Mass Appeal

HR discovers real value in offering leadership development to all employees, not just the chosen few.

Monday, March 7, 2016
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About two years ago, an employee at Monsanto phoned Ray Kleeman -- the company's vice president of global talent management, IT and analytics for HR -- seeking advice on how to say no to an internal request. The employee learned about Kleeman through Synapse, the company's online system that informally matches employees who want business expertise or advice with those who have it.

Among the system's goals is to unlock the leadership potential of the 23,000 employees at Monsanto, a global agro-chemical and agricultural biotechnology company based in St. Louis. Thousands of workers across all levels have taken advantage of the system, now available to nearly 16,000 employees in the United States, Canada, China, Brazil and Asia Pacific. So far, 2,837 (62 percent) of the company's nearly 4,600 middle managers and up have already developed profiles that highlight their competencies and areas of expertise.

The concept of converting staff into micro leaders is gaining traction. Over recent years, some employers have rolled out mixes of leadership opportunities to their entire workforces. The latest thinking is that all employees need leadership skills because they apply them in some capacity to accomplish job tasks, ranging from decision making to creative problem solving. HR has since discovered that this is an effective approach to continuously build employee capabilities, employee engagement and a leadership pipeline, which all impact the bottom line.

No two companies are alike when it comes to optimum strategies or programs. At Monsanto, leaders tap into the expertise of employees who belong to the company's business-resource network composed of multiple affinity groups. Sometimes, those interactions produce opportunities for network members to participate in executive events. When language-translation support was needed for a high-level meeting with foreign customers, for instance, bilingual members in the network were invited to attend as translators and participate in a unique leadership experience.

"The bulk of our emphasis is helping employees derive and wring out the [leadership-] development value that they can out of the current role they're doing day-to-day, backed up by people processes we have in place and by the strength of our leadership," Kleeman says. "Seventy percent of the development that we expect and hold our employees accountable to achieve is happening on the job."

To encourage employees to develop leadership skills, which naturally can help them reach their career goals, all employees are eligible for an annual cash incentive. A portion of that incentive is based on the quality of their self-development over the year.

"That [incentive] creates an environment [and] culture [focused on] the importance of ongoing leadership development that cuts across the entire organization," says Kleeman. "Everyone plays a leadership role in some aspect or another to get their work done."

He says the company is rolling out insightful analytics about leadership. Based on leadership surveys and other internal data collected over the past several years, he says, HR has identified four specific behaviors regarding how leaders drive performance: being trustworthy; exhibiting competence at developing people and teams; demonstrating basic managerial competencies such as setting direction, prioritizing or managing conflict; and creating an inclusive environment.

"We're now using this simple model to help reshape our leadership competencies internally and help drive messaging across our entire organization," says Kellman. " . . . Driving performance is something we want everyone to do in the organization . . . ."

Behind the Curve

Still, not many companies are embracing this strategy. In 2013, APQC, a member nonprofit that researches business benchmarking, best practices and knowledge management, surveyed 547 business and HR professionals from different countries about leadership.

"We were wondering, after all these years, why does this [leadership shortage] seem to be [becoming] more of an acute problem," says Elissa Tucker, research program manager for human capital management at the Houston-based organization. "Most companies are struggling."

Yet, only 8 percent of survey participants develop leadership capabilities in all employees. She said companies that held to the "everyone is a leader" philosophy had better leadership capabilities and felt more prepared on a range of leadership skills.

Another problem the survey revealed was that current leaders lack incentives to change their outdated leadership approaches, which rewards them for "hoarding knowledge and keeping power exclusive," she says.

Tucker says employers need to adopt this new everyone's-a-leader strategy; otherwise, filling leadership gaps will be a constant effort, due to the aging workforce as well as short employee tenure. Since 2012, the median number of years that wage and salary workers have been with their current employer was 4.6 years, according to the Bureau of Labor Statistics.

In 2014, APQC followed up its leadership survey with case study-based research on five different companies -- Caterpillar, Cardinal Health, Ford Motor Co., Monsanto and W.L. Gore & Associates.

The results were surprising, Tucker says, adding that researchers hypothesized that these companies would have abandoned traditional leadership programs that only targeted high potentials. Instead, she says, the five companies implemented a mix of both old and new programs and strategies.

Their strategies included:

* Identifying core leadership behaviors, tailoring them to specific employee roles and tying them to the company's business strategy and mission.

* Enabling easy access to organizational intelligence. Tucker says any employee at Caterpillar can share information and post best practices on the company's "Connections" website.

* Developing a culture in which employees must help others and ask for help to avoid making bad decisions that could "sink the boat," says Tucker.

* Sponsoring or informally coaching other workers. At W.L. Gore, she says, new hires are assigned sponsors -- other employees, not their supervisors -- by either HR or their team leaders. Throughout their careers, they select different sponsors who are best suited for their developmental needs.

In a global economy, Tucker adds, employers need to be highly adaptive and responsive to changing business and customer needs, which is difficult to achieve when leadership is confined to the top tiers of an organization. "The only way to adapt," she says, "is to empower the masses . . . to take action."

Positive Outcomes

While such all-inclusive leadership programs and strategies may be perceived as a passing fad, some companies are linking them to hard business results.

In 2011, Kimberly-Clark, a global producer of mostly paper-based consumer products, partnered with Harvard Business Publishing to offer a leadership-development program to its workforce.

The company rolled out Harvard ManageMentor, which consists of 44 online leadership and management skill-development courses, to all 46,000 global employees.

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Initially, the company started small, purchasing the program for 400 employees. Within two months, it expanded its licensing agreement to accommodate up to 2,000 employees. Several months later, that capacity was reached so the company purchased an enterprise-wide license. Roughly 16,000 employees -- more than one-third of Kimberly-Clark's workforce -- have completed many of the courses. Only 5,000 of those participants are currently in leadership roles.

The company's investment in expanding leadership development seems to have paid off. Since the program was offered, the company's stock price has doubled each year and net sales have soared roughly $300 million year after year, according to Rian Oosthuizen, global learning and development consultant at Kimberly-Clark in Atlanta. The online program, he says, is a contributing factor to not just the company's bottom line, but also employee engagement.

The company conducted employee-engagement surveys in 2011, 2013 and again in 2015.

"The area of the survey that continues to increase revolves around the way Kimberly-Clark invests in its employees," says Oosthuizen, who believes there's a strong link between the way the company develops and empowers its employees to better perform their jobs and employee-engagement scores. "Engagement has gone up in each survey since 2011. There's definitely a correlation to what we're doing."

Likewise, Cardinal Health has also realized strong benefits from expanding leadership development to its 36,000 global employees.

"It was about five years ago when we decided to better define what it means to be a leader at Cardinal Health," says Lisa George, vice president and global talent manager at the healthcare-services company based in Dublin, Ohio. "So we actually defined them. ... When we rolled them out, we said, 'Everybody is a leader ... . It just depends upon the job you have in terms of how you might lead.' "

Those behaviors, referred to as leadership essentials, consist of 10 skills that include: thinks and acts strategically, is an influential leader and has an enterprise-wide perspective. George says HR solicited input from employees across all levels to identify leadership essentials and then integrated them into every HR process, from hiring to employee promotions.

HR also went to "great pains," she says, to recognize employees at all levels who demonstrated leadership essentials. For example, it provided senior leaders and managers with stories to share with others during staff meetings or employee huddles on the manufacturing floor. Story highlights would also appear in scrolling messages on flat-screen TVs placed throughout the company's facilities.

In addition, employees can access hundreds of online leadership-development courses and workshops that are divided up by leadership essentials. Meanwhile, HR invested heavily in teaching frontline managers how to conduct career and performance discussions with staff, says George. By using new HR tools such as discussion guides, HR coined a new phrase: Development is as easy as 1, 2, 3. According to her, employees were asked to pick one skill they wanted to work on, select two ways to develop it and then talk about it with their manager three times a year.

"Since we created these leadership essentials, our managerial effectiveness scores have increased over six percentage points -- that's huge," George says, adding that 65 percent of the company's jobs are filled internally. "Engagement, inclusion, trust, innovation and adaptability -- everything has gone up significantly for us."

Read also:

Dismal Findings

Hungry for Development


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