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Leadership Development and Succession

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on 4 February 2016

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Transcript of Leadership Development and Succession

Leadership Development & Succession
Leadership Development
The focus of developing a certain skill, trait or behaviour (DuBrin, 2013) e.g. Conflict management, procedure proficiency, leadership style.

Leadership Succession
The identification and grooming of people to fill management positions (DuBrin, 2013)

Leadership development and succession are important pieces for any organisation to utilise to ensure long-term success.

This presentation will explore these ideas and develop your understanding of each concept.
What is Leadership Development and Succession?
It is suggested that there is no single best way to grow or develop a leader, however, companies that grow and develop leaders share many common characteristics. These top companies such as GE address leadership growth and development on several different fronts including articulating how leadership behaviour should evolve to meet certain future challenges (O’Connell 2010).

GE is seen as a top company for leader development as they put considerable effort into the selection, development and retainment of strong leaders at all levels of the business. Their emphasis is not just on good leadership but how they grow their leaders (O’Connell 2010).
The Growth of a Leader
How are leaders developed?
Here are a few points to help you better understand, or at a minimum, get a picture of what helps in developing leaders.

Give them the right experience
Allow them to struggle a little
Be a mentor
Create an ownership mentality
Rotate them to different roles
Teach them to network
Allow them to make mistakes
Highlight the importance of culture and shared values

From there comes succession planning which is a key part of filling leadership roles. Leaders have been making decisions from the beginning of time (Nye 2008).

image courtesy of pixabay.com
Step 1: Focus on development
Step 2: Identify critical positions
Step 3: Make it transparent
Step 4: Measure progress regularly
Step 5: Keep it flexible
Developing your pipeline
Conger, J.A, Fulmer, R.M (2003) discussed leadership in the Harvard Business Review, and addressed a 'Five Step Process' for leadership development
This is a major step for business and is, surprisingly, where many organisations (including global enterprises) get it wrong. It is important to ensure talent is identified early and supported throughout while being exposed to specialised leadership development (Skipper & Bell 2008) so they develop into visionary leaders. This requires patience, dedication and a strategy from all involved. This is about thinking and planning for future leaders and the next visionaries to operate the organisation and if they get it wrong here, so will the business.
Leadership development (2012) Hamiton Health Services

To get the best from your future leader, do you:

1: Train them?
2: Develop them?
Key points to remember:

Training is where you learn

Development is where you are

Case Study: Johnson & Johnson
Johnson & Johnson's “Leadership Imperatives” are based around the principles: Connect; Shape, Lead and Deliver. These principles reflect the leadership requirements needed for the organisation to enhance international competitiveness (Johnson & Johnson, 2015). How did J&J grow to become one of the world's most respected organisations?

• They understand that investing in future talent safeguards the pace of innovation and growth as well as a solution to fill skill gaps.
• Succession planning is an effective retention tool that can managers use to attract and retain talented employees (McDonald, 2008).
• Senior leaders nominate candidates who are split into 2 groups, the first are coached to be the top level management while others lead current or future change drivers (The Financial Express, 2002).
• Candidates can come from any business unit and are given a detailed career plan and then exposed to other business units to gain additional experience and further enhance their skills.
• Direct managers track the candidate’s progress and address opportunities for improvement. This double-loop style of learning is an effective way for J&J to monitor underlying policies and objectives (Argyris, 1977).
• Succession planning guidelines are written into the Principles of Corporate Governance to the extent that even the CEO is required to report to the Board of Directors on planning status.
• The development program that is heavily linked to the company’s core principles and ideals ensures long-term commitment to the cause.

A short video on J&J's leadership development
Business example
Procter & Gamble:
P&G Managers start with the destination role and then help future leaders acquire a deep understanding of that role. It's about understanding the individual from a deep perspective. They look at the timing for when a leader should go into the destination role, and then map backwards to where they are currently.

A.G. Lafley, Executive chairman of Procter & Gamble, in his recent book "Playing to Win", discusses how he benefitted from informal “on the job” training:

“My years at P&G afforded me ample opportunity to learn about business strategy and practice business leadership and management by doing. There, with clear accountability for strategy, operations, and results, I learned from my mistakes, lived with my failures, and appreciated on a daily basis my colleagues’ contributions to whatever success we were able to achieve together.”
Let's look at some business examples to understand how things work in the real world
Is "natural selection" enough to keep the leadership pipeline full, or should businesses ensure they are continually developing their leaders? Respond in the discussion board with your thoughts.
Business example
GE Careers (2013) takes a different approach by identifying talented leaders early on, and placing them in stretch assignments, often before they think they're ready. According to Johnson, "We support them, with over $1 billion a year in structured training. But today, change is such a continual force that even we at GE are taking a fresh look at how to develop talent".

The short video below explains how GE employees in their program feel about their leadership program.

Four fundamental competencies of a leader
Learning agility
What are some other ways businesses develop their leaders? Give this some thought, and respond in the board discussion.
5 Strategies That Will Turn Your Employees Into Leaders, 2013, 5 Strategies That Will Turn Your Employees Into Leaders, Forbes, viewed 14 December 2015, <http://www.forbes.com/sites/dailymuse/2013/06/25/5-strategies-that-will-turn-your-employees-into-leaders>

Argyris, C 1977, “Double Loop Learning in Organisations”, Harvard Business Review, September 1977, viewed 07 January 2016, <https://hbr.org/1977/09/double-loop-learning-in-organizations>

Bowes, B 2015, Successful organizations develop leaders for the future, viewed 06 January 2016, <http://www.legacybowes.com/latest-blog-posts/entry/successful-organizations-develop-leaders-for-the-future.html#sthash.HX92CGJo.dpufhttp://www.legacybowes.com/latest-blog-posts/entry/successful-organizations-develop-leaders-for-the-future.html>

Cabrera-Suarez, K 2005, Leadership Transfer And The Successor’s Development In The Family Firm, The Leadership Quarterly, Vol.16(1), pp.71-96 [Peer Reviewed Journal], viewed 16 January 2016 <http://www.sciencedirect.com.ezproxy.lib.swin.edu.au/science/article/pii/S1048984304001213>

Cairns, T.D 2011, 'Who's up next? Most companies fail to plan for leadership succession',
Employment Relations Today
, Vol. 28, 2, pp. 27-34

Centre for creative leadership, 2015, The leadership development roadmap, viewd 11 January 2016, <http://www.ccl.org/leadership/pdf/programs/LDR.pdf>

Conger, J.A, Fulmer, R.M, 2003, Developing your leadership pipeline, Harvard Business Review 01 Dec, viewed 13 December 2015, <https://hbr.org/2003/12/developing-your-leadership-pipeline>

Day, DV 2000, 'Leadership Development: A review in Context',
Leadership Quarterly
, vol. 11, No. 4, pp. 581-613, Swinburne University, EBSCOhost, viewed 14 January 2016.

DuBrin, A 2015, Leadership: Research Findings, Practice and Skills, 8th Edn, Cengage Learning, USA

GE Leadership program, GE's Experienced Commercial Leadership Program (ECLP), 03 October, viewed 10 January 2016, <www.youtube.com/watch?v=QMFL6a70xqI&list=PL4AF3E1CD74276107&index=7>

Griffith, MB 2012, Effective succession planning in nursing: a review of the literature, Journal of Nursing Management, Vol.20(7), pp.900-911

Gunasekara, A, 'Lecture week 10', ORG30002 Leadership in context, Learning materials on Blackboard, Swinburne University of Technology, viewed 07 January 2016

Hudea, O.S. 2014, "Leadership Development", Manager, , no. 20, pp. 110-114

Johnson & Johnson 2014, “Principles of Corporate Governance”, December 2014, viewed 7 January 2016, <http://files.shareholder.com/downloads/JNJ/1105430114x0x864365/37ED1C08-BC9F-458C-AB94-A5D8FE59D88D/JNJ_Principles_of_Corporate_Governance_December_2014_.pdf#page=9>

Johnson & Johnson 2015, “Leadership Development & Performance Management”, viewed on 07 January 2016, <https://www.jnj.com/caring/citizenship-sustainability/strategic-framework/leadership-development-and-performance-management>

McDonald, P 2008, “Succession Planning as a Retention Tool”, Financial Executive, Vol.24(6), p.18

Myatt, M 2012, The #1 Reason Leadership Development Fails, viewd 09 January 2016, <http://www.forbes.com/sites/mikemyatt/2012/12/19/the-1-reason-leadership-development-fails>

Nye, J. S. 2008. The Power to Lead. Oxford: Oxford University Press

O'Connell, P 2010, How Companies Develop Great Leaders, viewed 09 January 2016, <http://www.bloomberg.com/bw/stories/2010-02-16/how-companies-develop-great-leadersbusinessweek-business-news-stock-market-and-financial-advice>

O’Connell, P 2010, How Companies Develop Great Leaders, Bloomberg Business, viewed 12 January 2016, <http://www.bloomberg.com/bw/stories/2010-02-16/how-companies-develop-great-leadersbusinessweek-business-news-stock-market-and-financial-advice>

P&G, 2014, P&G Recognized for Excellence in Leadership Development, viewed 09 January 2016, <http://news.pg.com/blog/leadership/ceo-mag#sthash.RnIJDTTO.dpufhttp://news.pg.com/blog/leadership/ceo-mag, view>

PR Newswire 2005, Proven Practices For Leadership Development & Succession Planning, PR Newswire, November 21, viewed 15 January 2016, <http://search.proquest.com.ezproxy.lib.swin.edu.au/docview/453712883?accountid=14205>

Reich, J, How I’m Growing as a Leader Right Now, photograph, viewed 15 January 2016 <http://joshuareich.org/2014/04/28/how-im-growing-as-a-leader-right-now/>

Self Improvement Stock Illustrations - Royalty Free, photograph, viewed 19 January 2016, <http://www.gograph.com/stock-illustration/self-improvement.html>.

Skipper, C.O. and Bell, L.C., 2008. Leadership development and succession planning. Leadership and Management in Engineering, Vol 8 (2), pp 77-84.

The Financial Express 2002, “J&J Embarks on Two-Pronged Succession Planning Programme”, viewed 07 January 2016, <http://archive.financialexpress.com/news/j-amp-j-embarks-on-twopronged-succession-planning-programme/59608/1>
(Source: Joshua Reich. Image by Joshua Reich )

of boards have no plan if a CEO steps down (Cairns 2011)

are not prepared for an emergency succession (Cairns 2011)
If succession planning is viewed, in both public and private enterprise, as a vital part of their long-term success, why are so many organisations failing to act?

Based on the previous question and information supplied, develop a position and present your view on the best way leaders should be trained and developed
Leadership development
Let's review a case study
Estimates show the proportion of family firms worldwide, whose management lies in family hands, is between 65% and 80%, however less than 30% of these businesses make it to the third generation. Furthermore, a survey conducted by the Society for Human Resource found only 23% of organisations admitted to having a succession plan in place for their current CEO (DuBrin 2015, p. 501) meaning, 67% have not planned for succession. This, therefore, highlights how critical it is to have a succession plan and the challenges faced without one (Cabrera-Suarez 2005, pp. 71-72).

Induces Double Loop Learning from prospect employees and current leaders. Questioning efficacy of approach and minimizing defensive thinking enables setbacks to be profitable and a learning experience (DuBrin 2015, p. 486)

Mentoring is a beneficial method of development as it is effective in a formal training capacity but has additional positives of psychological and social support for prospective succession employees (DuBrin 2015, p. 493). Clearly linking happy employees with long-term employment and well being for the organisation

A work group's emotional reaction to the departure of a leader can be damaging to morale and productivity (DuBrin 2015, p. 505). However having a structured succession plan in place to promote someone who is already known and respected by the work group minimises this
Internal promotion instils ambition in employees as they see more opportunity for their own advancement (DuBrin 2015, p. 505)
Inspires loyalty from those selected for succession, in turn driving performance and work management (Griffith 2012, p. 902)
Perhaps the most important benefit from an organisation standpoint is foresight. Leadership Development and Succession planning gives the board/CEO etc. ample time to prepare and make a decision of replacement when high level managers exit (DuBrin 2015, p. 504)

Benefits of a Leadership Development & Succession Plan for Organisations
We have demonstrated the development of new leaders and succession planning is vital for organisations, not only to attract, but also to retain excellent employees (PR Newswire 2005). However, the majority of their primary emphasis of leadership development is interpersonal competence (DuBrin 2015, p. 484) and misses the mark.

It was highlighted the development of leaders appears to be a difficult process. Throughout the presentation it was shown many organisations, small or large: local or global, fail to develop their pipelines, and/or do not have enough vision to develop new leaders.

These failures are avoidable, and by putting into place strategies to identify and develop leaders, must be, at the forefront of every business owner, CEO and so on. If this is not done, organisations have a greater chance to fail.
If everything is going well, why rock the boat

They have few choices e.g. small family business

The potential successors may not fully meet their expectations

They fail to recognise the importance of successor development

Perceived complexity in planning and development may demonstrate the immaturity of management e.g. new business or family business

They feel they are irreplaceable
Our research has identified the following as reasons why management fail to develop strategies for successors:
Think of Steve Jobs from Apple
Corporate Culture in Leadership Development
In a survey undertaken by The Hay Group, it was found the best companies not only see leadership development as a key component to the success of their business, but they also spend more time and money on it over companies with low leadership development for their employees (O'Connell 2010).

For example - 22% of the best businesses for leadership development stated that they spend over 25 days per employee developing the leadership skills of their senior leaders, however, they also state that they invest time and money into developing the leadership skills of their mid to low performing employees as well (O'Connell 2010).
Leader development is typically individual based and includes businesses making investments in human capital. The focus is on enabling employees to gain knowledge, skills and ability (Day 2000, p. 584)

Leadership development explores building social capital, which includes an integration of helping people to understand how to relate to others, build commitments, coordinate their work and develop extended social networks (Day 2000, p. 586)

When developing leaders, there are three aspects of social capital to understand, these include , Commitment, trust and respect

In a survey conducted by American Society of Training and Development, 85% of companies are still widely using formal class room programs, but unfortunately there are many limitations to this as practicing leadership development is seen to be more effective and meaningful when applied on the job (Day 2000, p. 586)

The practice of 360-degree feedback, executive coaching, mentoring, networking, job assignment and action learning have all been seen as beneficial in developing leadership skills (Day 2000, p. 606). Leadership development needs to be considered in the social capital of the business as it complements the human and intellectual capital that is emphasised in leader development (Day 2000, p. 606)
Leadership Development as Social Capital
DuBrin (2015, p. 484) states, “The primary emphasis in leadership development is on building and using interpersonal competence”. A good leader will also use self-development and work on improving their self-discipline to assist them to be more open with providing feedback and recognition to others.
Leadership Through Self-Development
(Source: Gograph. Image by Unknown)
What are the major components of leadership self-development and why are they important?
So what is self-development? Developing leaders is usually seen as education/training, as well as job experience and coaching by others. Self-development can help with developing leadership capabilities, as a person that helps themselves to become a good leader will usually work on improving their communication skills, and model their own behaviour based on other good leaders that they know (DuBrin 2015, p. 485).
Succession planning
believe CEO succession is a business-continuity issue (Cairns 2011)
Gunasekara, A, 'Lecture week 10'
Leadership development (2012) Hamiton Health Services,
A collaboration between Alexander Gruber, Emma Cheung, James Gosselin, Krystelle Al Achi, Mark Christmas, Matt Rice and Shane Fellowes
Thank you for your time: our team trusts our presentation has provided enough information to allow each of you to be actively involved in the discussion board with your answers and any questions you may have for us
Full transcript