Common sense and decades of research show that great leaders make great – and successful – companies. And so it’s no surprise that research by McKinsey, which examined more than 5,500 leaders at 47 companies, found that leadership excellence was associated with company success. And it’s also no surprise that McKinsey found that great leaders are few and far between, and are very hard to find.
More interesting is McKinsey’s finding that the leadership skills that are important for company success vary depending on the strategy and approach of the company. In other words, one size does not fit all.
Equally interesting was McKinsey’s finding that a few great leaders are not enough – successful companies have large critical masses of leaders who excel at the characteristics that are required for the strategy of the business. For example, for a company to be highly likely to achieve superior growth, a full 40% of its senior executives must excel at customer focus.
McKinsey summaries by noting that “to achieve stronger growth, companies must not only assemble a critical mass of talent, which will require attracting and retaining an “unfair” share of excellent leaders, but also align these leaders’ roles and skills with the companies’ growth strategies.”
This research has a number of important ramifications for leadership development programs?
First, leadership programs need to develop leadership talent deeply in the organization – much beyond the C-Suite. This doesn’t just mean making leadership training, classes or workshops available – since traditional leadership programs do not work and do not produce real improvements in leadership. Instead, the program needs to provide real, meaningful growth opportunities to large number of leaders, something beyond the usual of leadership development.
For example, a typical leadership program consists of a two or three day leadership workshop for the majority of managers, plus 360s for mid-senior leaders (perhaps VP and above) with some outside consulting to assist leaders in understanding their results, and coaching for select senior leaders. Research consistently shows that workshops and 360s in isolation are unlikely to result in meaningful improvement in leadership, and this type of approach will not develop the critical mass of leaders that companies need. Successful companies will use more impactful approaches, such as coaching, for large groups of their leaders.
Second, leadership programs need to be flexible, to change focus as strategy changes. Again, the one size fits all models of leadership usually won’t work, because the strategy at a specific company will require disproportionate or unfair leadership skill in that area. Leadership programs should focus on leadership facets that are the most impactful for the company as a hole, and then on developing well-rounded leaders by addressing specific growth areas.
And finally, companies need to understand that building well-rounded, exceptional leaders is not quick. Successful companies will take a long-term view to building enhanced skills as leaders advance. Leadership development is not a one time thing – it must be part of the ongoing development of leaders.
Given that most leadership programs are not effective, and the need for a deep bench of quality leaders, it is not surprising that Harvard Business Review found that developing basic leadership competency represented a significant competitive advantage or companies. Companies that make real talent investments in their more junior leaders will reap significant performance advantages over those who do not.
Todd Murtha is CEO of Careerwave. Todd is a former workplace psychologist and CEO of a 350 person internet company and is a frequent speaker on leadership, coaching and technology.
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