The financial crisis of the late 2000s held up a mirror to the state of leadership development and revealed the need for a serious reassessment. The derailed financial services companies had some of the most sophisticated leadership development programs in the world. Considering how much money, time and effort was invested in leadership development, where were all the leaders?
“The financial crisis raised some tough questions for leadership development,” said David Dotlich, co-author of Leading in Times of Crisis: Navigating Through Complexity, Diversity and Uncertainty to Save Your Business. “Should we teach just what the CEO wants the leaders to learn or does it need to be broader? Leadership development’s aim must be to mold leaders to think and act independently as opposed to just training to a company’s competency model.”
Dotlich thinks traditional leadership training in a classroom using case studies and best practices isn’t enough. Rather, effective program development needs to be reworked from the ground up, with the clear intention of developing strong individuals and learning programs that are in line with a company’s strategy.
In order to do this, Leading in Times of Crisis co-author Stephen Rhinesmith said a company should first identify its strategic needs for a three- to five-year period, and then specifically build and relate training to that strategy. The yield will be people equipped with the required skills at various levels, making it easier for the company to attain its goals. Additionally, he said, there should be support from the HR department for all training programs. “There needs to be congruence between what people are taught and what people are rewarded for,” Rhinesmith said.
Triangulated Leadership Traits
In their book Head, Heart and Guts: How the World’s Best Companies Develop Complete Leaders, Dotlich and Rhinesmith contend that while analytical abilities are important for executives, successful leaders also need emotional intelligence and the ability to evaluate and take risks.
For example, the pharmaceutical industry has undergone enormous changes to its business model. Today, it takes about $1 billion to bring a drug through basic discovery to market. “Because of this change, the question for the industry is: What’s going to create value in the mind of the patient, the doctor and the payer in the future?” Dotlich said. “That’s not just a question for the CEO, but for all levels of the organization.”
Interpersonal emotional intelligence is also a big part of working in complex interdependent systems. There’s a need for empathy and understanding about how each individual impacts others, both inside and outside company walls. According to Dotlich, emotional intelligence is developed more through coaching than anything else.
Additionally, getting people to recognize how to best leverage their strengths as opposed to fixing their weaknesses is imperative in leadership training. “We all have a tendency to do dumb things that derail us, especially when under stress,” Dotlich said. “These are usually our strengths carried out to excess. Part of leadership development is to understand how these derailers can get in the way of our being effective and manage them.”
Leading Within a Paradox
Many leaders must deal with paradoxes, which can be both long-term and short-term — for example, global versus local decisions and work versus family considerations. Given this, the simplistic view of leadership — of being either “right” or “wrong” — is erroneous. Managing complexity today means balancing these paradoxes, not eliminating them.
Again taking the pharmaceutical industry as an example: There is an inherent tension between the commercial and research and development interests in this space. R&D proceeds along its own timeline of discovery and carefully follows the scientific method. The commercial interests, however, seek to respond to the demands of the marketplace, asking: Can a drug be developed faster and cheaper and can it get to market sooner? Both are right, and both are sometimes at odds with each other. Since both interests are important, a leader must balance and lead within that paradox.
Leadership Learning Methodology
A good leadership development program should include action-oriented modules that are tied to clear business issues and dilemmas. Students need to be allowed to bring problems to the table and talk about them, as opposed to needing to appear perfect. The environment should be one where people can take risks and talk about things they don’t know or understand. The best methodology is a mixture of techniques blending experiences, mentoring, classroom teaching and e-learning.
Leadership skills are also developed when people reflect on their behavior. An action review should be included in action-oriented modules so participants can think about what they did, why they did it and what they would do differently if faced with a similar situation.
Leadership training has gone through a transformation. Learning and development professionals today need to encourage leaders to think and act independently in order to be true leaders. Financial accountability should also be factored in. Programs that are tied to company objectives, strategies and real business problems are preferred. Additionally, learning that is spread out over time proves to have stronger retention results than single sessions. Participants who are taught how to think broadly and understand themselves, the workplace and the larger global business environment are better equipped to successfully make the hard decisions in the face of intense pressure.
Frank Waltmann is head of corporate learning at Novartis, a Swiss-based pharmaceuticals and life sciences company. He can be reached at editor@CLOmedia.com.