Organizations are increasingly sending top management to business schools (or, in many cases, are having select business school faculty come to them) for customized programs tailored specifically to their organization. Such programs place less emphasis on courses such as “Finance and Accounting for Non-Financial Managers,” instead focusing on helping organizations meet high-level strategic challenges. “We help organizations through some of their most pressing strategic issues,” said Gale Bitter, associate dean of executive education at Stanford. “We work closely with senior management and help devise plans to execute their strategy, and in some cases provide frameworks to help them create and refine new strategies.”
Executive Development’s Role in Strategic Planning & Execution
The strategic planning process–formulating the organization’s high-level goals and execution plans–is an especially compelling area of focus for executive development and education. Why? Strategy formulation is the process of choosing the best path for an organization—based on customer needs, competitive realities and internal capabilities. Organizations that can integrate all three effectively into strategic planning are more likely to have robust strategies and will perform better. When managed proactively, executive development improves not only the delivery of strategic plans, but also the design of the strategy itself. This article will present a list of recommendations to help CLOs integrate executive development into the strategic planning process, not only to provide excellent developmental experiences for senior management, but also to drive change within the organization.
What Is Typical?
Many chief learning officers argue that executive development can have a direct role in contributing to both the execution and creation of strategy for organizations. But does this contribution occur in practice for most organizations? While some organizations may actively link executive development to strategic planning, few may actually be considering executive development when it comes to crafting strategy in the first place.
Why the Disconnect?
Why don’t organizations integrate executive development with strategic planning? According to Bernard Jaworski, president of Monitor Executive Development, a specialty management development consultancy, there are three key reasons.
First, executive managers are not motivated to integrate executive development and strategic planning. They simply haven’t seen good examples of how the integration can be done, either for the benefit of the executive going through the training or the planning process itself.
Second, there is no ability to integrate the two processes. Doing it well involves both art and science. The organization needs individuals who understand the development processes and have expertise in management evaluation and development, balanced with long-term strategic planning and insight into the operational realities of the organization. Most often, these developmental professionals are not “at the table” for executive management meetings (since they are likely the vice president of HR), nor are they involved with corporate planning.
Third, there are not great opportunities to integrate the processes. The planning process can happen relatively quickly, usually with a small group of insiders, and at times must be done off the regular schedule of corporate planning, not affording ample opportunity to flesh out the management development discussions. According to John Beck of North Star Leadership Group, since corporate strategy is usually something that only the true insiders of the organization (i.e., the top 10 to 20 executives) are involved in, the reality is that the head of training will often not be included.
Three Types of Integration
One might categorize organizations into three types: those that treat executive development as a discrete process, others that partially integrate it with strategic planning and a third set that have fully integrated it as a driver of strategic planning. (See Figure 1.)
Significant differences likely exist across industries. In many modern service industries, where the service delivered is based on knowledge and the people delivering it (e.g., management consulting or other service industries), one would expect to see a better approach to the integration of strategic planning and executive development. In such situations, people are absolutely essential, as they are both inputs and outputs of the business. Of course, in traditional industries such as manufacturing, there are plenty of examples of companies that have sophisticated approaches.
What are the ramifications for the majority of organizations that fail to completely integrate strategy formulation and execution with executive development? The biggest problem is the creation of strategies that simply don’t work, since they are not grounded in reality. Sometimes, executives assume that any strategic plan–however radical it may be for the existing organization–is achievable and that, with the right development activities, management will “grow” into new roles. However, the fact is that management talent, like any corporate resource, can only change so much, especially within the tight timelines that often are presented. Some organizations find themselves with great plans, but no one capable of leading the execution.
In other situations, the planning process gets too far ahead of the management development process, and the talent pipeline is not delivering the quantity or quality of senior managers that the organization needs. The result is that the organization must go outside to get its talent. While hiring outsiders has proven value in bringing fresh perspectives, it can be costly, especially at senior levels. “When organizations have to consistently bring in outside talent to fill new management roles, that is an indication of a failed internal development process,” said Steve Burnett, associate dean at the Kellogg School of Management at Northwestern University. This poses serious problems, since outsiders in management roles have mixed track records. Often, there is difficulty integrating new senior management into an organization.
What is a CLO to do? For those organizations that already understand the role that executive development plays in driving change and improving corporate performance (Burnett estimates this at only 50 percent of the S&P 500 companies), as well as those who are new to this concept, there are some key principles that a CLO can adopt.
Acquaint Yourself With the Current Strategy-Formulation Process
The last thing a CLO wants is to be left out of the loop, but this often happens. “Transformations are sought by the board, C-level execs, and we typically don’t interface with training and HR,” Burnett said. Harvard Business School’s Executive Director of Executive Education David Sachs agreed, “We often are hired by and work hand-in-hand with the CEO.” In these scenarios, it seems executive management acknowledges the importance of executive development, but turns neither to the CLO nor to the VP of HR to manage the interface with outside specialists.
Does your organization currently work with business schools to drive programs? Has the organization retained a strategy consulting firm to help craft a new set of organizational plans? Which executives are charged with driving new strategies? CLOs need to have the answer to these questions since, once strategy is agreed upon, the executive team starts to think about execution—and that is where the CLO comes in. If a CEO picks up a new strategic plan and his first move is to call the head of a business school to discuss how to achieve the strategy, it is possible that the CLO has not instilled visibility or credibility for the organization’s capabilities. How can you be the one who gets that call?
Insist on Senior-Level Involvement
CLOs need to ensure that top management–starting with the CEO–is not only aware of executive development programs, but also has bought into the process. In a recent study by ExecSight, which provides executive development consulting services, it was found that the biggest factor affecting the success of executive development programs was the CEO’s involvement (way beyond simple awareness of such programs). CEOs can and should help in designing programs via active feedback, provide their own time as instructors and moderators of specific training sessions, and act as advocates for executive development to the rest of the organization.
A few years ago, 3M brought in a new CEO, Jim McNerney, who had come from General Electric after years of positive experiences with executive development as a strategic tool. According to Al Vicere, a Penn State professor and leadership specialist who worked with, 3M at the time, “They had Jim as the CEO who saw the value of linking the processes, and that can make all the difference. He set the tone for the entire organization.”
Integrate Business Plans and Executive Development Plans
CLOs need to be careful not to allow the separation of business plans and people plans that occurs in many organizations. CLOs need to make a strong case for their involvement in the strategic planning process, based in part on their unique perspective on matters such as succession planning, as well as a reality check on the assumptions that determine which managers are ready for new roles. Other management insiders may see aspects of the organization that the CLO has not experienced, but the CLO is often best suited to determine how much development activity is needed. CLOs should try to get ahead of the curve and know what a given open management position calls for in terms of skills and capabilities, and know who is best suited for that role.
According to Mark Nevins, a leadership development expert who previously ran Booz Allen Hamilton’s and Korn/Ferry’s global executive development programs, “CLOs need to ensure they have both a mastery of learning and developmental frameworks, but increasingly critical is having a general manager’s perspective on this business. The CLO, or any executive development professionals in the company, needs to understand (and be perceived as understanding) the business, goals and challenges of the organization, so they can advise on the talent needs, help translate plans into action and create development programs that will really help the business achieve its objectives.”
Inject Objectivity and Facts
There needs to be a ruthless pursuit of having the right leaders in the right roles at the right time for the organization, which means casting aside politics as much as possible, something that is sometimes easier for a CLO who is removed from the business units. CLOs also need to bring the facts to the table in the same way that other functional areas in the business do. The head of marketing brings market facts, the head of production brings manufacturing data, etc. As the head of talent, CLOs need to bring information on the current level of senior management in the organization and who is in the pipeline in the context of strategic plans and organizational needs. Consider using a succession database to track your management assets, based on in-depth discussions with business unit senior management and executive management to investigate their needs and talent supply. Have the facts “in your back pocket” about what it takes (time, money, etc.) to develop executives versus hiring outsiders.
Balance With Intuition
Know your limitations as a CLO: You may not have had the same chances to observe management candidates in situations of character and personality that other senior management may have. The people process is both a science and an art of intuition. Recognize that others will bring valuable perspectives, such as finding the best candidate for a role in terms of chemistry—not something that a competency model can capture. It takes real skill to balance hard facts (market share, competitive realities, etc.) and the “soft issues” around management development, and sometimes intuition and instinct can aid the process.
David Dotlich, CEO and managing partner at leadership development firm CDR International, a Mercer Delta Company, has worked with companies, such as Johnson & Johnson, whose executive management is able to maintain this balance. “At J&J, known for its stellar management, their executive team was capable of blending the art and science, but it takes talented executives who understand the need for both, which is rare in most organizations,” said Dotlich.
Don’t Forget the Day Job
As plans get communicated throughout the organization and responsibilities cascade to all levels of employees, specific goals and objectives become a defined part of top management responsibilities. At this point, there is typically another process of awakening to the skill deficiencies, given the new plans and roles in which management must operate. CLOs should proactively see that these gaps are addressed. Monitor the progress of top executives and be able to address potential derailment early on. While planning happens periodically, great execution on the part of the CLO, which earns the required visibility and credibility to become further entrenched in the next cycle of strategic planning, happens every day.
Executive development is playing a very different role in the organization than in the past, and this role will continue to evolve. CLOs can manage executive development in a more strategic fashion than just building competencies in the upper ranks. Executive development’s potential to both craft and execute strategy is waiting to be unleashed.
Scott Saslow is the executive director of ExecSight, a research and advisory services company in the executive development market, and is the founder of the The Institute of Executive Development (www.execsight.org), a professional association of executive development practitioners, service providers and academic members. He can be reached at firstname.lastname@example.org.