Case Study: Improving Profitability Through an Aligned Leadership Development Program
Leadership development must be viewed as a core business process which is critical for creating shareholder value and business success. It needs to be aligned with the organization’s business cycle and managed effectively as a business strategy.
Everyone within the organization must understand their role in leadership development and be held accountable for results. The reason leadership development programs fail is due to a lack of an aligned leadership development strategy tied to business goals and the organization culture.
To show how we can align leadership strategy tied to business goals and the organization culture, we can look at a case study.
In the 1980s, when companies were experiencing huge losses due to emerging global competition, one large manufacturing company went through a massive downsizing. Senior leaders of the organization, were desperately seeking a solution to increase their bottom line and improve declining revenue. To analyze the needs of the organization, the company took the help of OD Consultants.
After the consultants met with employees to collect data, they provided senior leaders with feedback on what major issues caused some of the problems. Three issues emerged: lack of quality, poor leadership, and low employee morale.
Senior leaders agreed to take action to save the organization. They created a “House in Order” leadership policy commitment based on 12 key principles of leadership behavior. In addition to address the quality issue, they launched a quality management program supported by the leadership “House in Order” policy.
The leadership principles were integrated into the organization culture and strategic goals. Each leader was committed and held accountable. The principles guided how leaders behaved in meetings, with employees, and with each other. In order to build a quality leadership team, senior leaders developed a leadership development strategy that was aligned with the business goals.
The leadership development process was aligned with the business cycle, and the process was communicated and managed by the senior leadership team.
When new leaders were hired, they attended a three-month onboarding process to help them learn about their job responsibilities and the culture of the organization. A formal mentoring process was established to support all employee development. Mentoring was integrated into the culture and each leader was responsible for mentoring individuals, group projects, high potentials, and their successors.
Career paths and career planning were established to help employees grow in their careers. Managers discussed career opportunities with their employees regularly. At the end of the performance cycle, managers rolled up their recommendations to senior leaders to be reviewed at the year- end performance discussions.
A leadership development program was created for high performers. Individuals were selected by the senior leadership team to participate in a two-year development program that involved attending leading universities to gain experience that would help the organization and leaders gain strengths as business leaders.
In addition, potential successors were selected for key roles and a succession development plan was created and reviewed by the senior leadership team. This involved job rotation, project teams, temporary assignments, coaching, attending leadership training, etc.
To address the issue of employee morale, managers met with their employees to discuss their performance goals and identified ways to grow within their current job family and discussed ways they could be more supportive as a leader.
The result of this strategically planned leadership development program helped the company grow globally and improve its profitability.
About the author: Nancy Zentis, PhD. is the CEO at the Institute of Organization Development (IOD). She has over 30 years of experience in the field of Organization Development, Human Resources, and Training and can be reached at nancy.zentis@instituteod.com.