Building a Company of Great Leaders

Starting from scratch

All successful programs and initiatives for developing leadership talent within an organization are created for one single purpose: to support important business needs. These programs are an integral part of running the day-to-day business of the company. They fuel growth while fulfilling the needs of human capital and leadership.

Most companies are not sure where to begin, others don't believe they can build leadership from scratch. Yet others start from scratch, launch costly initiatives with a variety of programs, but with no real plan to build a system that will sustain good leadership.

The truth is: great leadership programs are not programs at all. They are essential processes for driving the business.

Everything in leadership begins and ends with business. A leadership strategy needs to define how you will support your business strategy. It is a fundamental part of running the business and needs to run across selecting, developing, assessing and compensating your leaders.

 Identifying critical capabilities

First, you need to identify the critical capabilities you will need in your leaders so that you realize your long-term business goals. Each organization is different and these differences will dictate a different and unique competency model. However, while good processes allow executive teams to assess their needs and rethink their strategy, they need to be kept in perspective.

A good competency model is a starting place for a dialogue and discussion of what's required and its sole function should be to add clarity to expectations. You need to then choose the critical behaviors that will define the success of your leaders, which will create clarity of what's really important for your business and industry.

Two factors decide how well a leader fits with his or her role: the business strategy and the amount of change in the environment.

 Business strategy

There is no universal best-leader model that describes ideal leadership characteristics and strategies. Business strategy can be broadly classified into two—growth strategy and return strategy. Having a growth strategy means you pursue profits primarily by expanding sales, while having a return strategy means you will compete on the basis of having a more efficient organization than your competitors. Both these strategies require different sets of skills and capabilities from the leadership team.

 Change in the environment

The amount of change an organization will experience during the next few years can be measured on a scale ranging from transactional to transformational. Today, the pace of change is predictable and transactional change is only the first in a series of situations and business environments that show more dramatic change—like large acquisitions, industry transformations, financial crises. This kind of transformational change requires leaders with charisma, great communication capabilities and most importantly, strong vision.

Just like leaders need to have a fit with your business strategy, they also need to be comfortable with, and capable of dealing with, different degrees of change.

 This is just the first step...

Defining the capabilities required of your leaders is only the first step. To actually grow and reinforce their capabilities, you need to actually promote their growth through right sourcing, aligning, developing and rewarding. You need to identify the gaps between what you have and what you need.

Starting from scratch isn't easy, but it can be done. Sometimes, it's easier to start from scratch than to dismantle bad processes and then work out a new strategy.

Finding and developing leaders will become more challenging in the future than it is today. The future poses new challenges and greater speed and complexity, but also opportunities to develop leadership capability more effectively. The great companies of the future will be those who recognize the new challenges early and respond aggressively with the help of a strong senior team, a focus on their best talent and doing the right programs the right way.