New Ways to Develop Leaders in Challenging Times

Limited budgets spark demand for new ways of doing things, especially when it comes to leadership development

By John Baldoni

In the wake of the Great Recession, organizations now recognize that they need to change—and quickly. One way to bring about change, as well as prepare people for it, is to develop the next generation of leaders. But investment in leadership development is shrinking, according to a study of 25 global companies conducted by the Institute of Executive Development (IED). Only one-third of those surveyed were maintaining current spending; the remaining two-thirds were either reducing it or no longer making new investments in leadership development.

In response to declining budgets, new approaches to developing leaders are emerging, according to Scott Saslow, IED's executive director. For example, IED has worked to pair companies that wish to pool their leadership-development resources to create a shared leadership-development experience wherein executives from two different companies go through a single leadership-development program.

As Saslow puts it, companies come to the "realization that only so much innovation can happen within their own company walls. It is necessary to learn from others to shorten cycle time and find novel approaches." Such dual-development efforts help executives learn to network with executives in different companies, which can lead to mutually beneficial relationships.

Saslow was impressed with how quickly executives from different companies got down to business. They sought to "get to the bottom line in terms of thinking of ways to collaborate, increase business for both companies, and make a real impact" in their businesses. These executives pushed each other to achieve business results for their respective companies. As Saslow says: "That is why they are leaders."

Two companies among several such pairings that collaborated with IED on this venture are CBS (CBS) and Intel (INTC). A key benefit of the program is having your ideas challenged by seasoned executives who do not necessarily share your world view. According to Per Wingerup, vice-president for learning & development at CBS, "The opportunity to describe, support, explain, and sell one's own company, processes, ways of doing things while being challenged by other smart people from another company that doesn't share the same history and therefore doesn't view the world through the same lens" is of great value.

careful pairings are needed

Debra Whitaker, senior consultant, executive development at Intel, echoes this sentiment. We "learn from each other on different approaches and aspects on real business issues. [This] enables [a] more 'outside–in' perspective needed for senior leaders to keep them from stagnating in the 'not invented here' syndrome."

Wingerup appreciates the dual approach but cautions that it is not for everyone. "It has to be done carefully with two companies that share similar business challenges without being in direct competition with each other or in the same value chain. CBS and Intel worked because we're similar and play in the same space, yet different enough and not direct competitors."

Says Whitaker: "Most important is the networking that most every participant has noted to be one of the biggest takeaways from the experience. Some have contacted each other in an ongoing relationship of exchanging ideas, coaching, and exploring business issues. That's the best return we could have."

The need for leadership development remains relevant. According to the Bloomberg Businessweek/Hay Group 2009 Best Companies for Leadership survey, nearly 95% of respondents in the top 20 companies cited for excellence in leadership believed that their leadership-development efforts "better allow employees to deliver on my company's goals and strategies."

The good news is that leadership development is continuing, something that likely will position these companies to benefit from the upturn as well as hold steady in tough times.

John Baldoni is a leadership development consultant, executive coach, speaker, and author. In 2009, Top Leadership Gurus named John one of the top 25 leadership experts in the world. His newest book is Lead Your Boss: The Subtle Art of Managing Up (Amacom, 2009). John also writes the "Leadership at Work" column for Harvard Business Publishing. He can be contacted via his Web site, www.johnbaldoni.com.

Business Exchange

Track and share business topics across the Web.