Leadership Development: A Facts Based Approach to Improve Your Process, Mark Van Donge

Develop leaders for the future,Fact based approach

Dr. Mark van Dongen GPHRHR Director Global Business IntegrationCristal, Jeddah

Agenda

Agenda:1. An integrated model2. From HR roadmap to the HEART model of MD3. MD audits in three global FT 500 companies4. Conclusions

At the back of the room there is a handout, summarizing in a whitepaperwhat we discussed.

When you provide me your email address, I will send you the audit listand an interpretation tool. Email: [email protected]

An integrated model

• Succession and talent management has moved to the forefront of theagenda’s of CEO’s worldwide

• ‘War for Talent’ will increase due to demographics.• Research has shown that investment in personnel development has a

substantial ROI, depending on the right person being developed, toover 200%

• In the US $125.88 billion was spent on leadership development; ofwhich 24% on leadership development(ASTD 2009). Neverthelessleadership development remains the least explored topic within thefield of leadership.

• No integrated theory, or model to date has been accepted.

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Challenges?

• The field of HR is a not a science in itself, it is an amalgamation ofdifferent disciplines.

• Fragmented elements are developed, but currently there is not anintegrated theory on MD. These elements are derived from non-related sciences, hence from different methodical setup.

• The defined process should be theoretically correct, but alsopractically useful to both developed as well as less developedcompanies.

• If the MD process is truly seen as a competitive advantage, it will bedifficult to get access to data for the empirical part.

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What is Talent?

A talent is an individual, who generates a disproportional highervalue compared to the cost to employ them.

Therefore talent (as such) is not linked to company hierarchy, norleadership capability.

Talent

For ease of discussion, talent is split out in two ways:

1. Deep talent; individual value creators who do not have verticaltalent

a) Workers (skills / competencies based deep talents)b) Deep talent (unique deep knowledge based talents)

2. Vertical talents are individuals with the ability to move upward inthe organization.

In this presentation vertical talent is emphasized

What is leadership

Leadership is defined as the ability to exert a conscious influenceon the behavior of another person in order to make them pursuetargets the leader desires.

The most modern form of leadership is value based leadership,which is a scale with two poles, one is the transactional leader theother is the transformational leaders.• Transformation leaders change the individual perception to

attain the goal• Transactional leaders reward for changing behavior; bonus for

best behavior, etc.• Management is transactional leadership.

Talent and leadership talent

Leader-talents are defined as those who:1. Have the potential (intellectually) to develop themselves into

higher level roles (IQ & EQ)2. Have the development-need-strength to withstand

developmental challenges3. Have the individual engagement to ensure when developing

them, that these value adding capabilities benefits yourcompany.

4. Have personal values aligned with the values of the company

Gaining, keeping and developing such talents remains on theforefront of CEO´s agenda (CIPD, 2012)

Defining and detectingtalents

Organizationalprerequisites to theeffective process

Phase baseddevelopment of talents

Items reformulated into44 questions, that form16 clusters

Details of the processput to 34 International

HR directors from 11countries in 3 surveys

From process to audit tool and standardized company profile

Processfinalized

Case study of companies,including generation ofprofile

Empirical data from a group of companies

Results on talent defining and detectingtalent

1. 32.4% state their organization have no adequate definition of talentand only 26,5% had an organization defining entry level. Combine thiswith the 44.1% of the companies did not have a valid selection systemin place for entry

2. Less then 48.5% match individual values versus those of the company3. Intellectual capabilities are measured in 51.8 % (IQ) resp. 41.9% (EQ).

The rest assumed education as a predictor.4. 71% measure self motivation to develop,5. 61.3% stated they measure individual engagement, but tools used

were inadequate to measure this6. 61.8% found reference checks (candidate provided) a ‘good’ method.

Research showed a predictive validity of 0.19. (Anderson et.al., 1993,McClelland, 1998).

7. Categories of talent: Deep talent, 8.8% ; 91.2 % vertical talent.

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HR and MD1. In 97.1% of companies HR leads MD process,2. Only in 23.5 % is the MD (leadership development) lead by a ´talent´.3. Leading MD is needed to become head of HR in 23.5%4. When reviewing the use of leadership models upon which to base their

development, 53% use entirely outdated leadership models (such assituational leadership), though they state they have good knowledge onthe topic (58.%).

5. Most people support the definition given on leadership and management.Those that did not, often use SHL methods, which in term supports thedefinition (Burk et al. (2009) and Burke, (2010))

6. Full andragogical model were not seen. Only in 37% of the companies,input of the talent on their development track was requested.

7. Of those who stated understanding of leadership, 59,8% were not able tomentioned the model their company used. Exception was situationalleadership theory which is still used in 53.3% of the companies. Whicheither captures low knowledge or low influence by HR.

• Informal talent networks in only 14.7%;• Changing preferences of generations, taken into account in 32.3%.• Team based action learning used in 44%

Use of stretch assignments:Expat 54.5% all 35.2% HR

X-functional 64.7% all 26.5% HR

Job challenge measured in 53%• Stretch assignments:• Perfect fit (90%+) 11,8%,

• Near fit (75-90%) 67.7%

• True stretch assignments (60-75% fit) 20.6%

• 41.1% see mistakes as learning experiences, the remaining 58.1% sees itsimply as mistakes. No correlation between the assignment score and‘mistake’-score.

• Job challenge is not measured in 47% of companies.

Organizational prerequisites

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Reviewing performance versus the modelof Global Companies

The Audit list itemsThe 16 key elements of the MD model were:1. Talent is defined2. Values of the company and the individual are matched at recruitment3. The culture is more transnational than nationally dominated4. Capability of individuals are assessed.5. Methods of development vary as per the individual needs6. Knowledge is Transferred as per the development phase7. Stage based development model is adhered to.8. Feedback is provided to talents, in line with their phase9. Developmental assignments are used to develop talents.10.Leaders are made responsible for the development of their talents11.Active learning initiatives are used12.Mentoring relationship's and coaching is used13.Talents are rewarded differently14.The performance and development cycle is viewed differently15.There are networking initiatives offered to talents16.HR leads the MD process and is occupied by talents.

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Empirical results; Audited companies

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Empirical results; Audited companies

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Empirical results; Audited companies

TRENDS

Empirical results; Audited companies

ConclusionCompanies believe MD provides a competitive advantage, it is difficult toobtain data utilizing self-surveys, as self criticism was found difficult.

Though Talent is seen as one of the major differentiators for the future,companies often falls behind:

– Do not have a robust system of selection and development in place– Do not measure needs for developments and developments offered– Have insufficient knowledge or influence in incorporating leader-

development methods.– Have little knowledge on how development works, nor seem to invest

much in understanding, instead of cookie-cutting ‘best practice’solutions.

Conclusions 2

Many companies do not hold leaders accountable for development of theirtalents,

Companies do not reward for potential (future of company) instead rewardshort term goals achievement

Low hanging fruits “left to rot”:

Talent networks

Leaders accountable for talents

Action learning initiatives

HR measured and developed as other talents

Measure capabilities and their progress

Consequencesfor HR

• Though HR is accountable for MD, they need substantial improvementto increase knowledge

– Situational leadership model usage– Use of reference to check on applications– Declining decision style method etc.

• For a core process such as MD, signature processes should bedeveloped.

• Though talent is seen as strategic asset, little strategy seems tounderlie their development.

• Some short term solutions would already improve outcome, but longerterm reviews are needed.

Develop leaders for the future,Fact based approach

Dr. Mark van DongenHR Director Global Business IntegrationCristal, Jeddah