What Matters™ IN TALENT MANAGEMENT Significant Happenings in Talent Management │ September 2013 Colleagues,
TALENT MANAGEMENT COURSEWARE
The HCG team took a break from writing the newsletter this past month. We’ve been on the move. Jyldyz has temporarily
Visit our website to learn more about our evidence-based
moved from the US to Bishkek in Kyrgyzstan. I worked
and integrated talent management courseware.
primarily in India these last four years and am happy to be back in beautiful Northern California. However, this time of the
IN THIS ISSUE
year I miss the festivities and delicacies India has to offer. As before, we continue to support clients globally. Between
Leader of Tomorrow: Secret Ingredients
unpacking and readjusting, I did enjoy a few days off with my
Jyldyz Djumalieva, Izabela Widlak, and Shreya Sarkar-Barney
family visiting the local parks and beaches. Hope each of you had a chance to relax and rejuvenate, as well.
The 1994 launch of Amazon.com by its founder,
This month's newsletter focuses on leadership development.
Jeff Bezos, received barely a mention by industry
In a recent global survey by the Economic Intelligence Unit
experts. Critics questioned the value of selling
43% of the surveyed CEOs expressed concern about the lack
textbooks online when one could easily buy one at
of leadership talent.
Coincidently, leadership development
Nineteen years later, Amazon.com
has among the highest levels of investments relative to other
is a 125 billion dollar business empire selling online
types of development programs. There clearly appears to be
everything from books, toys and haute couture to
a disconnect between the types of investments made and the
company manufactured tablets. Bezos is one of
returns. In this issue we investigate leadership development
the 50 richest men in the world. His success is
practices that have the greatest pay-off.
attributed to a foresight about the future of the internet which disrupted the retail world. Although
This month’s Evidence Corner reviews some popular myths
not profitable until 2001, Amazon.com's customer
but have little support to warrant their use. We hope this
base has steadily grown and put many bookstores
inspires you to review your leadership development practices
out of business. Read more >
and replace them with what we know works. As always, we welcome you to visit our website and join a
The Evidence Corner
lively debate on this topic.
Jyldyz Djumalieva, Izabela Widlak, and Shreya Sarkar-Barney
The leadership development industry has weathered the recession. Organizations are reporting a surge in Dr. Shreya Sarkar-Barney
spending on developing leaders. On an average,
President, Human Capital Growth
companies increased their budgets by 14% in 2012. According to some estimates, just U.S. based companies have spent $13.6 billion on leadership 5
development in 2012. With such significant investments at stake, it is legitimate to scrutinize the effectiveness of these efforts. Especially because CEOs have expressed serious concerns about having insufficient leadership capability in their organizations. In our practice, we find that businesses rely on widely available tools and common practices, to meet their leadership development needs. Read more >
To expand your skills in this area join the Leadership Development Course
Download a PDF form of the Leadership Development Activities by Development Phase Tool
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Leader of Tomorrow: Secret Ingredients
Jyldyz Djumalieva, Izabela Widlak, and Shreya Sarkar-Barney
Transformational leaders create a compelling vision of the future that captures people’s hearts and minds. As GE CEO,
The 1994 launch of Amazon.com by its founder, Jeff
Jeff Immelt put it “Good leaders have passion...they think
Bezos, received barely a mention by industry experts.
and dream big”.
Critics questioned the value of selling textbooks online when one could easily buy one at a bookstore.
By connecting the vision to their people’s
values, transformational leaders evoke enthusiasm and engagement to act on the vision. They are usually able to
years later, Amazon.com is a 125 billion dollar business empire selling online everything from books, toys and haute couture to company manufactured tablets. Bezos is one of the 50 richest men in the world. His success is attributed to a foresight about the future of the internet which disrupted
drive team effort beyond what is ordinarily possible. Bezos certainly scores high in this domain. His vision for ecommerce was a trend setter that paved the way for other retailers such as Walmart, Williams-Sonoma and Best Buy. His ability to envision, inspire, and innovate has helped adapt
the retail world. Although not profitable until 2001, Amazon.com's customer base has steadily grown and put
Amazon in the face of stiff competition from sources such as eBay.
many bookstores out of business. Bezos is credited for creating an industry out of nothing. This trailblazer was
Bezos also shows signs of transactional leadership which is
back in the news with his recent purchase of the Washington Post. The troubled journalism and print media industry is slow to change and likely to be a tough
more operationally focused. Employees describe him as a micromanager with an obsession for details. This borders on transactional leadership, a moderately effective leadership
turnaround candidate. It is yet to be seen how Bezos
style, but it also shows signs of derailment behaviors.
reinvents The Washington Post. Many regard Jeff Bezos as the Steve Jobs of today's business world. He certainly
Transactional leaders influence employees’ performance by controlling rewards and punishments. Transactional
is well suited for this thorny job!
leadership serves an important role because it sends a clear When asked what makes Amazon.com successful, Bezos indicated "...long-term thinking, customer obsession, and a
message to employees about the performance expectations and addresses performance issues at hand. However, this form of leadership does not build long-term commitment.
willingness to invent". When we look deeper into his
Micromanagers also have a tendency to disempower their
attributes, he is an astute business leader with extreme
employees. Their pursuit for perfection can lead to fatigue.
ambition, extraordinary vision and a tenacity to win. Employees describe Bezos as one with a relentless pursuit 28
to get things right, and maniacal when it comes to details.
He is unusually good at inspiring a results-oriented culture that experiments and innovates.
According to some accounts, Amazon.com has among the most stressful work cultures in the tech-business 23
high attrition rate.
Examples of great leaders such as Bezos
highlight that even the most successful ones don't have it all. To the extent that the leader's style permeates into the organizational culture, like all human beings, Bezos has some learning to do. Let’s take a look at the core competencies of transformational leaders and why they are so relevant today. Leading change This competency can be defined as gaining employees’
The value created by Jeff Bezos is uncontroversial. If any
commitment to the need for change. To do this effectively
business could find one like him, they would be creating
leaders have to demonstrate a willingness to embrace
astronomical value. But how does his leadership style
change, and candidly communicate the impact of the
compare with what is known about leadership
change. The vast majority of organizations are facing
effectiveness? Bezos embodies many of the
changing economic conditions and a need to adapt their
characteristics of transformational and transactional
business models rapidly.
leaders. Global studies show that while transactional
to proactively respond to new challenges becomes essential.
leaders can be effective, transformational leaders deliver
In this context the leader’s ability
Develop future talent
Transformational leaders provide employees with
Jyldyz Djumalieva, Izabela Widlak, and Shreya Sarkar-Barney
opportunities to develop new skills, take on additional responsibilities, and grow professionally. Even during the
The leadership development industry has endured the
recession the war for talent has continued to intensify,
recession. Organizations are reporting a surge in spending to
especially in emerging economies. This is why leaders of
develop leaders. On an average, companies increased their
tomorrow will need to have an eye for spotting, growing
budgets by 14% in 2012. According to some estimates, just
and retaining talent.
U.S. based companies have spent $13.6 billion on leadership 5
development in 2012. With such significant investments at
Foster creativity and innovation This leadership competency involves a portfolio of behaviors such as (a) creating conditions for the exploration of new ideas, (b) promoting cultures that
stake, it is legitimate to scrutinize the effectiveness of these efforts. Especially because CEOs have expressed serious concerns about having insufficient leadership capability in their
rewards developing and implementing new solutions, as
well as (c) choosing experimentation in favor of low risk.
our practice, we
Most organizations seem to be challenged when it comes
to innovation. In a McKinsey survey, 84% of leaders
businesses rely on
indicated that innovation was extremely important.
However, only 55% felt their companies are better than their peers at innovation.
tools and common
practices, to meet Way Forward
The skills which comprise the core transformational
leadership competencies are currently in the highest
demand. A 2011 DDI survey of 1,897 HR professionals
and 12,423 leaders from 74 countries put transformational
leadership in the top five critical skills globally.
misguided. Next, we will contrast
Unfortunately, the skills gap in this area is significant and 1
has been documented in several studies.
(myths) with what rigorous studies have shown to work. A Surveys show that major corporations are spending an
word of caution - some of these may surprise you and cause
average of $7,000 toward the development of a high
you to rethink your own strategies!
potential leader, yet there is a perceived lack of leadership talent.
This alludes to an alarming scenario of high
investments with minimal returns and a significant risk
Myth 1: Although a charismatic leadership style is effective, it cannot be taught.
exposure. Replacing ineffective and unnecessary practices with just a few high efficacy drivers of leader development
Fact: This myth is a remnant of the â€œGreat Manâ€? leadership
can most certainly turn around this dire situation. Our
perspective prevalent in early 20th century that stipulated
course on leadership development is especially designed
that leaders are born, not made. Few professionals in the
to give you the models, steps and tools to pick the high
field will argue that innate traits and leadership behaviors are
impact solutions. In the Evidence Corner we highlight
both important. However, there are many beliefs about what
some of the common myths around leader development
behaviors are effective and how they can be developed.
and uncover the secrets of what works based on our review
Situational leadership training, because of its wide
of the research.
availability, is commonly used. However, studies show that it is mainly effective with less experienced employees.
Charismatic leadership, a form of transformational leadership has emerged to be more effective cross-culturally. What's exciting is that researchers have isolated the components of charismatic leadership and successfully trained managers in adopting a charismatic leadership style.
Myth 2: Emotional intelligence is the key to developing
the employee's self-esteem. In light of this evidence, the
quality of the feedback far outweighs the quantity.
Fact: The use of Emotional Intelligence (EI) tests for leader
Myth 4: Best tools for leadership development are well
development has become extremely popular. It intuitively
known and widely available.
makes sense that leaders need to be capable of regulating their emotions and building strong relationships with others.
Fact: Most common leadership development initiatives start
However, the current fad of measuring leaders on EI does
with an assessment. There are over 2,500 assessment
not have a strong scientific backing. There are conflicting
products on the market and only few of these have known
models of emotional intelligence, some measure it as a
relationships to leader effectiveness.
coachable dimension while others treat it as a fixed trait
shelf products lack sound theoretical backing .
that cannot be altered.
Such a confusion can be
Many of the off-the26
It is still the
case that unqualified hiring managers and HR professionals
troublesome for developing leaders. Do you leave out
continue to purchase, administer and interpret psychological
those low on emotional intelligence or treat them as a high-
assessments. Based on this, we strongly recommend
potential who can be developed? To add to the confusion,
ensuring that your chosen assessments are aligned with
studies show that emotional intelligence correlates highly
Standards for Educational and Psychological Testing and
with intelligence. It correlates so highly with cognitive
Principles for the Validation and Use of Personnel Selection
ability, that it’s unlikely to be measuring anything new.
Procedures. More importantly the professionals making decisions based on the tool should be qualified.
What is more predictive of leadership success is metacognitive thinking which is the ability to monitor, evaluate and self-regulate one’s thinking, feelings, and actions. Focusing on meta-cognitive thinking has many benefits. It addresses a leader's self awareness about their feelings, emotions, and ways of thinking. Most importantly, leaders who are self aware understand how their emotions impact their decisions. In studies, meta-cognitive thinking was found to explain between 6 to 22 percent variance in 24
Myth 3: All feedback is good and more feedback is always better. Fact: In the past decade, there has been widespread adoption of 360 tools for development and performance management. Conventional wisdom suggests that any
Myth 5: Leadership cannot be measured, it is an intuitive judgment.
leadership development activity is seen as incomplete without a feedback loop. Additionally, any increase in the amount of feedback is always preferable. However, a review of the published research found that feedback can 21
backfire. After reviewing a large number of studies on feedback efficacy, the researchers, Kluger and Denisifound that over a third of the time feedback interventions resulted in decreased performance! That’s right – a negative return on investment!
Fact: Many believe that leadership is a deep internal characteristic that can be felt but not measured or described. This creates a dilemma for those building leadership development programs and also for those charged with demonstrating the efficacy of such efforts. While there are still many unknowns about leadership, we have come a long way in isolating a handful of effective leader behaviors and characteristics. We now also have accurate measures of attributes that influence leadership effectiveness. Here's a
It turns out that feedback works when it is task specific and clearly demonstrates the gap between the standard and the performance. Feedback becomes debilitating as soon as it
list showing the strength of relationship between key individual attributes and leadership effectiveness:
Link to effectiveness Defined as a leader’s competency to develop a compelling vision, link followers’
sense of self to the vision, challenge followers to take ownership of their work and be an inspiring role model. Here's a list showing the strength of efficacy between transformational leadership and important leadership outcomes. Overall leadership effectiveness = .44
Leader job performance = .26 Organizational performance = .27 The "Big Five" personality traits account for about 15% in leader effectiveness. Personality
Conscientiousness =.16 Openness to experience =.24 Emotional stability =.22/ Neuroticism = -.24
Task-oriented leader behaviors (i.e. Job related technical/professional) are positively related to overall leader effectiveness and account for 33.3% of variance.
Meta cognitive ability
Defined as ability to “think about thinking”, this ability was directly linked to leader effectiveness and found to explain 6 to 22% of variance.
Measures of this ability consistently predict leader effectiveness. Based on metaanalytic studies the strength of the correlation is roughly around .24.
Leaders with a proactive personality tend to take on themselves the responsibility to find and solve problems. In recent studies, such leaders have been found to be significantly more effective (average correlation of .33) in reaching unit performance targets.
So there you have it, a quick primer on what works in leadership development. If these issues inspired questions about your leadership development practices, please reach out. We love thorny challenges and will be happy to contribute with our best thinking.
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About Human Capital Growth Human Capital Growth (HCG) provides consulting and technology-enabled products and services in evidence-based talent management. It has bases in the US and India, and operates globally through its partnership with the Global Alliance for Performance Improvement (GAPIconsult.com). Clients include Fortune 500 organizations, small and medium size organizations and not-for profit institutions. HCG has recently brought to market a first of its kind innovation - a multi-level courseware and certification on integrated talent management delivered through a cutting edge learning platform. For more information visit www.humancapitalgrowth.com. What Matters™ Human Capital Growth’s What Matters™ series distills the most impactful drivers of talent management practices, packages them for ready use and makes then available as courses, tools, webinars and podcasts. All resources can be accessed through our cloud-based social learning platform and includes mentor support. Our content experts, guided by their cross industry experience, have reviewed several hundred peer reviewed journals articles, top university research, and expert opinions, to bring to you a shortlist of what works in talent management. Talent management professionals can benefit from having access to the right tools and resources for all their client needs, and have the peace of mind knowing that relying on What Matters™ solutions delivers results. Graphic Design: Manasa Bharadwaj, Vinutha P. Image courtesy of stockimages and Ambro at FreeDigitalPhotos.net
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