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Page 1: Developing Sustainable Leadership Pipelines · 2019-06-24 · Developing Sustainable Leadership Pipelines | 3 EXECUTIVE SUMMARY Effective leadership is fundamental to executing an

Developing Sustainable Leadership Pipelines

Page 2: Developing Sustainable Leadership Pipelines · 2019-06-24 · Developing Sustainable Leadership Pipelines | 3 EXECUTIVE SUMMARY Effective leadership is fundamental to executing an

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TABLE OF CONTENTS

Executive Summary 3

Introduction 4

Identify Leaders 6

Develop Leaders 8

Lay a Foundation for Success 13

Conclusion and Recommendations 18

About the Research 20

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EXECUTIVE SUMMARY Effective leadership is fundamental to executing an organization’s strategy. Yet many leaders come into their roles without the skills and behaviors they need to perform well. Leadership development programs can support them, but often these programs come too late, missing the opportunity to strengthen leadership competencies before high-potential talent steps into a role.

Developing a sustainable leadership pipeline depends on approaches and tools for leadership development that allow organizations to better identify emerging leaders, grow leadership strengths, and build a foundation for future success.

Because there are few organizations can boast bench strength, HCI partnered with Cornerstone to learn the best ways to support current and future leaders with the right leadership development programs. We found that High-Performing Organizations (HPOs) set themselves apart through their highly-integrated approach to leadership development. These programs are more likely to include the following:

More internal sourcing of leaders

Tailored leader identification and evaluation methods to target their organizational needs

Sustained support of leaders’ growth over the course of their careers

Use of diverse methods for developing leaders

Use of a competency model

Alignment of leadership development with organizational strategy

Integration with workplace culture

Transparency in the communication of leadership plans

Accountability for leaders’ performance

Use of technology to create, deliver, and measure leadership development programs

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Why do organizations invest in leaders?

It can seem like there are as many typologies and definitions of leadership as there are leaders. In all its forms however, leadership is a process intended to influence, motivate, and direct others to consistently and ethically achieve the collective goals of an organization. Effective leadership creates value for the organization by executing strategy and building an environment for improved productivity and innovation. Leadership effectiveness alone explains nearly 80% of the variance in overall organizational health.1

While there are many ways to lead, not every leader demonstrates effective leadership. Those who have earned their position through technical competence and workplace performance, aren’t always equipped with the skills needed to inspire, coach, and empower others.2, 3 The leadership development programs they need often come too late,4 and these programs may miss opportunities to cultivate future leaders. This results in weak pipelines for future leaders that can pose a threat to organizational stability. And yet, only 14% of HR professionals report having strong bench strength.5 Similarly, a previous HCI study found that only 24% of high-potentials are considered leadership-ready.6

It is critical that organizations support and upskill current leaders as they develop sustainable pipelines for future leaders. Building effective leadership capabilities are key for the performance and sustainability of an organization. It’s why organizations invest in their leaders. But not every investment in leadership development sees a strong return. Knowing what works can help your organization make their investments in leadership development pay off.

What can we learn from the leadership development practices of HPOs?

Understanding leadership development programs at High-Performing Organizations (HPOs) can provide important insights for guiding these investments. These organizations outperform their peers on HCI’s index of 14 business and talent outcomes gauging organizational health.7 Organizations identified as HPOs are also more likely to see robust results from their leadership development programs (Figure 1).

These results are not simply the outcome of larger budgets and pricier programs, but reflect important differences in the approach, content, and

INTRODUCTION

“We invest in leadership because that’s how we

advance strategy.”—Anitra Manning, Ed.D., CPCC,

Talent and Human Resources Manager and Talent Development

Leader, W.K. Kellogg Foundation

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Through your organization’s leadership development program(s), how well are you able to accomplish the following? (Moderately and Very Well)

FIGURE 1

Improve current business performance

94%

91%

92%

82%

85%

88%

85%

84%

76%

73%

65%

67%

65%

63%

62%

70%

Retain high-potentials/successors

Build the skills that we need for our business strategy

Engage team members

Support organizational change

Attract talent to our organization

Develop organizational leadership capacity

Improve succession management/bench strength

High-Performing Organizations

All Other Organizations

deployment of leadership programs. HPOs are more likely to build these programs from competency models and to integrate them with their workplace culture. Not only that, they are also more likely to monitor and measure the results of their efforts. They also rely on technology to identify and track their leaders’ progress and to deliver program content.

These differences create tangible distinctions in the value of these programs. In fact, while only 33% of other organizations either somewhat or strongly agree that their leadership development approach produces a satisfactory return on investment, 72% of HPOs get leadership development right.

“Leadership development is a multiplier. If you can improve

the skills of a leader in any area, that person will impact

the lives of not just their team but all the people that their

team interacts with.”—Scott Switalski,

Strategic HR Programs Manager,Children’s Hospital of Philadelphia

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Source Leaders Internally

Success in developing sustainable leadership pipelines begins with the early identification and development of potential leaders. HPOs are more likely to assess, identify, and track current and potential leaders at every level in the organization. Compared to 70% of other organizations, nearly all HPOs (96%) actively monitor the progress of their high-potential talent.8 As a result, HPOs spend less time looking for leaders outside the organization and are more likely to source leaders internally (Figure 2).9

From where does your organization fill its open positions? (Respondents who cited internal sourcing of leaders.)

FIGURE 2

IDENTIFY LEADERS

Senior leaders/Executives/C-Suite

Directors/VPs

Mid-level managers

Front-line managers/Supervisors

86%

39%

47%

64%

64%

61%

31%

31%

47%

49%

Composite index for internal focus

High-Performing Organizations

All Other Organizations

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Tailor Your Evaluation Methods

Staying on the lookout for internal sources of leadership talent requires a more focused, intentional approach to identifying and assessing leaders. It’s not just that HPOs are more likely to use a wider variety of methods in their process; they shift these methods to meet their organizations’ needs at each level of leadership. For instance, HPOs are more likely to shift the emphasis of their selection methods toward 360-degree feedback surveys and succession planning calibration sessions, as leaders advance throughout the organization (Figure 3).

HPOs are also selective in what characteristics they are assess through these methods. While they are just as likely as other organizations to take personality and technical skills into consideration, HPOs tend to emphasize values and culture, emotional intelligence and interpersonal skills, cognitive ability and the ability to learn, as well as positive peer feedback.10

Through what methods do you identify leaders for the following level(s)? (Select all that apply.)

FIGURE 3

High-Performing Organizations

All Other Organizations

Performance reviews and

ratings

84% 73% 63%47% 46% 40%

67% 73% 57%41% 45% 40%

55% 64% 64%28% 30% 30%

49% 45% 46%20% 22% 24%

49% 55% 52%33% 32% 29%

21% 36% 52%19% 25% 28%

Succession planning talent

reviews, calibration sessions

Structured interviews

Observations

Assessments

360-degree feedback survey

Front-Line Managers Mid-Level Managers Directors/VPs

“One mistake is people thinking that out of-the-box

leadership development programs are going to solve

your problems. The only way that you’re going to learn it is

to do it, see it modeled, and build effective networking and

collaborative opportunities. Exposure is perhaps one of the most valuable things to new managers and to help

them see the bigger picture.”—Steve Dobberowsky, Senior

Principal, Cornerstone OnDemand

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Sustain Your Leaders’ Growth

Leaders are not born, they’re made. HPOs don’t simply believe this adage. They live it by proactively building leadership pipelines and sustaining their leaders’ development through all levels of the organization. While only 37% of other organizations agree that anyone with the right support and environment can lead others, 60% of HPOs believe leaders are made through continual guidance and development.11 They are more likely than other organizations to report a formal approach to developing leaders regardless of seniority or position (Figure 4).

For the levels and groups below, does your organization formally develop leaders in this group? (Yes.)

FIGURE 4

Senior leaders/Executives/C-Suite72%

54%

85%65%

Mid-level managers

72%43%

Individual contributors

82%58%

Directors/VPs

85%60%

Front-line managers/Supervisors

High-Performing Organizations

All Other Organizations

Use Personalized and Blended Methods for Leadership Development

Not all current and future leaders respond to the same methods of leadership development, and leaders in different positions may have different role requirements or functional constraints. It takes a blended approach to gain results. HPOs are sensitive to the contextual needs of varied leadership roles and are more likely to diversify and re-combine their methods of leadership development (Figure 5). While front-line

DEVELOP LEADERS

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Through what methods do you support and develop leaders at the following level(s)? (Select all that apply.)

FIGURE 5

High-Performing Organizations

All Other Organizations

Stretch assignments/

projects

Formal classroom

training

Sponsorship/advocacy from a

senior leader

Formal mentoring

program

E-learning

HR support and check-ins

Peer coaching

Peer networking at events or

conferences

Access to a professional

coach practitioner

61% 48% 27%58%36% 39% 28% 15%

60% 55% 40%67%44% 44% 30% 21%

61% 51% 30%69%38% 42% 25% 16%

58% 57% 39%60%34% 35% 30% 24%

48% 40% 28%46%24% 23% 17% 14%

40% 43% 21%18%18% 25% 18% 9%

33% 28% 24%33%19% 18% 11% 7%

49% 52% 37%43%25% 33% 29% 23%

27% 51% 43%12%10% 15% 25% 24%

Front-Line Managers Mid-Level Managers Directors/VPsSenior Leaders/Executives

and mid-level managers may be offered more stretch assignments and web-based trainings for instance, directors and senior level executives may be offered more peer networking and coaching opportunities.

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Some of these methods may vary relative to the size of an organization and their resources. E-learnings and formal classroom trainings all require budget to execute. Yet HPOs come in all sizes, and they effectively blend these more expensive programs with low and no-cost approaches including stretch assignments, sponsorship from senior leaders, and regular check-ins and support from HR.

Regardless of their current level of investment, we found that most organizations are planning to increase time, money, and staff across leadership development methods. HPOs and other organizations alike plan to focus on e-learning, followed by formal mentoring programs and coaching. In addition to these methods however, HPOs are also likely to increase the use of peer networking and formal classroom training as part of their leadership development programs.

Inform Methods with a Model

Although HPOs may vary their methods, they are consistent in articulating the competencies and capabilities they seek to develop. HPOs are more likely than other organizations to focus on developing self-awareness, interpersonal and emotional intelligence, and business acumen in their leaders at every level (Figure 6).

Recognizing and specifying the need for these competencies can take some effort. Yet, creating a detailed picture of the characteristics and qualities of leadership needed by the organization can be vital to shaping sustainable leadership pipelines. Competency models can offer this detail and inform the identification and selection of leaders, provide greater clarity in the design of leadership development programs, and produce more consistent results. HPOs are significantly more likely than other organizations to rely on a competency model in their approach to leadership development (76% HPOs versus 53% of others) and are most likely to use these models during performance and talent reviews, as well as when selecting talent into roles (Figure 7).12

“It’s important for organizations to realize their

priorities, competencies, values, etc. There is not a

one-size-fits-all approach to a leadership development

program or model. It’s continuous. Once you deploy

the program, it’s something to continuously evaluate

and maintain, and tweak as necessary.”

—Steve Dobberowsky, Senior Principal,

Cornerstone OnDemand

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Through your organization’s leadership development methods, what competencies and capabilities are you developing? (Focus at all levels)

FIGURE 6

Trust/relationship building89%

69%

Coaching and development team members

80%69%

Self-awareness91%

62%

Interpersonal/emotional intelligence85%

59%

Technical expertise/hard skills71%

65%

Spoken communication skills76%

63%

Inclusive behaviors/ multi-cultural competence

79%59%

Business acumen75%

51%

Delegation65%

49%

Negotiation/influence/ persuasion skills

64%42%

Strategic thinking/planning60%

43%

Visionary leadership/ communication strategy

54%35%

High-Performing Organizations

All Other Organizations

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How is your leadership competency model used? (Select all that apply.)FIGURE 7

During performance reviews/ talent reviews

46%

40%

31%

45%

36%

22%

15%

2%

30%

30%

24%

20%

21%

13%

8%

3%

Designing learning curricula

Career planning

Assessing bench strength/competencies gaps

Selecting into roles/promotions

Creating assessments

Designing compensation structures

We don’t use it

High-Performing Organizations

All Other Organizations

The use of a competency model allows organizations to clearly articulate the knowledge, skills, and abilities for successful leadership. As a result, the leaders themselves are more likely to understand what is required of them in their roles. This is why HPOs are significantly more likely to agree that their leaders know what leadership behaviors are expected of them (69% HPO versus 50% of all others).13

Because HPOs know what they are looking for in their leaders, they are better able to spell out career paths for employees and give choices to high-performers who prefer other responsibilities. They are more likely to offer promotion tracks for those who may not want to lead (70% HPOs versus 42% all other organizations.14

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Align Leadership Development with Strategy and Embed It in Workplace Culture

HPOs are not only more likely to agree that leadership development must be aligned with organizational strategy and goals (78% HPO versus 52% of all others), they also strongly support the integration of leadership development both with their culture and with their other talent management programs (82% HPO versus 46% of all others).15, 16 That’s because building these connections creates a truly sustainable leadership pipeline that addresses the specific needs of their organizations.

Lack of time and competing responsibilities are perennial challenges for leadership development. In fact, 70% of organizations report that their leaders tend to prioritize tasks over coaching and talent development. By creating close alignment between the organization’s needs and expectations and the skills and capabilities targeted in leadership development programs, organizations accomplish more for their leaders in the limited time available.

Most organizations share similar leadership development challenges, but HPOs view these challenges through a different lens. While other organizations more frequently see their challenges in terms of inadequate methods, HPOs are more concerned with continuity and alignment of leadership programs to the business strategy to balance the long-term and short-term needs of their organization.17

Create a Transparent and Democratic Process

Communicating plans for leadership development can also support the sustainability of leadership pipelines. This includes building and sharing succession plans and informing future leaders of their status. HPOs value this transparency in their leadership development efforts. They are more likely to have a formal succession plan to identify who should lead and when (73% HPO versus 44% of all others), and also much more likely to inform high-potentials of their status with regard to those plans (59% HPO versus 37% of all others).18, 19

In addition to maintaining transparency with respect to succession plans, HPOs democratize the process of leadership development by involving more decision-makers. While senior executives and directors are commonly involved at most organizations, HPOs are more likely to include HR leaders, board members, or leadership development teams who have the final say in who leads and when.

“We need to ensure that what leaders do every day has an alignment with the

strategy and that their teams have a line of sight from

what they do day-to-day up through the organization’s

strategy and mission.”—Scott Switalski,

Strategic HR Programs Manager,Children’s Hospital of Philadelphia

LAY A FOUNDATION FOR SUCCESS

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Maintain Accountability

It’s not enough just to build and deploy a leadership development program. Any program or process can break down if there is no follow through or accountability for its outcome. HPOs close the loop on leadership development programs and pipelines by holding leaders accountable for talent development. While at least half of all other organizations do not engage leaders in supporting talent development, nearly the same proportion of HPOs build this accountability into a leader’s performance objectives and incorporate these expectations into their culture (Figure 8).

How does your organization hold leaders accountable for talent development? (Select all that apply.)

FIGURE 8

Leaders are not held accountable for talent development

22%

49%

48%

27%

22%

27%

16%

51%

30%

19%

10%

9%

8%

10%

It is part of our culture/social norms

Formal recognition

Linked to bonuses

Build in to their performance objectives

Linked to promotions

Linked to salary increases

High-Performing Organizations

All Other Organizations

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When there are lapses in good leadership or a leader is not meeting expectations, some organizations aren’t always ready with a solution. HPOs are more likely than other organizations to offer retraining and development to strengthen and support leadership capabilities (Figure 9).

In most cases, when a leader is not meeting expectations for leadership what happens next? (Select all that apply.)

FIGURE 9

Offered training and development72%

36%

24%

21%

16%

48%

19%

21%

37%

15%

Terminated

Transitioned to another team or business unit as a manager

Moved to non-management role

Nothing

High-Performing Organizations

All Other Organizations

Use Technology to Create, Deliver, and Measure

HPOs use more tools and technologies to seamlessly integrate their leadership development programs across their organization. Technology can help with the creation and delivery of personalized learning, facilitate reporting and monitoring of program outcomes, gather assessment data, and manage career mapping and talent profiles. In contrast, all other organizations are much less likely to rely on a technology solution to enable and improve their leadership development programs (Figure 10).

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Which functionalities do you have in your technology for leadership development? (Select all that apply.)

FIGURE 10

Delivering learning content54%

45%

40%

34%

30%

16%

38%

21%

25%

11%

14%

44%

Delivering assessments

Creating and searching talent profiles

We don’t have a technology solution(s) for leadership

development

Reporting and analytics

Career mapping and tracking

High-Performing Organizations

All Other Organizations

The use of a technology solution allows HPOs to monitor and measure program effectiveness across multiple outcome variables to create a richer understanding of the leadership needs in their organization and the impact of their leadership development initiatives.

HPOs are not just more likely to measure their programs, it’s also what they are measuring that’s important. Like most other organizations, HPOs track promotion rates for high potentials, but they also take a longer view, measuring the rate at which their high-potentials are considered “ready” for leadership roles over 12- and 24-month intervals. HPOs also maintain a keen interest in the overall health of their workplace culture to ensure their leadership development plans are well-integrated. They are much more likely than other organizations to evaluate retention rates for high-potentials and examine data from employee engagement surveys (Figure 11).

“We are very mindful about having leadership development in the flow of work. Leadership development is not an event. It is something that you do on

a regular day-to-day basis—like our bi-weekly feedback

conversations with our teammates.”

—Anitra Manning, Ed.D., CPCC, Talent and Human Resources

Manager and Talent Development Leader, W.K. Kellogg Foundation

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What metrics and data points are used to measure the efficacy of your leadership development work? (Select all that apply.)

FIGURE 11

Engagement survey scores50%

Retention rate of promoted, internal leaders

49%30%

60%38%

Tracking and monitoring development plans

36%25%

% of women and minority promotions vs. % in pool

49%39%

Promotion rate of high-potentials (i.e., internal successors)

45%33%

Business and finance metrics of leaders

67%43%

Retention rate of high-potentials (i.e., internal successors)

45%25%

Number of candidates in pipeline

63%36%

% of high-potentials (i.e., internal successors) ready now/12

months/24 months

33%23%

Training/development ROI

High-Performing Organizations

All Other Organizations

75%

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Most organizations offer leadership development programs, but not all meet the organization’s needs in developing sustainable leadership pipelines. HPOs are not only more satisfied with the return on the investment in their programs, they engage in practices that integrate leadership development into the fabric of the organization; aligning it with both the organizational strategy and their workplace culture.

We can rely on insights from these HPOs to help build or improve our own programs. Here are the steps to take:

Start with the early identification and development of potential leaders by actively monitoring the progress of high-potential talent.

Rely on tools and approaches that select for the skills or behaviors needed for specific leadership roles.

Build leadership development programs that follow talent across the course of their career.

Meet leaders’ individual learning needs and solve for time constraints by offering multiple methods for deploying and consuming development content and experience.

Use a competency model to articulate expectations for leadership and criteria for leaders while setting standards for leadership development methods.

Ensure that leadership development programs can deliver competencies needed to execute the strategy and sustain an environment for a productive and engaged talent community.

CONCLUSION AND RECOMMENDATIONS

Tailor your evaluation methods

Sustain your leaders’ growth

Source more leaders internally

Use personalized and blended methods for

leadership development

Inform methods with a model

Align leadership development with strategy and embed

workforce culture

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Formalize succession plans and share them with stakeholders. Include decision-makers from multiple places across the organization.

Incorporate expectations for talent development into performance plans and be ready with development and re-training strategies to address lapses in effective leadership.

Rely on technology solutions to help seamlessly integrate leadership development programs across the organization while monitoring outcomes.

Use technology to create, deliver, and measure

Maintain accountablilty

Create a transparent and democratic process

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ABOUT THE RESEARCH

Survey Respondent Demographics

Information was gathered from a combination of secondary research, survey, and interviews. Insight into leadership development programs were offered by the following subject matter experts:

Steve Dobberowsky, Senior Principal, Cornerstone OnDemand

Anitra Manning, Ed.D., CPCC, Talent and Human Resources Manager and Talent Development Leader W.K. Kellogg Foundation

Scott Switalski, Strategic HR Programs Manager, Children’s Hospital of Philadelphia

In addition, from March 15th to April 5th, 2019, a survey link was distributed via e-mail to opt-in members of HCI’s Survey Panel and electronic mailings. The results of this questionnaire, subject-matter expert interviews, and secondary sources form the basis of this research.

Duplicate entries and careless or partial survey responses were filtered out of the dataset, for an initial total of 407 respondents. Of these, 289 respondents are involved in designing and implementing leadership development programs. Seventy-nine percent are headquartered in North America. Only categories describing at least 5% of the survey sample are displayed here.

Role

I am highly involved with designing and implementing leadership development programs. 58%

I am tangentially involved with designing and implementing leadership development programs. 42%

What is your current functional area?

Human Resources 37%

Learning and Development 18%

Talent Management/Organizational Development 17%

Other 6%

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What is your current level of responsibility?

I manage my own work and contribute to teams and projects. 33%

I manage my own work and lead a team of people. 19%

I lead and am responsible for other people managers below me. 10%

I am responsible for a business unit or function. 30%

I am responsible an entire organization. 8%

How many employees are in your organization?

Fewer than 100 13%

> 100 and ≤ 500 17%

> 500 and ≤ 1,000 12%

> 1,000 and ≤ 5,000 31%

> 5,000 and ≤ 10,000 7%

> 10,000 and ≤ 50,000 16%

> 100,000  3%

What is your industry?

Healthcare and Social Assistance 16%

Professional, Scientific and Technical Services 13%

Manufacturing 12%

Other Services (except Public Administration) 11%

Finance and Insurance 11%

Educational Services 10%

Public Administration 8%

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APPENDIX Endnotes

1. Leadership at Scale [Web log post]. Retrieved from https://www.mckinsey.com/featured-insights/leadership/five-fifty-leadership-at-scale?cid=soc-web

2. Zucker, R. (2019, February 19). Why Highly Effective Leaders Fail. Retrieved from https://hbr.org/2019/02/why-highly-efficient-leaders-fail

3. Lobasco, M. (2019, January 28). LinkedIn Report: These 4 Ideas are Shaping the Future of HR and Hiring. Retrieved from https://business.linkedin.com/talent-solutions/blog/trends-and-research/2019/global-recruiting-trends-2019

4. Zenger, J. (2012, December 12). We Wait Too Long to Train Our Leaders. Retrieved from https://hbr.org/2012/12/why-do-we-wait-so-long-to-trai

5. Sinar, E. et al. (2018). Global Leadership Forecast 2018: 25 Research Insights to Fuel Your People Strategy. Retrieved from https://www.ddiworld.com/DDI/media/trend-research/glf2018/global-leadership-forecast-2018_ddi_tr.pdf?ext=.pdf

6. Filipkowski, J. (2014). How to Accelerate Leadership Development. Retrieved from http://www.hci.org/hr-research/how-accelerate-leadership-development

7. We developed an index of 14 organizational outcomes for evaluating the relative strength and weakness of respondents’ organizations. These include seven talent outcomes (investments in training, internal mobility, employee engagement, diversity and inclusion, quality of hire, retention, and leadership bench strength) and seven critical business dimensions (customer satisfaction, regulatory compliance, talent attraction, innovation, profitability, growth/market share, and productivity). These inventories are composed of items with five-point rating scales. Scores from these items are aggregated to create a composite score that reflects the overall strength of each organization in terms of its performance. For this survey, 30% of respondents represent high-performing organizations (HPOs). These HPOs are diversely represented across industry and number of employees.

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8. Percent of respondents responding “Yes” to “Does your organization assess, identify, and track leadership in this group?”

9. r = .252, p < .01 (Based on a composite index for the level of internal focus across all leadership segments.)

10. In response to the question: “In your assessments, what are you measuring in your leaders? Select all that apply.”

11. Percent who somewhat or strongly agree in response to “Given the right support and environment anyone can lead others.”

12. z = 3.173, p < .01

13. z = 2.620, p < .01

14. z = 3.814, p < .01

15. z = 3.557, p < .01

16. z = 4.689, p < .01

17. Reponses to “What are the top challenges for leadership development at your organization? Select the top three.”

18. z = 3.907, p < .01

19. z = 2.913, p < .01

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Developing Sustainable Leadership Pipelines | 24

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Publication date: June 19, 2019

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