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.
Second are assignments that require them to lead a change initiative—starting up something new, fixing a problem somewhere in the organization, or having to move a group or part of the business in a new direction.
Third are the kinds of situations with higher stakes, where the executive has to make critical decisions under tight deadlines, while the situation provides him or her with higher visibility in the organization.
The fourth type are assignments that require the executive to work across organizational or geographical boundaries—situations in which executives have to use their influence rather than the authority of their position to get things done.
And finally, executives should be given assignments that require them to deal with diverse people, from different nationalities and cultures, in terms of ethnicity or gender, or from different professional and occupational backgrounds.
Two other factors are also critical, from a business perspective. Younger managers should be given the opportunity to gain experience in thinking strategically, perhaps through a specific project or a short-term assignment at corporate headquarters. And those who came up primarily in a staff function, our research shows, can benefit greatly from getting some operational line experience, where they can learn about actually running a business. The reverse is true as well: A line-to-staff switch is frequently cited as a key developmental experience because, again, such experiences teach managers how to be influential without being able to rely on the authority of their position in the hierarchy. Staff jobs also provide a view of the entire organization, which for many younger managers can be quite eye-opening.
S+B: Which factors determine how different companies approach experience-driven learning?
MCCAULEY: Perhaps the biggest is culture. Some organizations view learning from experience as the natural, expected development path. Many of these organizations are very action-oriented; the real challenge lies in giving executives the time to digest, understand, and maximize what they’ve learned, rather than simply moving through these experiences as fast as they can. Other, more risk-averse cultures can be reluctant to put people in stretch assignments unless they’ve already proven themselves.
A second cultural distinction involves the willingness to learn from others. The scientists at many science-based organizations, for instance, are used to being mentored by more senior scientists, an attitude that’s often deeply woven into the fabric of the organization. At other organizations, however, executives might resist having mentors because, culturally, that suggests they’re in the remedial program and need to be tutored.
S+B: How should companies monitor the progress of executives over the course of their experience-driven leadership initiatives?
MCCAULEY: The ability to learn from experience isn’t guaranteed, so monitoring is critical. Companies can’t just throw managers into these assignments with a “sink or swim” mentality and wait to see who survives. First, they must be very clear with executives as to the learning opportunities available in the assignment, and set specific learning objectives and goals, not just performance goals. After all, if you’re going to monitor something, you have to have a really clear understanding of what it is you’re looking for. What are the expectations and what should we be monitoring? So monitoring requires some planning.
Companies can’t throw managers into assignments with a “sink or swim” mentality.
It’s also important to build in regular check-ins during the assignment to find out from the individuals what the experience has been like—what they’re encountering, the insights they’re gaining, new kinds of behavior they’re having to incorporate into their routines. These check-ins might be with the boss, a coach, an HR partner, or some combination of them.
And because these check-ins also provide the opportunity for executives to reflect on their experience, they’re not just about monitoring progress. They can actually give executives space and encouragement to learn further from the experience. And then there’s the chance to gather data from observation and from feedback from others about what’s happening during the assignment. Are things going well? How is the person developing?
S+B: Can you name any companies that are particularly good at creating and implementing experience-driven learning opportunities?
MCCAULEY: Microsoft is certainly one. Culturally, it’s very action oriented, and learning from experience fits very well with its environment. The company pays a great deal of attention to how it staffs specific projects with leader development in mind. And it does a great job of integrating its formal development program with a variety of experiences, either creating special experiences as part of the development process or doing things like teaching people to become better learners as part of their formal development.
Another one is Kelly Services, which is working hard to promote the concept of experience-driven development throughout the organization, embedding it into its HR and talent management systems, to make it part of the culture, even on a daily basis. Every year, for instance, Kelly has a 30-day Leadership Fitness Challenge during which participants are asked to take on a new “micro-assignment” each day and then, using social media, share their experiences and what they’re learning.
There’s also SAP, which has a very sophisticated approach to project marketplaces. It has institutionalized a process by which managers in its high-potential pool can find projects and short-term assignments in other parts of the organization. These people have become so highly valued that executives heading up projects in different parts of the organization actually advertise for them, in hopes of attracting them to come and do a short-term assignment in their part of the organization. It’s one of the more sophisticated project marketplaces I’ve run across.
S+B: What advice would you give to organizations looking to create effective experience-driven leader development?
MCCAULEY: First of all, I would advise organizations hoping to accelerate their leader development to be very intentional in their efforts to use experience as a key part of the process. That means planning such initiatives carefully, developing the tools needed to monitor and assess learning and progress, and following through as executives move up in the organization.
Second, organizations need to customize learning experiences to the developmental needs of each individual, rather than assuming that everybody will benefit equally from the same set of experiences and curricula.
Third, take into account that there are times in executives’ careers when they really need concentrated development, when they’re transitioning to new levels in the organization. That’s the time to put together special initiatives that really integrate learning experiences, coaching, and peer networks, as well as formal education and training.
Finally, I can’t emphasize enough the importance of experiences that cross organizational boundaries. Organizations must have systems in place to allow temporary assignments, and opportunities for people to take on work that’s not part of their official jobs, in order to keep people from hoarding talent or blocking its development. Leader development won’t succeed if the organization sets it up to be the responsibility solely of the talent management function within HR. It needs to be the joint responsibility of line managers and HR if it is to benefit the entire company.
- Edward H. Baker is a longtime business journalist and a contributing editor at strategy+business.