This blog is a condensed summary of the article Better Pond, Bigger Fish published by Deloitte University Press.
If your leaders are immersed in a workplace that does not support their formal leadership development efforts, returns on leadership programs will likely be limited. Our recent global study reveals that while less mature companies tend to purely focus on formal leadership programs, the most mature organizations embed leadership growth into their daily work processes. They focus on the culture and design aspects of their organization in a way that enhances business outcomes and results in a higher percentage of leaders with critical leadership capabilities. At the same time, compared to their less mature counter parts, organizations that are characterized by high leadership maturity report:
- A 37 percent higher revenue per employee
- A 9 percent higher gross profit margin
They also are:
- 5 times more likely to be highly effective at anticipating and responding to change
- 10 times more likely to be highly effective at identifying and developing leaders
Practices to Reinforce Culture and Context for Leader Growth
Communicating the leadership profile: Regardless of the behavioral variability entailing different roles, companies should have a clear understanding of capabilities, behaviors, and attributes of a successful leader in the organization. It’s also important to define what the company stands for, and specify which capabilities enable leaders to execute the business strategy. Often neglected in less mature companies, talking about the organization’s “leadership profile” is essential for laying the groundwork for leadership development. Companies that effectively communicate their desired leadership profile are five times more likely to excel at identifying and developing leaders.
Many organizations have carefully crafted leadership competency profiles—but relatively few leaders actually know or use them. Worse, many companies cannot effectively measure against them. An antidote is to consistently and explicitly promote your company’s view of what effective leadership looks like.
Fostering a ‘risk-taking’ climate: Most mature companies encourage risk-taking to grow leadership capability. However, risk-taking endeavors can be nipped in the bud rather quickly in a risk-intolerant culture where others frown upon developing and acting on new concepts and ideas. Our data suggest that many organizations struggle with creating a culture that values risk-taking, but those that enable it are five times more likely to anticipate change and respond to it effectively and efficiently, and seven times more likely to innovate than others that do not. Thus, it is important to nurture an ecosystem that allows and encourages the exploration of new concepts and ideas on a daily basis. Fostering an ecosystem of “experimenting” behaviors as part of organizational culture creates a breeding ground for superior leadership capabilities.
The ability to assess and take appropriate risks may be a personality trait associated with leadership potential. An individual’s ability to express this trait, however, is influenced by the level of risk tolerance in the work environment.
Using knowledge-sharing for leader development: Free exchange of knowledge is one of the core aspects of creating an ecosystem of leadership development. An average of 41 percent mature organizations always or frequently do it, as against 35 percent less mature organizations that never do it. Knowledge-sharing is vital for effective leadership development. It gives both leaders and employees broader exposure to what is percolating in the organization and broader market, and reinforces desirable leadership behaviors that align with the prevailing strategy and culture. Moreover, sharing information about new products and services, personnel decisions, or client feedback in other business units helps develop a deeper understanding of the business itself. We found that companies with effective knowledge-sharing practices are four times more likely to improve processes to increase efficiency than those that don’t emphasize this practice.
Exposing leaders to other leaders, new contexts, and novel challenges: Exposure to peers and colleagues, as well as to consumer feedback, new external contexts, and social networks is a highly effective learning method for leadership development. Coaching and mentoring are common ways to expose high-potentials to diverse challenges and solutions. Creating leadership consortiums, externships, and immersion labs are other ways to help leaders in your organization gain external exposure to the needs of clients and partners. Exposure is how leaders learn most effectively, because exposure is what enables them to gather intelligence from peers and colleagues in the relevant business context.
Creating strong ties between HR and business leaders: HR leaders in mature organizations are not the “learning people” but, instead, strategic partners with business leaders. Disconnect between your HR and business leaders should be seen as a sign of lack of accountability for and misalignment of leadership growth efforts. The most mature companies create a symbiosis in which HR uses its expertise in leadership development to collaborate closely with business leaders, who apply and model leadership learning in the workplace. Strong collaborative relationships between HR and business leaders are six times more likely to excel at identifying and developing leaders.
Up until now, companies have focused primarily on training programs, but many have neglected the environment in which leaders perform and grow. However, you are more likely to grow a strong leadership and achieve stronger business results if you foster an ecosystem conducive to leadership growth.
Read the original article to learn the action step checklist to develop an effective ecosystem for leadership development.
A big Thank You also goes to Pallavi Sharma, who summarized the main report for this article.
 All data points mentioned in this article are based on High-Impact Leadership: The New Leadership Maturity Model, Bersin by Deloitte/Andrea Derler, Ph.D. 2016
 For this analysis, we identified organizations in our sample that are publicly traded and gathered 22 of their objective financial metrics. To minimize the effects of nonrecurring financial impacts, we identified the relevant data for 2013, 2014, and 2015; we then developed a three-year average that formed the basis for subsequent analyses. These two metrics showed a statistical difference between low and high maturity levels for the overall sample at a minimum 95 percent confidence level.
 We relied on the self-reported data from survey respondents and have reported findings that are significant at the 99 percent confidence interval. These outcomes are based on questions regarding the extent to which the respondents assess their organization’s performance on business and talent outcomes.
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