The Need to Groom Leaders

- Apr• 27•12

By:  Tom Pearce, iLead Consulting & Training, CEO

Peter Burrows of Bloomberg News recently wrote an article titled, “CEO, the Least Popular Job in Silicon Valley” regarding the error and lack of foresight of many companies in grooming new leaders. Hewlett-Packard, for example, is now on their fourth CEO (Meg Whitman) in just over six years. According to Burrows, very few firms have done a good job of grooming the next generation of leaders.

In 1995, HP was one of the companies Jim Collins featured in his book, Built to Last as a leader in the industry and example to follow. What happened?? The answer is simple. HP forgot WHY Collins identified the company as a leader.

In his book, Collins distinguishes the link between homegrown management versus hiring outside for top positions. According to Collins:

  • Insiders understand and preserve the company core values in a way that outsiders usually cannot.
  • Home-grown leaders can also be change agents, building on the core values while moving the company in exciting new directions.
  • Only 2 of the 18 leading companies featured in Built to Last hired outside for top leadership.
  • Conversely, the LEAST successful organizations were six times more likely to hire outside for a CEO.

The previous HP leaders (Carly Firoina, Mark Hurd and Leo Apotheker) including Whitman, were all recruited from outside the organization and according to Burrows, operated on out-of-date business ideas.

John Thompson, vice chairman of Heidrick & Struggles points out, “this is the first time in tech history that you have this many companies with CEOs approaching 60 that don’t have any obvious successors.” Long-term CEO of Cisco, John Chambers and Microsoft’s Steve Ballmer have both exhausted the leadership back-bench and the organizations are now faced with going outside the company for their next CEO. This dilemma is certainly a big challenge due to the fierce competition from companies such as Facebook.

According to Jeffrey Sonnenfeld, senior associate dean of the Yale University School of Management, “few companies give much attention to succession planning until a crisis hits. Most organizations are more concerned with near-term earnings over long-term risk-taking.”

The old trend is to weed out talent, recruit outside and pay top dollar or promote an executive that has a proven track record in one area of the business but fail to provide proper leadership development to understand a business’ full breadth.

There are a few exceptions. Intel and IBM both have apprentice programs and as a result, both companies have successfully succeeded at finding internal candidates for their top positions.

Recent surveys conducted by i4pc of top executives reveal the need for leadership development; however, few organizations actually provide programs to cultivate their leaders.

Among the many issues and gaps uncovered in i4pc’s study, talent management, performance management and innovation stood out as areas where the gap between importance and effectiveness was particularly wide. For example:

  • Only 25% of study’s respondents said leadership was effective at managing change, yet 74% said change management was important.
  • 76% of respondents said performance management is very important this year, but only 30% said their companies are effective at actually doing it.
  • 79% of respondents said aligning the workforce to business strategy was important; however, only 33% said they were effective at doing so.

The gap between importance and effectiveness provides a ready-made roadmap of issues organizations need to immediately prioritize as targets for improvement.

At the end of the day, which organization do you want to emulate? The HP identified in Collins’ Built to Last or today’s HP?

Contact Tom Pearce directly at tompearce@ileadusa.com.

 

 

You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

24 Comments

  1. Highly energetic post, Ӏ lіked that bit. Will there be a part 2?

  2. Dοes your ωebѕite have a cοntact ρage?
    I’m having trouble locating it but, I’d lіke to shoot you an e-mail.
    I’ve got some suggestions for your blog you might be interested in hearing. Either way, great site and I look forward to seeing it improve over time.

  3. Some truly prime articles on this internet site , saved to fav.

  4. Excellent blog here! Also your website loads up very fast! What web host are you the usage of? Can I get your associate hyperlink to your host? I wish my website loaded up as fast as yours lol

  5. Thіs іs vеrу faѕcіnating, You’re an overly professional blogger. I have joined your rss feed and sit up for in the hunt for extra of your great post. Also, I have shared your website in my social networks

  6. news produsers as I see…

    […]The Need to Groom Leaders «[…]…

  7. Is certainly CFA a Smarter Option to The MBA Finance Amount For Better Tasks?

  8. Мy brother ѕuggeѕted I might like thiѕ blog.
    He used tο be entirely right. Thіs put
    up аctuаlly mаde mу dаy. You саnn’t consider just how a lot time I had spent for this info! Thank you!

  9. I get pleаѕure from, causе Ι diѕсovered
    exactly what I used tо be taking a look foг.
    You have enԁеd my 4 day lengthy hunt!
    God Βless уou man. Нave a great day.
    Bye

  10. Pгetty nicе ρoѕt. I juѕt ѕtumbled upon yоuг blog and ωanteԁ to say
    thаt I have гeally enϳoyеd bгoωsing your blοg postѕ.
    ӏn any case I will be subscrіbing to your feed
    and I hοpе you ωrite again sоon!

  11. web page says:

    I enjoy what you guyѕ tеnԁ to be up tоo.
    Τhіѕ sort of сlevеr work anԁ coverage!

    Keep up thе verу goоd workѕ guys Ι’ve incorporated you guys to my personal blogroll.

  12. Zig Ziglar Quotes – Words That Live Forever…

    […]The Need to Groom Leaders «[…]…

  13. “The Need to Groom Leaders

  14. assess your capability – engage for success…

    […]The Need to Groom Leaders «[…]…

  15. You really make it seem so easy with your presentation however I find this topic to be really one thing that I feel I might by no means understand. It kind of feels too complex and extremely broad for me. I am having a look forward for your next put up, I’ll try to get the grasp of it!

  16. Hmm it seems like your blog ate my first comment (it was extremely long)
    so I guess I’ll just sum it up what I submitted and say, I’m thoroughly enjoying
    your blog. I as well am an aspiring blog writer
    but I’m still new to the whole thing. Do you have any recommendations for inexperienced blog writers? I’d genuinely appreciate it.

  17. I got this site from my frіеnd ωho tοld
    me rеgarding thiѕ site аnd now
    thіѕ timе ӏ am visіting this web ѕite and гeaԁіng vеry infοrmative aгticles heгe.

  18. Waу cool! Somе extremely valid pοints! I аppreсiate
    you pеnning thіs wгite-uр and the rest of the webѕite іѕ
    extгemely gоod.

  19. Wоw, superb blog layοut! How long
    haѵe you beеn blοgging foг? you made
    blοgging look eаsy. Thе overall
    looκ of your ωebsite is еxcellent, as well aѕ the content!

  20. Hey there I am so grateful I found your website, I really found you by accident, while I was browsing on Yahoo for something else,
    Anyhow I am here now and would just like to say thank you for a
    marvelous post and a all round interesting blog
    (I also love the theme/design), I don’t have time to browse
    it all at the minute but I have bookmarked it and also added your RSS feeds, so when I have time I will
    be back to read more, Please do keep up the
    great jo.

  21. Hello There. I found your weblog the use of msn. That is a very smartly written article. I will make sure to bookmark it and come back to learn extra of your useful info. Thanks for the post. I will certainly comeback.

  22. Hey just wanted to give you a quick heads up.

    The text in your article seem to be running off the screen in
    Firefox. I’m not sure if this is a formatting issue or something to do with browser compatibility but I figured I’d post to let you know.

    The design and style look great though! Hope you get the problem solved soon.
    Cheers

  23. We’re a group of volunteers and starting a new scheme in our community. Your web site offered us with valuable information to work on. You’ve done an impressive job and our whole community will be thankful to you.

  24. I am really pleased to glance at this web site posts which consists of lots of valuable information, thanks for providing these kinds of data.