What’s the best way to create tomorrow’s business leaders? Companies in the United States spend an estimated US$10.3 billion on leadership development, most of it on a combination of education, training, mentoring, and networking. Many companies also run loose career-development programs that rotate executives through trial-by-fire assignments in different functions, business units, and geographical markets.
Yet researchers and executives alike are realizing that such programs aren’t enough. Training, education, and coaching can’t reproduce actual on-the-job conditions. And most on-the-job rotations lack the kind of oversight and rigor needed to ensure that executives get the most out of them. At many organizations, those rotations are still merely a box that rising managers need to check on the way up.
To improve on this situation, some forward-thinking companies are becoming far more deliberate and results-oriented in the way they cultivate leaders. These organizations are creating systematic, experience-based programs to help promising executives develop their potential. They’re also identifying clear goals, and they’re measuring executives’ progress against those goals.
The Center for Creative Leadership, a nonprofit that studies leadership development worldwide, recently published Experience-Driven Leader Development: Models, Tools, Best Practices, and Advice for On-the-Job Development (Jossey-Bass, 2013). The book, coedited by Cynthia McCauley, a senior fellow at the center, synthesizes the center’s extensive research into best practices in designing, managing, and monitoring on-the-job leadership experience.
McCauley spoke with strategy+business about the kinds of experiences that should be made available to developing leaders, the importance of monitoring the progress of potential leaders through these experiences, and which companies are already putting these ideas into practice.
S+B: Why is it so important for top executives to participate in experience-driven leader development?
MCCAULEY: To be effective, every executive needs a broad perspective on both the organization and the business context that it operates within. This perspective can only come from having work experiences in different parts of the organization, in different businesses, and, for global companies, in different parts of the world. Although important, traditional leadership coaching, training, and mentoring programs—which most companies have focused on in their efforts to build leadership skills—are no substitute for carefully organized and managed on-the-job leadership experience.
Successful executives also need a broad repertoire of skills. Virtually all executives start out in their careers possessing certain natural strengths. Perhaps they could synthesize and create order out of large amounts of information, or they were great at building productive relationships, or they were really resilient in the face of adversity.
But to be effective in a wide variety of leadership situations, they can’t just rely on those natural talents; they have to master a much wider variety of skills. And leaders who step into new situations face challenges that call for untested abilities. They continue to develop their capacities and successfully take on higher levels of leadership responsibility. That’s consistent with what we know about adult learning and development, too: People learn how to do things when they’re put in situations where they have to do them and practice doing them.
Finally, it’s important to keep in mind that as managers move through different assignments and projects, they have the opportunity to develop a more diverse network of relationships. That’s another asset that can contribute to their success as leaders.
S+B: What kinds of assignments should budding corporate leaders get the opportunity to experience?
MCCAULEY: Our research identified five types of assignments that are critical for developing people being groomed for senior-level leadership responsibilities:
First, managers need to be exposed to parts of the organization or to responsibilities that are unfamiliar. Cross-functional opportunities are critical in gaining that broader experience all top executives need.