Benefits of Developing Leadership in a New Way

We’ve hinted at why companies should acknowledge these passages and integrate them into core people processes, but we’d like to hone in on the specific benefits that companies receive when they do so. The effort does the following:

• Reduces the risk of great leaders leaving the company. Every organization has a story of executives who left because they were moved off the fast track (or were never placed on it) and became superstars somewhere else. This happens with surprising frequency. Organizations routinely mislabel good performers as good leaders and average performers as average leaders. This is because they view leadership within a narrow framework. When you look at the whole leader, you realize that a leader is the sum of many parts, both personal and professional. As a result, you begin to see that an individual seems to have become a much better developer of talent after a significant life event or that a volatile, judgmental manager became a much better communicator and motivator after enduring a major lost contract in which customers confronted his actions. No system is foolproof, but a leadership development system that takes a broader view of experience, including passages, will do a much better job of identifying leadership potential.

• Increases leadership bench strength and diversity. Most companies can accommodate no more than 15 percent of their employees in leadership development programs. What’s more, the ones chosen for these programs are often remarkably homogeneous; they tend to come from similar functions or experiences, share similar attitudes and perspectives about business, and demonstrate an ability to achieve goals, meet deadlines, and do well on performance reviews. In most companies, they even look and dress alike. None of this is necessarily bad, but it prevents a mix of diverse perspectives crucial to innovation, adaptiveness, flexibility, and success. A focus on passages allows organizations to recognize and acknowledge experiences and learnings that may make a great leader but that don’t necessarily fall within traditional assessment boundaries. By considering the whole leader when making hiring, promotion, and development decisions, companies won’t place artificial limits on who receives leadership positions. Just as important, they will give more development opportunities to a larger number of people, because now such opportunities won’t be confined to a short list of high-potentials. Finally, it makes people accountable for their own development. The sole responsibility for development is shifted from the company’s shoulder to the individual’s, making it a more accessible process.

• Prevents organizations from firing leaders at times of maximum learning. This phenomenon rapidly depletes an organization’s talent pool. Maximum learning takes place during the passages, especially when executives join companies at senior levels, when they return from an overseas assignment, and when they experience significant failure. Unfortunately, these are also the times when companies terminate executives. People return changed from these experiences. They question policies they always accepted or are more willing to take risks or are more contemplative and willing to listen. When behaviors and attitudes change, it can make senior people uncomfortable. Conformity is still important within organizations, and going through a passage encourages people to be authentic rather than play a role. These returning executives sometimes look like a bad fit for the organization, though in reality they fit perfectly; it’s just that they have grown as people and as leaders, and so they appear to be different.

  We are often called in to coach senior executives who have been hired at senior levels from other high-performing companies such as GE. These executives have usually been recruited because of their unique experiences, personality, or cultural background, but as they begin to manifest the very qualities for which they have been recruited, the hiring company begins to experience buyer’s remorse. Rather than challenge the culture of conformity that is rejecting the transplant, the solution is often to coach the new hire into fitting in and adapting, accepting the leadership style that he or she was recruited to modify. Of course, this process is entirely unconscious, but it does implicate the culture of conformity that characterizes most senior executive ranks.

  With the passages in mind, companies will recognize leadership growth for what it is. Not only will this help them avoid removing people who have just made a major step forward as leaders but it will save the company a great deal of money in recruiting and training costs to replace those they have let go.

• Identifies and defuses ticking time bombs. In many companies today, a few dysfunctional and even emotionally abusive executives rise to senior levels. All of us are vulnerable to our derailment potential, but at senior levels, executives don’t always receive good feedback about how to manage their derailers effectively. Mischievous CEOs who are mostly creative and innovative challenge accepted accounting practices. Arrogant leaders refuse to acknowledge the viewpoint of others. Perfectionists drill down into endless details. Senior executives use fear as a management technique or attempt to cover up their own sense of vulnerability. How are these people promoted into positions of great responsibility? Why don’t companies do a better job of identifying those who thwart or de-motivate others, or act without adequate consideration of consequences?

  One explanation is that the leadership development and promotion process in most companies today is linear. The better you perform against easily measured outcomes such as financial targets, market share, product development schedules, Six Sigma indices, and the like, the likelier you are to be promoted. Performance assessment usually takes a few factors into consideration when evaluating leadership talent. For senior leaders, however, financial performance should be just one factor among many. Because it is not, companies often overlook the fact that their leaders are performing but not learning. Without reflection, especially from negative events, learning doesn’t happen. Obvious dysfunctional behavior can sometimes indicate the need for learning to occur.

  The passage model offers companies a way to spot behaviors and attitudes that need to be changed or curtailed and leads to the questions: What is going on, What has gone on, and What needs to happen to encourage this executive to learn and grow?

The real umbrella benefit of these passages to organizations is that it humanizes the system. Consciously or not, companies have modeled their hiring, assessment, and development processes on a financial-planning model. In many companies today, leaders are viewed as assets or liabilities; formulas are used to calculate value. Executives are penalized for significant failures, often spending time in the “penalty box” until their image has been rehabilitated or they are removed. Others are perceived as “not quite on the team” because they arrived through acquisition, worked in the wrong division, don’t have a strong advocate within the trusted relationship network of the company, or some aspect in their background is suspect. At the same time, because there is no good way to measure it, executives receive little credit for their ability to develop others, to adapt, or to see an issue from multiple perspectives; neither is credit given for their skill at bringing a diverse group of people together to work with drive and purpose or for their willingness to test nontraditional solutions.

A broader understanding of leadership effectiveness will lead to more intelligent choices in how we recruit, measure, and develop people to become leaders of others. It will be less driven by dry competency models and more focused on a holistic view of how leaders develop and learn, especially through personal and professional passages.