When EDA conducted its first study of trends research in 1983, executive and leadership development was still a fledging discipline. At that time, the idea that executive development should directly reflect and support a firm’s strategic objectives or drive performance was, to many CEOs, a revelation.
Today, the notion of purposefully developing the company’s executive talent pool and cultivating the future leadership cadre is almost universally embraced. Most CEOs accept the logic of tying their executive and leadership development programs to the long-term strategic goals of their companies. Yet, even though they get it in theory, many CEOs do not embrace this concept in practice. How do we know? It quickly becomes evident when examining where leadership development as a function typically falls within an organization.
One of an organization’s most sustainable sources of competitive advantage is its leadership talent, yet leadership development typically falls layers down within most organizations. Oftentimes it is buried under a Human Resources Vice President who, in most cases, does not have the ear of the CEO and may not be trained in the leadership side of the human capital space. HR professionals and leadership development professionals are fundamentally different in their focus as well as their background and training.
- HR professionals’ jobs lean toward the legal side of the house in that they cover recruiting, hiring, performance evaluations, reorganizations, diversity issues, grievances, benefits, employee compensation, state and federal policy compliance, disciplinary actions, layoffs and firings.
- Executive and leadership development professionals are corporate educators. Their areas of expertise span both management and leadership development. They conduct needs assessments for the entire organization as well as its divisions and business units to evaluate current skills against business objectives, and then develop programs to close gaps. They ensure smooth delivery of and continuous improvements to each program, while maintaining consistency of key learnings. They need to work closely with senior management teams across the enterprise to identify and anticipate learning needs of all employees, from the frontline to the senior level leaders, to ensure that the right people are ready when the company needs talent to step up into key roles. They must define prioritized annual objectives and provide leaders with the coaching and guidance needed to cultivate success. They must also enable change management efforts and organizational planning at the highest level to position the company for ongoing future growth.
Shareholders are consistently demanding higher returns and we know that an organization’s executive and leadership talent are its greatest and most sustainable sources of competitive advantage. Then why do executives still cite lack of bench strength in their future leadership group as the primary concern on their ability to deliver key results? Why is it that most leaders failing in this area do so due to leadership issues, not skill-related issues? And here’s the thing. Our trends research shows that this has been the same story for over a decade. So why haven’t we conquered these problems? Is it that we don’t know how or are we unwilling to make changes in order to rectify the situation?
I believe that a strong case can be made to separate the HR and leadership development functions completely within any given organization, with HR reporting to the General Council due to the litigious nature of the job functions and leadership development reporting to the CEO. Why? Because the CEO ultimately owns leadership. He/she is the chief leader of the company, the person ultimately accountable that the company has a clear sense of purpose and vision, is appropriately aligned at all levels and delivers results. Employees must know where the organization is headed and be trained and prepared to take it there.
If the CEO owns leadership development, then the person over that function should be near the CEO on the org chart. He/she must have a seat at the senior leadership table to be able to hear the daily struggles of the business, and then recommend the best methods to educate and train the workforce to tackle problems and achieve desired goals. He/she can learn about new lines of business, new projects and/or products in the pipeline firsthand and then ensure that the talent pool is packed full of prepared leaders to support any critical new functions. The CEO, then, becomes a champion for leadership development by utilizing the function to achieve real and practical business results. The days of floating corporate education with no real tie to the performance of an organization are over. It’s time for a change, which ultimately starts and ends with the CEO.