Fear: Does your organization have the Courage to invest in tough times?

Posted on November 13, 2008. Filed under: Enterprise Learning, Leadership Development, Talent Management | Tags: , , |

You can’t pick up a newspaper these days without reading about more business downturns, layoffs, and lowered expectations for retail sales, automobiles, consumer products, housing, and financial services.  Lots of business leaders are making tough decisions right now, and I also know a lot of our HR and L&D readers are worried about their jobs.

In fact, for baby boomers like me, the concept of retirement in the next 10-15 years is now becoming a fleeting thought:  many people now realize that they may have to put off retirement for another time.  (The stock market has lost an entire decade of positive performance, so we all have to wonder what that says about US business competitiveness.)  

So there is a lot of fear out there – and business leaders in almost every industry are being forced to make difficult decisions:  cutting costs, reducing headcount, getting out of certain businesses, and restructuring.  In our just-released Fall 2008 TalentWatch®, we found that almost 1/3 of our respondents have a new CEO or top management team and 26% are going through some type of major restructuring.  These changes bring stress into every person in the organization.

How do organizations deal with these transformations?  The key, of course, is to build a workforce that can rapidly adapt.  In this kind of environment people have to take on new roles, take charge of turning around their operations, and focus relentlessly on execution.  In many cases these changes identify dramatic gaps in capabilities and skills which may have been glossed over during good times.  

An example:  Global Pharmaceutical Company

Let me give you an example.  We are working with a large pharmaceutical company which is going through a business transformation.  This company is a global leader and traditionally built its business through a series of autonomous geographic business units, supported by a global research, global manufacturing, and global corporate functions.  Such a business structure worked well in a market with fast growth, high margins, and highly differentiated products.

The world has changed however.  Today pharmaceutical companies must deal with the loss of patent protection on many products, the need to sell to low cost healthcare providers, a neutral to negative regulatory environment, and the need to continuously invest in R&D as new genetic-based pharmaceutical breakthroughs become possible.

So this highly successful, well regarded company, which is over 100 years old, needs to change.  They are changing in two big ways:  first, they are reorganizing the company into global business units which focus on different market segments;  second they are revamping their manufacturing capacity to more rapidly deliver generic versions of their patent drugs.  These two changes result in new job roles, new leadership positions, and a new sense of purpose among tens of thousands of loyal employees.  The company is now focused on operating as an integrated company, with the ability to reduce costs, increase adaptability, and deal with these market changes.

Such Changes Demand Investment:

This particular company realizes that in many ways they are not prepared for this transformation.  So they are investing in a series of new leadership development programs, a new global leadership model, and a new program to rebuild the “nobility of first line management” through a new focus on managerial talent development.  

They also realize that many people who’s careers were built in one business function (e.g. sales or marketing) have to broaden their understanding of the business, so they have built a business simulation which teaches leaders about how the entire company and the pharmaceutical industry work. 

These programs show a commitment to building skills and capabilities during the downturn, with a clear understanding that now is the time to empower and enable managers and leaders to make the changes needed.

Does Your Company have this Courage?

It takes courage and leadership to invest in talent now.  One of the easiest things to cut during tough times are HR and L&D budgets.  While you may have to tighten the screws on your learning and HR operations, you will find that a continued focus on talent development today is more important than ever.  Our 2008 High Impact Learning Organization® research clearly found that organizations with a continuous, systemic focus on organizational learning greatly out-perform their peers.   Your role as an HR or L&D leader is to help build confidence in your leadership that they should continue to invest and hold you accountable to deliver the programs and strategies that help your organization transform itself during today’s economic slowdown.

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Corporate Universities: They’re Baaaaaaack!

Posted on May 9, 2008. Filed under: Enterprise Learning, Organization & Governance | Tags: , , , , , , |

I recently spent a few days in Mexico City meeting with HR and L&D leaders from some of the largest companies in Mexico (Banamex, Pemex, Groupo Modelo, and others).  The meetings reinforced a very important trend which is going on in corporate training today:  the “recentralization of corporate training.”

Over the last five years there has been a tremendous focus on building what we call the “federated” training organization – a model where the centralized L&D function focuses on learning technology, strategic leadership development programs, learning standards, and some key enterprise-wide programs.  In a well run federated training organization the central (a’la the Federal Government) takes clear responsibility for corporate-wide systems and programs, and the federated training groups (a’la the State Governments) take responsibility for training in their functions (sales training, customer service training, IT training, etc.).

We have written extensively about trends in this direction, and we have dozens of case studies and examples of high performing organizations which are learning how to implement this model well.  It takes advantage of the built-in tension within corporate L&D:  the need to centralize for efficiency and sharing, juxtaposed with the need to move training closer and closer to the business problems and operational groups.

The Corporate University

Historically, the term “Corporate University” was used to describe a fairly large, centralized training group which ran a wide variety of corporate programs, often organized into “colleges” which specialize in different functional areas.  For example, at GM there is a “College of Manufacturing.”  Other organizations have a “College of Finance,” using the term “college” to represent a set of programs and curricula designed to meet the needs of these functional units.  The heads of these program areas are even called “Deans.”

This terminology connotes the concept of education, not training.  The idea is that the University will focus on the long term development needs of the organization and will build multi-tiered curricula and career development programs which help employees within these disciplines build skills and careers in the company.

Unfortunately, when e-learning became the rage (starting around 2000 and 2001), many of these “universities” became somewhat obsolete, and over the last 10 years many companies have been disbanding them to build what we called “learning services” organizations.  (I actually wrote a controversial article entitled ‘Death of the Corporate University’ around 2004, identifying this trend.)  The “learning services” organization is a highly powerful concept:  the idea here is that the centralized training group is in fact a shared services team which provides LMS services, content development services, and other types of learning services which are used by employees and federated training groups to improve performance. 

The “learning services” model is patterned after the same transition which took place in IT.  IT departments have moved from “data centers” into “IT service centers” which provide direct support to business units, employees, and strategic initiatives through applications, networking, personal computers, and a wide variety of tools.  Instead of only “running systems,” the provide “IT support at your desk.”  Similarly, Learning Services organizations provide “learning services” at the point of need, and they do not only “run courses.”

Enter Talent Management and the New Corporate University

Enter the tremendous need for integrated talent management.  Today, thanks to the aging workforce and many other changes in employee demographics, organizations are in desperate need for integrated talent management solutions.  They now need integrated career development programs, onboarding programs, and a wide variety of what we call “talent-driven learning programs” to fill gaps in the leadership pipeline, an under-educated workforce, and the influx of younger workers.  Such solutions require a greater level of investment in the centralized learnign and development organization, and this has created a “new type of corporate university.”

Corporate University at Banamex

For example, at Banamex in Mexico (Citibank of Mexico), the Corporate University not only manages leadership development and operational training, but the organization has recently developed several degree programs, taught by local professors and business leaders, to deliver Bachelors and Masters degrees to Banamex employees. 

The program leverages virtual classroom technology to enable employees from all over the country to participate.  Employees take classes and do homework at night, and they receive accredited degrees.  The program includes basic educational training and many Citibank-specific topics in banking, customer service, and operations.   The results have been fantastic:  employees must be nominated to attend (only high-performing and high-potential employees are included) and hundreds of employees are participating. 

What is the value of this program?  There are many benefits:  first, the program develops tremendous levels of retention and employee engagement – people greatly respect the company and those that can complete the program are employees for life.  (They do have a two year commitment to stay with the company after completion, otherwise they must pay back tuition fees.)  Second, the program fills needed gaps in employee skills.  Mexico is a country with highly motivated people but a tremendous lack of educational opportunities.  Many of these employees would succeed in a university setting but did not have the financial resources or access to education before they went to work.  Third, this program is a career-development program which improves employee performance.   These people are not only learning accounting, math, and financial skills – they are also learning how to manage accounts and run the bank.

We have been talking with dozens of companies going through similar “recentralization” projects in their corporate learning.  These include Cardinal Health, Wellpoint, Caterpillar, and even GE.  While we still do not believe that a large centralized corporate university is the right solution for many organizations, talent management is clearly creating a tremendous need to “recentralize” much of L&D.


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Leadership Development: The Six Best Practices

Posted on January 26, 2008. Filed under: Content Development, Enterprise Learning, Leadership Development | Tags: , , , , , |

In our recent study, High-Impact Leadership Development: Trends, Best Practices, and Industry Solutions, we identified the best practices and the top providers in leadership development. Our study covered all aspects of leadership development and evaluated a number of HR consultancies. With rich data in hand, we revealed six best practices in leadership development that yield business impact.

1.  Develop strong executive engagement: The most important practice of all is to obtain the engagement of top leaders and managers. Their commitment means that the program will be highly regarded, aligned with corporate strategy and focused on the right business issues.  Philips Medical Systems – Ultrasound believes a key to its success is the active role of senior management in shaping, marketing, supporting, and executing the leadership development program. For example,

  • The CEO and executive team are instrumental in defining the deficiencies and identifying the critical content and topics that are the key to successful leadership within the organization. 
  • Senior leaders work closely with program participants to create individual development plans and help them select the top two priorities for action learning.
  • Senior leaders continue to meet with participants to coach and monitor progress on action learning throughout the year.

2.  Define tailored leadership competencies:  Successful leadership development programs are based on identified leadership competencies. By isolating and agreeing upon leadership competencies most important to your business, you will have the foundation for leadership development, as well as succession planning, career development and other talent-related processes. All high-impact programs we’ve studied are built on well-established leadership competency models.  For example, Aetna’s leadership curriculum supports three distinct levels of leadership.  Each training level focuses on specific competencies and builds on the level before it.

  • Foundational – First-level manager content that focuses is on the leadership competency area of engagement and performance; for example, engaging and developing people, and creating accountability.
  • Advanced – Mid-level manager curriculum that targets the leadership competency area of business discipline; for example, executing strategy and working effectively across business units.
  • Mastery – Senior-level manager program that builds the leadership competency area of value creation; for example, driving change and innovation.

3.  Align with business strategy:  Leadership development is far more than management training. As leaders move up in the organization, their skills must shift from people and project management to strategic business and operations management. Organizations such as Agilent, Aetna and Cisco focus heavily on company-specific business strategies in their leadership programs. Such programs cannot be totally comprised of off-the-shelf content. Furthermore, leadership development programs must be included in business conversations and planning. At New York Mellon, senior executives ensure a strong alignment to the culture, values, and strategies of the company.  For example,

  • The top 10 executives meet quarterly, to review how the efforts of the leadership development group are supporting the company’s current business initiatives. The top 30 to 35 executives identified common attributes and assembled them into an organized set of leadership competencies.
  • Executives identify real-time business issues and then spend time listening to and providing feedback on recommended solutions by leadership program participants.

4.  Target all levels of leadership:   Effective leadership development isn’t about training individuals.  Its primary objective should be the development of a leadership team capable of moving a company forward and meeting key strategic objectives.  To do this, every layer of management has to be equally prepared.  At Shell, three primary audiences are targeted.   They are:

  • Line managers participate in a program called Shell Life, which includes basic training in coaching, change management, delegation and development.
  • Functional managers participate in a program that focuses on business leadership, business management, vision and other leadership qualities.
  • Top business leaders are involved in a third program, which focuses on Shell’s business management and uses external education and consultants to train top global leaders.

5.  Apply a comprehensive learning approach:  No sound leadership development program consists solely of an instructor-led training event. Programs must include developmental assignments, 360-degree assessments, meetings with global counterparts, case studies, external education and a wide variety of e-learning and other media to give leaders a complete experience. People learn to lead by doing, so the best leadership development programs focus heavily on experiential learning. The National Basketball Association (NBA) designed a blended leadership program to train the company’s middle managers.  The program format includes five components described as follows:

  • Kick-off – A ½ day in the classroom for an introduction to the program.
  • On-line Instruction – A 3-week period for learners to complete six hours of e-learning.
  • Classroom Instruction – A one day workshop that summarizes the online training and provides opportunity for application, practice and exercises.
  • Review and Coaching.  Three follow-up review and coaching sessions to address principles learned in the course and to help work through any difficult situations.
  • Three Month Review. After 3 months, a one-hour in-class “refresher” course is conducted for the learners to discuss how they have been using the leadership models in their everyday challenges.

6.  Integrate with talent management:  To build a sustainable leadership pipeline, organizations must implement programs to assess leadership potential (part of the performance management process), identify successors to existing leaders and place these individuals into the right development programs as part of the company’s regular business practices.  In fact, one of the biggest indicators of a first-class leadership development program is a set of established practices and a corporate culture that encourages development throughout the enterprise.  At Textron, talent management processes are integrated as follows:

  • Performance Management – One-hundred percent of the worldwide salaried workforce participates in and completes a consistent performance assessment process. The performance management process not only looks at what employees need to get their jobs done, but also allows individuals to plan their careers.
  • Succession Planning – Succession planning at Textron is a process that naturally feeds into the identification, assessment and development of its leaders. The potential of leaders against long-term strategies is assessed and appropriate developmental plans are put into action.
  • Recruitment and Selection – Talent assessments are reviewed through a centralized sourcing and recruitment function which enable the company to identify candidates and ensure a strategic fit, ensure high potential people are moved frequently acorss businesses and functions, and align talent selection with Textron’s core leadership competencies.

In our most recent research, we found that leadership development

is the number one talent management function that needs the

most improvement, as identified by 43% of companies.

In this same study, 60% of companies (up from 51% in 2007)

identified “gaps in the leadership pipeline” as their number one talent issue.  


As companies evaluate their business challenges, we urge them to also consider their current leadership development strategies and think about the steps that they need to take to ensure that their leadership pipelines will be ready and able to execute business strategies that are critical for long-term success.  We highly recommend that they do this by assessing themselves against the six best practices.

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