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Business performance and business leader development – the Catch 22


This feature was contributed by Dr Catherine Bailey and Dr David Butcher of the General Management Development Group, Cranfield School of Management.

The Business Leadership Development (BLD) industry is founded on the assumption that organizational performance is directly related to business leadership. Yet anecdotal evidence suggests that much business leadership development fails to deliver on this expectation. When so much organizational importance is attached to leadership, why is this so? Our survey of 190 senior managers in 103 organizations explored the gap between the rhetoric of leadership development as a pillar of organizational success, and the reality of BLD in practice. Our findings are outlined below.

Business Leadership Development: A diffuse and confused activity

Business leadership development may be hugely important but few organisations in our sample had a strategy for it. Far from BLD being a planned strategy to develop future capability, it more often reflected short-term needs, individual initiatives or the routine performance management cycle.

Practices are characteristically diverse and typified by managers driving their own BL development despite their organization, rather than because of it. With specific exceptions, the predominant view was that BL development processes generally had a low personal impact and no real business impact, even though few of the companies surveyed measure hard financial outcomes.

The need for business relevant BLD, however, was widely expressed. Understanding what’s behind these alarming findings is a primary concern for all those intent on realising the true potential of BLD.

Four explanatory factors

We found four key factors that hamper effective BL development:
- First, HR and MD specialists often fail in their attempts to influence BLD at board level, or to implement business relevant BLD due to the lack of strategic alignment.

- Second, senior managers who lack a clear vision of BLD’s strategic value inevitably fail to challenge BLD to deliver.

- Thirdly, organizational politics conspire against the creation of a coherent BLD strategy, resulting in loosely fragmented BLD strategies and practices.

- Finally, the quality of BLD strategic formulation, communication and implementation is highly variable.

It is apparent that the wide gap between the BLD rhetoric and reality is therefore created and sustained by several distinct factors. That said, we did find senior managers who were informed customers of BL development, and with a clear vision of future business challenges. We found HR/MD Directors with a strategic overview, providing a professional view on future business leadership capability. We also found MD providers with a well-informed perspective on strategic implementation, as well as some BLD recipients with a real grasp of effective BL activities. However, none of these were the norm and in no one organisation did they coincide.

Beyond Catch 22

What we most frequently encountered were “Catch 22” situations, where the four factors acted in concert to create ‘unvirtuous’ circles. How do MD practitioners persuade senior managers to support BL development when those very managers themselves lack the strategic perspective to appreciate the significance of the argument being made? How does an HR Director who understands the criticality of future leadership development convince an executive locked onto the requirements of immediate financial performance?

Clearly the problem is how to make the circle between business strategy, BLD and business leadership “virtuous”. We are addressing this through a series of practical and challenging questions in a second stage of our research. It includes both best practice BLD case studies and an international survey of innovative practices, and we are asking:

- How do you help top managers to think futuristically?

- What are the future leadership needs of a business beyond the broad generalisations generic to any business?

- How can we relate investment in executive development to sustained business improvement?

- What are the critical methodological elements of effective BL development?

- What is it that makes external programmes more effective than internal programmes for BL development and how can the impact of internal programmes be improved?

- How important is evaluation, and what is worth measuring?

- How can BL capabilities be developed in unfavourable organizational circumstances?

The findings, to be published in March 2003, challenge conventional ‘best practice’ advice about business leadership development and provide the basis for a radical rethink of how such development is conceived and delivered. When published, they will offer radical ideas to help organizations close the gap. You can access the Executive Summary.

Dr Catherine Bailey is Programme Director for the Advanced Development Programme and Dr David Butcher is Director of General Management Development Programmes Group at Cranfield School of Management.


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