High impact leadership and learning
By Christo Nel MD Graduate Institute of Management & Technology (GIMT) who can be contacted at mailto:
1. Introduction: the competitive imperatives
Two intertwined dynamics are intensifying the need for executive and management education that proves capable of delivering High Impact Leadership and Learning.
First, over the past three decades there has been a growing realization amongst researchers that leadership is a primary driver of organisational excellence and competitiveness. As long ago as the 1970s, Professor Harry Shroder (ex-Princeton) identified a set of high performance leadership competencies that made the difference between average, good and superior performance within teams and organisations. Shroder's work laid the foundation for much of the research that has followed over the past three decades.
In his latest book, Good to Great, Jim Collins demonstrates that the critical variable between good companies and great ones is leadership. He illustrates that leadership is the key differential that separates high performing organisations and teams from the less competitive ones. (See figure 1.)
Second, in the late 1990s, McKinsey's defined the looming challenge of "The War for Talent." Their seminal analysis demonstrates that talent is increasingly one of the critical drivers of the sustainable competitiveness of organisations and societies.
In this light, one of the scariest statistics around is one that demonstrates that the USA will, within the next two decades, experience an expected shortfall of almost 30% of people who are deemed capable of becoming executives. This shortfall in talent is not limited to the USA. Most of Europe and Japan have already moved into stagnant and even negative population growth rates. Australia is in the same position. It means that these developed countries will no longer be able to supply their own executive and talent needs.
Holland has started to offer special tax breaks for certain categories of people who are willing to take up residence and employment in their country. Australia offers special dispensations to the families of individuals who possess certain competencies. The developed economies of the world are ahead in the game of appreciating that the growth and well being of their economies and societies is closely linked to their capacity to develop, attract and retain talent. What makes it scary is that, once the world economy moves out of its current stagnant period, the developed countries will experience a pent-up need for talented people. And where will they find them? Increasingly in the developing world!
The skilled people of countries such as South Africa will become an even more sought-after source of talent and leadership. Any sustained positive growth of developed economies will almost certainly give rise to an intensified period of hard currency poaching.
This is not a new phenomenon, but in the years to come we can expect several forces to converge: slow and even negative population growth in developed countries; increasing demand for higher order leadership, managerial and executive competencies; recovery of the global economy; a new period of economic growth led by the developed countries; acceleration of globalsation; increased appreciation of the pivotal roll that talent and leadership plays in ensuring sustainable competitiveness; and increasing mobility of talented people who are already inclined to work for up to two to four times more employers in a lifetime than their counterparts of a mere three decades ago.
These are global realities and challenges, but they have a potentially exaggerated impact on organisations operating in developing countries such as South Africa.
2. Responding to the challenge
As these forces converge, many organisations will be inclined to search beyond their own boundaries for talent and leadership. Some of this will be led by somewhat mercenary poaching, but truly competitive organisations have long realized that money alone cannot retain and motivate talent and leadership. It may prove capable of initially attracting the desired people, but the research demonstrates that it is money alone is incapable of retaining true talent and leadership - except for a very small minority of people.
The conclusion is becoming increasingly self-evident. Organisations that hope to become and remain competitive will have to initiate and maintain an integrated set of strategies, which prove capable of delivering the following:
# A reputation as a haven for talent and leadership, and as a highly desirable place to work
# An authentic employment value proposition that is capable of attracting, retaining and optimizing talented people and leaders
# Enhanced capacity to identify and optimize the talents and leadership capacity of individuals
# Continuous development of talented individuals and leaders to ensure that they do not stagnate or become disillusioned with their own situations
# The entrenchment of an organisational culture and values that encourage talent development and management, and leadership across all levels of the organisation
As is to be expected, the developed world is leading the rest of the globe in this race. One of the most effective strategies is proving to be intensified development of executives and management. It is meaningful that in the USA the investment in executive and management education is already 50% higher than expenditure on external consulting services. Premier providers of executive and management education have grown on average twice as fast as the economy in areas such as the USA and Europe. Clearly the organisations within developed economies are rapidly comprehending the urgency of the challenge and taking steps to meet it.
Yet, the challenge is arguably much greater for organisations operating within developing countries. Not only do they often have to cope with wiping out a backlog of talent and leadership. They also have to prove capable of countering the negative impacts of the converging trends and threat of hard currency poaching.
3. Service providers need to demonstrate impact
There are already a few South African organisations that are leading the way in meeting these challenges. Some, like SAB Ltd, have gained an international reputation as a globally competitive developer of talent and leadership. Others, such as Investec, ABSA and Amplats have entrenched leadership development and talent management strategies that, they believe, will provide the only truly sustainable strategic advantage - leadership and talent.
But, this comes at a cost. These exercises are never cheap. And, as the stakes become higher and the investments rise to keep up with the global demand for talent and leadership, organisations are changing their own expectations. In particular, they want to know what impact their investment in executive and management education is having.
The response from service providers, such as business schools and dedicated executive/management development firms, has been to introduce various forms of "action learning." The reality is that this seldom amounts to more than requiring learners to complete projects that suggest ways in which learning can be applied, or how the organisation could tackle certain challenges.
In keeping with the escalating pressures of developing and retaining talent and leadership, service providers will increasingly be expected to demonstrate how their service offerings impact the organisation. A combination of Harry Shroder's research, and research conducted in South Africa since 1999, demonstrates that there are three sets of variables that can be tracked in the medium and even short term. It is not only possible, but also increasingly essential for executive and management education to demonstrate its impact on:
# Developing and enhancing high performance leadership practices
# Entrenching organisation building behaviours
# Improving an organisation's sustainable competitiveness
These three sets of interrelated performance indicators form the spine of high impact leadership and learning. The challenge for organisations and service providers alike is to customise and focus executive and management education in ways that demonstrate tangible shifts to a basket of priorities that fit the particular requirements and strategic context of the organisation.
This may not provide the total answer to meeting the challenges of talent creation and leadership development. But, without it, it is likely that even the most expensive solutions will fail to meet these crucial challenges facing all organisations in South Africa.
High impact leadership and learning