Managing Talent MANA 4328 Dr. Jeanne Michalski

“Leaders Matter”

What do we know about how leadership and how leaders develop  Corporate Executive Board  “Voice of the Leader”  Center for Creative Leadership  McKinsey & Company Research  “War for Talent”  “Performance Ethic”

*Corporate Executive Board “Voice of the Leader”  Sponsored by Corporate Executive Board  Designed to provide systematic evidence to help organizations make decisions on effective leadership development approaches  Web-based survey administered to over 15,000 leaders  Over 8000 Executives from 31 organizations in 6 industries responded  Using conjoint analysis, the effectiveness of leadership development activities was evaluated from the eyes of the leaders

What Drives Effective Leadership? Complete List of Characteristics Evaluated by Respondents Source: Corporate Executive Board 2001 Leadership Survey.

*Corporate Executive Board Most important attributes of effective leadership  Leaders consider people-leadership skills as the most important attributes of effective leadership, followed by strategic-leadership skills.

*Corporate Executive Board Most important attributes of effective leadership  People-leadership skills  Clearly communicating expectations  Recognizing and rewarding achievement  Inspiring others  Strategic-leadership skills  Identifying and articulating a long-term vision  Understanding markets, competitors, and customers  Understanding the strengths and weaknesses of the company

*Corporate Executive Board What leadership activities do leaders value the most?  Feedback and relationship-based development programs are viewed as more effective than on-the-job experiences, which in turn are viewed more effective than education-based programs.  The amount of decision-making authority given to leaders, however, is the single most important factor in leadership development.

*Corporate Executive Board Feedback and Relationship programs  Creating Leadership development plan  Interacting with Peers  Meeting with an executive coach  Meeting with a mentor  Feedback

*Adapted from McKinsey & Company Bottom Line Impact  Evidence suggests that stronger leadership teams can positively affect company economic performance.  Companies that are the best at managing talent deliver far better results for their shareholders, up to 22% better  High performing employees generate:  40% more productivity from Operations performers  49% increase profits from General Management performers  67% increased revenue from Sales Representatives

*Adapted from McKinsey War for Talent Study “War for Talent”  McKinsey & Company groundbreaking study on Leadership Development  77 companies involved in the study at CEO level and the top 300 in the company  Top 300 people studied extensively  11 different industries represented  All 6,500 executives were asked to complete a 45-minute survey on what they have done in their career, and what drives and keeps them at their current company  Unknown to the 6,500 executives, they were split into three buckets: high potential, good performer, below average  The companies were split into quintiles by financial performance in their respective industries

*Adapted from Corporate Executive Board Research Findings  There is a direct link between a company’s ability to provide leaders with the development opportunities they most value and the overall strength of the leadership bench.

*Adapted from McKinsey War for Talent Study Build a talent mindset  A belief that talent impacts business results  A belief that “A” players will outperform “B” players, regardless of the challenge  Executives know what an “A” player is, and the “A” players have been identified  Executives are accountable for people leadership and development  The best will be rewarded

*Adapted from McKinsey War for Talent Study Culture that encourages candor and risk taking when discussing people  Executives talk about people frequently in a candid and probing way…they differentiate people on performance and potential  Take risks on people and move them into jobs before they are ready (stretch assignments)  Executives talk candidly about their own and others’ development  Executives are expected to ask for and give insightful feedback  Shared set of values around people development

*Adapted from McKinsey War for Talent Study Build solid leadership development processes  Performance Management  Feedback & Coaching  Education & Development  Recruiting  Assessment

*Adapted from McKinsey War for Talent Study “First Break all the Rules”  Gallup Organization’s research  80,000 managers in 400 organizations

“First Break all the Rules”  What the World’s Greatest Managers Do Differently…  Select the right talent  Correctly coach for the right outcomes for direct reports  Maximize strengths  Place the right person in the right job at the right time  Create heroes in every role  Reward performance  Frequent interaction regarding performance  Focus on future and the next level

*Adapted from McKinsey Performance Ethic Study “Performance Ethic” Study  McKinsey & Company - 6,900 managers in 56 organizations

*Adapted from McKinsey Performance Ethic Study “Performance Ethic” Study  These are the things high performing companies do consistently:  Mission / Inspiration  Highly aggressive short- and long-term goals  Flat, atomized, accountable organizational units  Transparent performance feedback  Consequence management  Coordination and control Levers  Motivation levers

How do leaders develop? Experience and Feedback!