To stay competitive, organisations need to build managers who can deal with and manage change effectively.
From September 2007 through May 2008, Harvard Business Publishing facilitated 22 roundtable discussions across North America and the United Kingdom with more than 200 senior learning and development executives from large multinational firms. The goal was to understand more about the challenges facing these executives and identify some best practices for talent management. Harvard Business Publishing also issued a survey to senior-level learning and development and human resources professionals in November 2008, which posed questions around similar themes. This article highlights the results of that survey as well as the issues discussed at the roundtables.
Nearly every executive agreed that tying recruitment, development and retention initiatives to business strategy was critical to the success of their organisations. But few leaders said they were satisfied that their organisations had all the programmes and tools in place to help them meet talent demands in the current rapid-cycle, global economy.
The need for new strategies
There was strong agreement among executives that former development processes will not meet the challenges that face corporations today. The time-honoured, work-up-through-the ranks-and-assignments methods are no longer enough. The need for new talent, new leaders and new competencies on a global basis is too great. And younger, high-potential employees display little patience for the old “do as I say” rules and process for advancement.
“Forget telling these people to move, take a rotation for five to 10 years, work really hard, and there will be a payoff someday,” said one executive. “They don’t see the world that way.”
Most executives described themselves as engaged in “transformation efforts” within their companies, as well as responding to the challenges brought on by acquisitions, reorganisation and global expansion. As they struggle with integrating new employees, new technologies and new ideas into established cultures, many came to see change management as an important part of their jobs.
“Change is a key theme in our profession, but for me, it’s the whole theme,” said one executive. “Our job is to build managers who can deal with and manage change effectively.”
Looking for new models
A consistent theme in the discussion: The need for learning and development to solve immediate problems as well as create new channels for innovation.
“We’ve got to clarify what problems we are trying to solve around talent management,” one executive said. “We’ve spent time identifying all the gaps, now we have to decide which gaps to address first.”
Added another executive with global responsibilities, “We have a big gap between what we are teaching people who are in the pipeline versus what skills they need to move into the next level of leadership.” He said, “We have some critical retirement risks that have been accelerated. Now we’re looking at a real gap in three to five years. So we need to increase the skills of our emerging leaders to fill the unique requirements of these jobs.”
Added another, “Among our top leaders, 50 per cent will be gone in seven years. This is an unintended consequence of flattening the organisation like so many people did. We also failed to refresh the pipeline. As a result, we don’t have the bench strength we would like to have or the development programmes we need.”
Leadership development models are clearly being challenged. “We’re now working with different financial models, very different demographics, and a great deal of unpredictability,” said one executive. “How do you create a model that anticipates who you will need tomorrow? The old way did work, that’s why the company was successful. But that model is now challenged every day.”
Active learning and coaching
All the executives said they were continually reviewing their investments in leadership development in order to find the right mix of courses, coaching and developmental projects that could be tied to the company’s most important goals.
One executive described how his company had narrowed the offering of corporate university “courses” and increased the coaching, training and developmental assignments tied directly to the daily work of the employee.
“In the past, it was a badge of honour to be selected for a leadership development programme. But at the end of the day it didn’t change anything,” said one executive. “We decided to link learning to what is happening now. We need a new curriculum based not just on courses, but on the work they do. That gets them ready for the future. “
A number of other companies have been deploying “test and learn” projects, where high-potential employees were involved in an ongoing initiative around employee learning and development. These projects accelerated the time-to-market of innovation. In addition, these projects helped identify skill gaps that would inhibit future growth.
However, executives said such projects demanded strong investment from top leadership, particularly in providing coaching “in teachable moments.”
“There is a lot of power in leader as teacher,” said one executive. “But the leader has to make the time and acquire the skills to coach and mentor. We face a big barrier getting the executives to spend the time to learn those skills.”
Said another, “Smart 20-somethings don’t think leadership development is sitting in a class. They demand individual attention. They expect it. So we’re experimenting with peer-to-peer, cross-function teams. But in the end, there are not enough people with enough skills and enough time.”
Development of leaders
Many organisations reported using a combination of active learning, executive education programmes and lateral moves to develop high-potentials. But many were concerned about the pressure to accelerate the process.
“It’s a challenge,” said one executive. “We have leadership jobs to fill. But we’ve taken people over the last three years and put them in jobs so complex they got out of their comfort zone. They left because they didn’t feel safe. They felt if they failed at this job, they failed at their career.”
Others said that they had shortened rotational assignments only to discover that it made the experience less valuable for the employee and the organisation. “We leave high-potentials in their jobs for 18 months. But that’s not long enough to see results. The new rule of thumb is 30 months. We hope we make it,” one executive said.
One executive commented that younger employees were demanding an accelerated path for advancement. “These younger workers want to know exactly what it’s going to be like for them. They want choices. And they want responsibility now,” he said.
Joked one attendee, “A Gen Y would say that a perfect job is an important one that he doesn’t have any idea how to do.”
Other executives reported a growing tension between the need to develop leaders with global experience and the resistance, among younger executives, to move to a different city for advancement.
Said one executive, “I think our next CEO will come from outside the US. I think many of our leaders will. We aren’t developing enough people with a global outlook and experience fast enough.”
Many executives said their companies had turned to “buying” outside talent because leadership development hadn’t happened quickly enough inside their companies.
“We would like 70 per cent of key leadership to come from within. That’s our goal, but we are millions of miles from it,” said one leader. “In key leadership jobs, we need industry experience. From the bottom up, we don’t have enough programmes in place to make that happen.”
Building a leadership pipeline
Many executives said that their failure to provide more people with cross-functional training and development opportunities was making it difficult to ensure that the pool of future leaders would be large enough.
One commonly cited roadblock for cross-company employee development was the reluctance of managers to let go of great talent when the structure of their incentives rewards only unit achievement.
“The issue of sharing talent across organisational boundaries comes up and again,” said one executive. “I worked in a company where the CEO was prodding constantly, saying, ‘We are all one company, one family, let’s share talent.’ And unit heads said, ‘Like hell! I’m going to keep the talent in my own organisation!”
“The CEO could never overcome the fact that this was a siloed organisation with walls thicker than the Great Wall of China.” Eventually, the organisation was “blown up,” the executive reported, and cross-unit development plans were put in place. But “people still find ways to perpetuate the old order,” he said. “And everyone holds their cards so close to their vest because they don’t want to give up valuable intellectual assets to the people they compete with.”
All the executives agreed the involvement of the CEO was key in getting a talent development programme working.Continuity and change
The role of training and development in retention surfaced many times during the discussion. Loyalty was a word that some executives thought had disappeared after the repeated layoffs and reorganisations of the past decades. But turnovers are often costly and disruptive. And at a time when critical knowledge is leaving the corporation with the retirement of the baby boomers, there is growing talk among executives about the value of allegiance.
“We shouldn’t promise a lifetime employment guarantee in this job. But when we invest in people and their development — not just the skills they need right now to get a job done — we’ve found we’re getting return on our investment, both short term and long term,” one executive said. “And if they leave, we’ve learned that often they will come back.”
Added another: “Younger workers want to know when they walk in the door, how are you going to invest in me? What will you do to develop me individually? And if that doesn’t happen, they are more inclined to walk out the door.”
Other executives talked about the role of culture in employee retention and how culture creates the organisational “glue” as their companies expand, shift strategies, and adapt to new technologies.
“Of course, the company cannot be what it was 10 years ago,” said one. “How do we create a kind of mosaic that integrates the history of the company with the ideas and skills of new people coming in? I think we have to focus on both continuity and change.”
The article is excerpted from a Harvard Business Publishing white paper (HBP’s corporate learning team works to provide blended learning solutions for talent development). Copyrights reserved.
