“If we pull this off, we change the game.
We change the game for good.”
When Brad Pitt’s character Billy Beane uttered these words in the Academy Award nominated 2011 movie “Moneyball,” he verbalized what the best CEOs are thinking when they challenge their CLOs about leadership development. They are looking for new approaches to build a winning leadership team, and a talent development pipeline that understands their business in a way that produces game-changing results that allow them to leapfrog the competition.
Developing top-notch leaders is difficult for even the largest and best companies across the globe. Douglas Ready and Jay Conger, in an MIT Sloan Management Review article, say the problem is a lack of results. “For most companies, the combination of eloquent statements and massive investment has not produced a sufficient pipeline of leaders.”
In general, talent development is difficult, particularly for organizations that are not market leaders in their industry, as was the case for the Oakland A’s when Beane took over as general manager. What Beane was able to accomplish during the 2002 season with a small-budget team is, in many ways, significant. Beane realized that his small franchise would never be able to attract — pay for — the top baseball talent, so he had to find a different lever. This challenged the accepted practice of focusing solely on talent.
There is always a war for talent in baseball, but the pursuit of talent and its associated challenges carry over to business as well. In business, like in sports, there are not enough proven leaders to go around. And just as was the case for the Oakland A’s, finding the resources to recruit and pay scarce top talent is challenging and usually not feasible. Therefore, a top talent-only strategy is a difficult proposition for CEOs to rely on when building high-performing leadership teams.
Creating a game-changing leadership team requires a different strategy. The insight Beane took from his association with his assistant general manager, Peter Brand, was to study ballplayers’ outcomes rather than focus on their physical profile, their potential or even their competencies. “Your goal shouldn’t be to buy players. Your goal should be to buy wins. In order to buy wins, you need to buy runs,” Brand coached Beane during a pivotal scene in the movie.
By understanding the outcomes required to create a winning team — and each individual’s ability to consistently accomplish one or more of those outcomes — Beane was able to successfully compete in the big leagues with a small-market team. The lessons from “Moneyball” are directly transferable to the learning leaders’ efforts to create a new leadership franchise in a corporate organization, deploying an outcomes-based strategy throughout the leadership development program.
Identify Winning Outcomes
Each business, like each sport, has its own critical outcomes. In baseball the critical outcomes are high on-base percentage, low runs allowed, especially in critical innings, and so forth. Each player contributes to the overall goal — winning games — by consistently producing his portion of the critical outcomes.
It works the same way in business. To win in a particular industry, leaders must successfully produce certain critical outcomes. For example, leaders across an organization might be expected to produce direct reports who are equipped to take on greater roles, leaders at department levels might produce annual operating plans, and leaders in functional roles might be responsible for outcomes related to their functions such as R&D spending plans or detailed sales territory maps. Understanding those critical outcomes is the key to developing the steady stream of solid leaders needed for a company to compete and win.
To uncover those critical outcomes, it helps to start with a deep understanding of the most exceptional leaders’ accomplishments. To illustrate, consider the “Moneyball” analogy. To win games, a team needs a great closer, someone who can come to the pitching mound in the late innings of a game and hold onto a slim lead by shutting down the opposing batters.
Conventional wisdom holds that great pitchers make great closers. But a deeper inspection reveals, as is often the case, that conventional wisdom is wrong. Brand and Beane realized there was really only one critical outcome for a closer — a single scoreless inning. To produce that outcome, investigation revealed the best closers did three key tasks:
• Throw one or two pitches that are essentially unhittable for one at bat. Not two at bats, but only one. It didn’t matter if hitters figured out the pitch after they saw it because the game would be over, and there would be no second chance.
• Be able to throw those one or two pitches with little warm-up in high-stress situations. Closers are brought in late in the game, with runners on base and everything on the line.
• Repeat those two things night after night.
Once they understood the key outcomes produced by a closer, they were able to broaden the candidate pool considerably. They were no longer limited to the pool of potential starting pitchers.
Organizations know who their most accomplished players are. But leaders may not clearly understand what key critical outcomes have propelled them to their success.
Consider a retail organization. Who are the best store managers? What outcomes do they produce that truly drive success? While it is tempting to provide generalized answers, they would be meaningless without understanding the context of the organization and its leaders. Understanding what successful leaders focus on, how they allocate their time, how they measure completion of each outcome, what tools and templates they use and so forth is critical to understand their success.
Conventional wisdom and generic leadership development approaches assert that store managers have to possess good business acumen. But what does that mean for a store manager in a particular industry in a particular location or market? Perhaps a critical outcome is an accurate model of the store’s customer base reflected in a demographic spreadsheet showing shopping habits, buying preferences and a localized understanding of the competitive landscape. A top-performing store manager might develop that tool on the side without instruction. These types of discoveries are valuable and are typical when an outcomes-based approach to development is deployed.
Taken as an aggregate across the organization, what outcomes of value must leaders produce for the organization to achieve success today? What are the anticipated outcomes necessary for tomorrow? Is the organization clear on these outcomes? Is it selecting and developing leaders based on that understanding?
There is often a great difference in performance between high-performing and average leaders. Imagine the organizational impact if average leaders were able to close even half the gap between them and the top performers, which is a realistic and attainable goal using an outcomes-based development approach.
Everyone has the potential to be a leader of some kind, but no one can be every kind of leader. An athlete’s height, strength, weight, speed and other physical factors define the sport that best fits his or her abilities. Executives’ cognitive abilities and hard-wired personality strengths define their most effective type of leadership role. In other words, a leader’s strengths define the kind of outcomes he or she can most easily produce.
Once the desired outcomes have been identified, it becomes clear which leader can most effectively deliver those outcomes. Then the learning leader can design a development plan to add or amplify the skills needed. By first confirming the individual’s ability to deliver the skills, the company leverages its executive talent efficiently. The confidence this provides also enables the company to develop leadership talent more aggressively.
Consider the following example: Company A, facing a tidal wave of technology-driven changes in its industry, needs a different set of outcomes than that of stable, profitable Company B. Those outcomes require different strengths. Company A demands leaders with a strong orientation to change and a clear vision of the future, along with a powerful and persuasive personality to drive the difficult decisions that will be necessary during its proposed transition. Company B might not survive those same leadership strengths. It needs leaders who reinforce the plans and procedures that have proven successful, while maintaining a tactical focus on continual quality improvement and profitability. Figure 1 summarizes these different strengths for the two leadership types described.
Just as Beane’s baseball roster showed him each of his players’ strengths, an inventory of the leadership strengths among a company’s executives may reveal how each can contribute to the various outcomes needed across the business.
Reduce Training for Better Results
By clearly answering two fundamental questions — What distinct outcomes must leaders produce for an organization to win and who is best able to consistently produce these outcomes in the organization — leaders can achieve above-average results with few changes to the existing leadership team. The key, however, is to focus each person’s efforts on the one or two attributes in which he or she shows a natural inclination to produce strong outcomes. Through focused development, good ability can be transformed into exceptional performance.
To elaborate further, consider the example of a closing pitcher. It’s possible to take an average pitcher just making it in the majors and tailor his development plan. Careful observation may reveal that he has one good natural pitch that works much of the time. Build on that natural ability and don’t spend lots of time and money trying to turn him into an expert at multiple pitches with the stamina to deliver consistently over seven innings. Instead, avoid a broad and overly generalized approach of developing a wide repertoire of pitches and focus on the one pitch that comes naturally. Then align him with the important outcomes associated with the role of a closer and, through deliberate focus, turn him into an exceptional closer. This streamlined and focused approach can produce exceptional results from an average talent and significantly contribute to the team’s success.
A winning leadership development strategy for today’s learning leader is straightforward and based on establishing a clear understanding of the distinct leader outcomes that drive the business, discovering and using the available data on who in the organization is best able to contribute these outcomes and driving a focused, less-is-more approach to training.
This is a leadership development strategy for the times, one that will allow any CEO to play “Moneyball” and change the game.
Butler Newman and Greg Long are vice presidents for GP Strategies, a global performance improvement company. Chuck Russell is chairman and CEO of BestWork DATA. They can be reached at editor@CLOmedia.com.
To watch Ron Garrow, group head of global talent acquisition, management and development at MasterCard, describe how to encourage thoughtful risk taking and project a sense of urgency amongst leadership, click here.