Long Term Challenge of Leadership Development

The HR challenge is leadership development in the long-term and our success at managing this will drive the very existence of our businesses in the future. Discussions with HR professionals across Europe reveal a remarkable clarity and agreement about the challenges and opportunities facing the profession. “We’re in it for the long haul.”

Ask any human resource professional what are the biggest challenges facing business today and the answers will fall in the same quarter. It’s about leadership. At every level in the firm. And how to improve it.

As if this isn’t a big enough challenge, there’s more, they say. It’s also about the long term. Europe’s HR professionals challenge business’s current obsession with the immediate short-term. And – looking backwards for a moment – they challenge the way businesses often forget their heritage and roots.

These are not just a random collection of meaningless HR sayings. They come from a series of workshops and meetings across Europe conducted by the Executive Education department at London Business School. More than 200 HR professionals shared their thoughts and concerns for the future of leadership development. While some participants came just to listen and to reflect, others were vociferous with their opinions. But all were passionate about leadership development and its challenges.

‘We face many long term challenges,’ said one professional, echoing the responses of many others. Furthermore, the challenges are ingrained in the roots of business and they will only change over time, ‘with the persistence and resilience of our future leaders.’

Identifying and developing the future leaders of a company has long been regarded as the key for the future success of organisations – by HR professionals, at least. But many companies are questioning their current approach and are looking for ways to improve their development systems and to engage the hearts and minds of their line managers and top executives. And herein lies a potential problem. ‘We want our high potentials to challenge our middle managers continuously,’ explained one professional. Why? ‘Because the middle managers have become part of the problem.’

It soon becomes clear that many HR and OD executives share this view. Like the view that the future talent of the organisation must have a good understanding of the intangible assets and resources of the company, contrasting with the thoughts and experience of the old guard, concerned with the traditional tools of land, labour and capital. But we’re getting ahead of ourselves. Let’s take a step back and explore how firms appear to be identifying high potential managers of the future.

What are the key criteria for identifying high potential managers of the future?

In looking for the managers and leaders of the future many executives blindly consider past performance. But is what someone has done before adequate evidence that they can do different things, better, in the future? Many firms believe there are intangible indicators that someone will be an effective leader of the future. Intangible elements such as how motivated they are and whether they have this thing that many call emotional intelligence? But – some professionals ask – can we include intangible elements in a systematic and thorough analysis of future high performance? Or should we stick only with tangible, observable criteria?

While the jury is still out it’s worth bearing in mind that looking exclusively at past performance to predict future success is flawed, but – say many HR executives – there’s no doubting that it is still a frequently used and common sense approach. There’s safety and security in numbers, after all.

However, it is pretty clear that the criteria used for performance reviews generally are insufficient to provide a reliable ‘measure’ of future performance in leadership roles. Such a measure could, in truth, only be called an indicator anyhow. And this explains why a number of firms have welcomed the use of intangible measures – such as personal values and ethics – in their criteria to identify high potentials. This must continue.

Any search for a possible indicator of a leader’s being a high potential manager should provide insight into their likely future success in leadership roles. Several companies seemed to have found one approach to reducing the risk of identifying tomorrow’s leaders is to give them projects or roles that require the development or use of the capabilities leaders are likely to need in the future. Sometimes known, in its most difficult form, as dropping someone ‘in at the deep end’, this process does give us valuable information about someone’s potential for a future role.

One of the most significant developments of the Tomorrow’s Leaders Research Group has been the appreciation that an individual’s ability to learn – what the group has come to call ‘learning intelligence’ – may be a key indicator for leadership potential, and this has been generally acknowledged by the wider group of European HR professionals. But defining ‘learning intelligence’ and how the concept may be assessed was subject to considerable debate.

The debate among professionals has so far been far ranging and inconclusive. Is learning intelligence, just learning ability, for instance? Is it ‘the pace at which someone understands, their new environment or their new responsibilities and is then successful’? One executive suggested that learning ability goes beyond being smart (as in IQ): ‘It demonstrates that someone is able to transfer new knowledge into effective action’.

There are many different interpretations of the learning intelligence concept – reflective capacity, self awareness, adaptability, relentless energy, impatience, curious to a fault, constantly seeking feedback, stretching oneself, pushing boundaries and an ability to listen. This discussion, though, isn’t taking place in much of the academic literature. So to make a real contribution here, the research group will need to specify the definition of the potentially new concept in its future research. Importantly, for its predominantly practitioner audience, the group will also have to operationalise the concept so that it can be used in the daily work of line managers and HR professionals.

Although learning ability may be an important indicator of the future success of tomorrow’s leaders, there are other things HR professionals felt should be looked for. How to build and nurture relationships, was perceived to be very significant. And other indicators that were also emphasised: the ability to drive change, have an impact and be emotionally intelligent. Three important additional characteristics were suggested: over delivering, communication skills and the ‘strength’ to break the rules.

Concurrently with the discussions around key criteria for entry into the tomorrow’s leaders category, HR professionals regularly mentioned the

professionals to use these criteria. Many executives experience within their companies was of sophisticated and elaborate systems that were simply unusable and not used by line managers. The challenge therefore is to establish a simple process for identifying high potentials as well as a practicable definition of learning intelligence.

There is a risk in designing any prescriptive model for identifying high potentials that the company context in which potentials are identified is forgotten. But this is critical to the criteria of choice and to the process through which people are identified. The action research method – involving practitioners in sharing their own practices, reflecting on their discussion and systematically learning from it – was seen as a powerful tool. Using workshops, for instance, professionals can get key stakeholders together and discuss the criteria for high potentials within their companies. The process itself teaches the managers what it is they think about leadership development.

Many OD professionals believe that the action learning process is an end in itself. If the development of company specific criteria is carried out professionally in a workshop format, it meets two objectives: the key criteria for high potentials are defined and the process is accepted by top executives and line managers. During our own workshops people repeatedly asked: Shouldn’t we run these workshops with our line managers?

In the Netherlands and Denmark there were numerous debates around the word high potential. Should we distinguish high potentials from others or not? Does the very identification of high potentials lead to the de-motivation of other people in the company? The word high potential is highly sensitive in these countries and therefore not used that much. Instead, everyone in the company should be involved in the development efforts, through systematic talent management or people development. Call them what you will, the ‘high potentials’ will still emerge. One person said: ‘If we target the whole company, I expect my high potentials to stand out in those development activities that are aimed at everyone.’

Many companies in these countries choose not to identify high potentials specifically, although informally they do know who are the ones that may fulfil future leadership roles. This issue is immaterial, in actual fact, as long as the organisation knows who tomorrow’s leaders are likely to be and how to develop them. Knowing is all.

Two other distinctions are important to make in this respect. People can very well be of high value to the company in the roles that they have, without having potential or ambition to grow to higher-level leadership roles. And people who are not identified as high potential for future leadership roles may well have potential in other valuable roles within the company: professional, project, business development.

Commitment from line managers is crucial. Although this is nothing new a new appreciation seems to reach HR professionals when they address the issue. The best results in developing high potentials is almost always through the joint efforts of line managers and HR professionals. Of course there also needs to be support and role modelling from the top, but it is the line and HR managers that fundamentally drive the process. The discussions probably reflect reality in the sense that there is a lot of agreement at lip service level. Until we start talking about the daily practice: ‘Our line managers are very time constrained’. ‘All their objectives support short term thinking’. ‘Many line managers lack the people management skills to identify and develop their people’. ‘There is little motivation to mention your best people in high potential reports if the greatest reward is that you may lose them to another division or business unit’. The obvious argument to get line managers involved remains hard to realise in truth.

Another major problem – explored by numerous HR-professionals – is that the profession is too pre-occupied with formal systems of monitoring and assessment. ‘Line managers prefer the informal circuits, because that is the way they will get what they want’.

If the informal circuits are the way to achieve our HR objectives then what do we spent our time doing? Quite often, say HR professionals, ‘We are the ambassadors of the formal systems, whereas line managers seem to prefer the informal route.’ One HR-professional put the case for many when he said: ‘I will only spend time on the informal processes once all the formal processes are sorted’.

There was some debate around the question of whether the informal was still informal once it is organised or pro-actively used to pursue HR-goals. But the general opinion was that HR can be more aware of the informal processes and should use these to drive and improve its formal systems and processes.

The Tomorrow’s Leaders Research Group will continue to reflect on its journey in search of high potential leaders of the future. We welcome your suggestions and feeback. Please tell us what you are doing in this important arena. It’s a long-term challenge and it probably won’t finish anytime soon. But the journey should be valuable.