What’s in an effective leadership program? (and why it matters)

Last week HR Daily wrote up a summary of the research recently undertaken by Psylutions and Curve Group, which has been published as a white paper Best Practice in practice talent management.

There was a range of issues to do with talent that were covered in the paper but of particular current interest of me was the commentary around the content most commonly provided in effective leadership programs.

Given the recent research that demonstrates the clear link between a company’s leadership capability and their financial performance and the increasing use of leadership development programs within Australian companies, this information on leadership program content is especially valuable.

The effective leadership development programs contained the following content (the comments after the bold are mine):

• Foundation management skills for frontline or first-level leaders: These skills include recruiting staff, setting performance expectations, holding staff accountable for delivering to these expectations, coaching to address issues of skill and behaviour and balancing leading, managing and doing.
• Personal development and self-awareness: This is the process by which a person discovers their true strengths and weaknesses, how they are perceived by others and how closely this perception aligns with the person’s own reality.
• Creating networks across the business and gaining exposure to senior leaders: Leadership involves cross-functional leadership behaviours (eg solidarity in company decisions, not speaking ill of others in the company etc) as much as it involves the way the person leads their team. The awareness and importance of this cross-functional leadership increases dramatically when there are unambiguous structures, protocols and current examples to follow.
• Senior leader mentors and shadowing: Any internal leadership program that does not have this component, risks being seen as not walking the talk on leadership. What better way is there to demonstrate effective leadership in action other than to watch a senior leader do their job? If the people responsible for the leadership program are reluctant for this to occur then my simple conclusion is that the leadership program needs to start further up the food chain; desired leadership behaviour travels fastest down an organisation, not up.
• Formal sponsorship into external and industry based leadership programs: Regardless of the quality of a company’s internal leadership program there is always benefit to be gained by having people mixing with external influences, whether they be through formal programs and events or informal networking. Having your leaders benchmarking themselves with the best in their industry, rather than the best in your company, is almost always a good thing.
• Individual development plans linked to business and personal strategies: Ultimately the success of a leadership development program is due to ownership. If the person in the program understands what is at stake for them, personally and professionally, in completing the program and fully commits to the program then the chances of the program working as intended are maximised.

Why is this important to get right?

As I wrote about 15 months ago, the Society for Knowledge Economics published a fascinating study in late 2011 into Australian workplaces, Leadership, Culture and Management Practices of High Performing Workplaces in Australia: The High Performing Workplaces Index.

The research involved interviewing 5,661 employees from 77 Australian organisations to understand what separated high performing workplaces (HPWs) from low performing workplaces (LPWs) and what financial difference having a high performance workplace provided. After a full analysis was undertaken, 12 organisations were classified as HPWs and 13 organisations were classified as LPWs.

Comprehensive comparisons were then made between the two groups to identify how much financial difference there was between these two groups and what this difference was attributed to.

• LPWs have an average profit margin ratio of 5.44% whilst HPWs have an average profit margin of 15.63%. In other words, the profit margins of HPWs are nearly three times higher than LPWs.
• HPWs are better at achieving their stated financial targets than LPWs by 34%.

Leadership capabilities and practises made a substantial difference in HPWs.

Leaders in HPWs:

• Spend more time and effort managing their people than leaders in LPWs (29.3% higher).
• Have clear values and ‘practise what they preach‘ (25.7% higher).
• Give employees opportunities to lead work assignments and activities (22.9% higher).
• Encourage employee development and learning (21.1% higher).
• Welcome criticism and feedback as learning opportunities (20.4% higher).
• Give increased recognition and acknowledgement to employees (19% higher).

Unless you are investing in your own and/or your company’s leadership development then there’s a fair chance your workplace is a LPW (Low Performing Workplace).

How’s that working for you? (with apologies to Dr Phil)

Related articles:

The leadership difference: why effective leadership pays and how

The ‘gravity of success’ prevents innovation: Summary of the 2011 RCSA Conference

Motivating recruiters: Who’s responsible?

How Davidson Recruitment ranked #6 on the 2011 BRW Best Places to Work list

Australia’s most productive companies: what can recruiters learn?