2. Join The Effort
The Global Leadership Research project will be expanded to collect data from
organizations on a continuing basis. Each year, the survey will be refined to
collect additional data on issues that previous surveys have identified as
important. As such, the research process will be a continuing process.
We are seeking participation once annually from those leaders and HR executives
most involved in leadership development and succession planning.
The Global Leadership Research Project will be periodically updated as various
academics and research partners complete more in-depth analyses of the
massive database begun in 2010.
We thank you in advance for your interest, and look
forward to your future support and participation.
2
3. The Future: Understanding
Why Organizations May Want To Join Leadership Requirements
The Global Leadership Research Project in the emerging #1 global
economy, China, with
We will also be expanding the concept of Leadership Development
Criteria such as:
ranking beyond the concept of “Corporate Olympics” (see page 10)
to establish a rating process to document classes of effectiveness.
• Guanxi: an obligation of one
We will recognize all the companies that have established successful
party to another, built over
processes, based on the practical principles that Leadership Devel- time by the reciprocation of
opment is not a zero sum game…and that many companies rated social exchanges and favors.
as excellent but not ranked as number one are equally effective in
• Longtermism: the creation of
developing their future leadership, as witnessed by their ability to
a sustainable organization for
return substantial benefit to all their constituencies. The ratings will
the future.
provide identification of specific areas of strength or opportunity
for improvement. • Mentoring: personal, contin-
uous coaching tailored to the
This leadership project also will establish multiple categories of needs of a specific individual
excellence so that we are evaluating comparables and identifying that’s more encompassing in
and recognizing the different processes that may be appropriate what is imparted, since tacit
knowledge, relationships,
for different organizational circumstances. Preliminary findings
and intimacy with values and
suggest that “leadership” is a broad term that actually includes
informal social structure can
several types of leadership appropriate for different situations. be imparted only through
mentorship.
The Future Plan
• Parsimony: economy in the
The Global Leadership Research Project will be expanded to collect use of means to an end.
data from organizations on a continuing basis. Each year, the survey
will be refined to collect additional data on issues previous surveys • Collectivism and harmony:
pride in the community and
have identified as important. As such, the research process will be a
concern with one’s reputation
continuing process, seeking participation once annually from those
in the community.
leaders and HR executives most involved in leadership development
and succession planning. • Ambicultural sensitivity:
taking the best from Eastern
and Western philosophies
and business practices while
avoiding the negatives.
3
5. Table of Contents
Research Team, Sponsors, Participating Organizations 6
Executive Summary 8
The First Annual Global Leadership Research Project 13
The Initial Project Analysis 29
Leadership Roles 30
The Leadership Paradox 32
The Leadership & Succession Planning “Risk Factors” 34
The CEO’s Role in the Depth of the Leadership Pipeline 38
Leadership for the Future 39
Global Leadership Research Project Participating Partners 41
Global Leadership Research Project 2010 Survey Response Summary 45
5
6. Research Team
Research Ken Carroll Chally Group Worldwide
Jenna Filipkowski M.A.
Christopher Holmes Ph.D.
Scott Hudson
James Killian Ph.D.
Bart Mosele
Scott Runkle
Howard Stevens M.A.
Sally Stevens
Peter Tassinario M.A.
Brett Lippencott Chally International
J.P. Donlon Chief Executive Group
Sandi Edwards American Management Association (AMA)
Jean-Francois Jadin Imperial Consulting
John Read
Marjorie Woo MBA Keystone Group, Inc.
Karen Lindquist MBA Management Centre Europe (MCE)
Erick Myers
Sanja Licina Ph.D. Personified (a Division of CareerBuilder)
Stephan Rantela ProActive Oy Ab
Sanna Salmela
Michael Haid Right Management
Gerald Purgay
Deborah Schroeder-Saulnier
Shi Bisset Shi Bisset & Associates
Satyan Menon Turning Point
Ajay Namboodiri
Academic Fu Yan (Laura) Hauzhong University of Science & Technology
Tina Iansisi Hauzhong University of Science & Technology
Jason Jordan University of Virginia’s Darden School of Business
Corey E. Miller Ph.D. Wright State University
Das Narayandes Ph.D. Harvard Business School
Wu Bin (Julie) Hauzhong University of Science & Technology
Production Team Barry Breig
Cindy Burgess
Trisha Lamb
Deb Tackett
Heath Wilkins
Dean Wright
6
8. Executive Summary
The Global Leadership
Development Project
Executive Summary
Bringing More “Analytics” to Leadership Development, in lock step with
talent management, has seemingly become the primary focus of this
millennium’s business consultants, business oriented authors, and
business associations, and for good reasons!
1. The total quality management (TQM) “revolution” of the ‘60s and its
evolution through Six Sigma, ISO standards, and other efficiency and quality
methods, has essentially eliminated a competitive edge through
better product quality, for any serious business competitor. And differing
global standards for the protection of intellectual capital have reduced
innovation advantages…or at least sustainable advantage.
2. Ubiquitous global access to raw materials, components, and even
labor and more advanced professional services made available
through supply chain management, digitally based communication,
and access to information have tended to standardize costs
across those same serious business competitors. Another competitive
strategy defused!
3. The speed of change in product life cycles and the rise of new competitors,
as well as emerging new productivity, communication, and distribution
systems lessen the old long-term advantages of size, capital investment,
and even real estate.
8
9. Executive Summary
So what’s left? People! That is, having better people, because they innately have more
ability, can be deployed to their best utilization, are receptive to training and develop-
ment to maximize their capabilities, and can be nurtured and supported to maintain their,
and therefore your, sustainable competitive advantage.
The World Class Sales Research Benchmarking Project, ongoing since 1992 (see chally.
com), demonstrates, quite powerfully, that even sales growth has less to do with quality,
price, marketing, etc., than the effectiveness of the salesperson interfacing with the
customer.
And people, be they employees or customers, bring us to the need for leadership.
The art and science of organizing, directing, and motivating people, directly as in
employee, or indirectly as in customer (or voters for that matter), is the sole domain
of a leader. And while the particular skills may differ by the type of organization,
public or private, big or small, fairly stable or rapidly changing, the common thread
is what we call Leadership.
But we have never applied TQM to people, not to mention Six Sigma or ISO…
So we are still operating primarily through tribal wisdom, personal experience, or
collections of anecdotes to help us figure out what to aim for, who to use, and how
to channel their efforts toward the goals we have aimed for. Most recently there is a
movement toward the same kind of “analytics” used in other business functions, but
is indeed nascent.
There has also been research on applying the principles of TQM to the human side
of an organization. TQM or TQTalentM (see chally.com) with the somewhat surprising
but irrefutable evidence that our old “star” mentality of attempting to select the right
people, motivating them with exceptional rewards, and supporting them with all the
other non-stars…just doesn’t work for long in organizations with more than one top
performer. TQM teaches us that business stars are exciting, praise worthy, and often
great authors, but overrated as business resources. Jim Collins has documented the
flaws of the well positioned, flamboyant types, who are indeed very good, but who
are also out performed by the less flamboyant, often invisible (outside their own
organizations). Jack Welsh, for example, led GE from $26.8 billion (the year before he
assumed leadership) to over $150 billion the year before he retired. However, under
the leaders he put in place, GE has lost over $300 billion in the last 10 years. While
companies reported by Collins such as Walgreens, with a much less visible leader,
have continued to grow through leadership succession.
9
10. Executive Summary
Chally Worldwide and its partners believe it is time to move
The Trouble with past “research for marketing value” to research to advance
“Corporate Olympics” our organizational effectiveness. We are focused on three
differentiators from the typical annually published corpo-
The Olympic model for identifying rate Olympics ranking through a panel of experts as if this
the “best” athletes has become one were figure skating or diving.
of the most successful financial and
First, we have assembled a broad team of both academic and
marketing promotional events in
business experts… to design the data collection…and analyze the
the world today.
data collected. This does not remove the problems of self-reported
As a business, it’s phenomenal. As data, but does insure that the data is provided by individuals who
an accurate measure of athleticism, have firsthand knowledge versus outsiders who may or may not
the competition itself is somewhat have intimate knowledge of the companies involved.
dubious. There is little doubt that
Second, this research project will become an ongoing progression
being selected to participate in the
of data and analysis with each year building further insights on the
Olympics does put an athlete in an
previous years’ findings, and tracking changes in leadership devel-
elite class. But “winning the gold”
opment techniques.
on a given day is often almost an
accident. The difference between Thirdly, we’ll develop “categories” or levels of leadership develop-
a medal winner and “losing” is so ment effectiveness since the economic indicators suggest that
trivial as to be essentially meaning- there are little to no effective differences between companies
less. Nevertheless, winners achieve within the same quartile.
world recognition, greatly enhanced
financial prospects, and at least
their 15 minutes of fame.
In business, this type of ranking
may have attractive PR value, but
the practical implication of im-
proved business performance is
not in the rank…but being in that
“class” of companies, or within the
broad range of companies who
are legitimate candidates for
consideration. The research on
financial performance suggests a
rough correlation for the top quar-
tile versus the bottom quartile…
but absolutely no correlation with
rank within the quartile.
So we enjoy the competition, and
enjoy learning who won…it is
indeed an honor…for at least 15
10
minutes!
11. Executive Summary
Brief Findings:
1. Top-ranked companies for developing leaders produce substantially
better financial performance than bottom-ranked companies.
• Top-ranked companies had a 10-year growth of market cap of 17% while
bottom-ranked companies lost 2%
• Top-ranked companies produced 5% total returns to shareholders, while the bottom-
ranked companies lost 39%
2. The required competencies for different “C” Level positions are substantially different.
• Only CEOs are seen as having responsibility for Strategy
• Only COOs had as many as two of the four most important competencies in common
with the CEO, Finance CFOs who are also likely to succeed to CEO, had only one
• This suggests that job rotation may be invaluable for understanding the business
but be less helpful in preparing high potentials in planning strategy for the future
3. The most frequent sources of succession failure or “leadership risk factors” are related
to people skills.
• This was amplified if the promotions were internal
• The leading “Leader Failure” cause was reported as “failure to adapt to the culture”
4. The Data is insufficient, but here are strong indicators supporting the
fact of real differences in required competencies in Asia and the Far East.
• Non-Western companies are more likely to share strategic responsibility across
several “C” Suite leaders
• Less “personal profit” driven economies, such as China, seem to have dramatically
different leadership requirements
5. The extent of the CEOs personal involvement in the Leadership Development
Process, is a critical key to the program’s overall effectiveness.
11
14. The First Annual Global
Leadership Research Project
The efforts to identify the companies who are best at developing leaders have become
a major business media topic for most of this decade and in academic research for
decades earlier. Fortune and Hewitt likewise have promoted their research. Today,
there are three publications that feature these surveys, now including Bloomberg
BusinessWeek in cooperation with The Hay Group.
The previous research has been valuable, especially in focusing on the
processes and procedures that are most effective and most
commonly used by top ranked companies, these include:
• Having a formal process that involves
the active participation of the CEO
• A development program for a wide funnel of
high potentials in the formative years of their careers.
There is also a reasonable consensus on a variety of developmental techniques,
including “action learning,” monitoring and coaching, formal classes, etc. identified
across all the research that will assist any company trying to develop or refine its
“talent management” regimen.
Taking the Research to the Next Level
Chally Group Worldwide is pleased to introduce the First Annual Global Leadership
Research Project overview results.
14
15. We have engaged:
Multiple business and academic partners who are committed to expanding
our global knowledge base, in order to transcend concerns of results being
driven by any one organization’s marketing needs
A blue-ribbon team of research analysts from Harvard, the University of Virginia’s
Darden School of Business, Chally Group Worldwide, Right Management,
Personified/CareerBuilder, Wright State University, Huazhong University of
Science and Technology, The American Management Association, Turning
Point and more.
We have investigated key trends in effective leader development with analysis of
differences found in functional roles, organization types, and with consideration
of the impact of geo-cultural variations.
Research Goal:
To establish broadly recognized and ongoing thought leadership research
documentation outlining global standards in Leadership Practices, Leadership
Development, and Succession Planning.
15
16. Several key questions, previously
unanswered in these studies, have
been addressed:
1. Does leadership development really drive better business performance?
All the research assumes that leadership development is important, but there is less
understanding of the actual ROI that can be attributed to these efforts. Without a mean-
ingful calculation of long-term return, it is difficult for companies to expand their invest-
ment consistently, especially in trying economic periods. In fact, almost two-thirds of
responding companies listed “financial limitations” as their number one challenge in
achieving their leadership development goals.
2. Does leadership development actually produce higher quality leaders who drive
better organizational performance, and if not…What goes wrong?
For several decades there has been significant business and organizational emphasis
on developing leaders. We’ve seen substantial investment, research, consulting activity,
reporting, and books published on the “State of the Art”. So, why has the CEO turnover
(failure) remained as high as it has and even deteriorated over the decades? And why is
there relatively so much less research on the causes of failure. In other important aspects
of business, the principles of Total Quality Management (TQM) are routinely applied to
identify and correct sources of troubling issues. We propose to identify and establish the
principles of “Total Quality Talent Management (TQTalentM) by identifying Leadership
Development and Succession “Risk Factors” and ultimately document the approaches of
organizations that are successful at minimizing those.
3. Is leadership development effectiveness more subject to external factors outside an
organization’s control?
And if not, how can companies rated as BEST in Leadership Development drop out one
year later, or be high on one research list and not even appear on another in the same year?
4. How do we separate the marketing hype from the Critical Success Factors (CSFs)
Since resources are limited, which are the most important factors influencing Leadership
Development, and ultimate business success, and how good is good enough?
16
17. In order to establish more empirically based findings,
the research defined multiple qualifying criteria for
inclusion and final ranking in The Best Companies For
Leaders. These included:
• The existence of a formal development program
• The percentage of time the CEO was personally involved
• The percentage of both senior leadership and middle management
recruited internally
• The frequency of being cited as a recruiting target by other organizations
• The long-term growth of market capitalization and shareholder value
These measures will be consistently applied across time.
17
18. The following information provides a high-level summarization
of the research sample. This research represents responses from
C-Level and Senior Human Resources and Development leaders
from over 1,000 global organizations.
Organization Size
Annual Revenue of organizations in US$
Revenue CEO (%) HR (%)
Less than 25 million 49.4 20.1
25 to 50 million 8.0 13.6
50 to 100 million 6.1 10.0
100 million to 500 million 13.5 14.1
500 million to 1 billion 3.6 8.2
1 to 5 billion 10.7 12.4
5 to 10 billion 3.6 11.3
Over 10 billion 5.5 10.5
Number of Employees
Employees CEO HR
Fewer than 500 62.0 34.4
500 to 1,000 8.4 11.3
1,000 to 2,500 7.3 13.5
2,500 to 5,000 5.0 9.6
5,000 to 10,000 5.3 7.9
10,000 to 25,000 3.1 7.6
25,000 to 50,000 4.5 5.9
50,000 to 75,000 0.8 3.1
75,000 to 100,000 0.1 2.8
More than 100,000 3.1 3.9
18
19. Location of Company
Headquarters
HR
CEO 0
0
HR
CEO 14.0
7.0
HR
74.6 HR
2.3
CEO
80.9 CEO
0.5
HR
1.5
CEO
HR 1.8
CEO
0.5 1.5 CEO
7.8
HR HR
0.4 1.7
CEO HR
0.3 3.4
CEO
1.0
Regions
North America Southeast Asia
South & Central America East Asia
Middle East / Africa Oceana and Australia
Europe Asia
South Asia
19
21. The Initial Project Analysis:
Leadership Roles
The Leadership Paradox
Leadership and Succession
Planning “Risk Factors”
The CEO’s Role in the Depth
of the Leadership Pipeline
Leadership for the Future
21
22. Differences are evident in:
Leadership Roles
• Functional responsibility. Where Leaders Come From
• Career path opportunities: Leadership development would be infinitely simpler if leader-
The more broadly one’s ship were a singular, finite competency or set of competencies
career exposure across busi- that applied in all situations. However, the facts loudly refute
ness units, product/market this perhaps naïve, hope. Leaders evolve from a wide variety of
segments, or customers
backgrounds, experience, and job functions. Western corporate
(Operations, Finance, and
CEOs are most likely to come from Operations and Finance.
Sales), the higher likelihood
of selection for the senior When asked what functional areas are most likely to produce
leadership positions. your C-level executives, Operations was the most likely to be
indicated (68%) and Finance was second ranked (56%) with
• Geo-cultural environment:
Sales third (49%). The more specialized functions were less likely
India and the Far East have
meaningfully different views to provide the career path to the top. Marketing was less likely
of leadership development at 34%, Human Resources, 24%, Engineering 22% , IT 13%, and
than the “West”. Research and Development only 8%. “Other” was indicated by
2% of respondents.
• Size of the organization:
Where there is a tendency
What functional areas are most likely to produce
to manage/lead directly
your C-level executives? (check all that apply)
(and personally) rather than
through layers of subordi-
Operations 68.4%
nates, dictates whether there
is a need for different skill Finance 55.6%
sets. Sales 48.6%
• Type of organization: Public, Marketing 34.0%
Private or Governmental/ Human Resources 24.1%
Charity: Where the responsi-
Engineering 22.0%
bilities of different functional
leaders, as well as the con- Information Technology 12.8%
stituencies they must serve, Research & Development 8.2%
may differ substantially. Other 1.7%
Factors That Drive Effective Leadership
To date, survey respondents have supported the premise that
leadership, while often thought of as a singular capability, is
actually several variable sets of skills. Leadership development,
therefore, should include differing practical experiences (often
referred to as “Action Learning”) and training/education oppor-
tunities unique to the requirements of a specific leadership role.
22
23. Differences in
Leadership Roles...
In trying to determine the lessons behind the wide disparity between functional roles as
career paths, it is only partially clear why most CEOs come from Operations and Finance. If
all leadership roles required the same skill set, we would expect all functional areas to be
equally represented. If all positions required the same skill set as the CEO position, then
all individuals from all the functions should have similar skill sets. We would assume that
people are promoted to CEO from Operations and Finance because they are perceived
to have developed competencies that are important for the CEO role. It is possible that
Financial people in their rise to the top are exposed to all the business functions or divisions
within the company.
Possibly Operations people are at least familiar with all the products and services and
salespeople are familiar with all the customer segments. Alternatively, it might be argued
they were rotated through these functional management roles because they were originally
chosen for their “C” suite potential. In either case, there is strong evidence that suggests that
different leadership roles require a different set of competencies and experience in func-
tional roles in itself does not prepare one for succession to CEO particularly well.
We asked respondents to rate which of the most commonly suggested critical competencies
were the four most critical for several typical C-level positions. Taxonomy Table 2 presents
the results. The top four competencies for CEO were Creating a Strategic Vision (91.7%),
Inspiring Others and Maintaining Key Leadership Responsibility (62.3%), Developing an Ac-
curate and Comprehensive Overview of the Business (56.9%), and Decision Making (54.5%).
This analysis helps explain why CEOs are more likely to come from Operations and sec-
ondarily from Finance. The CEO role shared two critical competencies with the COO and
one critical competency with the CFO position. The COO position emphasizes “Developing
an Accurate and Comprehensive Overview of the Business” and “Decision Making”, which
are two of the four critical CEO competencies. The CFO position had only “Developing an
Accurate and Comprehensive Overview of the Business” as critical. The fact that only one
or two competencies overlap may also suggest why succession, even from these “closest”
functions, may fail.
23
24. The Leadership Paradox
How would a company develop leaders that have a
demonstrated track record of Creating a sound Strategic
Vision and Inspiring Others and Maintaining Leadership
Responsibility when these roles are more likely to be
a fairly exclusive domain of the CEO?
The CEO role seems to be positioned almost as royalty. By achieving that
Paradox 1.
position they seem to be almost exclusively responsible for creating the
strategic vision and inspiring others to achieve it.
Functional leaders are unlikely to have had a chance to practice those key CEO
skills, or demonstrate competence. If the organization’s strategy is to promote
successful people from the lower levels, might not the wrong person be pro-
moted? Someone may be successful in the COO role because they had Techni-
cal and Business Expertise, and skill at Directing, Delegating, and Establishing
Monitoring Systems. These competencies are seen as least important to the
CEO role.
It is likely that all too often, someone may be promoted because they had a mix
of competencies that lead to success in their functional role, for example, but
may actually lead to failure in the CEO role. Those promoted from the COO role,
which emphasizes Identifying and Focusing on Critical Priorities and Technical
and Business Competence/Expertise may be less prepared to plan, lead, and
monitor long-term strategy.
24
25. Paradox 2. The results also suggest that many organizations may suffer from a
critical but hidden weakness in terms of bench strength. Considering
that essentially, all execution will demand accomplishing the corporate
goals through others, it may be telling that less than half of all respon-
dents cited “Selecting and Developing Successors and Key Reports” as
a critical strength for any role.
C-Suite Executive Competencies
Table 2. Taxonomy CEO CFO CIO CLO COO
Creating a Strategic Vision 91.7 16.8 22.0 23.2 24.1
Developing an Accurate &
56.9 56.1 31.2 9.7 56.1
Comprehensive Overview of the Business
Politically Astute 31.9 10.3 10.7 27.4 16.3
Selecting & Developing Successors and Key Reports 40.4 21.1 19.9 41.1 27.5
Inspiring Others & Maintaining Leadership Responsibility 62.3 15.6 15.8 35.8 33.4
Decision Making 54.5 42.7 31.8 30.5 51.8
Initiative to Produce Appropriate Change 29.9 18.2 29.8 37.9 36.0
Identifying and Focusing on Critical Priorities 34.4 51.6 44.6 37.5 50.5
Technical & Business Competence/Expertise 18.1 61.4 70.5 40.7 49.7
Directing, Delegating, and Establishing Monitoring Systems 13.4 53.0 43.8 26.7 33.2
Objective Self-Assessment of Own Limitations 19.6 15.1 16.4 20.0 18.4
Timely/Effective Execution 17.0 41.0 56.5 35.8 54.7
Collaborative 18.5 29.5 44.6 48.8 30.3
Most Critical For the Role
Least Critical For the Role
25
26. Leadership turnover, for non-
performance, or other leadership
The Leadership and
dissatisfaction issues continues to
be higher than planned, especially
Succession Planning
since choices regarding senior
leadership could be considered
“Risk Factors”
the most important corporate
decision a company could make.
To gain some insight as to Fails to Build Relationships and a Team Environment
40.2%
possible sources or “Succession Percentage of those
who responded A Mismatch for the Corporate Culture
Risk Factors,” we asked for the 32.4%
High Risk
perspective of the Senior HR Failure to Deliver Acceptable Results
Moderate Risk 25.1%
Executives who responded to
Low Risk Unable to Win Company Support
our survey. Arguably, they have a 25.1%
unique vantage point as insiders Lack of Appropriate Training
23.5%
(with a more intimate view) but
Egotistical
still somewhat external to the risk 15.1%
factors they may observe. Lack of Vision
14.5%
Of the HR executives eligible to Not Flexible
13.4%
provide this data, 63% responded. Poor Management Skills
The table to the right ranks the 12.3%
factors believed to contribute Poor Communication
11.2%
most to the failure of senior leaders Lack of Political Savvy
in their organizations. 11.2%
Lack of Organization
Since the survey included diverse 8.4%
Given no Clear Direction
HR Executive responders from
7.8%
multiple situations, it is more help- Job Mismatch
ful to identify differences within 6.7%
Lack of Drive/Motivation
different classes of companies.
6.1%
Lack of Business Acumen
3.9%
Poor Decision Making
3.4%
Lack of Honesty
2.8%
Left the Business
1.1%
26
27. Our hypotheses regarding critical leadership competencies included
anticipating differences according to:
Different Succession Practices:
Percent promoted internally versus externally recruited executives
• Senior level
• Mid level
The size and type of company
• Over 1 billion in revenue versus smaller
• Publicly held versus private or non-profit
• Geo-cultural differences
We present initial findings across source of promotion and difference by size of company.
The Risks of Low Internal Promotion
“Bringing In Outsiders Who Don’t Know the Business”
The advantages and
disadvantages of Failure to Execute
33%
internal promotion
3% 30%
Many CEOs as well as HR Didn’t get Clear Direction
executives identified a 17%
corporate preference either 4%
13%
to promote: Poor Organization
13%
• Almost exclusively 9%
4%
from within
• Externally, but from their
own market vertical The Risks of High Internal Promotion
“Promoting the Anointed who Haven’t Learned Humility”
(or closely related)
Didn’t adapt to culture
• Externally from outside 34%
their market vertical 7% 27%
(for a “fresh” perspective)
Lacking Political Savvy
17%
7% 10%
Mismatch Role
11%
6% 5%
Low Internal Promotion
High Internal Promotion
27
28. Do leaders need a deliberate and effective “on-boarding” process
to integrate them into a new level of responsibility even if they are
internally promoted…much as new employees often benefit from well-
conceived integration into a new company and position?
We were surprised to see that HR Executives across the board identified lack
of company support as a leading new leader “Risk Factor” regardless of where
that individual was recruited or promoted from. Companies that emphasized
on internal promotions, however, were less than half as venerable than orga-
nizations that recruited outside candidates. This may suggest a “sink or swim
approach” or that some organizations assume that selecting the right indi-
vidual is sufficient. They may assume that if they made the right selection the
individual will immediately assume responsibility for his or her own success.
It may also mean that the selection criteria were inadequate and focused too
much on experience and job knowledge with too limited a concern for readi-
ness from the “people management” side of the leader’s new responsibilities.
The Surprise! Lack of Support by the
Company was Significant Across all
Succession Sources
Lower Levels of Internal Promotion
40%
Moderate Levels of Internal Promotion
24%
Higher Levels of Internal Promotion
19%
28
29. There may be several explanations for these findings.
First, the fewer responses cited by the smaller companies could indicate that smaller
organizations are “easier “to lead. Possible, also, is that smaller organizations are less likely
to attract such “accomplished” recruits so that, as Jim Collins pointed out in Good to Great,
“Some more effective leaders but less “self promoting” are more humble and sensitive to
the need to acclimate with the staffs of their new organization or role.”
Disadvantages of Smaller Disadvantages of
Organizations Larger Organizations
(Under $1B in Revenue) ( Over $1B in Revenue)
Lacked Clear Direction Didn’t Fit Culture
11% 51%
4%
7% 24%
27%
Not Organized or Prioritized Egotistical
11% 22%
9% 9%
2% 13%
Not Flexible
High
20%
Low
11%
9%
Lack of Political Savvy
20%
8%
12%
29
30. The CEO’s Role in the Depth
of the Leadership Pipeline
To evaluate the possible consequence of having, • 48% of respondents from companies with a high
or not having, a sufficient leadership pipeline, we split percentage of promoting from within agreed,
our sample into three groups - focusing on top and or strongly agreed, that his or her company
had a sufficient number of qualified candidates
bottom groups. The top group featured those that
ready to assume senior leadership positions. In
were among the top 20% in filling senior level leader-
comparison, only 24% of the bottom companies
ship positions and the management levels below agreed that they had a sufficient number of se-
by promoting from within (80% or higher internal nior management candidates, and none of them
promotions). The bottom group features those with strongly agreed with the statement.
the fewest internal promotions (40% or less).
• 55% of the top companies agreed, or strongly
We found that companies that filled a higher agreed, that they had a sufficient number of
qualified mid-level manager candidates, while
proportion of positions from promotion
only 31% of the bottom-performing companies
from within had significantly more personal agreed or strongly agreed.
involvement of their CEO in their leadership
development system. The converse was also true.
• The personal involvement of the CEO has sig- While only 39% of top companies disagreed or
nificant benefits; companies that have a higher strongly disagreed that they had sufficient quali-
proportion of promotions from within were less fied mid-level leadership positions, 53% of the
likely to suffer from a lack of qualified candidates.
bottom-performing companies did. While only
28% of top companies disagreed or strongly dis-
agreed that they had sufficient qualified mid-level
leadership positions, 43% of the bottom-perform-
ing companies did.
It appears that in the war for talent, those CEOs who invest more of their personal time in developing leaders
enjoy a better likelihood that they can fulfill the company’s leadership needs from within.
Percent CEOs Percent CEOs
Involved Involved
Activity Top Companies Bottom Companies
Coaching and Feedback 53 54
Appear in Training Classes 51 30
Informal Information Exchange
80 73
Sessions
One-on-One Mentoring 71 58
Formal Training Classes 35 29
30
31. Leadership for the Future
Research focused on Geo-cultural differences suggest the
Multinational companies will require a New Global Leadership
profile: the ideal ambicultural leader, will be an enlightened
citizen/businessperson with competencies such as:
• Cross cultural insight: the wisdom and strength to integrate other cultural and
business paradigms
• Recognition of the shortcomings of other business models to meet the complexities
presented by globalization and emerging markets
• Openness to new ways of thinking
• Balancing the diverse needs of social, geopolitical, environmental, and human needs,
and the ability to transcend divisions around the globe
A dedication to integrating global awareness into everyday actions:
• An emphasis on unity and morality
• An ability to balance social good and self-interest
• An emphasis on trust-based and legal relationships
• An equal appreciation for teamwork and individual stars
• A commitment to continued learning, sharing knowledge, and experience
in the interest of mutual improvement, and reaching the pinnacles of
professional achievement and humanity
The ability to appropriately integrate:
• Social good and self-interest
• Trust-based and legal relationships
• Teamwork and individual achievement
• Risk taking and caution
• Business and society
• Locally and globally sensitive
31
34. Chally Group Worldwide is a sales and leadership talent management company
that was founded in 1973 through a grant from the United States Justice Depart-
ment. The grant funded the creation of actuarial assessment techniques and a
validation technology that accurately predicts on-the-job effectiveness. Chally’s
talent analytics has been improving productivity and reducing turnover for
customers in over 49 countries. Customers choose Chally’s talent measurement
process for improved candidate selection and employee and organizational
development. Chally continues to fund and develop comprehensive research in
sales and management development including the Best Companies for Leaders
and World Class Sales Research, which has been conducted for several years.
Right Management (www.right.com) is the talent and career management expert
within Manpower, the world leader in innovative workforce solutions. Right
Management helps clients win in the changing world of work by designing and
executing workforce solutions that align talent strategy with business strategy.
Our expertise spans Talent Assessment, Leader Development, Organizational
Effectiveness, Employee Engagement, and Workforce Transition and Outplace-
ment. With offices in over 50 countries, Right Management partners with compa-
nies of all sizes. More than 80% of Fortune 500 companies are currently working
with us to help them grow talent, reduce costs, and accelerate performance.
Personified, a division of CareerBuilder, is the leading business intelligence
consulting firm focused on talent. We specialize in job seeker and employee
research, human capital consulting, and talent sourcing and screening. Our real-
time access to job seekers, employees, and employers helps us deepen talent
acquisition strategies and swiftly implement recruitment tactics so companies of
all sizes realize the best return on their people.
Turning Point has been addressing various needs in Sales, Customer Service,
Leadership, Vision-Mission, Balance Score Card, Reengineering, and Implemen-
tation in different organizations since 1999. The company’s international pool
of consultants in India and the Middle East have specialized capabilities in the
above-mentioned segments. Over the past several years, Turning Point has es-
tablished a name for itself in achieving levels of excellence for its clients.
34
35. ProActive is a Scandinavian based company that offers customers a broad
and diverse professional expertise to help enable strategic development. Pro-
active focuses on competency assessment, strategic planning, management
issues, and strengthening the corporate image. We help organizations clarify
needs and initiate the evaluation and development process.
Imperial Consulting represents the American Management Association (AMA)
in Singapore, Malaysia, Philippines, Indonesia, India, and Australia. In partnership
with AMA, our mission is to provide managers and their organizations with the
knowledge, skills, and tools they need to improve business performance, adapt to
a changing workplace and prosper in a complex and competitive business world.
MCE was established in Brussels in 1961 as the European headquarters of the
American Management Association (AMA), and provides high quality and
consistent management development solutions across Europe and globally.
We cover the three areas of leadership, managerial, and business functions.
American Management Association is a world leader in professional
development, advancing the skills of individuals, teams, organizations, and
government agencies. With over 85 years of experience delivering 140+
training seminars throughout the country, AMA has refined their training
programs to meet today’s challenges. AMA promotes the goals of individu-
als and organizations through a comprehensive range of solutions, including
business seminars, blended learning, Web casts and podcasts, conferences,
books, whitepapers, articles and more.
35
38. Global Leadership Research Project
2010 Survey Response Summary
Does your organization have a formal process for developing leaders?
% %
Formal Process CEO HR
Yes 52 54
What development opportunities are included in it?
Opportunity CEO HR
Coaching and mentoring 94 93
Action learning/developmental assignments 77 77
Assessment and feedback 84 89
High-potential programs 1 65
International assignments 30 44
Cross-functional team projects 69 72
Exposure to senior executives 77 76
Exposure to internal and external thought leaders 59 51
Formal classroom training 69 79
External workshops and training 69 79
Tuition Remission 52 52
Other: please specify 8 14
Does your company have international operations?
CEO HR
39 52
What does your company do to ensure it has a good leader pipeline?
Action CEO HR
Provide informal development opportunities to key internal people 80 74
Rigorously recruit and hire external candidates who have the potential to become
37 45
top-level leaders to fill specific position openings
Maintain a network of potential external leadership candidates 30 22
Other: please specify 11 20
What are the greatest challenges individuals face in being successful leaders outside of their home country?
Response HR
Adapting business practices to local conditions 48
Cultural assimilation 80
Family issues 7
38
39. % %
Language barriers 19
Disconnect with domestic organization 8
What percent of your current senior management team was recruited internally?
CEO HR
54 52
What percent of your current next level under senior management was recruited internally?
CEO HR
52 55
What functional areas are most likely to produce your
next C-level executives? (Choose the top FOUR)
Functional Group CEO HR
Engineering 16 28
Finance 50 62
Human Resources 26 23
IT 12 13
Operations 67 69
R&D 9 8
Sales 48 49
Marketing 36 32
Other 11 13
In your location, how do the skill requirements differ among various leadership roles?
(Pick the top FOUR most important skill requirements within each job title category.)
Critical Skills for CEO
Skill CEO HR
Developing an Accurate and Comprehensive Overview of the Business 58 55
Creating a Strategic Vision 92 92
Technical & Business Competence/Expertise 18 19
Objective Self-Assessment of Own Limitations 21 17
Decision Making 57 50
Timely/Effective Execution 18 16
Politically Astute 29 37
Collaborative 23 13
Initiative to Produce Appropriate Change 30 31
Inspiring Others & Maintaining Leadership
63 62
Responsibility
Identifying and Focusing on Critical Priorities 33 35
Directing, Delegating, and Establishing Monitoring Systems 15 11
Selecting & Developing Successors and Key Reports 40 40
39
40. Critical Skills for COO % %
Skill CEO HR
Developing an Accurate and Comprehensive Overview of the Business 47 52
Creating a Strategic Vision 21 29
Technical & Business Competence/Expertise 48 51
Objective Self-Assessment of Own Limitations 20 16
Decision Making 52 51
Timely/Effective Execution 56 52
Politically Astute 16 17
Collaborative 33 27
Initiative to Produce Appropriate Change 36 35
Inspiring Others & Maintaining Leadership Responsibility 32 35
Identifying and Focusing on Critical Priorities 48 53
Directing, Delegating, and Establishing Monitoring Systems 38 28
Selecting & Developing Successors and Key Reports 29 25
Critical Skills for CFO
Skill CEO HR
Developing an Accurate and Comprehensive Overview of the Business 56 55
Creating a Strategic Vision 13 23
Technical & Business Competence/Expertise 61 60
Objective Self-Assessment of Own Limitations 15 16
Decision Making 41 44
Timely/Effective Execution 41 44
Politically Astute 10 13
Collaborative 30 28
Initiative to Produce Appropriate Change 17 21
Inspiring Others & Maintaining Leadership Responsibility 13 19
Identifying and Focusing on Critical Priorities 52 51
Directing, Delegating, and Establishing Monitoring Systems 53 51
Selecting & Developing Successors and Key Reports 21 20
Critical Skills for CIO
Skill CEO HR
Developing an Accurate and Comprehensive Overview of the Business 31 24
Creating a Strategic Vision 18 26
Technical & Business Competence/Expertise 73 67
Objective Self-Assessment of Own Limitations 16 17
Decision Making 30 34
Timely/Effective Execution 55 59
Politically Astute 11 10
Collaborative 48 40
Initiative to Produce Appropriate Change 32 29
Inspiring Others & Maintaining Leadership Responsibility 14 19
Identifying and Focusing on Critical Priorities 42 47
40
41. % %
Directing, Delegating, and Establishing Monitoring Systems 38 50
Selecting & Developing Successors and Key Reports 20 20
Critical Skills for CLO
Skill CEO HR
Developing an Accurate and Comprehensive Overview of the Business 29 34
Creating a Strategic Vision 18 29
Technical & Business Competence/Expertise 40 40
Objective Self-Assessment of Own Limitations 20 21
Decision Making 30 31
Timely/Effective Execution 35 37
Politically Astute 27 27
Collaborative 50 48
Initiative to Produce Appropriate Change 33 46
Inspiring Others & Maintaining Leadership Responsibility 32 42
Identifying and Focusing on Critical Priorities 36 40
Directing, Delegating, and Establishing Monitoring Systems 30 21
Selecting & Developing Successors and Key Reports 42 40
Do you reserve key top-level management positions within foreign
countries for locally recruited/developed nationals?
CEO HR
49 43
How would you rate your organization’s ability to develop leaders?
Response CEO HR
Poor 9.3 13.8
Average 25.2 30.4
Good 28.9 30.4
Very Good 24.8 19.2
Excellent 11.8 6.3
What challenges do you face in developing leaders within your organization?
Response CEO HR
Limited financial resources 57 60
Difficulty balancing long-term and short-term business requirements 57 53
Rapidly changing business requirements so criteria for success is fluid 36 34
Difficulty identifying high potential development prospects 15 25
Difficulty retaining top talent 10 20
Difficulty attracting top talent 21 26
No systematic process for identifying and developing talent 35 41
Other: please specify 12 13
41
42. Describe the processes you use to identify top internal talent (e.g., succession
planning, talent pool planning, potential identification and tracking, etc). %
Response HR
Have no formal process 21
Succession Planning 39
Performance Reviews/Development plans 19
Identification and Tracking of hi-potentials 18
Coaching/mentoring 4
Annual talent review 22
360 Feedback 5
Nomination by boss 1
Assessment Results 8
Leaders pick next leaders/hi-potentials 8
Do you have a formal definition of high potential? HR
HR 34
What are the two best ways to identify hi-potential talent? (Check the Top TWO.)
Responses HR
Credentials 24
Recommendations from superiors 75
Peer Nominations 22
Completion of minimum identified assignments or course work 19
Assessment Tests 21
Assessment Centers 20
Other: please specify 20
How far down in your organization do you go in identifying and track high potential leaders.
HR
Individual Performers with no Management Experience 35
First Level Supervisor 14
Middle Managers 32
Upper Level Managers 13
Other 5
What percent of your time is spent engaging in other’s development activities?
CEO HR
28.8 16.9
42
43. In which of the following development activities do you get personally involved?
% %
Response CEO HR
Teaching formal training classes 43 14
Guest appearances in training classes 45 48
Mentoring one-on-one 82 38
Coaching and feedback for skill development 79 45
Informal information exchange sessions 81 75
Other: please specify 6 15
What percent of your time is spent on your own personal development activities?
CEO HR
19.2 15.3
What developmental experiences were most impactful in preparing you for the role of a
CEO/C-Level executive during your career?
Response CEO
Sitting on Boards 2
Cross-functional responsibilities 21
Formal education/advanced degree 13
Experience at multiple organizations 21
Given stretch goals 26
On-the-job training, hands-on learning 34
Service roles outside of work 11
Formal training 14
Other companies actively try to recruit our organization's leaders.
Response CEO HR
Strongly Disagree 5.6 4.3
Disagree 12.8 13.5
No Opinion 27.0 28.0
Agree 40.5 40.1
Strongly Agree 14.1 14.0
Retention of key talent is a formal performance metric for our managers
Response CEO HR
Strongly Disagree 5.9 14.0
Disagree 20.4 32.4
No Opinion 22.4 18.4
Agree 36.8 26.1
Strongly Agree 14.5 9.2
43
44. My company has a sufficient number of qualified internal candidates that are ready to
assume mid-level manager positions % %
Response CEO HR
Strongly Disagree 3.9 8.2
Disagree 29.9 27.9
No Opinion 21.4 17.3
Agree 36.2 37.5
Strongly Agree 8.6 9.1
My company has a sufficient number of qualified internal candidates that are ready to
assume senior manager/executive positions
Response CEO HR
Strongly Disagree 7.0 11.2
Disagree 36.8 39.5
No Opinion 22.2 19.0
Agree 27.8 25.4
Strongly Agree 6.3 4.9
Upper-level managers recruited externally have been successful.
Response CEO HR
Strongly Disagree 5.4 1.9
Disagree 11.9 9.2
No Opinion 22.8 29.6
Agree 47.6 54.9
Strongly Agree 12.2 4.4
Mid-level managers recruited externally have been successful.
Response CEO HR
Strongly Disagree 2.7 1.5
Disagree 8.8 5.3
No Opinion 29.5 20.9
Agree 51.2 66.5
Strongly Agree 7.8 5.8
HR is an effective partner in the leadership development process
Response CEO
Strongly Disagree 4.1
Disagree 10.2
No Opinion 23.8
Agree 35.0
Strongly Agree 26.9
44
45. Sector: % %
Sector CEO HR
Publicly Traded 22.0 36.4
Privately Held 72.0 56.4
Government Entity 5.9 7.2
What processes do you use to recruit and hire top external leadership talent? (Check all that apply.)
Response HR (%)
Use specialized recruiting firm 66
Recommendation from internal managers/executives 65
Recommendation from external executives 47
Networking at industry events 47
Assessment Process 31
General Interviews 44
Structured Interviews 60
Other: please specify 9
What on-boarding processes do you use for top-level leaders? (Check all that apply.)
Response HR
Assigned a mentor 31
Planned rotation of meeting key individual 70
Short-term assignments in different functional areas 23
Other: please specify 25
Which of the following are most predictive of leadership success? (Check all that apply.)
Response HR
Previous experiences 73
Educational background 18
Interpersonal skills 86
Fit with company values and culture 90
Motivation to lead 81
Lack of derailers 29
Other: please specify 5
45
46. List the three greatest causes of leadership derailment or failure.
% %
Response HR
Lack of business acumen 4
Not flexible 13
Poor communication 12
Cultural mismatch 32
Poor decision maker 3
Given no clear direction/expectations by superiors 8
Arrogant attitude 15
Fails to execute 26
Lack of honesty 3
Mismatch with role 6
Left the business 1
Poor management skills 13
Lack of personal drive 6
Lack of organization 8
Lack of political savvy 11
Fails to build relationships/team 40
Not supported by the company 25
Lack of training 24
Lack of vision 15
Describe the best processes to minimize leader derailment.
Response HR
Provide clear goals and expectations 14
Improve communication 7
Allow person latitude to fail 13
Provide regular feedback 28
Hire good match 29
Be honest about the position’s requirements 3
Provide a mentor 28
Mgt/Corp should support the person 9
Encourage teamwork 10
Provide training and development 47
What are the most critical skills to be a very effective upper-level manager?
Response CEO HR
Business acumen 16 19
Resilient to change 17 13
Communicates well 33 28
Makes good decisions 14 15
46
47. % %
Good talent management (hires and groom well) 7 7
Honesty 10 12
Knowledgeable/experienced 15 10
Leadership skills 38 47
Listens 18 19
Management skills 23 25
Motivated to be successful 24 20
Organized 12 12
Builds Relationships/good interpersonal skills 32 37
Sales skills 6 5
Builds teams 16 21
Analytical thinker, technical competence 20 17
Has vision 42 38
Additional Comments
(The following also appear at the end with the % for each response on the 5 point scale)
Question CEO HR
How would you rate your organization’s ability to develop leaders? 3.05 2.24
Retention of key talent is a formal performance metric for our managers. 3.34 2.84
Other companies actively try to recruit our leaders. 3.45 3.46
My company has a sufficient number of qualified internal candidates that are ready to as- 3.15 3.12
sume mid-level manager positions.
My company has a sufficient number of qualified internal candidates that are ready to as- 2.90 2.73
sume senior manager/executive positions.
Upper-level managers recruited externally have been successful. 3.49 3.50
Mid-level managers recruited externally have been successful. 3.53 3.70
HR is an effective partner in the leadership development process. 3.70 N/A
47