ideas@work vol.2

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

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.
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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
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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

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).


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

As the companies examined in these pages will
demonstrate, developing and executing an organization’s
The Seven Elements of a
collective ambition requires involvement at all levels. HR Collective Ambition
and talent management professionals play a powerful
role every step of the way, from helping to shape the Scholars have studied what makes for engaged and
collective ambition to executing it. An organization’s sustainably profitable organizations for decades. Collins
collective ambition can only be successful if there are and Porras wrote eloquently about the importance of
the right people, in the right places and with the right linking strategy with vision. Schein championed the
knowledge, skills and abilities. Simply put, it takes importance of culture and values to an organization’s
people 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 of
Promise these elements of organizational success—is not new.
Instead, it provides a framework
This 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

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, compelling



The Collective Ambition Compass
After years of working with organizations across the an organization’s collective ambition and when they are
globe, we believe there are seven elements that really focused, provide a compass that leads to success. We call
matter for organizational success. These elements define it the collective ambition compass (CAC):

7

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.



SCB has more than 85,000 employees comprised of 129
nationalities who work in 71 markets. Going into the recession,
the bank had a strong foundation, a compelling vision (“to be
the world’s best international bank, leading the way in Asia,
Africa and the Middle East”), and a robust, well-aligned collective
ambition. Despite this, most of the world—including many key
stakeholders—couldn’t articulate what made SCB unique among
financial institutions. It had always had “the glue,” but it needed
to strengthen it. SCB leaders believed the recession was the
perfect time to do this.

In 2009, Peter Sands, SCB’s CEO, created a taskforce of
senior leaders (including their chief human resource officer) that
traveled the world to speak with thousands of SCB stakeholders—
customers, employees, regulators, shareholders and the larger communities in which SCB
operates—to get their take on the organization’s vision and collective ambition. They heard a
similar theme among their diverse and geographically disbursed stakeholders; that SCB was
a positive force, an ethical partner, and a company in it for the long haul. As a result, “here
for 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 realized
that if they were to differentiate themselves from their competitors, they must deliver “here
for good” to every stakeholder in every part of the world. To ensure that the promise was
kept, they created a global accountability process.

The first step to deliver the promise was to engage all of their employees because they
would be the ones to deliver it on a daily basis. SCB held town hall meetings at all their
locations, a centerpiece of which was a two-minute “here for good” strategy video about
SCB’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 for
good” 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

“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.



Example: 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

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.”



The Four Seasons’ Collective Ambition Compass

Copyright © 2010 Doug Ready. All rights reserved.

Copyright © 2010 Doug Ready. All rights reserved.

13

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.



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.

Conclusion
The companies showcased in this article continue to Finally, they used the process itself as a springboard to
succeed despite the economic environment because initiate change and execute strategy.
they have harnessed the power of collective ambition
to 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 organization
clearly defined purpose and genuine commitment at effortlessly to the Promised Land, or an external guru
the senior executive level. As demonstrated throughout who can show the way in an hour’s speech. The good
this paper, an organization’s purpose is the center of news is that it can be done if the organization pulls
its collective ambition. Purpose matters for business together to work for it. This requires the commitment
enterprises. Purpose drives and informs employee of HR and talent management professionals to ensure
engagement, leadership development initiatives and that the organization has the right people with the
branding. It breeds trust, speeds decision-making and right skills and cultural fit to execute an organization’s
is the heard of compelling change initiatives. These collective ambition. HR leaders must also work to
companies embraced collaboration to shape their prepare employees at all levels so that they are ready for
collective ambition and to energize their employees. the changes to come.

15

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.


EMPLOYEE ENGAGEMENT: MEASURE AND IMPROVE IT

Characteristics of Engaged Employees
Researchers for the Institute for Employment Studies Engaged workers:
(IES) recently asked about the characteristics common to • Believe in their organization
engaged employees as they embarked on the study,
The Drivers of Employee Engagement. They found that • Desire to work to make things better
there was general agreement among HR professionals • nderstand the business context and the “bigger
U
about engaged workers. picture”
A key finding of the IES study was that engagement was • Are respectful and helpful to colleagues
a 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
K
they offer employers.

17

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.



A study by consulting firm Towers-Watson revealed an As the economy recovers, employees at all levels will
even bleaker situation. Their research concluded that emerge from where they were and may begin to look for
only about 15 percent of employees were fully (actively) new opportunities. The biggest concern will be the
engaged; 65-70 percent of employees were moderately potential loss of an organization’s most valued talent, so
engaged, 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
E
an engaged worker based on its G12 employee
engagement 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 engaged
as 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 career
work 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 senior
their jobs and go through the motions. management.

Actively Disengaged Workers .............................................................................................................................................
Actively disengaged workers are the most damaging negative attitudes have a disproportionate effect on the
employees in the workplace. They are unhappy and let performance of their co-workers and overall operational
that unhappiness show in words, attitudes and actions. performance.
They undermine the performance of others by constantly
voicing their displeasure and listing the many reasons why While it is not impossible to re-engage actively disengaged
they are so miserable in their jobs. Kelly Services notes workers, it is much more challenging. Letting employees
that while these actively disengaged workers make up know that senior leaders are aware of employee
only 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

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.



Potential 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 ‘11

Source: The Corporate Executive Board, Employee Engagement Trends Report: Q1 2011.

21

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 to



• 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. Employee
engagement starts at the top.

Four Steps for Improving Employee Engagement
There is nothing more damaging to employee morale • nvolvement in decision making
I
than asking employees for their thoughts and opinions
on 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 and
steps are being taken to improve employee engagement value employees’ contributions
as a result of their responses.
• he opportunities employees have to develop
T
their jobs
Step 1: Know What Drives Employee
Engagement • he extent to which the organization is concerned
T
for employees’ health and well-being
Now that you have a pulse on your employees’
commitment to the organization, action is required. In all cases, two-way communication and management
Knowing what drives employee engagement will help play vital roles in keeping employees engaged.
you plan those action steps. IES identified several
components of what drives employee engagement:

23

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.



Example: 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

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/.


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 E

At UNC’s Executive Development Institute,
you’ll gain the core knowledge of an MBA program
without the long-term time commitment. You’ll
also learn how to view the business world from a
senior executive’s perspective. And you’ll develop the
UNC EXECUTIVE DEVELOPMENT
key 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

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.


CLOSING THE GAPS IN LEADERSHIP DEVELOPM E N T

performance. Only about two-fifths of respondents,
however, agreed or strongly agreed with the statement
Promise
that their “leadership development program is highly This white paper examines the knowledge, skills and
effective.” That same study found that among abilities business leaders must have to ensure the
companies with 1,000 or more employees and some continued success of their organizations in today’s
degree of a multinational presence, approximately half competitive global marketplace. It will introduce HR
had implemented one or more leadership development and talent management professionals to a four-step
programs (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

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, 2011


CLOSING THE GAPS IN LEADERSHIP DEVELOPM E N T

1. penness (new thinking, welcoming strangers,
O
acceptance)
A Framework for
2. lexibility (flexible behavior, flexible judgment,
F Developing Leaders
learning new languages)
Despite the hundreds of studies and books dedicated
3. Personal autonomy (inner purpose, focus on goals) to leadership development, a single formula has yet
4.
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) found
5. erceptiveness (attuned, reflected awareness)
P no single best leadership practice in their survey of
6. istening orientation (active listening)
L top leadership qualities. Instead, they uncovered a
framework that top organizations have in place to
7. 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 potentials
9. nfluencing (rapport, range of styles, sensitivity
I • The right leadership practices, done right
to context)
Hewitt found that CEOs at organizations rated high
10. ynergy (creating new alternatives)
S in leadership development were truly passionate about
developing leaders and felt it was their legacy to ensure
Talent development and HR professionals should that there were strong leaders in place throughout the
identify the knowledge, skills and abilities required for organization after they left. Hewitt’s study also revealed
leaders in their organization so that they can build a that the boards of companies with high leadership
framework that will support the development of these development believed it was one of their primary
competencies. 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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