Your SlideShare is downloading. ×
Global Leadership 2011 2012
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Global Leadership 2011 2012

922
views

Published on

Global Leadership …

Global Leadership
2011 - 2012


0 Comments
2 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
922
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
19
Comments
0
Likes
2
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. 2011 / 2012 Research 1
  • 2. Join The Effort The Global Leadership Research project will be expanded to collect data from organizations on a con- tinuing basis. Each year, the survey will be refined to collect additional data on issues that previous surveys have identified as important. As such, the research process will be a continuing process. We are seeking participation once annually from those leaders and HR executives most involved in leadership development and succession planning. The Global Leadership Research Project will be periodically updated as various academics and re- search partners complete more in-depth analyses of the massive database begun in 2010. We thank you in advance for your interest, and look forward to your future support and participation.2
  • 3. Letter From The ChairmanA Note From HowardThe challenges of corporate leadership in the modern Each year, the project kicks off with an in-depth surveyera demand dramatically greater capabilities than the of approximately 1000 Chief Executive Officers (CEOs)traditional disciplines of the past. Quality, service, and and senior Human Resource (HR) leaders globally.innovation are no longer competitive advantages but The results from this survey produce the annual Bestrather minimum requirements. The speed of change, Companies for Leaders, as published in the January/responding to new and unpredictable competitive February edition of Chief Executive magazine. Ourforces, and keeping up with the daunting evolutions team of researchers then works with these survey data,in technology, increases the stress on business and its in combination with interviews conducted with seniorleadership. Most notably it is the CEO who bears the ulti- consultants and CEOs who represent contemporarymate responsibility for shepherding the organization to thinking on leadership strategies, and present thislong-term success. report as the culmination of the research to date.The best of the best have long relinquished the depen- We invite you to learn more about the current trendsdence on home run strategies and silver bullets. They in leadership development. To further expand on thisaccept that no one can accurately predict tomorrow’s research and to provide valuable comparative bench-paradigm-altering technology, competition, or global marks, we will soon release a more exhaustive evalua-environment. They cannot predict the future, but tion based on interviews with the Best Companies forthey can prepare their successors with the requisite Leaders. Information will be posted on our website atcompetencies, experiences, and resources to leverage www.chally.com.whatever the future holds and drive continued growthand profitability.Mindful of the charge for these business leaders, ChallyGroup Worldwide, in close partnership with RightManagement, presents the summary results from the Howard P. StevensSecond Annual Global Leadership Research Project.Designed as an ongoing research study, our analysis Chairman, Chally Group Worldwidebuilds year over year on insights shared, intelligencegained, and paradoxes revealed about the leadershipdevelopment practices of companies globally. Addi-tional sponsors of the study include a range of busi-ness and academic partners committed to expandingthe global knowledge base about best-in-class talentmanagement strategies. 3
  • 4. About the Research Research Objectives The Global Leadership Research Project involves CEOs and Human Resource leaders direct- ly in the examination of evolving practices in leadership development and the recognition of the innovative approaches and persistent challenges faced by companies committed to investing in their own talent. Recognizing Excellence in Leadership Development The study defines multiple qualifying criteria for inclusion and final ranking in the Best Companies for Leaders. These include: Quality of formal leadership development initiatives Personal involvement invested by the executive team Strength of leadership pipeline for internal recruitment Reputation amongst peers for excellence in developing sought-after talent Long-term growth of market capitalization and shareholder value This last criterion recognizes that impactful leadership development ties directly to strong business performance. More information about the companies who made it to the top 40 public rankings and top 10 private rankings can be found in the January/February edition of Chief Execu- tive magazine. (A reprint of this article is available in this report.)4
  • 5. Challenges to Leadership DevelopmentFocused not only on honoring the best of the best, but also on providing pragmatic analy-ses of the most vexing challenges, this year’s study seeks answers to several questions thatemerged from earlier findings.1) The Dominant CEO Challenge: Leadership within a Global EconomyGiven that companies increasingly operate in a global economy, and vast numbers do notreserve top-level positions for local candidates, how successful are international assignmentsand what do leaders require to increase their efficacy outside of their home country?2) Public versus Private: Competing PressuresWhile recognizing that public and private companies vary widely in the leadership challeng-es they face, what, if any, are the distinguishing characteristics between the two that shedlight on the forces competing with leadership development?3) Succession Failure: The Leadership Paradox RevisitedWith the emphasis on leadership development so strong, what insights can be gained toaccount for the surprisingly high turnover of executives, as part of a broader trend in theworkforce, particularly considering the associated costs? 5
  • 6. Trends in Turnover The Financial Times reported that Kevin Kelly, the CEO of global executive search power- house Heidrick & Struggles, revealed the results of an internal study of 20,000 executive searches performed by his firm: “We’ve found that 40 percent of executives hired at the senior level are pushed out, fail or quit within 18 months.” Dr. John Sullivan, ERE.Net reports the following data: 46% turnover — 46% of new hires leave their jobs within the first year (Source: eBullpen, LLC) and 50% of current employees are actively seeking or are planning to seek a new job (Source: Deloitte). 46% failure rate — 46% of U.S. new hires must be classified as failures within their first 18 months (fired, pressured to quit, required disciplinary action, etc.) (Source: Leadership IQ). In addition, 58% of the highest-priority hires, new executives hired from the outside, fails in their new position within 18 months (Source: Michael Watkins). Only a 19% success rate — only one out of five of the process output can be classified as unequivocal successes (Source: Leadership IQ). Germane Consulting Estimates of the financial cost of a single failed manager range from $1,000,000 to $2,700,000, not including golden parachutes, losses related to intellectual capital, the good will of the firm’s reputation, unmet business opportunities and goals, damage to employee productivity and effectiveness, or the cost to the external environ- ment, as seen in recent failures of financial institutions and auto makers. The average rate of senior manager and executive failure from nine independent research studies is 47% with the majority of these failures taking place following the transition to a new role.6
  • 7. Table of ContentsResearch Team, Sponsors, Participating Organizations 8The Second Annual Global Leadership Research Project 11Chief Executive Magazine’s The 40 Best Companies For Leaders 14Key Findings 23 Dominant CEO Challenge: Leadership within a Global Economy 24 Public versus Private: Competing Pressures 27 Succession Failure: The Leadership Paradox Revisited 29 Featured Interviews: An External Perspective from Bain & Company 31 Impactful Leadership Development Directly Tied to Business Performance 33Global Leadership Research Project Participating Partners 35Global Leadership Research Project Survey Response Summary 39 7
  • 8. Research Team Research Ken Carroll Chally Group Worldwide Rob Cottingham Jenna Filipkowski Ph.D. Christopher Holmes Ph.D. Scott Hudson James Killian Ph.D. Carly McVey Bart Mosele Joe Nelson Scott Runkle Howard Stevens M.A. Sally Stevens Peter Tassinario M.A. Tracey Wik J.P. Donlon Chief Executive Group Sandi Edwards American Management Association (AMA) Jean-Francois Jadin Imperial Consulting Marjorie Woo MBA Keystone Group, Inc. Karen Lindquist MBA Management Centre Europe (MCE) Erick Myers Stephan Rantela ProActive Oy Ab Marcus Rantala Michael Haid Right Management Gerald Purgay Shi Bisset Shi Bisset & Associates Satyan Menon Turning Point Ajay Namboodiri Academic Elaine Eisenman Ph.D. Babson College Executive Education H. James Wilson Fu Yan (Laura) Hauzhong University of Science & Technology Wu Bin (Julie) Das Narayandes Ph.D. Harvard Business School Jason Jordan University of Virginia’s Darden School of Business Corey E. Miller Ph.D. Wright State University Production Team Cindy Burgess Trisha Lamb Cindy Mitchell Deb Tackett Heath Wilkins Dean Wright8
  • 9. SponsorsLead PartnerResearch Partners andParticipating Organizations 9
  • 10. 10
  • 11. The SecondAnnual GlobalLeadershipResearch ProjectThe Global Leadership Research project will be expanded to collectdata from organizations on a continuing basis. Each year, the survey -be a continuing process. 11
  • 12. The following information provides a high-level summarization of the research sample. This research represents responses from C- Level and Senior Human Resources and Development leaders from over 1,000 global organizations. Organization Size Annual Revenue of organizations in US$ All (%) Private (%) Public (%) 25 21.5 32.1 2.9 50 7.4 9.6 4.4 100 7.9 10.5 2.2 500 18.5 20.1 14.1 1000 9.9 10.5 9.6 5000 15.9 10.1 27.4 10000 6.9 2.9 14.1 10000+ 11.9 4.3 25.2 Number of employees All (%) Private (%) Public (%) 500 34.7 50.2 11.1 1000 12.7 15.8 6.7 2500 14.6 12.9 15.6 5000 9.4 6.2 14.1 10000 6.1 4.8 8.2 25000 7.7 5.3 11.9 50000 6.9 2.4 14.8 75000 2.8 0.5 6.7 100000 2.2 1.0 4.4 100000+ 3.0 1.0 6.712
  • 13. Location of CompanyHeadquarters Private Private Public 0 15.3 0 Public 20.0 Private Private 71.8 2.9 Public 63.0 Public 3.7 Private Public 0.9 0.7 Public Private 0.7 1.9 Public Private 3.7 Private 0.5 2.4 Public Private 2.0 4.3 Public 6.0 Regions North America Southeast Asia South & Central America East Asia Middle East / Africa Oceana and Australia Europe Asia South Asia 13
  • 14. Chief Executive Magazine’s The 40 Best Companies For Leaders and 10 Best Private Companies For Leaders This Executive Overview was published in the January/February 2012 issue of Chief Executive Magazine14
  • 15. leadership development The 40 Best Companies for Leaders How the top companies—public and private—excel in leadership development. By J.P. Donlon KEY TAKEAWAYS Z Bob McDonald, CEO of P&G, which returned as this year’s top-ranked company for leadership development after a five-year hiatus. “I see my role as the chief talent officer of the com- pany,” says Procter & Gamble CEO Bob McDonald. “Lead- ership is the one factor that will ensure our success long after I am gone as CEO.” The West Point graduate and former brand manager for such products as Tide, Cascade and Dawn believes leadership development is central to the consumer prod- uct giant’s ability to grow earnings and cash flow in low to no- growth economic times. Since the ranking’s inception in 2005, P&G has numbered among the top-tier firms of Chief Executive’s Best Companies for Leaders. The ranking is based on a study of about 1,000 firms worldwide conducted in partnership with Chally Group Worldwide (www. chally.com), a Dayton, Ohio, sales and management productiv- ity firm. Companies were scored on four key criteria, including: 1. Having a formal leadership process in place; 2. The commitment 10-year growth or decline in market capitalization. This generally level of the CEO, as measured by the time and quality of involve- results in only slight ranking adjustments, as any company mak- ment with the leadership process and development program; 3. ing the list is a champion apart from most others. In fact, aside The depth of the leadership funnel as measured by the percent- from P&G, the remaining top 10 scored within several points of age of senior management positions filled by internal candidates one another, with the second 10 on the ranking scoring no more as well as the percentage of middle management positions filled by than six to 10 points below the first 10. internal candidates; and 4. The number of other companies that The Best Companies for Leaders survey tracks changes and report recruiting from the company being evaluated. To this nar- developments from year to year. For example, this year some dif-GETTY IMAGES rowed list, we factor in a shareholder value performance metric, ferences in priorities and challenges facing CEOs in public ver- slightly modifying point totals where necessary based on sus private companies were observed (See sidebar, p. 28). Because 24 CHIEFEXECUTIVE.NET JANUARY/FEBRUARY 2012 15
  • 16. it would be inappropriate to compare private companies with larger public companies that enjoy greater resources, 40 BEST COMPANIES we list separately the most noteworthy private firms with in-depth leadership development programs (See p. 29). FOR LEADERS Respondents this year also made it clear that when suc- cession from outside the company becomes necessary at the highest levels of management, companies depend on external recruiters. They charge these agencies with pur- 2012 (rank previous year) 2011 suing candidates from either other companies with the greatest reputation for leadership development or admired competitors with market expertise in their industry. 1 Procter & Gamble (2) JPMorgan Chase Several key factors most affect company rankings, including a company’s reputation among its peers as a 2 IBM (4) Procter & Gamble source for well-rounded talent. Also considered is the CEO’s personal involvement in a company’s internal pro- 3 General Electric (14) Wipro Technologies cess. For example, this criterion is one reason American Express dropped from last year’s ranking and PepsiCo rose 10 ranks on the ladder. 4 3M (24) IBM The pages to follow offer a look at the top five compa- nies on this year’s list, highlighting some of the reasons they 5 Southwest Airlines Bharat Petroleum secured their top-tier positions. The full Best Companies for Leaders report will be available in early February at www. 6 ADP Verizon chally.com. Also, later in the year, an in-depth benchmark report, detailing the process and metrics of the best compa- nies for leaders will be available at www.ChiefExecutive.net. 7 PepsiCo (17) Caterpillar P&G Rank: 1 8 Cardinal Health Hewlett Packard Quite simply, P&G executives are considered the Navy SEALs of management. This results in no small measure from a razor-like focus on internal succession planning 9 Caterpillar (7) National Australia Bank at all levels. From its inception 174 years ago, promo- tion from within has been a hallmark of the company. It 10 Discovery Wells Fargo places a rigorous process on managers to develop manag- Communications ers below them. In general, your boss can’t be promoted until you are ready to be promoted. P&G scored very high 11 Dow Chemical Graybar Electric in its internal development program, receiving the maxi- mum points for the percentage of its leaders that are inter- 12 Boeing Emergency Medical nally recruited as well as being referenced by others as the Services source of their external talent search. Development encompasses both formal as well as 13 Verizon (6) General Mills informal training. In 2000, when A.G. Lafley became CEO, he asked then-COO Bob McDonald to start a general man- 14 CRH plc. General Electric ager college where individuals were taught values-based leadership, a curriculum McDonald himself created. He trains many of these 250 leaders personally. Some out- 15 General Mills (13) PwC siders think it crazy that the CEO devotes his own time to this process. “It’s the most valuable resource this com- 16 Hitachi Data Systems (36) Tata Steel pany has,” he shoots back. “This is exactly the difference between our company and others.” 17 International Paper PepsiCo McDonald also personally looks at the top 300 to 400 executives and reviews the progress of key candidates with the board of directors. The most important element 18 Manpower American Express is short feedback loops that include 360-degree reviews where the system tries to prevent derailment. Failure is 19 McDonald’s (31) HCL Technologies an option at P&G provided it’s caught early and analyzed for what went wrong. “We have assignments that test peo- 20 Stanley Black & (20) Stanley Black & ple, stretch them, but don’t break them,” offers McDon- Decker Decker ald. “We often put our best people in our toughest jobs and often they may not get great results because of the dif- ficulty of the assignment.” McDonald learned this first- hand when he worked for P&G in Canada. After attending (Continued on p. 27) a number of focus groups there, he championed the idea16
  • 17. leadership development of putting the company’s liquid products in film enviro-packs, leaders and spend $2 billion in R&D and probably half that in which proved to be a non-starter in the marketplace and had to leadership, although the company doesn’t parse LD from its be discontinued. other activities.” “I learned that what people say in focus groups isn’t what they will necessarily do at the point of purchase,” he says. Like GE, IBM Rank: 2 IBM and 3M, P&G sees itself as a learning organization. “We live IBM has a long history of innovative leadership development in a VUCA world (volatile, uncertain, complex and ambiguous), and cross-discipline mentoring. Its Basic Blue for IBM Lead- which makes it impossible to know the future,” McDonald says. ers, Shades of Blue and Accelerate Executive Leaders program “So instead we create a learning system that prizes flexibility and for new executives and Executive Insights for newly hired or adaptability. The only way to do that is to have an organization acquired executives are among the many examples that involve that is willing to admit when something goes wrong. deeply integrated programs for identifying, assessing and devel- “Every year in July, I take 150 leaders from around the world oping some 60,000 high-potential leaders at all levels. for leadership training at a facility such as West Point or CCL. The planning process first defines all roles across IBM and We have to sharpen our saw each year. We must invest in the creates “Success Profiles” for all leadership roles. This system is used to define demand for leadership roles by business unit or market and to identify critical gap roles (requiring accelerated development and recruitment). The second Leadership process focuses on pipeline identification and develop- ment. Leadership competencies of those currently in Development ROI leadership roles are regularly evaluated to assess the lead- ership potential and functional skills of IBMers glob- ally. Guidance on potential career paths and personalized The need to develop leaders is widely acknowledged but the ac- development plans are provided for each IBMer, tracking tual return on investment from these efforts is seldom quanti- progress through the IBM management system, including fied. Without a meaningful expectation of a long-term return, it is more difficult to justify the investment, especially in trying eco- providing experiences and developmental opportunities. nomic periods. In fact, for two years in a row, almost two-thirds of Placement for each leadership role focuses on defin- responding companies listed “financial limitations” as one of the ing potential candidates, considering diversity for each top challenges to achieving their leadership-development goals. opening. Placement decisions are accomplished through Comparing the long-term growth in market capitalization of pub- “5 Minute Drills” conducted at annual leadership reviews lic companies with their ratings for leadership development of- at all levels of the business. This company-wide process fers solid justification for investment in developing leaders. The moves upward to high visibility “Chairman’s Reviews” comparison covered the 10 years from 2001 to 2011, a period long with action follow-ups. enough to minimize short-term and situational fluctuations. The According to Stanley Litow, IBM’s vice president of correlation is dramatic (See table, below). corporate citizenship and corporate affairs and president An equally important finding is that the differences within the four quartiles are relatively less substantial than the differences of the IBM International Foundation, IBM’s “success has between the top and bottom performers. In terms of the contribu- its roots in an adherence to core values while embracing tion to growth potential, the top leadership companies show sig- fast-paced global change.” nificantly greater growth than the lowest as measured by market IBM’s succession process has been a major reason it is capitalization. one of the few firms that has lasted a century. It has one of the most closely watched institutionalized succession plans of any company in the world. This was evidenced Top-Ranked Leadership Companies by the smooth transition of CEO responsibility to Virginia Perform Better “Ginny” Rometty from Sam Palmisano. She will become Summary 10-year performance comparisons* the ninth CEO since the company’s founding and its first woman CEO. This was no exception, as Lou Gerstner’s Chief Executive/Chally Average % Market handoff to Palmisano was another good case study on Worldwide Capitalization Growth leadership transition. Best Companies for Leaders Survey Ranking GE Rank: 3 GE established the quintessential executive training ground at its world-famous Crotonville, N.Y. facility—on Top 15% of Responding +22% which GE reportedly spends about $1 billion a year. Gen- Companies eral Electric’s John F. Welch Leadership Center marks its 55th anniversary this year. According to chief learn- Bottom 15% of Responding -23% ing officer Susan Peters: “We have 13 offerings involving Companies leadership skills that everybody should have, such as pre- sentation skills, project management skills and under-*Includes companies where public data is available for 2001 through 2011. standing finance in a generic way.” These courses are Reasons for unavailable data include merger, acquisition or start-up within the managed through the Crotonville staff but are delivered period. A full survey report is available at www.chally.com. at GE businesses around the world, including Shanghai, Munich and Bangalore, among other places. This is done through a Train the Trainer (TTT) concept. “The integrity 26 CHIEFEXECUTIVE.NET JANUARY/FEBRUARY 2012 17
  • 18. of the course is maintained because the Crotonville staff ensures that the person teaching it has been trained and 40 BEST COMPANIES certified,” Peters explains. GE trains 50,000-60,000 people a year digitally and an additional 9,000 attend courses at FOR LEADERS Crotonville. It’s little wonder why so many other organiza- tions covet the company’s graduates. 3M Rank: 4 2012 (rank previous year) 2011 3M practices leadership development through assign- ment rotation; but, consistent with the study’s findings of other top-rated companies, it takes the approach that 21 Cooper Companies (37) FedEx executives stay in a job for about four years in order to experience failure (the best teacher) and sustained suc- 22 Sealed Air Steris cess. Other companies often move people around every year or so, which yields a limited return on the develop- 23 El Paso Aditya Birla ment investment. 3M also focuses on leaders two to four levels below the CEO to develop and transition them into new roles. The company projects its commitment to lead- 24 National Australia Bank (9) 3M ership development on its website: “The premise is sim- ple: If your people grow, your company will grow. The key: 25 David Jones Ltd Harris linking growth in individuals to those things that unlock energy and activities that our customers value. Leader- 26 Stryker Medtronic ship development remains at the top of the company’s agenda.” 3M CEO George Buckley spends over a fifth of his time on talent issues and teaches strategy and leader- 27 Wolverine World Wide Acxiom ship to executives who meet twice a year. He also reviews what personal experiences executives need to improve 28 Konecranes AVX their learning and advance their career. He says he pre- fers surrounding himself and the organization with people more capable than himself. Courage and a strong sense of 29 Unilever Plc. JCPenney ethics will take a manager far, he believes, along with the ability to focus and separate opportunity from peril. The 30 Barnes Group LG Electronics board has been working on a succession plan with Buck- ley for well over a year in anticipation of his retirement in 31 Aggreko plc. McDonald’s February 2012. Southwest Airlines Rank: 5 32 PwC (15) Saputo Dairy Products Canada An airline known for its low costs and high spirits, Southwest manages largely through its culture. It hires 33 Dominion Tupperware Brands on attitude and enthusiasm and attempts to burnish this in a variety of ways, including The University for People 34 DuPont Canada Avery Dennison (U4P), its corporate training facility dedicated to devel- oping and delivering personal, professional and lead- ership curriculum. The Manager-in-Training (MIT) 35 Philips, N.V. Wyndham Worldwide Program is a development experience for high-poten- tial leaders who have long-term interest and future pros- 36 Saudi Basic Industries Hitachi Data Systems pects within the company. There are two program levels: MIT I and MIT II. MIT I offers learning experiences and department visits that emphasize all aspects of South- 37 AAM Cooper Companies west Airlines and its culture. Participants experience 20-plus training sessions, including interactive exer- 38 DuPont (39) Sprint Nextel cises, assignments and visits by different departments within the company. Participants learn about various 39 Faurecia Holdings DuPont aspects of Southwest Airlines to give its workforce a bet- ter understanding of the “big picture” and what South- west Airlines, as a company, is all about. MIT II focuses 40 Monsanto Michelin Malaysia on leaders at the manager level to strengthen manage- ment expectations and build key leadership skills, such as strategic thinking and coaching. Building relation- ships with other managers, directors and senior leaders across the company is another invaluable experience of both levels of the MIT Program. JANUARY/FEBRUARY 2012 CHIEFEXECUTIVE.NET 2718
  • 19. leadership development ISTOCKPHOTOAre Private Company CEOs More Liberated? It has frequently been suggested that executives who hone these CEOs, who do well with the bottom line, will be left alone.their skills at the helm of private companies have much moreflexibility than those at publicly owned companies. Public com- The impact on CEO priorities may be significant:pany CEOs are constrained by their need to balance multiple ob-jectives in a complex corporate ecosystem that includes Wall 1. Public companies have an intense focus on the numbers andStreet analysts, shareholders, their public culture and brand stock price. These differences remain constant regardless ofand other stakeholders. They need to be the face of the company, the size of the organization.dealing with analysts interacting constantly with the media. 2. In spite of the recent turmoil in the financial markets, public These added obligations can distract from a CEO’s focus on companies are significantly more likely to promote from with-internal operations. Public company CEOs must also cope with in, regardless of size.the comparisons shareholders can make with returns garnered 3. Public companies find the cost of development processes andby hedge funds (fair or not) and with regulatory compliance is- succession planning less prohibitive, again regardless of size.sues. These trends can force public company executives to be 4. However, probably due to the greater range of external re-more short-term focused on quarterly earnings targets and more sponsibilities, public company CEOs spend almost 17 percentrisk-averse. less time on their own development and 7 percent less time on At private companies, executives are often less encumbered developing others than private companies, also regardless of size.and make decisions autonomously. Management teams can focuson understanding the “science” of running their specific busi- Public companies face a paradox: The demands on their skillsness and be more like business “technologists.” It is likely that are greater, but they have less time to maintain and hone them. Public and Private Companies Weight Criteria Differently Public Companies Private Companies Rank Leadership Performance Measure Leadership Performance Measure 1 EBITDA Customer Satisfaction 2 Gross Profit Gross Profit 3 Income Growth EBITDA 4 Customer Satisfaction Income Growth 5 Costs Costs 6 Stock Price/Valuation Customer Retention 7 Market Share Market Share 8 Customer Retention Employee Retention 9 Employee Retention Stock Price/Valuation 10 Patents Patents28 CHIEFEXECUTIVE.NET JANUARY/FEBRUARY 2012 19
  • 20. BEST PRIVATE COMPANIES FOR LEADERS Private companies operate in a much different business environment than public companies. Nevertheless, private companies that commit to leadership development deserve to be recognized in their own right. They may not be as large, but with fewer external distractions, many are actually more focused on developing their people—if on a reduced scale and with fewer resources. Here are 10 that stand out among this year’s respondents. Company CEO 1 Business Publications Connie Wimer 2 JFE Shoji Service Mikio Fukushima 3 Westfield Insurance Robert Joyce 4 American Infrastructure A. Ross Meyers 5 Eagle Manufacturing Joe Eddy 6 Golder Associates Brian H. Conlin 7 IT Authorities Jason Caras 8 Genesis HealthCare George Hager 9 Bombardier Sifang (Qingdao) Jianwei Zhang, President and Chief Country Representative Transportation Ltd. Bombardier China 10 Harwood International Gabriel Barbier-Mueller Reputational Leaders A company’s reputation among its peers, as demonstrated by its attractiveness as a senior executive talent pool, carries a weight and status beyond its numbers. The reputational stars for leadership development are still limited to a few at the top of their game. GE remains at the top in the good company of P&G, IBM and HP based on their leadership development programs. J&J, Microsoft and Unilever are primarily valued due to their expertise in specific markets. Here are the top target companies and the reasons behind their status as perceived by others. Company Most Cited Leadership Strengths GE Solid, disciplined process, critical thinking and leadership training provided early in an individual’s career P&G Marketing expertise, global perspective, innovation and leadership know-how, as well as strong company values IBM Developing leaders in a high-tech, value-add environment and performance-driven culture HP The “HP Way”: an egalitarian, decentralized approach in which employees’ brainpower is the most important resource J&J A proven drug commercialization skillset, medical device expertise and research capability Microsoft A dominant player in its marketplace Unilever A global leader in the production, distribution and marketing of consumer packaged goods JANUARY/FEBRUARY 2012 CHIEFEXECUTIVE.NET 2920
  • 21. leadership developmentCFOs Surge Ahead... AlmostAs with previous years, operations, finance and sales executives remain the preferred candidates for the CEO job. However, a slightbut suggestive change among public companies appeared for the first time in this year’s study. Perhaps because of the length anddepth of the recent recession and the pressure on financials, chief financial officers crept ahead of operational executives as pre-ferred candidates for senior succession, at least among public companies, while R&D moved up to tie with HR executives. Publiccompanies also showed a greater interest in technically skilled candidates in R&D and engineering. The percentages below indicaterespondent company preferences of functional sources of CEO candidates. Where Companies Look for Their Next CEO Private Companies Public Companies 1. Operations 73% 1. Finance 72% 2. Finance 66% 2. Operations 71% 3. Sales 65% 3. Sales 67% 4. Marketing 46% 4. Marketing 51% 5. Engineering 22% 5. Engineering 35% 6. Human Resources 20% 6. Human Resources 20% 7. Other 16% 7. R & D 20% 8. IT 11% 8. Other 14% 9. R & D 9% 9. IT 6% *Percentages indicate respondent company preferences for functional sources of CEO candidates.Balancing Long- and Short-Term is Toughest ChallengeWhile both public and private companies struggle with the rate of business change, public companies find it significantly moredifficult dealing with the conflict of immediate tactical business issues and longer-term (more strategic) needs. Private companiesstruggle more with finding the financial resources and developing a more systematic approach to leadership development. Challenge Private Co Public Difficulty balancing long-term and short-term business 53% 76% requirements Limited financial resources 57% 44% Rapidly changing business requirements so criteria for success is 45% 42% fluid No systematic process for identifying and developing talent 30% 24% Difficulty attracting top talent 23% 23% Difficulty identifying high-potential development prospects 16% 18% Difficulty retaining top talent 14% 16% Other 11% 11% *Percent of respondent companies citing challenge30 CHIEFEXECUTIVE.NET JANUARY/FEBRUARY 2012 21
  • 22. 22
  • 23. Key Findings: The Dominant CEO Challenge: Leadership within a Global Economy Public versus Private: Competing Pressures Succession Failure: The Leadership Paradox Revisited Featured Interview: An External Perspective from Bain & Company* Leadership for the Future Impactful Leadership Development Directly Tied to Business Performance 23
  • 24. The Dominant CEO Challenge: Leadership within a Global Economy Given that companies increasingly operate in a global economy, and vast numbers do not reserve top-level positions for local candidates, how successful are inter- national assignments and what do leaders require to More than ever before, the 21st century presents businesses of all sizes with the opportu- nity and challenge of operating in a borderless world; not only do products and services flow across geographies, but so too does talent. Organizations routinely face the decision whether to develop leaders in country or to transfer successful leaders to new geogra- phies. Participants in the Global Leadership Research Project reveal a slight preference for the latter, choosing less frequently to reserve top-level management positions for locally recruited or developed nationals. Overall, 54 percent of survey respondents provide for in- ternational leadership assignments; clearly public firms – at 58 percent – impact the results when compared against private firms at 49 percent. The success rates of such assignments, however, prove rather dismal especially for private companies, who report successful transfers occur only about 55% of the time. Public com- panies that are often larger and better resourced fair only slightly better at just fewer than 65% successful international transfers.24
  • 25. The most frequently reported challenge, by CEOs and HR leaders alike, is the inability oftransferred leaders to adapt to the new cultural requirements posed by the local environ-ment. Not surprisingly, the overwhelming majority of respondents – 80 percent – pointto inadequate preparation provided to these executives that would serve to support thecultural assimilation. Additionally, results indicate that they do not receive enough “in situ”coaching or mentorship to guide them through the sometimes vast differences in businessmodels, laws, values, customs, and politics. Nor do most international assignments allowsufficient time for the transferred leaders to attain the expected results, given that thecultural mastery required to achieve success may take as long as three years, particularlywithin dramatically different cultural environments. Training and Development Solutions Focus On: 1. Overview of cultural differences 44% 2. Language training 38% 3. Personal coaching 33% 4. Cultural awareness training 27% 5. Mentorship 23%Along similar lines, language and communication challenges are identified as barriers tosuccess by 20% of respondents. Data reveals that most expatriates receive no languagetraining at all, and many receive only the support of translators. Those who do receive lan-guage training may not progress past the relatively superficial level of proficiency requiredto communicate socially and negotiate typical consumer transactions. While these chal-lenges are less daunting for individuals with a natural proclivity for learning new languag-es, such criteria are seldom part of the nominating process for international assignments.CEOs and HR leaders participating in the study suggest that two additional barriers tosuccess come from a lack of preparedness of a different sort. Local politics within the workenvironment may lead to resentment toward the transferred leader who has been selected 25
  • 26. from the outside and not from within the local operation. In short, too little attention gets paid to laying the groundwork locally for the new leader. Moreover, 5% of respon- dents report that basic logistical issues, such as adequate means for day-to-day com- munication, currency, and cost of living differences, are challenges that distract from the business priorities. Lastly, while cited by a relative minority of respondents, the above challenges are fur- ther exacerbated by complications presented by the unique family circumstances of an executive. They may face the typical issues associated with trailing spouses who have successful careers of their own, children who resist leaving their schools, friends and sports, parents and other family members who rely on their support. Perhaps not surprisingly, when asked to describe what companies do to prepare senior leaders for the international assignment, we see that the numbers reveal a preference for surface-level cultural acumen building – 44 percent of training and development solutions focus on an “overview of cultural differences” versus 27 percent that focus on more in-depth training. However, lest too harsh a judgment be levied against these firms, over 20 percent of participating companies report providing “minimal to no preparation” whatsoever. One of the top-ranked companies for leaders may provide insight into how to ap- proach these global leadership challenges in the future. Rather than an either/or scenario, i.e., local versus transferred leadership, this company leverages the proven strength of its most successful leaders – regardless of geographic location – in a proj- ect-based situation to achieve desired business outcomes in a new geography while boosting the development of local leadership. As opposed to long-term transfers, these international assignments are characterized by a focused, in-country kick-off and subsequent checkpoints that bring together the local leadership and project leader- ship with the interim periods managed virtually. While not eliminating the requirement for cultural astuteness, this approach potentially lessens the intensity of the experience and better positions the two leadership teams to collaborate and capitalize on the unique strengths of both parties.26
  • 27. Public versus Private:Competing PressuresWhile recognizing that public and private companies varywidely in the leadership challenges they face, what, if any, arethe distinguishing characteristics between the two that shedWhen asked to identify the key challenges in developing leaders, different barriers emerge forprivate versus public companies. While both struggle with the rate of business change, public com-panies report significantly more difficulty dealing with the conflict of immediate tactical businessissues over longer term and often more strategic needs such as executive development, likely dueto the unyielding and relatively short-term pressures applied by external constituencies. Privatecompanies, on the other hand, struggle more with finding the financial resources and developing asystematic approach to leadership development.Organizational Barriers to Leadership Development * Private PublicDifficulty balancing long-term and short-term business requirements 53.85% 76.12%Limited financial resources 57.21% 44.03%Rapidly changing business requirements so criteria for success is fluid 45.19% 42.54%No systematic process for identifying and developing talent 30.29% 24.63%Difficulty attracting top talent 23.08% 23.88%Difficulty identifying high-potential development prospects 16.35% 18.66%Difficulty retaining top talent 14.42% 16.42%Other 11.06% 11.94% *Note: Respondents were able to select more than one response. 27
  • 28. This analysis proves consistent with other findings about the distinction between public and private companies. Survey respondents report on the key performance measures that determine the overall success of the organization and reveal a stark contrast in priorities. In the case of public companies, the external pressures applied by Wall Street analysts, public opinion, and a variety of shareholders take precedence over pressures applied by two other constituent groups – customers and employees. Customer satisfaction, customer retention, and employee retention rank higher on all counts for private companies than public companies. Public and Private Companies Weigh Criteria Differently Public Companies Private Companies Rank Leadership Performance Measure Leadership Performance 1 EBITDA Customer Satisfaction 2 Gross Profit Gross Profit 3 Income Growth EBITDA 4 Customer Satisfaction Income Growth 5 Cost Cost 6 Stock Price / Valuation Customer Retention 7 Market Share Market Share 8 Customer Retention Employee Retention 9 Employee Retention Stock Price / Valuation 10 Patents Patents Source: Chally Group Worldwide28
  • 29. Succession Failure:The Leadership ParadoxRevisitedWith the emphasis on leadership development sostrong, what insights can be gained to account for thesurprisingly high turnover of executives, as part of abroader trend in the workforce, particularly consideringIn 2010, the Global Leadership Research Project confirmed that leaders do indeed evolvefrom a wide variety of backgrounds, experience, and job functions; however it also revealedthat certain functions tend to serve as a conduit for leaders to the position of CEO. Whenasked yet again to identify the functional areas most likely to produce C-level executives,this year, 72 percent of participants choose Operations, with Finance close on its heels at 68percent and Sales not far behind at 64 percent. Given the economic challenges of the time,perhaps it is not surprising that CFOs and COOs tie at 71 percent amongst public companyrespondents. Specialized functions such as marketing, human resources, engineering, IT, andresearch and development were significantly less likely to generate selected candidates forChief Executive Officer. 29
  • 30. Interestingly, when respondents speak to the competencies essential to the role of CEO, there emerges a notable divergence from those associated with the roles of COO and CFO. For example, while the vast majority of respondents – over 90% - view “Creating a Strategic Vision” as the CEO’s most critical competency, it is not seen as vital to either the COO or CFO position, nor is the competency regarded as second most important for the CEO, i.e., “Inspir- ing Others and Maintaining Leadership Responsibility.” In fact, the only competency that CEOs and HR leaders see as essential to CEOs, COOs, and CFOs is “Developing an Accurate and Comprehensive Overview of the Business.” This commonality, though limited, cannot be downplayed however when viewed in comparison to other C-level roles that do not share a single competency from amongst the most critical for success for CEOs. These findings suggest that succession management efforts cannot assume that all C-level positions are created equal as pipelines for CEO candidates nor even that the most probable sources – COO and CFO – necessarily provide the experiences for building competencies required by the CEO. The question remains, however, as to how best to prepare candidates for the role. It would seem that the most critical skills for CEOs – “Creating the Strategic Vision” and “Inspiring Others and Maintaining Leadership Responsibility” – in fact may be the least trainable. Both involve intangibles – vision and inspiration – that are not easily defined for those who have not, but are readily identifiable amongst those who have.30
  • 31. FEATURED INTERVIEWS:An External Perspective fromBain & Company*The following are excerpts from interviews with Russ Hagey,Company, and John Donahoe, former Worldwide Managing -dent, and Director of eBay.The Global Leadership Research Project secures additional analysis and insights from lead-ing thinkers in the world of talent management. In a discussion about the potential pitfallsof CEO leadership, Russ Hagey and John Donahoe reaffirm the unique role of the CEO increating a strategic vision and inspiring others through leadership. While CEOs exerciseultimate authority within an organization, their ability to lead through others, employingsophisticated interpersonal skill, is paramount. It is not about “emotional intelligence” buta strong sense of self. The CEO role can be an isolated one, independent from others in theorganization and subject to their critical eye. He or she must have the ability to stick withdecisions in the midst of dissension and deliver pointed, while appropriate, communica-tions about the way forward without appearing too arrogant or ignoring the corporateculture. Successful CEOs provide the organization a candid but careful sharing of informa-tion and clear statements of the vision that information directs. 31
  • 32. Particularly striking in public companies, CEOs must expand their role to include the exceptional burden of governance, for which a plurality of new CEOs are poorly prepared. They often lack the necessary experience to effectively manage stakeholders and other external constituencies beyond the customer. Good governance requires the CEO to establish relationships with the board that are open and non-judgmental. They must work with the board individually and independently as personal advisors, as well as in their traditional fiduciary oversight role. Doing this requires establishing the contribution each can make, connecting the board members individually to key functional groups, and helping the board to spend time on succession management, thereby assuring a strong leadership pipeline. The most effective boards spend per- sonal time with succession candidates to ensure that development experiences target the governance gap by including opportunities to interact with constituencies outside the company’s four walls, such as unions and governments, and to participate in non- profit or smaller company boards. By no means novel, yet nonetheless notable, the pace of change, particularly in the realm of technology, presents the CEO with an added challenge. Leading this change has become the dominant corporate requirement of these times. The established in- ternal operating norms that were formerly appropriate and successful no longer match the emerging forces from new markets and competition. “What got us here won’t work anymore.” Today’s success requires balancing constant innovation with “sufficient” quality at an increasingly rapid rate. The new and still changing fundamentals become increasingly unclear. Internal candidates often do not have the appropriate experience to face the significant external market changes which require a different or broader perspective than the traditional corporate culture or business priorities provided. The speed of learning becomes critical and new CEOs, who do not have an insatiable curiosity about the market, struggle. Ego, arrogance, and an exaggerated sense of self, especially as a barrier to continually learning from others, can be fatal. Yet the strong but realistic sense of self remains key to the boldness required to cannibalize their own products before the competition does.32
  • 33. Impactful LeadershipDevelopment Directly Tiedto Business PerformanceThere exists a general consensus that leadership developmentmerits organizational attention; however, particularly in times ofwithout the ability to demonstrate a direct return on investment.As indicated above, for two years in a row, almost two-thirdscompeting pressure against leadership development initiatives.Data from the Global Leadership Research Project, however, suggests that an organizational com-mitment to leadership development correlates directly with business performance. The comparisoncovers 10 years from 2001 to 2011, a period long enough to minimize short-term and situationalfluctuations. The correlation is dramatic (see table, below). The top companies for leadership showsignificantly greater growth than the lowest companies as measured by market capitalization. Whilethe relationship cannot be declared causal, the connection between the two should be regarded ascompelling enough to bolster claims that an investment in leadership development makes goodbusiness sense. Impactful Leadership Development Directly Tied to Business Performance Average % Market Organizational Commitment to Leadership Development Capitalization Growth Top 15% of participating companies +22% Bottom 15% of participating companies -23% *Includes companies where public data is available for 1999 to 2009. Reasons for unavailable data include merger, acquisition, or start-up within the period. 33
  • 34. 34
  • 35. The GlobalLeadershipResearch ProjectParticipatingPartners 35
  • 36. Chally Group Worldwide is a sales and leadership talent management company that was founded in 1973 through a grant from the United States Justice Department. The grant funded the creation of actuarial assessment techniques and a validation technol- ogy that accurately predicts on-the-job effectiveness. Chally’s talent analytics has been improving productivity and reducing turnover for customers in over 49 countries. Cus- tomers choose Chally’s talent measurement process for improved candidate selection and employee and organizational development. Chally continues to fund and develop comprehensive research in sales and management development including the Best Companies for Leaders and World Class Sales Research, which has been conducted for several years. Chief Executive Group was founded in 1977 to create and foster opportunities for CEOs to share their experiences and expertise within a community of peers. It serves its CEO audience in a variety of media including print, in-person, and online, which in turn pro- vides advertisers and sponsors multiple opportunities to develop long-term relationships at the Chief Executive level. In addition to publishing Chief Executive magazine and www. chiefexecutive.net, the Chief Executive Group brings CEOs together through its annual CEO2CEO Conference, open to C-suite executives, and its by-invitation-only CEO Round- tables, Symposiums, and Global Events. Right Management (www.right.com) is the talent and career management expert within Manpower, the world leader in innovative workforce solutions. Right Management helps clients win in the changing world of work by designing and executing workforce solu- tions that align talent strategy with business strategy. Our expertise spans Talent Assess- ment, Leader Development, Organizational Effectiveness, Employee Engagement, and Workforce Transition and Outplacement. With offices in over 50 countries, Right Manage- ment partners with companies of all sizes. More than 80% of Fortune 500 companies are currently working with us to help them grow talent, reduce costs, and accelerate perfor- mance.36
  • 37. American Management Association is a world leader in professionaldevelopment, advancing the skills of individuals, teams, organizations, and govern-ment agencies. With over 85 years of experience delivering 140+training seminars throughout the country, AMA has refined their trainingprograms to meet today’s challenges. AMA promotes the goals of individuals andorganizations through a comprehensive range of solutions, including business seminars,blended learning, Web casts and podcasts, conferences, books, whitepapers, articles andmore.Imperial Consulting represents the American Management Association (AMA) in Singa-pore, Malaysia, Philippines, Indonesia, India, and Australia. In partnership with AMA, ourmission is to provide managers and their organizations with the knowledge, skills, andtools they need to improve business performance, adapt to a changing workplace andprosper in a complex and competitive business world.MCE was established in Brussels in 1961 as the European headquarters of the Ameri-can Management Association (AMA), and provides high quality andconsistent management development solutions across Europe and globally.We cover the three areas of leadership, managerial, and business functions.ProActive, Ltd. is a Scandinavian based business consultancy company that offerscustomers expertise when auditing and evaluating strategic competence to enablegrowth. Proactive focuses on competency assessment, strategic planning, manage-ment issues, and strengthening the corporate image. We help organizations clarifyneeds and initiate the evaluation and development process.Turning Point has been addressing various needs in Sales, Customer Service, Leader-ship, Vision-Mission, Balance Score Card, Reengineering, and Implementation in differ-ent organizations since 1999. The company’s international pool of consultants in Indiaand the Middle East have specialized capabilities in the above-mentioned segments.Over the past several years, Turning Point has established a name for itself in achievinglevels of excellence for its clients. 37
  • 38. 38
  • 39. Global LeadershipResearch ProjectSurvey ResponseSummary 39
  • 40. Our Company is most known to our customers as a: Brand Leader with desirable upscale brands=1 Custom-Made Solution Leader with individualized turnkey solutions=2 Value Leader with cost efficient, quality offerings=3 All (%) Public (%) Private (%) 1 brand leader 32.9 38.9 29.0 2 custom made solutions 26.8 23.5 30.4 3 value leader 40.3 37.5 40.6 Rank the key performance measures your leadership tracks to determine the overall success of the organization? 1 as most important to 11 as least important All Public Private Retention 5.0 5.9 (8) 4.4 (5) Customer Satisfaction 4.0 5.0 (4) 3.4 (1) Employee retention or Turnover 6.1 7.1 (9) 5.6 (8) Income growth 4.3 4.3 (3) 4.3 (4) Market share 5.7 5.8 (7) 5.6 (7) Patents 9.0 8.9 (10) 9.1 (11) Stock price 7.7 5.6 (6) 8.8 (10) Costs 4.7 5.1 (5) 4.5 (6) EBITDA 4.0 3.6 (1) 3.9 (3) Gross Profit 3.8 3.7 (2) 3.6 (2) Publications 8.7 9.5 (11) 8.4 (9) At which level(s) does your company track profitability? (Check all that apply.) All (%) Public (%) Private (%) Per transaction 47.4 40.7 47.9 Per customer 62.6 60.0 61.2 Per market segment 67.2 71.1 61.2 Per geographic area 60.6 72.6 49.8 Per product offering 73.9 73.3 70.840
  • 41. Does your organization have a formal process for developing leaders? All (%) Public (%) Private (%)No 32.1 20.6 38.3Yes 67.9 79.4 61.8Does your company have international operations? All (%) Public (%) Private (%)No 37.9 16.9 47.0Yes 62.1 83.1 53.0What development opportunities are included in it? (Check all that apply.) All (%) Public (%) Private (%)Coaching and mentoring 95.6 95.5 96.9Action learning/developmental 86.7 90.9 82.7assignmentsAssessment and feedback 92.7 91.9 94.5High-potential programs 70.9 83.8 59.8International assignments 48.4 67.6 32.3Cross-functional team projects 75.0 78.4 72.4Exposure to senior executives 85.1 84.7 85.8Exposure to internal and external thought leaders 60.9 55.9 63.8Formal classroom training 81.9 87.4 75.6External workshops and training 79.8 80.2 77.9Tuition Remission 60.5 63.9 56.7Other: please specify 13.7 13.5 14.2What does your company do to ensure it has a good leader pipeline? (Check all that apply.) All (%) Public (%) Private (%)Provide informal development 57.5 52.2 59.3opportunities to key internal peopleRigorously recruit and hire externalcandidates who have the potential to 69.9 73.9 67.9become top-level leaders to fill specificposition openingsMaintain a network of potential external leadership 38.1 43.5 38.3candidatesOther: please specify 11.5 13.0 11.1 41
  • 42. What percent of your current senior management team was recruited internally? All (%) Public (%) Private (%) 0 3.3 1.5 4.3 10 5.0 5.3 3.9 20 7.5 5.3 8.7 30 7.5 6.0 7.7 40 7.2 4.5 7.7 50 11.4 9.8 13.5 60 10.6 11.3 10.6 70 11.1 10.5 11.5 80 14.4 22.6 9.1 90 13.9 18.8 12.0 100 8.1 4.5 11.1 What percent of your current next level under senior management was recruited internally? All (%) Public (%) Private (%) 0 3.1 3.8 2.4 10 3.6 3.0 3.9 20 5.6 3.8 5.8 30 6.4 3.8 7.2 40 4.4 3.0 5.8 50 11.1 8.3 13.5 60 12.5 11.3 13.5 70 15.6 22.6 10.6 80 16.9 21.0 15.4 90 11.7 14.3 10.1 100 9.2 5.3 12.0 Which functional areas are most likely to produce your C-Level executives? (Choose the top FOUR.) All (%) Public (%) Private (%) Engineering 27.0 34.8 22.5 Finance 67.8 71.9 66.5 Human Resources 20.7 20.0 19.6 IT 10.5 6.7 11.0 Operations 71.6 71.1 72.7 R&D 12.9 20.0 9.1 Sales 63.6 67.4 65.1 Marketing 47.1 51.1 46.4 Other 16.3 14.1 16.342
  • 43. Do you reserve key top-level management positions within foreign countries for locally recruit-ed/developed nationals? All (%) Public (%) Private (%)No 54.0 58.0 49.0Yes 45.9 41.9 50.9How would you rate your organization’s ability to develop leaders? All Public PrivateAverage 3.1 3.2 3.1 (%) (%) (%)Poor 6.6 2.2 8.7Average 27.4 28.2 26.9Good 28.7 32.6 26.4Very Good 25.1 25.9 24.5Excellent 12.2 11.1 13.5What challenges do you face in developing leaders within your organization?Check all that apply. All (%) Public (%) Private (%)Limited financial resources 52.1 44.0 57.2Difficulty balancing long-term and short-term 61.8 76.1 53.9business requirementsRapidly changing business requirements so criteria for 43.2 42.5 45.2success is fluidDifficulty identifying high-potential development 18.6 18.7 16.4prospectsDifficulty retaining top talent 15.5 16.4 14.4Difficulty attracting top talent 24.7 23.9 23.1No systematic process for identifying and developing 28.3 24.6 30.3talentOther: please specify 11.1 11. 11.1 43
  • 44. What percent of your time is spent engaging in other’s development activities? All (%) Public (%) Private (%) Average of What percent of your CEO’s time is spent 25.7 24.3 27.0 engaging in other’s development activities? Average of What percent of your CEO’s time is spent 17.3 15.8 18.4 on their own personal development? In which of the following development activities do you get personally involved? (Check all that apply.) All (%) Public (%) Private (%) Teaching formal training classes 26.5 22.9 27.8 Guest appearances in training classes 61.2 68.2 55.9 Mentoring one-on-one 64.5 57.8 69.4 Coaching and feedback for skill development 61.7 57.8 65.1 Informal information exchange sessions 75.8 74.8 77.0 Other, please specify 11.0 13.3 8.6 Other companies actively try to recruit our organization’s leaders. All Public Private Average 3.8 3.9 3.7 (%) (%) (%) Strongly Disagree 3.6 2.9 3.4 Disagree 8.1 7.5 7.7 Neither Agree nor Disagree 19.4 15.7 22.9 Agree 45.0 40.3 48.3 Strongly Agree 23.9 33.6 17.744
  • 45. Retention of key talent is a formal performance metric for our managers. All Public PrivateAverage 3.3 3.3 3.3 (%) (%) (%)Strongly Disagree 6.4 4.5 7.7Disagree 25.4 26.9 23.4Neither Agree nor Disagree 19.2 21.7 17.7Agree 34.3 32.1 35.9Strongly Agree 14.8 14.9 15.3My company has a sufficient number of qualified internal candidates who are ready to assumemid-level manager positions. All Public PrivateAverage 3.3 3.3 3.3 (%) (%) (%)Strongly Disagree 4.7 2.3 5.7Disagree 23.7 25.6 22.5Neither Agree nor Disagree 17.8 21.8 15.8Agree 43.7 38.4 46.4Strongly Agree 10.0 12.0 9.6My company has a sufficient number of qualified internal candidates who are ready to assumesenior manager/executive positions. All Public PrivateAverage 2.9 3.0 2.9 (%) (%) (%)Strongly Disagree 6.4 3.7 6.7Disagree 37.9 37.3 39.4Neither Agree nor Disagree 19.8 20.9 18.3Agree 28.8 29.9 28.9Strongly Agree 6.9 8.2 6.7 45
  • 46. Upper-level managers recruited externally have been successful. All Public Private Average 3.6 3.6 3.7 (%) (%) (%) Strongly Disagree 1.4 0.8 1.9 Disagree 7.5 9.8 6.7 Neither Agree nor Disagree 27.6 30.8 26.8 Agree 52.7 48.9 53.1 Strongly Agree 10.9 9.8 11.5 Mid-level managers recruited externally have been successful. All Public Private Average 3.7 3.8 3.7 (%) (%) (%) Strong Disagree 0.8 0 1.4 Disagree 6.7 6.1 7.2 Neither Agree nor Disagree 22.7 22.1 23.9 Agree 60.8 61.1 59.8 Strongly Agree 8.9 10.7 7.7 HR is an effective partner in the leadership development process. All Public Private Average 3.8 3.9 3.7 (%) (%) (%) Strongly Disagree 3.6 2.8 3.3 Disagree 10.8 2.8 13.9 Neither Agree nor Disagree 18.1 22.2 17.2 Agree 39.2 41.7 36.9 Strongly Agree 28.3 30.6 28.746
  • 47. Sector: All (%)Publicly Traded 37.8Privately Held 57.8Government Entity 4.4Industry (Check all that apply) All (%) Public (%) Private (%)Administrative & Support & Waste 1.1 1.6 0.9Management ServicesAgriculture, Forestry, Fishing 3.4 5.4 2.4Arts, Entertainment & Recreation, 2.3 2.3 1.9Accommodation and Food ServicesHealth Care 11.0 5.4 14.4Professional, Scientific and 15.6 12.4 18.2Technical ServicesTransportation & Warehousing 7.7 6.2 8.1Information, Media, Telecommunications 7.4 6.9 7.7Mining, Utilities, Construction 8.5 8.5 8.6Finance, Insurance, Real Estate 12.2 9.3 13.9Wholesale Trade & Retail Trade 10.8 9.3 12.4Manufacturing 24.4 32.6 21.1Other 17.9 17.0 15.8HR SURVEYWhat type of preparation do you provide to managers before a transfer outside their home coun-try? (Check all that apply. ) All (%) Public (%) Private (%)In-depth cultural awareness training 27.4 37.1 16.3Language training 37.6 47.4 27.5Personal coaching 32.8 43.3 21.3Ongoing mentorship 22.6 29.9 16.3Overview of cultural differences 43.6 56.7 31.3Minimal to none 20.9 17.5 26.3Other, please specify 25.8 17.5 31.3 47
  • 48. What percent of such transfers have been successful? All (%) Public (%) Private (%) Average 58.7 64.1 54.1 What have you found to be most effective for developing a global mindset? All (%) Public (%) Private (%) Living and working abroad 40.5 47.9 34.5 Exposure to International assignments 39.5 35.4 45.2 Other 20.0 16.7 20.2 How do you currently evaluate a recruit’s fit with your company’s culture? Check all that apply. Recruit All (%) Public (%) Private (%) Structured interview 86.6 84.7 89.7 Psychological assessment / tests 37.6 37.8 35.6 References 69.1 70.4 66.7 Personal recommendations from trusted sources 60.8 55.1 65.5 Other, please specify 5.2 7.1 3.5 How do you currently evaluate an employee’s fit with your company’s culture? Check all that apply. Employee All (%) Public (%) Private (%) Don’t do it 17.9 14.3 19.5 Multi-rater evaluation like 360 40.3 55.1 25.3 Past performance reviews 56.6 62.2 52.9 Wide visibility or reputation as a champion of the 32.1 37.8 29.9 company’s culture? Other, please specify 22.5 19.4 26.4 Do you have a formal definition of high potential? All (%) Public (%) Private (%) No 44.2 33.3 52.9 Yes 55.8 66.7 47.148
  • 49. What are the two best ways to identify hi-potential talent? (Check the Top TWO.) All (%) Public (%) Private (%)Credentials 21.4 21.2 20.9Recommendations from superiors 74.5 79.8 69.8Peer Nominations 24.5 20.2 30.2Completion of minimum identified assignments or 20.4 19.2 22.1course workAssessment Tests 20.4 15.1 26.7Assessment Centers 28.1 30.3 24.4Other: please specify 15.8 18.2 13.9How far down in your organization do you go in identifying and track highpotential leaders? All (%) Public (%) Private (%)Individual Performers with no Management 34.0 34.3 34.5ResponsibilityFirst-level supervisors 22.3 22.2 18.4Middle Managers 29.4 33.3 26.4Upper level managers 11.7 9.1 16.1Other 2.5 1.0 4.6What processes do you use to recruit and hire top external leadership talent?(Check all that apply.) All (%) Public (%) Private (%)Use specialized recruiting firm 82.9 86.7 81.6Recommendation from internal managers/executives 70.1 69.4 70.1Recommendation from external executives 50.5 55.1 43.7Networking at industry events 50.5 51.0 48.3Assessment Process 33.5 31.6 35.6General Interviews 50.0 45.9 52.9Structured Interviews 64.9 64.3 64.4Other: please specify 5.2 8.2 0.0 49
  • 50. What on-boarding processes do you use for top-level leaders? (Check all that apply.) All (%) Public (%) Private (%) Assigned a mentor 41.9 43.6 39.5 Planned rotation of meeting key individual 77.2 80.9 72.8 Short-term assignments in different functional areas 21.2 22.3 19.8 Other 20.1 21.3 19.8 Which of the following are most predictive of leadership success? (Check all that apply.) All (%) Public (%) Private (%) Previous experiences 76.6 81.7 72.4 Educational background 14.4 11.8 16.1 Interpersonal skills 92.02 93.6 93.1 Fit with company values and culture 86.7 89.3 83.9 Motivation to lead 78.2 82.8 73.6 Lack of derailers 35.6 41.9 27.6 Other: please specify 11.7 11.8 11.5 Are you the most senior level HR/staff executive responsible for corporate-wide leadership development in your company? All (%) Public (%) Private (%) No 47.6 50.0 47.1 Yes 52.4 50.0 52.950
  • 51. 51
  • 52. 52