workers at one time. Somewhere along the way, though,leave on time, take their breaks, never volunteer for extra they became disengaged because of a lack of careerwork or projects, and do little else in between beyond the growth or promotion, a perception of salary inequity,minimal effort. They show little passion or creativity for job dislike, or distrust in their direct manager and seniortheir jobs and go through the motions. management.Actively Disengaged Workers .............................................................................................................................................Actively disengaged workers are the most damaging negative attitudes have a disproportionate effect on theemployees in the workplace. They are unhappy and let performance of their co-workers and overall operationalthat unhappiness show in words, attitudes and actions. performance.They undermine the performance of others by constantlyvoicing their displeasure and listing the many reasons why While it is not impossible to re-engage actively disengagedthey are so miserable in their jobs. Kelly Services notes workers, it is much more challenging. Letting employeesthat while these actively disengaged workers make up know that senior leaders are aware of employeeonly 15-18 percent of the employee population, their engagement levels and are committed to taking positive action to address it is a key step. 19
  20. 20. Measuring Employee Engagement One reliable instrument to measure employee engagement is Gallup’s G12 feedback system. Gallup has identified the factors that determine whether people are actively engaged, disengaged, or actively disengaged. Their research (which consistently shows a correlation between high survey scores and superior job performance) yielded a series of 12 questions known as Gallup’s Q12. The 12 questions are (rated on a scale from 1 to 5): 1. Do I know what is expected of me at work? 2. Do I have the materials and equipment that I need in order to do my work right? 3. At work, do I have the opportunity to do what I do best every day? 4. In the last seven days, have I received recognition or praise for doing good work? 5. Does my supervisor, or someone at work, seem to care about me as a person? 6. Is there someone at work who encourages my development? 7. At work, do my opinions seem to count? 8. Does the mission or purpose of my company make me feel that my job is important? 9. Are my coworkers committed to doing quality work? 10. Do I have a best friend at work? 11. In the past six months, has someone at work talked to me about my progress? 12. This past year, have I had opportunities at work to learn and grow? Source: Gallup, n.d. The Cost of Low Employee Engagement L ow employee engagement has ramifications far Other researchers have determined that the value beyond immediate co-workers. According to the added by good (not even outstanding) performers Gallup organization, the cost for keeping actively versus average performers was one-half of their disengaged workers over a five-year period was gross salary. In an article in the Headwinds Journal, approximately $300 billion in lost productivity and Joel Head points out that poor performers will cost employee performance. an organization about one-half of their gross salary; the difference between a poor performer and a Research indicates that studies exist which show good performer, then, is equal to one employee’s that low employee engagement not only affects annual salary. performance, it increases employee turnover, lowers customer service satisfaction and increases absenteeism.20 ALL CONTENT © UNC EXECUTIVE DEVELOPMENT 2012 To subscribe, visit www.uncexec.com
  21. 21. EMPLOYEE ENGAGEMENT: MEASURE AND IMPROVE ITPotential Increase in Overall Engagement? Intent to stay has steadily increased another 2.3 percent across the first quarter of 2011. More importantly, discretionary effort took an upswing from its decline and increased by over 8 percent. The combination of employees exhibiting an increase in both discretionary effort and intent to stay reflects a potential increase in overall employee engagement.Quarterly Data of Intent to Stay vs. Discretionary Effort Intent to Stay Discretionary Effort Percentage of Employees 70% 60% 50% 40% 30% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 ‘09 ‘09 ‘09 ‘09 ‘10 ‘10 ‘10 ‘10 ‘11Source: The Corporate Executive Board, Employee Engagement Trends Report: Q1 2011. 21
  22. 22. Get the Pulse on Employee Engagement Levels How can HR and talent management professionals assess the level of employee engagement in their organizations? Just ask. smaller workplaces, one-on-one meetings with employees may be the easiest, most effective For method to assess employee engagement. For medium and larger workplaces, one-on-one meetings may be supplemented with town hall meetings, focus groups and surveys. In all cases, it is important that employees are asked the same questions. This allows for better analysis of the feedback, which leads to better, more targeted action steps. Quantum Workplace, a leader in building science-based tools to measure and manage employee engagement, loyalty and retention, has developed survey questions to assess employee engagement. This survey asks employees to rank on a scale of 1 to 10 their responses to these statements: 1. Management provides good leadership and guidance during difficult economic conditions. 2. My job is mentally stimulating. 3. I understand how my work contributes to my company’s performance. 4. There are future opportunities for growth at my company. 5. My company affords me the opportunity to develop my skills. 6. I receive recognition and reward for my contributions. 7. There is open, honest communication between employees and managers. 8. I see professional growth and career opportunities for myself in this organization. 9. I know how I fit into the organization’s future plans. 10. onsidering the value I bring to the organization, I am paid fairly. C Gathering feedback should not end here. There is a strong do discretionary work above and beyond their link between leadership and employee engagement. As normal assignments? Do they understand how these such, HR and talent management professionals should activities align with the organization’s goals? If not, attempt to gauge the engagement levels of CEOs and are managers and employees given an opportunity to senior leaders. question the value of doing this discretionary work? Becky Shambaugh, president and CEO of Shambaugh • Are you and senior leaders creating a corporate culture Leadership, offers the following questions for CEOs and built on shared values, trust and empowerment, valuing senior leaders regarding employee engagement: diversity and team work? Or has the climate become restrictive, un-collaborative and mistrusting? Are people • ow are you and the other C-Suite execs “showing H being perceived as commodities rather than assets? up”? How visible are you and your senior leaders to your employees? • re you taking a multi-cultural view of inclusiveness A and diversity where people feel valued for what they • oes it seem like your employees are tuning lately D bring to your company rather than feeling like they to radio station “WIIFM”… What’s In It for Me? Do have to conform and fit into an uncomfortable mold? employees understand why they are being asked to22 ALL CONTENT © UNC EXECUTIVE DEVELOPMENT 2012 To subscribe, visit www.uncexec.com
  23. 23. EMPLOYEE ENGAGEMENT: MEASURE AND IMPROVE IT• re you giving employees examples where individuals A and teams have gone above and beyond the call of duty to overcome a challenging business problem or exceed a client’s expectations? Story telling is a critical way for a manager to help employees relate to what needs to be accomplished with real live examples.• re your managers helping employees sort through A tasks and priorities so the urgent doesn’t overwhelm what’s important?• astly, are you and your management team L proactively asking employees how to make things better, improve customer relations and leverage innovative ideas for competitive advantage?Shambaugh suggests—and research confirms—that if the answer to any of these questions is no,then employee engagement is suffering. Employeeengagement starts at the top.Four Steps for Improving Employee EngagementThere is nothing more damaging to employee morale • nvolvement in decision making Ithan asking employees for their thoughts and opinionson an issue and then failing to take any action based • The extent to which employees feel able to voice on their input. It is vital that employees understand that their ideas, and managers listen to those views andsteps are being taken to improve employee engagement value employees’ contributionsas a result of their responses. • he opportunities employees have to develop T their jobsStep 1: Know What Drives EmployeeEngagement • he extent to which the organization is concerned T for employees’ health and well-beingNow that you have a pulse on your employees’commitment to the organization, action is required. In all cases, two-way communication and managementKnowing what drives employee engagement will help play vital roles in keeping employees engaged.you plan those action steps. IES identified severalcomponents of what drives employee engagement: 23
  24. 24. Step 2: Get Senior Leader Buy-In As the IES study revealed, senior leader buy-in “ ith high levels of engagement, W is critical for employee engagement initiatives to firms can see revenue growth 2.5 succeed. Good leaders create a culture of engage- times that of their peers and a ment, keep employee trust, and help increase productivity, employee satisfaction and retention. 40 percent reduction in expensive staff turnover.” If senior leaders do not understand the importance Source: Giving Everyone the Chance to Shine, HayGroup, 2010 of employee engagement, now is the time for HR and talent management professionals to educate them. Show them the direct correlation between employee engagement and the organization’s Step 4: Act on the Results bottom line. Share with them the results of the Each organization will differ in what they need to do employee survey (or of the one-on-one meetings, to improve employee engagement. In some cases, for focus groups or town hall meetings) and the steps example, feedback may reveal that employees don’t needed to improve engagement. understand the organization’s mission and vision. If this is the case, a series of meetings or brown-bag lunches Consider using customer satisfaction surveys to can be arranged where the organization’s mission, vision corroborate the results of the employee survey. and strategic plan are discussed and a link made to each Monica Nolan of PeopleMetrics notes that several employee’s role in the organization and how their work studies have shown a positive correlation between contributes to the organization’s success. The important customer satisfaction surveys and employee point is that the action steps should be tailored to the engagement. If customer satisfaction is high, it is needs identified through employee feedback. likely that employee engagement is too. Conversely, if customer satisfaction is low, so is employee Action steps to improve employee engagement do engagement. In either case, comparing the results not need to be costly or time-consuming. A McKinsey of customer satisfaction surveys with employee Quarterly survey revealed three effective non-cash engagement levels can make a stronger business awards that improve employee engagement that can case to senior leaders of the need for their support. work for small and large organizations: Step 3: Communicate with Employees • Praise from immediate supervisors • ttention from leaders (e.g., one-on-one meetings or A One of the hallmarks of organizations with strong attention from the top) employee engagement is communication. Let employees know the steps you have taken to assess • Opportunity to lead projects or task forces employee engagement, the outcome of those steps, Kevin Sheridan, chief executive officer and chief and the plans moving forward to improve employee consultant for HR Solutions believes organizations will engagement. Communication can take the form of increasingly use actively engaged employees as mentors town hall meetings, articles in employee newsletters to help motivate and re-energize disengaged workers. and on employee intranets or e-mail. Always use the Other engagement trends predicted by Sheridan include communication methods you have found to be most the use of social media to engage employees. For effective in your workplace. example, using internal social networks to acknowledge employees for jobs well done or to promote new organizational and CSR (corporate social responsibility) initiatives can be effective uses of social media.24 ALL CONTENT © UNC EXECUTIVE DEVELOPMENT 2012 To subscribe, visit www.uncexec.com
  25. 25. EMPLOYEE ENGAGEMENT: MEASURE AND IMPROVE ITExample: Southwest Airlines and Employee Empowerment Employee engagement can lead to better customer service. Southwest Airlines is renowned for its outstanding customer service, the keys to which are its recruitment and employee empowerment philosophies. According to Kevin Freiberg in the book Nuts! Southwest Airlines’ Crazy Recipe for Business and Personal Success, “Southwest looks for people with other-oriented, outgoing personalities, individuals who become part of an extended family of people who work hard and have fun at the same time.” To empower their employees, according to Freiberg, Southwest dispensed with rigid work rules and job descriptions so their employees could assume ownership to get the job done and get their planes out on time, regardless of whose “official” responsibility it is. The airline also gives employees the flexibility to “bend” company policy if they think it would be in the best interest of its customer. This flexibility allows Southwest employees the ability to go above and beyond to deliver exceptional customer service—a challenge in any industry. “It can be tough and put you into a bad mood real quick when you deal with a nasty and abusive person,” notes Libby Sartain in a recent article for SHRM Online. Sartain is an HR management consultant and former chief HR officer for Southwest Airlines and Yahoo. “It’s a matter of training and empowering employees to do the right thing,” she said. “If you trust that employees will do the right thing and handle situations as best they can, then that’s what will happen.” Southwest tightly links the way it empowers its people and manages its operations on the inside, and the way it positions itself to the customer and the marketplace on the outside. Sridhar Balasubramanian, Professor and Associate Dean of UNC Kenan-Flagler’s MBA program, notes that this linkage has helped the company to be true to its values, and to execute on its customer promise flawlessly. “Southwest is a fun brand that delivers focused value,” he said, “and the flight attendants and pilots who crack jokes and entertain the passenger are not just putting on a show. They have been hired at Southwest because that sense of humor comes naturally to them.” 25
  26. 26. Conclusion As the economy continues to improve, organizations Organizations in which people feel with active employee engagement programs in place will prosper. The time is now for HR and talent both motivated and “enabled”can management professionals to do more about helping achieve revenue growth 4.5 times everyone achieve their maximum level of potential and satisfaction. Assessing and improving employee that of peers. engagement to re-energize and re-engage workers can Source: Giving Everyone the Chance to Shine, HayGroup, 2010 be the first step in this retention process to ensure the best and brightest continue to attain both personal and professional success with the organization. 100 Best Companies To Work For. Ellig, J. Ellig, C. (May 31, 2011). Change Kelly Services (n.d.). Disengaged Employees Sheridan, K. (January 10, 2011). CNN Money. Retrieved June 16, 2011 from at the Top Can Shatter Employee Morale. Costs the Company. Smart Manager. Retrieved Top 2011 Employee Engagement Trends. http://money.cnn.com/magazines/fortune/ Business Insider. Retrieved June 2, 2011 from June 3, 2011 from http://www.kellyservices. MonsterThinking. Retrieved June 2, 2011 bestcompanies/2011/index.html. http://www.businessinsider.com/churn-at-the- com/eprise/main/web/us/ hr_manager/articles_ from http://www.monsterthinking.com/2011/ top-can-topple-employee-morale-2011-5. nov08_actively?printer=1. 01/10/employee-engagement/. Bellon, J., Estevez-Cubilete, A., Rodriquez, N., Dandy, R., Lane, S. Deringer, E. (2010). Everett, C. (May 13, 2011). Report Reveals Leonard, B. (April 19, 2011). Study: Employee Wiley, J. (July 13, 2010). The Impact Employee Engagement and Customer Engagement More Complicated than Moods Impact Performance. SHRM Online. of Effective Leadership on Employee Satisfaction. Allied Academies International We Thought. HR Zone. Retrieved June 2, Retrieved June 16, 2011 from http://www. Engagement. Employee Relations Today, 37, Conference, New Orleans: LA. 2011 from http://www.hrzone.co.uk/topic/ shrm.org/hrdisciplines/ employeerelations/ 2, 47-52. managing-people/report-reveals-engagement- articles/Pages/EmployeeMoods.aspx. Bolchover, D. Re-engaging With Engagement. more-complicated-we-thought/111498. Wilson, C. (2010). The High Cost of Low The Economist: Economist Intelligence Unit. Nolan, M. (May 2009). Dream Jobs: Engagement. Management Concepts, Inc. Retrieved June 17, 2011 from http://haygroup. Freiberg, K. (1998). Nuts: Southwest Airlines’ Companies with the best employee com/EngagementMatters/Re-engaging-with- Crazy Recipe for Business and Personal engagement scores. PeopleMetrics. Retrieved Woods, D. (May 20, 2011). Mine’s a latte with engagement.pdf. Success. Crown Publishing. June 2, 2011 from http://blog.peoplemetrics. extra employee engagement, says Caffé Nero com/ dream-job-companies-with-the-best- HRD. HR. Retrieved June 2, 2011 from http:// Cataldo, P. (April 5, 2009). Thinking Ahead: Gallup. www.gallup.com. employee-engagement-scores/. www.hrmagazine.co.uk/hro/news/ 1019501/ Why keeping staff engaged matters. Centre mine-s-latte-extra-employee-engagement- Daily Times. Retrieved June 2, 2011 from Giving Everyone the Chance to Shine. (2010). Ohannessia, K. (May 25, 2011). American caff-nero-hrd. http://www.centredaily.com. HayGroup. Retrieved June 17, 2011 from Employees Are Staying Put. FastCompany. http://www.haygroup.com/Downloads/ww/ Retrieved June 2, 2011 from http://us.mg203. Wright Results. www.wrightresults.com. CLC Human Resources (April 2011). misc/Giving_everyone_the_chance_ to_shine_ mail.yahoo.com/neo/launch?.partner= sbc. Engagement Trends: Q1 2011. Corporate whitepaper_singles.pdf. rand=c7055etegiqu.m. Executive Board. Retrieved June 16, 2011 from http://cebengagement.com/wp-content/ Gruman, J. Saks, A. (June 2011). Robinson, D., Perryman, S., Hayday, D. (April, uploads/2011/05/CLC-Quarterly-Employee- Performance Management and Employee 2004). The Drivers of Employee Engagement. Engagement-Trends-Q1-2011.pdf. Engagement. Human Resource Management Report 408. Institute for Employment Studies. Review, 21, 2, 123-136. Shambaugh, B. (September 16, 2010). Are Head, J. (February 25, 2011). Beware the High Your Employees Engaged? Shambaugh Cost of Low Engagement. Headwinds Journal. Leadership. Retrieved June 2, 2011 from Retrieved June 2, 2011 from http://www. http://www.shambaughleadership.com/blog/ headwindsjournal.com/?p=34. comments/are_your_employees_engaged/.26 ALL CONTENT © UNC EXECUTIVE DEVELOPMENT 2012 To subscribe, visit www.uncexec.com
  27. 27. If you’re ready totake the next step in your career, make a quick trip back to the classroom first.E X E C U T I V E D E V E L O P M E N T I N S T I T U T EAt UNC’s Executive Development Institute,you’ll gain the core knowledge of an MBA programwithout the long-term time commitment. You’llalso learn how to view the business world from asenior executive’s perspective. And you’ll develop the UNC EXECUTIVE DEVELOPMENTkey leadership characteristics that lead to effective The Power of Experience.strategic performance. The result? In two weeks,you’ll be fully prepared for that next step.To learn more, visit www.edi.uncexec.com. 27
  28. 28. Closing the Gaps in Leadership Development Brigitta Theleman Director, OneMBA Program UNC Kenan-Flagler Business School Introduction The bottom line from leadership study after leadership • n American Management Association study found A study: the better the leader, the better the organiza- that organizations with global leadership programs tional performance. According to a 2011 Development in place are more likely to report higher market Dimensions International (DDI) leadership forecast, organizations identified in the study as the top third in overall leadership quality out-performed organizations in the bottom third in workforce retention, employee Top Positions in Organizations engagement, organizational performance and the Held by Leaders, Not Managers passion to lead. “Passion to lead” was defined in the study as “those in leadership positions who are In a survey of 50 global companies, committed to and enjoy their roles as leaders for the right reasons: helping see their company, teams research firm ISR found a direct and each individual they manage succeed”. These link between effective leadership organizations also report increased customer satisfaction and financial performance. In and productivity. organizations whose employees rated their leaders as “average”, HR and talent management professionals know the sales improved a little more than 6 value of strong leadership but continue to struggle to percent in a year. In organizations create learning cultures in their organizations: whose employees rated their leaders • ccording to the DDI report, 66 percent of leaders in A as above average or higher, sales organizations that rate their overall leadership quality rose more than 10 percent. as high are confident of their organization’s success. Source: Symonds, 2009 Only 4 percent of leaders in organizations with low leadership quality are confident of their organization’s success.28 ALL CONTENT © UNC EXECUTIVE DEVELOPMENT 2012 To subscribe, visit www.uncexec.com
  29. 29. CLOSING THE GAPS IN LEADERSHIP DEVELOPM E N Tperformance. Only about two-fifths of respondents,however, agreed or strongly agreed with the statement Promisethat their “leadership development program is highly This white paper examines the knowledge, skills andeffective.” That same study found that among abilities business leaders must have to ensure thecompanies with 1,000 or more employees and some continued success of their organizations in today’sdegree of a multinational presence, approximately half competitive global marketplace. It will introduce HRhad implemented one or more leadership development and talent management professionals to a four-stepprograms (Vickers, 2010). process taught at UNC’s Kenan-Flagler Business School to improve leadership skills and to create• report by Theresa Minton-Eversole, editor/manager A a leadership culture within organizations. for SHRM Online, found that only 40 percent of employers reported having a formal succession or executive coaching program in place, and only 54 percent said they had a process in place to identify high potential employees (Minton-Eversole, 2009). Organizations in the top third in overall leadership out-performed those in the bottom third in employee engagement and other related performance factors. PERFORMANCE FACTOR LEADERSHIP QUALITY BOTTOM 1/3 TOP 1/3 Workforce Retention 24% 70% Employee Engagement 9% 50% Organizational Performance 13% 52% (Financial performance, customer satisfaction, service quality, productivity) Passion to Lead 7% 53% Source: DDI Global Leadership Forecast, 2011. 29
  30. 30. Leadership Knowledge, Skills and Abilities Needed Today An increasing number of employers understand the directly to the increasing influence of HR and talent connection between leadership and organizational management professionals in an organization. An IBM success. During the recent recession when organizations study also noted that creativity and innovation were slashed training budgets, leadership development critical leadership skills. Neuroscientist and founder of programs were retained (Mattiolli, 2009). Employers the NeuroLeadership Institute David Rock would add learned their lesson from previous lean times and knew adaptability to that list (Fox, 2011). that if they were to emerge from the recession in good shape, they needed to find, keep and foster good Not all organizations will need all the leadership skills leaders to effectively lead in difficult times. DDI, IBM and others identified at the same time or in the same proportion due to differing industry and But what skills do business leaders need for today’s organizational needs. However, these skills are a good business environment? The DDI study tried to determine start when looking at the present and future needs in whether the skill sets leaders need in today’s business your own organization. environment would be the same needed in the next few years. They found that some of the key skills required London-based competency consultant firm Worldwork today, such as driving and managing change; coaching has identified 10 key leadership competencies that and developing others; and executing organizational help global business leaders become quickly effective strategy, would still be required. Two new skills were in unfamiliar cultural settings. Although these identified as being increasingly vital in the near future: competencies were determined with global business identifying and developing future talent and fostering leaders in mind, they can easily be applied to all business creativity and innovation. These latter skills speak leaders (Worldwork, n.d.): What Makes a Good Leader? It May Be Neuroscience, Not Rocket Science In a recent interview with HR when to stick to their beliefs and when to Magazine, David Rock, founder work collaboratively. They also know when of NeuroLeadership Institute in to look at the big picture and when Sydney Australia, reported they need to get into the nitty-gritty. that neuroscience has This means, according to Rock, discovered that self- that leaders have “tremendous regulation—the ability connections across all regions of to regulate emotions, the brain.” This does not mean thoughts and attention— that leadership is in the genes; is essential to leadership. The Rock believes that most leaders optimal leader, then, is adaptive. learn the ability to adapt and self- The optimal leader, for example, knows regulate through experience. Source: Fox, 201130 ALL CONTENT © UNC EXECUTIVE DEVELOPMENT 2012 To subscribe, visit www.uncexec.com
  31. 31. CLOSING THE GAPS IN LEADERSHIP DEVELOPM E N T1. penness (new thinking, welcoming strangers, O acceptance) A Framework for2. lexibility (flexible behavior, flexible judgment, F Developing Leaders learning new languages) Despite the hundreds of studies and books dedicated3. Personal autonomy (inner purpose, focus on goals) to leadership development, a single formula has yet4. Emotional strength (resilience, coping, spirit of to emerge that will ensure an organization’s success adventure) in developing good leaders. Global consulting and outsourcing firm Hewitt (now Aon Hewitt) found5. erceptiveness (attuned, reflected awareness) P no single best leadership practice in their survey of6. istening orientation (active listening) L top leadership qualities. Instead, they uncovered a framework that top organizations have in place to7. ransparency (clarity of communication, exposing T sustain their ability to build leadership talent: intentions)8. ultural knowledge (information gathering, C • CEO and board leadership support and inspiration valuing differences) • A maniacal focus on high potentials9. nfluencing (rapport, range of styles, sensitivity I • The right leadership practices, done right to context) Hewitt found that CEOs at organizations rated high10. ynergy (creating new alternatives) S in leadership development were truly passionate about developing leaders and felt it was their legacy to ensureTalent development and HR professionals should that there were strong leaders in place throughout theidentify the knowledge, skills and abilities required for organization after they left. Hewitt’s study also revealedleaders in their organization so that they can build a that the boards of companies with high leadershipframework that will support the development of these development believed it was one of their primarycompetencies. responsibilities to ensure there was sufficient leadership strength to sustain their organizations for three to five years. Not surprisingly, organizations with strong leadership The Global Leaders of Tomorrow development cultures (called Top Companies in the Hewitt study) identify and keep a sharp eye on their Project high potential employees. The Hewitt study found that 95 percent of the Top Companies in leadership U.K.-based Ashridge Business School’s 2008 development identify high potentials as compared with survey found that 76 percent of CEOs and 77 percent of other companies. Top Companies track executives surveyed said it was important that turnover of high potentials 72 percent of the time, senior executives have the skills and knowledge versus 60 percent in other companies. In addition, the to respond to trends like climate change, Top Companies use internal training and developmental resource scarcity and doing business in emerging assignments with high potential employees 90 and 89 markets. Less than eight percent felt these skills percent of the time, respectively. In comparison, non- were currently being developed very effectively top companies use the same development activities by their organizations. just 51 percent and 43 percent. Top Companies also Source: Gitsham. n.d. compensate high potential employees just for being high potential 75 percent of the time, versus 38 percent of the time for non-top companies. 31

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