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Organizational Dynamics (2012) 41, 2331

Available online at www.sciencedirect.com

journal homepage: www.elsevier.com/locate/orgdyn

Developing leaders in turbulent times: Five steps towards integrating soft practices with hard measures of organizational performance
Dennis Tourish

THE CHALLENGE OF EVALUATING LEADERSHIP DEVELOPMENT


Effective leadership is crucial to both strategy formulation and implementation. Yet the practice of leadership often falls short of what is needed. One survey of Canadian chief executive ofcers (CEOs) found 70 percent of them asserting that leaders in their companies were only fair to weak in building strong teams, securing employee commitment and making employees feel valued. A survey of 1500 managers in the U.K. found that almost a third rated the quality of leadership in their organizations as poor. The Great Recession has intensied the demands on leaders, but left many of them feeling ill equipped to respond. A global survey of over 2000 mid-level leaders conducted in 2010 found that only 10 percent of them felt well prepared to meet the top challenges they think theyll face in the next two years. Now more than ever, there is a gap between the kind of leadership organizations know they need and the kind of leadership many of them have. It is a gap that leadership development, done well, can bridge. David Day reports that at least $45 billion is spent annually on development, in the United States alone. Yet these gures are misleading. While some organizations do a lot on this issue, others do little or nothing. For example, one study found that while almost all organizations recognized the need to develop leaders, only 44 percent had a formalized process for doing so. It is also far from clear whether all this activity does much good. A report by the Council for Excellence in Management and Leadership concluded that there are no credible measures to show a link between management and leadership development and business performance. The problem is that many studies purporting to show such a link rely on self-report

data, with participants themselves estimating (that is, guessing) the impact they think their involvement in particular programs is likely to have on their organizations performance. This is certainly not rigorous, and is rarely persuasive. Other studies simply assume that since some data shows successful companies investing more in human capital, succession planning and leadership development, it follows that these practices have a causal relationship to business success. It is equally plausible to suggest that successful companies have more resources to invest in such activities than their less successful rivals. Leadership development and business performance may correlate without being causally connected. Given this, it is little wonder that fully 78 percent of American businesses responding to one survey revealed they made no attempt to evaluate the return on investment (ROI) of their leadership development activities. On the surface, this is surprising. Few of them would spend heavily in new technology without evaluating whether it delivers an adequate ROI. Yet a less than systematic approach to leadership development seems common. Without evaluation, organizations nd it hard to impossible to know whether their investment of time and money in development has any positive impact. Reecting this, a 2006 study of leadership development in Fortune 500 companies concluded that establishing measurable and repeatable ROI for leadership development is the wave of the future. Yet the ongoing lack of serious evaluation suggests that little real progress has been made. To address this challenge, the present article outlines ve steps that enable organizations to develop robust measurements of the relationship between their leadership development activities and business performance, and which integrates it into strategy formulation and implementation. It draws on a range of studies, plus data from an in-depth study of 192 organizations, using a survey instrument and follow-up face-to-face interviews with

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24 47 key managers centrally involved in leadership development. It also reects many years of consulting with companies, and experience in leading leadership development programs. In essence, the article suggests that leadership development must be oriented around the evaluation of results, to ensure that it impacts much more directly on organizational performance than it has in the past.

D. Tourish their leadership development activities at all four levels. Over a quarter (26 percent) did not evaluate it at all. Of those that did, only 32 percent evaluated it for its impact on business results arguably, the most important category of all. This suggests that either the need for evaluation is little recognized, or that the task is perceived as too difcult to warrant rigorous and sustained attention. Given the difculty of demonstrating bottom line benets, advocates of leadership development often resort to bland suggestions that leadership is a good thing, and that something should be done to develop key people. Meanwhile, sceptical senior managers want evidence that this something will work, and be seen to do so. This is part of a wider challenge. How do we develop hard measures of the impact of soft practices on organizational performance?

LEADERSHIP DEVELOPMENT AND ITS EVALUATION


Managers have to choose from what often feels like a bewildering variety of leadership development tools. Options include development programs and courses, internally or externally provided; 360-degree performance feedback; coaching; mentoring; networking; job assignments, and action learning. Evaluation is vital, since it enables us to differentiate between those approaches that add value and those that dont. Donald Kirkpatrick has suggested that evaluation can look at four impact measures namely:  Reactions How participants react to it.  Learning The extent to which participants have advanced in areas such as competencies, skills, knowledge and attitudes.  Transfer The extent to which learning from a program has transferred to behavior at work.  Results Whether the program has improved performance, including return on investment, higher prots, increased sales, improved quality, decreased costs. The 192 organizations in the study referred to above were asked how they evaluated the various forms of leadership development that they employed. Only 15 percent evaluated

Integrating Soft Practices with Hard Measures of Organizational Performance


Meeting this challenge means that, in the eld of leadership development, organizations need to transform how their leaders are identied, selected, developed, and evaluated. But most important they need to link all stages of this chain to solving existing organizational problems and challenges. The ve-step framework summarized in Fig. 1 suggests how this can be done. The problem is that too much leadership development begins and ends in a classroom. It is therefore often divorced from the actual situation in which leadership will be practiced. The assumption is that rote learning some descriptions of successful leadership behaviors in other arenas will impact on both the persons leadership behaviors when they return to work, and on the organization in which they are employed. A more nuanced and contextual approach is required to realize these intentions.

Figure 1

The results based leadership development framework.

Developing leaders in turbulent times This means that we need greater clarity on what the purpose of leadership development should be. When we put organizational results and outcomes at the heart of the process, its core purpose can be described as to solve problems, and help organizations to achieve their business objectives. Its goal is system-wide change, in which individual leader development is intimately connected to the context in which leadership is practiced. This means that it is geared at achieving direction, alignment and commitment between the needs of the organization, the behaviors/values of those practicing leadership and the other constituents of the organization. It follows that each stage of leadership development needs to be checked against its capacity to impact on business results. Accordingly: 1: START WITH CLARITY ON THE ORGANIZATIONS VISION AND GOALS This means much more than articulating a vision, however compelling or energizing it is. The vision must be translated into short-, medium- and long-term goals across a range of results based criteria. These include sales, productivity and protability. It also means determining how people can be supported and developed to achieve them. It might be expected that leadership development is routinely related to an organizations strategic goals that is, designed with such goals in mind, intended to further their achievement and evaluated on the degree to which it does so. Yet the 192 organizations surveyed in this research reported that their leadership development activities were never (8 percent), rarely (17 percent) or only sometimes (41 percent) related to their strategic goals a total of 66 percent. Follow-up interviews found that even those who insisted such connections existed could rarely show what they were. Contrast this with PricewaterhouseCoopers (PwC), now employing over 130,000 people in 148 countries. Flowing from its strategy, business goals are set in the three key areas of people, clients and quality. The Quality Lens program that addresses the latter issue is used to drive extensive internal consultation on the issue, and a key priority move auditing on from the check-box approach that was implicated in the Enron debacle.

25 But two other major factors impact on how seriously they are likely to be taken. First, a public commitment to goals creates a dynamic to live up to the commitment made. It creates an imperative to save face in ones eyes and that of others, particularly around the issue of integrity. Second, regular feedback that summarizes progress made towards the goal is much more powerful than goals on their own. All this suggests that near-term goals to which people are expected to publicly commit, where progress or its lack can be readily discerned and where regular feedback will be made available are more likely to drive changes in behavior than distant goals where progress is more difcult to observe, evaluate and provide feedback on.

Linking a Short Term Focus to Longer Term Goals


The challenge for managers is to make positive use of our focus on the short term by linking it to medium- and longterm goals. There are few better examples than General Electric, where an obsessive focus on leadership and leadership development has been at the heart of its strategy process for decades. All its managers are required to embrace leadership training at every stage of their careers. It declared its intent in recent years to put more emphasis on expanding businesses and growing new ones than in acquisitions. This found immediate reection in its leadership development activities. A Leadership, Innovation and Growth (LIG) program was launched in 2007, which gathered all the senior members of a business management team to explore the challenges involved and the changes that were needed. Its stated aim is to embed growth into the companys DNA. The relationship between short and long-term goals, and how they should be managed, is also a key part of the program. Immediate steps are framed in terms of how they stretch towards long-term goals. EMC is a major information infrastructure provider based in Massachusetts. Consistent with the approach discussed here, it starts its leadership development by reviewing each departments strategic plans. An organization and talent review process (OTR) then identies employee skills and attitudes that the strategic plan shows are required. In essence, the system identies problems that need to be solved on the road to the organizations envisioned future. It then gives the organizations leaders, established and emergent, the responsibility of solving them in the present. The focus is on issues that include how to collaborate in a complex environment, lead change and innovation, and global execution. Goal clarity is a vital prerequisite for attempts to identify leadership behaviors likely to ensure that the goals are achieved. The Washington Group, an engineering and construction rm with 24,000 employees worldwide, sets individual employee goals that are aligned with business unit and work group goals. In this way the link between strategy and goals is worked through to individual level. Here is another critical aspect of their process. Managers and employees collaborate to set the goals, measure progress and set development objectives. They arent handed down from above, but are made meaningful through dialogue, communication and partnership. The key insight is that long term goals that are insufciently connected to organizational action and measurement

Senior Management Commitment is Vital


Building these kinds of links between strategy and goals requires intense engagement from senior managers. A study of top companies for leadership in Europe was conducted by Hewitt Associates in 2005. In 90 percent of them, CEOs were directly involved in leadership development. This compared with 68 percent of CEOs in other companies. Such an approach is particularly important when identifying the critical goals that most immediately ow from the companys strategy. Goal setting theory suggests that the short term goals that emerge from the vision are particularly important. They focus attention on those activities consistent with the attainment of the goal and away from those that are likely to prevent it. They energize people if the goal is challenging enough to require additional effort. They also encourage persistence, and wider engagement with whatever relates to the task of achieving the goal.

26 in the present are unlikely to be achieved. Peoples behavior is driven most dramatically by immediate opportunities, readily available rewards and imminent rather than long term challenges. A small number of attainable goals that are severely time-limited focuses attention on the most critical question that leaders face each day: what are my priorities right now? Leadership development programs can address this challenge head-on, and contribute to the identication of leadership behaviors that will deliver measurable results (Step 2). 2: IDENTIFY THOSE LEADERSHIP BEHAVIORS THAT ARE NEEDED TO ACHIEVE THESE GOALS. BE SPECIFIC No one should entertain the illusion that greater clarity on the issue is either easy to achieve, or a transformational route to instant change. Behavior statements or competency models may encourage the view that behaviors can exist independently of context, or that it is easier to associate them with predictable outcomes than is actually the case. They may also assume a generic quality that fails to act as a guide to organization specic action. To avert this, they should emerge more organically from a full consideration of the business challenges that individual organizations actually face (Step 1 above). This means deep reection on the concept or theory of leadership that is in action within the organization, and a hardnosed assessment of its usefulness in the current operating environment. In essence, organizations need to ask themselves seriously: what kind of leadership do we need? What do we need to change to ensure that we get more of it? What stops us getting it? How will we recognize it when it arrives?

D. Tourish consistent with its culture and business strategy, and which were not. Only those that matched its needs were adopted. General Electric interviews company leaders worldwide to identify business needs and emerging leadership competencies. Barclays Global Investors holds focus groups with over 100 middle level managers and interviews others to identify the critical abilities they think need to be developed in the organizations leaders. The Bose Corporation, a global leader in high-end home entertainment systems, goes further. They have developed different competency models for rst line, middle and senior management positions. These are regularly reviewed to ensure that they remain consistent with current business needs. The more specic the behaviors in question, the more likely they are to drive improved performance on the ground. Recognizing that required behaviors vary between contexts, PepsiCo has created global competency models for marketing, sales, nance and other functional areas. Following similar principles, the Army Management Staff College in the U.S. runs a Sustaining Base Leadership and Management Program (SBLMP). Civilian personnel in military employment participate alongside a range of ofcers. The key question guiding its design is an analysis of the skills, abilities and knowledge that are required of those graduating the program and assuming greater leadership responsibility. Its content is specic to the needs of the U.S. military. Sessions are held on such topics as the national security environment, and designing and resourcing military forces.

Keep it Short and Focused Linking Strategy to Desired Leadership Behaviors


Motorola is an excellent example. It is obsessed by training and development. Every employee is required to attend a minimum of 40 hours on job-relevant training and education per year. It also runs a development program for its Messaging Systems Products Group that pays close attention to the relationship between business needs and leadership competencies. Marguerite Foxon reports that four key questions guide the design of the program: 1. Given where MSPG is headed in the future, how aligned are its current management practices to its future business needs? 2. What are the critical leadership competencies MSPG leaders need in order to take the business into the anticipated future? 3. In what ways are current processes for identifying, selecting and developing leaders ineffective to meet the leadership needs of its growing business? 4. What are the major change issues MSPG needs to take into account going forward? In this way, strategy is linked directly to the leadership behaviors necessary to achieve implementation. This is an internal journey with an external focus. It is one that many more organizations have now embarked on. For example, Abbott Laboratories, an Illinois-based company, has made a thorough study of available best practices and competencies and then decided which ones were A sense of proportion is also needed. Any statement of desired leadership behaviors must be succinct, if it is to serve as a guide to action. For over ve decades, memory researchers have advised us that short term memory works on the formula of seven plus or minus two. That is, people can only remember and pay attention to chunked pieces of information to the tune of about seven items of information. It follows that behaviors, competency statements and declarations of values that stretch across many pages confuse people and scatter their energies, rather than focus them on specic actions that they can take today or tomorrow. A concise statement on behaviors forms something that people can study, reect upon, absorb into their own practice and means that others can evaluate their performance. The key insight is that more attention must be paid to clarifying the leadership behaviors that organizations need to achieve their goals. This should be an annual cycle. While the competencies and behaviors are unlikely to change radically within such a timescale, a rigorous assessment of business strategy means that their individual weightings may well shift. In turn, a heightened awareness of these issues can be integrated into the entire development process. The Hewitt study cited above found that leadership competencies were formally integrated with succession planning in all of the top companies they studied. This compared with 78 percent for the others. Addressing this, in such a thorough manner, means that organizations can then systematically select those people for leadership development who are best placed to help them achieve their key business goals (Step 3).

Developing leaders in turbulent times 3: SELECT LEADERS BASED ON THESE LEADERSHIP BEHAVIORS Selection for leadership development is often haphazard. One study of 260 multinational companies found that less than half of them had succession planning or formal development programs in place for their high potentials. Contrast this with Cisco Systems, consistently ranked as one of Americas top companies, and one of its most admired. Fully 20 percent of its people have been identied as having high potential. Gretchen Spreitzer, drawing on positive psychology, has argued that it is better to focus on leveraging peoples strengths, rather than identifying gaps in their performance and attempting to overcome them. This suggests that organizations should select people for leadership development based on their already identied ability to demonstrate those leadership behaviors that are important for future success.

27  Can you see this person leading from and living the companys core values? Would they t our culture?  Does the person have the potential to assume greater responsibility in the future?

Remember that Past Behaviors Guide Future Performance


While this is a good starting point, a more explicit focus on leadership behaviors could enhance it. Psychological research supports the view that an evaluation of past accomplishments remains the best predictor of future potential. For this reason, social cognition theory shows that one of the most difcult of all tasks is trying to get people to unlearn existing patterns of behavior. Most of us become deeply attached to our existing behaviors and are correspondingly resistant to change. Of course, there will be highly adaptive individuals capable of transforming their behaviors and attitudes with relative ease. But managers would be wise not to count on nding that their organizations are populated by human chameleons. The reality is that those behaviors really needed by a business in a given context must be reviewed, updated, and utilized more creatively in the selection and development of leaders. Depending on each organizations specic business challenges, such a focus suggests that 360-degree appraisals seeking to identify potential leaders could usefully ask such questions as:  How quickly does this person resolve conict in your team?  How often in the past year has this person produced a new quality initiative?  When did X last solve a problem with the new delivery system?  When did you last hear X talk about the sales drive that we are launching in March? Behavior is critical. For that matter, as Jack Welch has often argued, values mean behavior or they mean nothing. Behavior drives attitudes, performance and goals. Organizations that bring behavior to the fore are sending a clear message what matters are results. Established, as well as emergent or potential, leaders should also be evaluated on these measures. It follows that, if these measures are not in evidence, other roles may have to be found for the leaders. It is equally important to offer programs and support that match the particular needs of the individuals involved. But all this needs to be built around addressing real and pressing problems that stand in the way of goal attainment (Step 4). 4: IDENTIFY PROBLEMS THAT MIGHT OBSTRUCT ORGANIZATIONS ACHIEVING THEIR GOALS. GIVE PEOPLE THE JOB OF SOLVING THEM Leadership development needs to provide people with an opportunity to identify problems, and lead the charge in solving them. A results based framework suggests a fourpronged approach to this issue:  Identify specic problems that are likely to obstruct the organization achieving its goals this year.

How to Focus on High Potentials


There are plentiful examples of this approach in action. PepsiCo uses a People Planning process to identify high potentials. Three hundred sixty degree feedback, data from other appraisals and other information is used to identify people who have shown functional expertise, and a wide breadth of skills and experience. All this is directly related to a hard look at the organizations overall progress towards its current key development and change initiatives. At PECO Energy in Pennsylvania, line managers nominate employees as having high potential, based on a range of screening criteria. But the process only starts there. Recommendations are further evaluated by a committee of middle and senior managers. Their views are further considered by a management development committee that includes the CEO and chairman of the company another instance of top management engagement with leadership development. Those that emerge from this process then attend an assessment centre for further evaluation. In yet others, such as IBM, top managers attend senior team meetings chaired by the CEO, where ve minute drills are used to identify employees with high potential. Three hundred senior managers are involved in this process, with each of them given ve minutes to nominate at least one person deemed to have high potential. While all this is an improvement on self-selection, there is still a need to focus more powerfully on the actual behaviors that potential leaders display in their daily work and to gather data on this issue from multiple sources. In this regard, 360-degree appraisal is particularly useful. Bank of America employs such an approach to select leaders, based on the following inventory of questions:  Would you personally trust your career to this person?  Do you see yourself learning from them?  Is this person capable of putting enterprise objectives ahead of their own goals?  Would this person complement the direct team s/he would be a part of?  Would this person be able to accept, process, and apply candid coaching and feedback in order to continuously improve?  Do they have the drive and passion to be part of a winning team?

28  Give people the job of solving them.  Link leadership development to whatever support they need to do it.  Provide feedback on progress towards solving the problems that have been identied. There is signicant evidence that the best forms of leadership development create opportunities for people to learn from their experiences, and then apply it to solving pressing problems in their organizations. Keith Grint has suggested that effective leadership practice ows not just from knowing why something needs to be done, but from having sufcient access to knowledge and situated practice to identify appropriate ends, think strategically from that starting point and then act accordingly. As he puts it, this requires exposure to experience as well as information, so that forms of action are created that focus directly on xing the problem itself, not a form of reeducation or re-skilling that xes the people. The implications for leadership development are immense. Organizations need to focus peoples attention on problems they face at work that are likely to impede the achievement of key business goals, draw out appropriate lessons, and equip them to make a real difference in their daily work. Formal programs must be supplemented by mentoring, coaching and other interventions designed to sustain deep reection and ongoing learning in the real world of work. This puts action at the heart of the learning process. In particular, and consistent with the ndings of social cognition theorists, people grow in self-condence and selfbelief when they experience success in solving problems. We are motivated to repeat behaviors that have been rewarded. And few things feel more rewarding than the frisson of success.

D. Tourish not t all. Above all, people need feedback on their efforts to solve the problems that have been identied, to ensure that real change is taking place. Some companies are already doing this. Eli Lilly is a major pharmaceuticals rm. Potential leaders are identied through a rigorous selection process. Their development program then mixes people from different functions and sets them major strategic tasks. As an example, Jay Conger and Robert Fulmer cite the case of a team charged with developing an e-business strategy. The team spent ve weeks interviewing over 150 people and then presented their proposals to senior managers, who sanctioned the teams proposals. Participants in PepsiCos Building the Business Program spend a month developing an idea for a growth project in conjunction with their divisions president. While continuing with their normal job, they then spend 90 days developing the project with the aim of having it ready for implementation by the end of this timeframe. Other companies are blazing a similar trail. IMASCO is a Canadian company that extracts material from mineral deposits. Its three-stage development program begins by exposing participants to a general managers perspective on a particular organizational case study. They embark on a program where they explore each operating companys business challenges and how it is dealing with them. Finally, teams are formed to address a specic business issue and make recommendations to the companys top team. GEs LIG program was discussed earlier in this article. It is also structured so that the teams participating draft an action plan to change their business and take responsibility for implementing it. All this goes to show that while sending people on courses makes them think differently, setting them problems to solve makes them act differently. The distinction is crucial.

Provide Access to Vivid, Unforgettable Experiences


All this suggests that the challenge for leadership development all too rarely met is to create vivid, unforgettable experiences that will assume critical salience in the minds of those undergoing them. Leaders are developed when people are challenged, when they are given problems to solve, and when they know that what they do is valued and evaluated by their organizations. This approach contrasts with the ongoing heavy emphasis on offsite training programs. The problem is that the enthusiasm and fresh insights generated during such training often wither in the face of bureaucracy, conicting priorities, resistance to change and systemic indifference. It is an error to put changed people into an unchanged situation unless they are given the authority to take decisive action. Make no mistake: formal programs are important. They can provide information, challenge outmoded habits, offer fresh perspectives and facilitate networking. They are particularly effective when the organization makes frequent use of its own top people to provide input, as is the norm at General Electric and Caterpillar, among others. But they should be supplemented by mentoring, coaching, job assignments, job rotation and other interventions. One size does

Link Development to How People do their Everyday Jobs


This is part of a move away from seeing leadership development exclusively in terms of off-site programs, and more as a means of intervening in the normal cycle of activity in order to drive improvements in performance. Managers are often reluctant to release people for programs. Their absence is seen as subtracting resources from operational activity, rather than adding long term capability. When development is directly tied to how people do their jobs, this tension can be turned into an opportunity. It follows that the most effective development seeks to reach beyond the ranks of the senior management team. IBM runs a well-regarded Basic Blue leadership program, aimed at over 5000 rst level supervisors. Sonoco Products is a global packaging manufacturer. Its succession process seeks out employees at all organizational levels not just senior management. At General Electric about 4 percent of its 240,000 employees annually pass through its leadership development program at Crotonville. In this way, strategic awareness is cultivated throughout the organization. When the right program is offered to the right people, to help them deliver on key organizational goals, it then becomes possible to evaluate the impact of their behavior on business performance (Step 5).

Developing leaders in turbulent times 5: ASSESS FOR BEHAVIOR CHANGE AND IMPACT ON BUSINESS PERFORMANCE Some organizations separate the possession of leadership skills from the greater challenge of delivery. This may be like selecting players for a baseball team by assessing them psychologically for scoring competence, or asking them how they would hypothetically pass the ball to a teammate, rather than observing how they perform under actual game conditions. As Keith Grint has suggested, it follows that even selecting people because they have demonstrated particular skills in the past may, by itself, prove insufcient to guarantee that such behaviors will be repeated, have a positive impact on the wider organization and that hard measures of such impact can be tabulated. The framework proposed here suggests two measures designed to address this challenge. The rst is assessment for behavior change. Repeating the 360-appraisal process with the same items as before should indicate how much change and improvement has occurred in the individual, if it is required.

29 ROI of 79 percent. This approach maintains a results orientation to evaluation. But it is selective, and therefore doable. Other companies have also made huge progress on this issue. EDF Energy, a large U.K. energy company with 12,000 employees, shows what can be done. EDF created a leadership development program for 1800 people focused on sales and which made extensive use of coaching. In its aftermath, staff turnover fell from 17 percent to 11 percent, staff satisfaction increased from 33 percent to 72 percent, and 515,000 new customer contacts were made against a target of 375,000. The company estimates that more than 3000 in savings per employee was made per year, against a cost of 1000 per employee to run the program.

The Example of Royal Dutch Shell


The best example may well be the oil giant, Royal Dutch Shell. Shell launched what it calls a Focused Results Delivery (FRD) program in 1995. From the beginning, the driver was measurable performance. Record prots the previous year posed the question: how can we sustain this performance? In particular, there was a need to eliminate waste, cut costs, and improve the quality of goods and services. Analysis also suggested that achieving this goal required having leaders at far more levels than any of Shells competitors, and thus the need for a program that extended far beyond the senior management team. Shells program is distinguished by a focus on action learning combined with measurement. People are charged to deliver real results within a 90-day timeframe. They implement solutions rather than just deliver recommendations. More than 15,000 personnel, out of a 100,000-strong workforce, have now gone through the program. Shell estimates that over $1.5 billion in savings and process improvements have been realized. But this attention to results is the exception rather than the rule. A results orientation to leadership development shines a searchlight on performance. It creates opportunities in the form of challenges, and provides support in order to help people reach these challenges. But it is also clear that the endpoint is the impact of such actions on business results. Leadership is not a lifetime reward for past performance. It is conditional on the ongoing needs of the organization, and depends on whether people can deliver what is needed. We should not expect people to retain leadership roles if they cannot deliver what is needed to sustain business performance. A robust, results oriented framework will help organizations to identify the leadership talent they need, and to t the right people into the right roles at the right time. It also ensures that the costs and benets can be measured. When, as with Shell and EDF Energy, a clear benet is shown, the program is validated. But if the costs outrun the benets, then the focus on results is insufcient, and the organization must revisit what it does, at least now knowing precisely what the problem is.

Evaluate for Impact on Business Results


But the second, and most important, element concerns results. While it is clear that not all organizational change is positive, organizations should certainly assess whether any has occurred in response to the leadership development activities it has undertaken. This means that we must ask questions such as these:  Have the goals that were set 12 months ago been achieved?  Have the problems that were identied been resolved?  How can these be quantied? The answers will, of course, vary from organization to organization. In some, the problems might have been high inventory, with a problem-solving target that this be reduced by a given percentage. In others, the problem might be low sales, with an objective that these should increase to a particular level. The point is that the problems, challenges and targets will have been identied at the beginning of the cycle, leadership development will have been focused at providing the help needed to solve or reach them, and evaluation will then tabulate precisely what has been accomplished and what the gains have been from the development undertaken. For example, an evaluation exercise undertaken by The Service Parts Operations (SPO) of General Motors, and emphasizing results, concluded that a leadership development program involving all 90 of its managers yielded a 21 percent increase in productivity, and savings of $4.4 million in its operating budget. This can be approached on a sampling basis. If 100 people go through a particular program in a large organization, then 10 percent can be sampled to see what impact the program has had on performance and results. This is likely to be representative of the rest. The U.S. telecommunications company AT & T Midwest, previously known as Ameritech, used exactly this approach when evaluating its Network Leadership Development program. 23 individual case studies were compiled. These studies suggested that every $1 invested in the program led to a saving of $1.79 through changes that were implemented an

CODA: It Begins Again


A results framework, built around short-term goals that are aimed at medium- and long-term outcomes, needs to be an

30 annual cycle. At the conclusion of each cycle, goals for the coming year are claried, and the results focus on leadership development kicks into action once again. It is not unusual to encounter organizations with a leadership development program that has been running for many years, essentially unchanged. While participants often report that they are happy with it, they are less certain when asked to show how it impacts on business results. Often, this is because it doesnt. The framework proposed here requires senior management engagement, not least because it depends on the vision and goals that the organization is committed to. It is challenging, since it means that managers must focus greater attention on a range of issues than they might otherwise do. But the payoff is that it binds strategy and implementation together. There is no shortcut. Leadership development can connect peoples behaviors on the ground with an organizations strategic intent, improve execution and reduce the volume of wildres that consume so much attention in many companies. This will only be realized when a lead is given from the top; when strategy and execution become more closely linked; and when leadership development becomes synonymous with attempts to address an organizations most pressing problems, rather than an optional but questionable extra. MAIN LESSONS AND CONCLUSIONS If leadership development really matters, it should be declared a priority, a clear vision of what leadership means needs to be developed, and statements should be made that attempt to articulate how organizations expect their leaders to behave. To suggest otherwise is to imply that any set of leadership practices, spanning the full range from autocratic to laissez faire, is as effective as any other. The reality is: context matters. Regular reviews are needed to see if expected and desirable leadership behaviors still make

D. Tourish sense, have materialized in practice as well as theory and have made a positive impact on organizational performance. As we have seen, Shell and General Electric are among the companies that take this seriously. But people will only respond to the challenges posed if leadership development identies strategic priorities, relates these to their everyday role and gives them the tools to address them. The long- and short-term have to be kept simultaneously in view. Yet managers often fear that providing such development will divert people from their day jobs, cost a great deal of money, and yield few if any tangible gains. Leadership development must therefore focus peoples attention more tightly on the job rather than less, produce gains that can be measured, and hold people more fully to account for their actions. In the process, the development of individual leaders (leader development) is more likely to proceed in alignment with leadership development i.e. the transformation of leadership culture, values, beliefs and practices within the wider organizational system. Few organizations have yet mastered every aspect of this. For example, while PepsiCo has been cited here for many excellent practices, it doesnt yet quantify any ROI for its development programs. A new approach is needed. The framework proposed in this article puts both reection and action at the core of leadership development, strengthening both through evaluation. It enables organizations to integrate soft practices with hard measures of organizational performance, in pursuit of improved strategic direction, alignment, commitment and competitive advantage.

Developing leaders in turbulent times

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SELECTED BIBLIOGRAPHY
A comprehensive overview of many of the issues that are most central to leadership development, including the importance of goals, feedback and experiential learning can be found in D. Day, Leadership development, in A. Bryman, D. Collinson, K. Grint and B. Jackson, eds., The SAGE Handbook of Leadership (London: SAGE, 2011). The challenge of developing leaders and how to ensure that the right people can be selected for leadership roles is thoroughly explored in J. Conger and R. Fulmer, Developing Your Leadership Pipeline, Harvard Business Review, 2003, December, 7684. This involves identifying peoples strengths, particularly in terms of a demonstrable ability to utilize those leadership behaviors an organization has identied as critical to its success. A detailed discussion of how this can be approached can be found in G. Spreitzer, Leading to Grow and Growing to Lead: Leadership Development Lessons from Positive Organizational Studies, Organizational Dynamics, 2006, 35, 305315. Keith Grints work on the relationship between wisdom and leadership also informs some of the analysis here of how people should be selected for leadership roles. His ideas are detailed in K. Grint, Learning to Lead: Can Aristotle Help Us Find the Road to Wisdom? Leadership, 2007, 3, 231246. One of the most insightful summaries of leadership development and its relationship to strategy, including plentiful examples of best company practice, can be found in: R. Fulmer, The Leadership Advantage: How The Best Companies Are Developing Their Talent To Pave The Way For Future Success (New York: Amacom, 2008).

Dennis Tourish is a professor of leadership and organization studies at Royal Holloway, University of London in the U.K., a Fellow of the Leadership Trust Foundation, a visiting professor of leadership at several universities, and an associate editor of the journal Leadership. He has published seven books and over 60 journal articles on leadership, leadership development and organizational communication. (Royal Holloway, University of London, Egham, Surrey TW20 OEX, United Kingdom. Tel.: +44 01784276684; email: Dennis.Tourish@rhul.ac.uk).