global leadership 2011 2012

12011 / 2012 Research

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Join The EffortThe Global Leadership Research project will be expanded to collect data from organizations on a con-tinuing basis. Each year, the survey will be re!ned to collect additional data on issues that previous surveys have identi!ed as important. As such, the research process will be a continuing process.

We are seeking participation once annually from those leaders and HR executives most involved in leadership development and succession planning.

The Global Leadership Research Project will be periodically updated as various academics and re-search partners complete more in-depth analyses of the massive database begun in 2010.

We thank you in advance for your interest, and look forward to your future support and participation.

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Each year, the project kicks o" with an in-depth survey

of approximately 1000 Chief Executive O#cers (CEOs)

and senior Human Resource (HR) leaders globally.

The results from this survey produce the annual Best

Companies for Leaders, as published in the January/

February edition of Chief Executive magazine. Our

team of researchers then works with these survey data,

in combination with interviews conducted with senior

consultants and CEOs who represent contemporary

thinking on leadership strategies, and present this

report as the culmination of the research to date.

We invite you to learn more about the current trends

in leadership development. To further expand on this

research and to provide valuable comparative bench-

marks, we will soon release a more exhaustive evalua-

tion based on interviews with the Best Companies for

Leaders. Information will be posted on our website at

www.chally.com.

Howard P. Stevens Chairman, Chally Group Worldwide

A Note From Howard

The challenges of corporate leadership in the modern

era demand dramatically greater capabilities than the

traditional disciplines of the past. Quality, service, and

innovation are no longer competitive advantages but

rather minimum requirements. The speed of change,

responding to new and unpredictable competitive

forces, and keeping up with the daunting evolutions

in technology, increases the stress on business and its

leadership. Most notably it is the CEO who bears the ulti-

mate responsibility for shepherding the organization to

long-term success.

The best of the best have long relinquished the depen-

dence on home run strategies and silver bullets. They

accept that no one can accurately predict tomorrow’s

paradigm-altering technology, competition, or global

environment. They cannot predict the future, but

they can prepare their successors with the requisite

competencies, experiences, and resources to leverage

whatever the future holds and drive continued growth

and pro!tability.

Mindful of the charge for these business leaders, Chally

Group Worldwide, in close partnership with Right

Management, presents the summary results from the

Second Annual Global Leadership Research Project.

Designed as an ongoing research study, our analysis

builds year over year on insights shared, intelligence

gained, and paradoxes revealed about the leadership

development practices of companies globally. Addi-

tional sponsors of the study include a range of busi-

ness and academic partners committed to expanding

the global knowledge base about best-in-class talent

management strategies.

Letter From The Chairman

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About the Research

Research ObjectivesThe Global Leadership Research Project involves CEOs and Human Resource leaders direct-

ly in the examination of evolving practices in leadership development and the recognition

of the innovative approaches and persistent challenges faced by companies committed to

investing in their own talent.

Recognizing Excellence in Leadership Development The study de!nes multiple qualifying criteria for inclusion and !nal ranking in the Best

Companies for Leaders. These include:

Quality of formal leadership development initiatives

Personal involvement invested by the executive team

Strength of leadership pipeline for internal recruitment

Reputation amongst peers for excellence in developing sought-after talent

Long-term growth of market capitalization and shareholder value

This last criterion recognizes that impactful leadership development ties directly to strong

business performance.

More information about the companies who made it to the top 40 public rankings and top 10 private rankings can be found in the January/February edition of Chief Execu-tive magazine. (A reprint of this article is available in this report.)

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Challenges to Leadership Development Focused not only on honoring the best of the best, but also on providing pragmatic analy-

ses of the most vexing challenges, this year’s study seeks answers to several questions that

emerged from earlier !ndings.

1) The Dominant CEO Challenge: Leadership within a Global Economy

Given that companies increasingly operate in a global economy, and vast numbers do not

reserve top-level positions for local candidates, how successful are international assignments

and what do leaders require to increase their e#cacy outside of their home country?

2) Public versus Private: Competing Pressures

While recognizing that public and private companies vary widely in the leadership challeng-

es they face, what, if any, are the distinguishing characteristics between the two that shed

light on the forces competing with leadership development?

3) Succession Failure: The Leadership Paradox Revisited

With the emphasis on leadership development so strong, what insights can be gained to

account for the surprisingly high turnover of executives, as part of a broader trend in the

workforce, particularly considering the associated costs?

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Trends in TurnoverThe Financial Times reported that Kevin Kelly, the CEO of global executive search power-house Heidrick & Struggles, revealed the results of an internal study of 20,000 executive searches performed by his !rm: “We’ve found that 40 percent of executives hired at the senior level are pushed out, fail or quit within 18 months.”

Dr. John Sullivan, ERE.Net reports the following data:

46% turnover — 46% of new hires leave their jobs within the !rst year (Source: eBullpen, LLC) and 50% of current employees are actively seeking or are planning to seek a new job (Source: Deloitte).

46% failure rate — 46% of U.S. new hires must be classi!ed as failures within their !rst 18 months (!red, pressured to quit, required disciplinary action, etc.) (Source: Leadership IQ). In addition, 58% of the highest-priority hires, new executives hired from the outside, fails in their new position within 18 months (Source: Michael Watkins).

Only a 19% success rate — only one out of !ve of the process output can be classi!ed as unequivocal successes (Source: Leadership IQ).

Germane Consulting Estimates of the !nancial cost of a single failed manager range from $1,000,000 to $2,700,000, not including golden parachutes, losses related to intellectual capital, the good will of the !rm’s reputation, unmet business opportunities and goals, damage to employee productivity and e"ectiveness, or the cost to the external environ-ment, as seen in recent failures of !nancial institutions and auto makers. The average rate of senior manager and executive failure from nine independent research studies is 47% with the majority of these failures taking place following the transition to a new role.

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Table of Contents

Research Team, Sponsors, Participating Organizations 8

The Second Annual Global Leadership Research Project 11

Chief Executive Magazine’s The 40 Best Companies For Leaders 14

Key Findings 23

Dominant CEO Challenge:

Leadership within a Global Economy 24

Public versus Private: Competing Pressures 27

Succession Failure: The Leadership Paradox Revisited 29

Featured Interviews:

An External Perspective from Bain & Company 31

Impactful Leadership Development

Directly Tied to Business Performance 33

Global Leadership Research Project Participating Partners 35

Global Leadership Research Project Survey Response Summary 39

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Research Team

Ken Carroll Chally Group WorldwideRob CottinghamJenna Filipkowski Ph.D. Christopher Holmes Ph.D.Scott Hudson James Killian Ph.D. Carly McVeyBart Mosele Joe NelsonScott RunkleHoward Stevens M.A.Sally StevensPeter Tassinario M.A.Tracey Wik

J.P. Donlon Chief Executive Group

Sandi Edwards American Management Association (AMA)

Jean-Francois Jadin Imperial Consulting

Marjorie Woo MBA Keystone Group, Inc.

Karen Lindquist MBA Management Centre Europe (MCE)Erick Myers

Stephan Rantela ProActive Oy AbMarcus Rantala

Michael Haid Right Management Gerald Purgay

Shi Bisset Shi Bisset & Associates

Satyan Menon Turning Point Ajay Namboodiri

Elaine Eisenman Ph.D. Babson College Executive EducationH. James WilsonFu Yan (Laura) Hauzhong University of Science & TechnologyWu Bin (Julie) Das Narayandes Ph.D. Harvard Business SchoolJason Jordan University of Virginia’s Darden School of BusinessCorey E. Miller Ph.D. Wright State University

Cindy Burgess Trisha Lamb Cindy MitchellDeb Tackett Heath Wilkins Dean Wright

Research

Academic

Production Team

9

Lead Partner

Sponsors

Research Partners and Participating Organizations

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The Second Annual Global Leadership Research ProjectThe Global Leadership Research project will be expanded to collect data from organizations on a continuing basis. Each year, the survey ZLOO�EH�UH¿QHG�WR�FROOHFW�DGGLWLRQDO�GDWD�RQ�LVVXHV�WKDW�SUHYLRXV�VXU-YH\V�KDYH�LGHQWL¿HG�DV�LPSRUWDQW��$V�VXFK��WKH�UHVHDUFK�SURFHVV�ZLOO�be a continuing process.

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Organization Size

The following information provides a high-level summarization of the research sample. This research represents responses from C-Level and Senior Human Resources and Development leaders from over 1,000 global organizations.

Annual Revenue of organizations in US$

All (%) Private (%) Public (%)

25 21.5 32.1 2.9

50 7.4 9.6 4.4

100 7.9 10.5 2.2

500 18.5 20.1 14.1

1000 9.9 10.5 9.6

5000 15.9 10.1 27.4

10000 6.9 2.9 14.1

10000+ 11.9 4.3 25.2

Number of employees

All (%) Private (%) Public (%)

500 34.7 50.2 11.1

1000 12.7 15.8 6.7

2500 14.6 12.9 15.6

5000 9.4 6.2 14.1

10000 6.1 4.8 8.2

25000 7.7 5.3 11.9

50000 6.9 2.4 14.8

75000 2.8 0.5 6.7

100000 2.2 1.0 4.4

100000+ 3.0 1.0 6.7

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Location of Company Headquarters

Public 63.0

Private71.8

Public 0.7

Private2.4

Public 20.0

Private 15.3

Private0Public

0

Private0.5

Public 2.0

Private1.9 Public

3.7

Private4.3

Public 6.0

Public 0.7

Regions

North America

South & Central AmericaMiddle East / Africa

EuropeSouth Asia

Southeast Asia

Asia

East AsiaOceana and Australia

Private0.9

Private2.9

Public 3.7

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Chief Executive Magazine’s The 40 Best Companies For Leadersand 10 Best Private Companies For Leaders

This Executive Overview was published in the January/February 2012 issue of Chief Executive Magazine

15

KEY TAKEAWAYS

leadership development

24 CHIEFEXECUTIVE.NET JANUARY/FEBRUARY 2012

GETT

Y IM

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“I see my role as the chief talent o!cer of the com-pany,” says Procter & Gamble CEO Bob McDonald. “Lead-ership is the one factor that will ensure our success long after I am gone as CEO.” The West Point graduate and former brand manager for such products as Tide, Cascade and Dawn believes leadership development is central to the consumer prod-uct giant’s ability to grow earnings and cash flow in low to no-growth economic times. Since the ranking’s inception in 2005, P&G has numbered among the top-tier firms of Chief Executive’s Best Companies for Leaders.

The ranking is based on a study of about 1,000 firms worldwide conducted in partnership with Chally Group Worldwide (www.chally.com), a Dayton, Ohio, sales and management productiv-ity firm. Companies were scored on four key criteria, including: 1. Having a formal leadership process in place; 2. The commitment level of the CEO, as measured by the time and quality of involve-ment with the leadership process and development program; 3. The depth of the leadership funnel as measured by the percent-age of senior management positions filled by internal candidates as well as the percentage of middle management positions filled by internal candidates; and 4. The number of other companies that report recruiting from the company being evaluated. To this nar-rowed list, we factor in a shareholder value performance metric, slightly modifying point totals where necessary based on

10-year growth or decline in market capitalization. This generally results in only slight ranking adjustments, as any company mak-ing the list is a champion apart from most others. In fact, aside from P&G, the remaining top 10 scored within several points of one another, with the second 10 on the ranking scoring no more than six to 10 points below the first 10.

The Best Companies for Leaders survey tracks changes and developments from year to year. For example, this year some dif-ferences in priorities and challenges facing CEOs in public ver-sus private companies were observed (See sidebar, p. 28). Because

The 40 Best Companies for Leaders How the top companies—public and private—excel in leadership development.By J.P. Donlon

Bob McDonald, CEO of P&G, which returned as this year’s top-ranked company for leadership development after a five-year hiatus.

Z

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it would be inappropriate to compare private companies with larger public companies that enjoy greater resources, we list separately the most noteworthy private firms with in-depth leadership development programs (See p. 29). Respondents this year also made it clear that when suc-cession from outside the company becomes necessary at the highest levels of management, companies depend on external recruiters. They charge these agencies with pur-suing candidates from either other companies with the greatest reputation for leadership development or admired competitors with market expertise in their industry.

Several key factors most a!ect company rankings, including a company’s reputation among its peers as a source for well-rounded talent. Also considered is the CEO’s personal involvement in a company’s internal pro-cess. For example, this criterion is one reason American Express dropped from last year’s ranking and PepsiCo rose 10 ranks on the ladder.

The pages to follow o!er a look at the top five compa-nies on this year’s list, highlighting some of the reasons they secured their top-tier positions. The full Best Companies for Leaders report will be available in early February at www.chally.com. Also, later in the year, an in-depth benchmark report, detailing the process and metrics of the best compa-nies for leaders will be available at www.ChiefExecutive.net.

P&G Rank: 1 Quite simply, P&G executives are considered the Navy

SEALs of management. This results in no small measure from a razor-like focus on internal succession planning at all levels. From its inception 174 years ago, promo-tion from within has been a hallmark of the company. It places a rigorous process on managers to develop manag-ers below them. In general, your boss can’t be promoted until you are ready to be promoted. P&G scored very high in its internal development program, receiving the maxi-mum points for the percentage of its leaders that are inter-nally recruited as well as being referenced by others as the source of their external talent search.

Development encompasses both formal as well as informal training. In 2000, when A.G. Lafley became CEO, he asked then-COO Bob McDonald to start a general man-ager college where individuals were taught values-based leadership, a curriculum McDonald himself created. He trains many of these 250 leaders personally. Some out-siders think it crazy that the CEO devotes his own time to this process. “It’s the most valuable resource this com-pany has,” he shoots back. “This is exactly the di!erence between our company and others.”

McDonald also personally looks at the top 300 to 400 executives and reviews the progress of key candidates with the board of directors. The most important element is short feedback loops that include 360-degree reviews where the system tries to prevent derailment. Failure is an option at P&G provided it’s caught early and analyzed for what went wrong. “We have assignments that test peo-ple, stretch them, but don’t break them,” o!ers McDon-ald. “We often put our best people in our toughest jobs and often they may not get great results because of the dif-ficulty of the assignment.” McDonald learned this first-hand when he worked for P&G in Canada. After attending a number of focus groups there, he championed the idea

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40 BEST COMPANIES FOR LEADERS

(Continued on p. 27)

Procter & Gamble

IBM

General Electric

3M

Southwest Airlines

ADP

PepsiCo

Cardinal Health

Caterpillar

Discovery Communications

Dow Chemical

Boeing

Verizon

CRH plc.

General Mills

Hitachi Data Systems

International Paper

Manpower

McDonald’s

Stanley Black & Decker

JPMorgan Chase

Procter & Gamble

Wipro Technologies

IBM

Bharat Petroleum

Verizon

Caterpillar

Hewlett Packard

National Australia Bank

Wells Fargo

Graybar Electric

Emergency Medical Services

General Mills

General Electric

PwC

Tata Steel

PepsiCo

American Express

HCL Technologies

Stanley Black & Decker

(2)

(4)

(14)

(24)

(17)

(7)

(6)

(13)

(36)

(31)

(20)

(rank previous year)2012 2011



of putting the company’s liquid products in film enviro-packs, which proved to be a non-starter in the marketplace and had to be discontinued.

“I learned that what people say in focus groups isn’t what they will necessarily do at the point of purchase,” he says. Like GE, IBM and 3M, P&G sees itself as a learning organization. “We live in a VUCA world (volatile, uncertain, complex and ambiguous), which makes it impossible to know the future,” McDonald says. “So instead we create a learning system that prizes flexibility and adaptability. The only way to do that is to have an organization that is willing to admit when something goes wrong.

“Every year in July, I take 150 leaders from around the world for leadership training at a facility such as West Point or CCL. We have to sharpen our saw each year. We must invest in the

leaders and spend $2 billion in R&D and probably half that in leadership, although the company doesn’t parse LD from its other activities.”

IBM Rank: 2IBM has a long history of innovative leadership development

and cross-discipline mentoring. Its Basic Blue for IBM Lead-ers, Shades of Blue and Accelerate Executive Leaders program for new executives and Executive Insights for newly hired or acquired executives are among the many examples that involve deeply integrated programs for identifying, assessing and devel-oping some 60,000 high-potential leaders at all levels.

The planning process first defines all roles across IBM and creates “Success Profiles” for all leadership roles. This system is

used to define demand for leadership roles by business unit or market and to identify critical gap roles (requiring accelerated development and recruitment). The second process focuses on pipeline identification and develop-ment. Leadership competencies of those currently in leadership roles are regularly evaluated to assess the lead-ership potential and functional skills of IBMers glob-ally. Guidance on potential career paths and personalized development plans are provided for each IBMer, tracking progress through the IBM management system, including providing experiences and developmental opportunities.

Placement for each leadership role focuses on defin-ing potential candidates, considering diversity for each opening. Placement decisions are accomplished through “5 Minute Drills” conducted at annual leadership reviews at all levels of the business. This company-wide process moves upward to high visibility “Chairman’s Reviews” with action follow-ups.

According to Stanley Litow, IBM’s vice president of corporate citizenship and corporate a!airs and president of the IBM International Foundation, IBM’s “success has its roots in an adherence to core values while embracing fast-paced global change.”

IBM’s succession process has been a major reason it is one of the few firms that has lasted a century. It has one of the most closely watched institutionalized succession plans of any company in the world. This was evidenced by the smooth transition of CEO responsibility to Virginia “Ginny” Rometty from Sam Palmisano. She will become the ninth CEO since the company’s founding and its first woman CEO. This was no exception, as Lou Gerstner’s hando! to Palmisano was another good case study on leadership transition.

GE Rank: 3GE established the quintessential executive training

ground at its world-famous Crotonville, N.Y. facility—on which GE reportedly spends about $1 billion a year. Gen-eral Electric’s John F. Welch Leadership Center marks its 55th anniversary this year. According to chief learn-ing o"cer Susan Peters: “We have 13 o!erings involving leadership skills that everybody should have, such as pre-sentation skills, project management skills and under-standing finance in a generic way.” These courses are managed through the Crotonville sta! but are delivered at GE businesses around the world, including Shanghai, Munich and Bangalore, among other places. This is done through a Train the Trainer (TTT) concept. “The integrity

Leadership Development ROI

The need to develop leaders is widely acknowledged but the ac-tual return on investment from these e!orts is seldom quanti-fied. Without a meaningful expectation of a long-term return, it is more di"cult to justify the investment, especially in trying eco-nomic periods. In fact, for two years in a row, almost two-thirds of responding companies listed “financial limitations” as one of the top challenges to achieving their leadership-development goals. Comparing the long-term growth in market capitalization of pub-lic companies with their ratings for leadership development of-fers solid justification for investment in developing leaders. The comparison covered the 10 years from 2001 to 2011, a period long enough to minimize short-term and situational fluctuations. The correlation is dramatic (See table, below).

An equally important finding is that the di!erences within the four quartiles are relatively less substantial than the di!erences between the top and bottom performers. In terms of the contribu-tion to growth potential, the top leadership companies show sig-nificantly greater growth than the lowest as measured by market capitalization.

Top-Ranked Leadership Companies Perform BetterSummary 10-year performance comparisons*

* Includes companies where public data is available for 2001 through 2011. Reasons for unavailable data include merger, acquisition or start-up within the period. A full survey report is available at www.chally.com.

Chief Executive/Chally Worldwide

Best Companies for Leaders Survey Ranking

Top 15% of Responding Companies

Bottom 15% of Responding Companies

Average % Market Capitalization Growth

+22%

-23%

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40 BEST COMPANIES FOR LEADERS

FedEx

Steris

Aditya Birla

3M

Harris

Medtronic

Acxiom

AVX

JCPenney

LG Electronics

McDonald’s

Saputo Dairy Products Canada

Tupperware Brands

Avery Dennison

Wyndham Worldwide

Hitachi Data Systems

Cooper Companies

Sprint Nextel

DuPont

Michelin Malaysia

(37)

(9)

(15)

(39)

(rank previous year)2012 2011

of the course is maintained because the Crotonville sta! ensures that the person teaching it has been trained and certified,” Peters explains. GE trains 50,000-60,000 people a year digitally and an additional 9,000 attend courses at Crotonville. It’s little wonder why so many other organiza-tions covet the company’s graduates.

3M Rank: 43M practices leadership development through assign-

ment rotation; but, consistent with the study’s findings of other top-rated companies, it takes the approach that executives stay in a job for about four years in order to experience failure (the best teacher) and sustained suc-cess. Other companies often move people around every year or so, which yields a limited return on the develop-ment investment. 3M also focuses on leaders two to four levels below the CEO to develop and transition them into new roles. The company projects its commitment to lead-ership development on its website: “The premise is sim-ple: If your people grow, your company will grow. The key: linking growth in individuals to those things that unlock energy and activities that our customers value. Leader-ship development remains at the top of the company’s agenda.” 3M CEO George Buckley spends over a fifth of his time on talent issues and teaches strategy and leader-ship to executives who meet twice a year. He also reviews what personal experiences executives need to improve their learning and advance their career. He says he pre-fers surrounding himself and the organization with people more capable than himself. Courage and a strong sense of ethics will take a manager far, he believes, along with the ability to focus and separate opportunity from peril. The board has been working on a succession plan with Buck-ley for well over a year in anticipation of his retirement in February 2012.

Southwest Airlines Rank: 5 An airline known for its low costs and high spirits,

Southwest manages largely through its culture. It hires on attitude and enthusiasm and attempts to burnish this in a variety of ways, including The University for People (U4P), its corporate training facility dedicated to devel-oping and delivering personal, professional and lead-ership curriculum. The Manager-in-Training (MIT) Program is a development experience for high-poten-tial leaders who have long-term interest and future pros-pects within the company. There are two program levels: MIT I and MIT II. MIT I o!ers learning experiences and department visits that emphasize all aspects of South-west Airlines and its culture. Participants experience 20-plus training sessions, including interactive exer-cises, assignments and visits by di!erent departments within the company. Participants learn about various aspects of Southwest Airlines to give its workforce a bet-ter understanding of the “big picture” and what South-west Airlines, as a company, is all about. MIT II focuses on leaders at the manager level to strengthen manage-ment expectations and build key leadership skills, such as strategic thinking and coaching. Building relation-ships with other managers, directors and senior leaders across the company is another invaluable experience of both levels of the MIT Program.

JANUARY/FEBRUARY 2012 CHIEFEXECUTIVE.NET 27

Cooper Companies

Sealed Air

El Paso

National Australia Bank

David Jones Ltd

Stryker

Wolverine World Wide

Konecranes

Unilever Plc.

Barnes Group

Aggreko plc.

PwC

Dominion

DuPont Canada

Philips, N.V.

Saudi Basic Industries

AAM

DuPont

Faurecia Holdings

Monsanto



It has frequently been suggested that executives who hone their skills at the helm of private companies have much more flexibility than those at publicly owned companies. Public com-pany CEOs are constrained by their need to balance multiple ob-jectives in a complex corporate ecosystem that includes Wall Street analysts, shareholders, their public culture and brand and other stakeholders. They need to be the face of the company, dealing with analysts interacting constantly with the media.

These added obligations can distract from a CEO’s focus on internal operations. Public company CEOs must also cope with the comparisons shareholders can make with returns garnered by hedge funds (fair or not) and with regulatory compliance is-sues. These trends can force public company executives to be more short-term focused on quarterly earnings targets and more risk-averse.

At private companies, executives are often less encumbered and make decisions autonomously. Management teams can focus on understanding the “science” of running their specific busi-ness and be more like business “technologists.” It is likely that

these CEOs, who do well with the bottom line, will be left alone.

The impact on CEO priorities may be significant:

1. Public companies have an intense focus on the numbers and stock price. These di!erences remain constant regardless of the size of the organization.

2. In spite of the recent turmoil in the financial markets, public companies are significantly more likely to promote from with-in, regardless of size.

3. Public companies find the cost of development processes and succession planning less prohibitive, again regardless of size.

4. However, probably due to the greater range of external re-sponsibilities, public company CEOs spend almost 17 percent less time on their own development and 7 percent less time on developing others than private companies, also regardless of size.

Public companies face a paradox: The demands on their skills are greater, but they have less time to maintain and hone them.

Are Private Company CEOs More Liberated?

Public Companies

Leadership Performance Measure

EBITDA

Gross Profit

Income Growth

Customer Satisfaction

Costs

Stock Price/Valuation

Market Share

Customer Retention

Employee Retention

Patents

Private Companies

Leadership Performance Measure

Customer Satisfaction

Gross Profit

EBITDA

Income Growth

Costs

Customer Retention

Market Share

Employee Retention

Stock Price/Valuation

Patents

Rank

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10

Public and Private Companies Weight Criteria Di!erently

ISTO

CKPH

OTO

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Reputational Leaders

A company’s reputation among its peers, as demonstrated by its attractiveness as a senior executive talent pool, carries a weight and status beyond its numbers. The reputational stars for leadership development are still limited to a few at the top of their game. GE remains at the top in the good company of P&G, IBM and HP based on their leadership development programs. J&J, Microsoft and Unilever are primarily valued due to their expertise in specific markets.

Here are the top target companies and the reasons behind their status as perceived by others.

JANUARY/FEBRUARY 2012 CHIEFEXECUTIVE.NET 29

Most Cited Leadership Strengths Solid, disciplined process, critical thinking and leadership training provided early in an individual’s career

Marketing expertise, global perspective, innovation and leadership know-how, as well as strong company values

Developing leaders in a high-tech, value-add environment and performance-driven culture

The “HP Way”: an egalitarian, decentralized approach in which employees’ brainpower is the most important resource

A proven drug commercialization skillset, medical device expertise and research capability

A dominant player in its marketplace

A global leader in the production, distribution and marketing of consumer packaged goods

GE

P&G

IBM

HP

J&J

Microsoft

Unilever

Company

Private companies operate in a much di!erent business environment than public companies. Nevertheless, private companies that commit to leadership development deserve to be recognized in their own right. They may not be as large, but with fewer external distractions, many are actually more focused on developing their people—if on a reduced scale and with fewerresources. Here are 10 that stand out among this year’s respondents.

Company

Business Publications

JFE Shoji Service

Westfield Insurance

American Infrastructure

Eagle Manufacturing

Golder Associates

IT Authorities

Genesis HealthCare

Bombardier Sifang (Qingdao) Transportation Ltd.

Harwood International

CEO

Connie Wimer

Mikio Fukushima

Robert Joyce

A. Ross Meyers

Joe Eddy

Brian H. Conlin

Jason Caras

George Hager

Jianwei Zhang, President and Chief Country Representative Bombardier China

Gabriel Barbier-Mueller

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BEST PRIVATE COMPANIES FOR LEADERS



CFOs Surge Ahead... Almost

As with previous years, operations, finance and sales executives remain the preferred candidates for the CEO job. However, a slight but suggestive change among public companies appeared for the first time in this year’s study. Perhaps because of the length and depth of the recent recession and the pressure on financials, chief financial o!cers crept ahead of operational executives as pre-ferred candidates for senior succession, at least among public companies, while R&D moved up to tie with HR executives. Public companies also showed a greater interest in technically skilled candidates in R&D and engineering. The percentages below indicate respondent company preferences of functional sources of CEO candidates.

Balancing Long- and Short-Term is Toughest Challenge

While both public and private companies struggle with the rate of business change, public companies find it significantly more di!cult dealing with the conflict of immediate tactical business issues and longer-term (more strategic) needs. Private companies struggle more with finding the financial resources and developing a more systematic approach to leadership development.

1. Operations

2. Finance

3. Sales

4. Marketing

5. Engineering

6. Human Resources

7. Other

8. IT

9. R & D

1. Finance

2. Operations

3. Sales

4. Marketing

5. Engineering

6. Human Resources

7. R & D

8. Other

9. IT

73%

66%

65%

46%

22%

20%

16%

11%

9%

72%

71%

67%

51%

35%

20%

20%

14%

6%

Private Companies Public Companies

Di!culty balancing long-term and short-term business requirements

Limited financial resources

Rapidly changing business requirements so criteria for success is fluid

No systematic process for identifying and developing talent

Di!culty attracting top talent

Di!culty identifying high-potential development prospects

Di!culty retaining top talent

Other

53%

57%

45%

30%

23%

16%

14%

11%

76%

44%

42%

24%

23%

18%

16%

11%

Private CoChallenge Public

Where Companies Look for Their Next CEO

*Percentages indicate respondent company preferences for functional sources of CEO candidates.

*Percent of respondent companies citing challenge

23

Key Findings: The Dominant CEO Challenge: Leadership within a Global Economy

Public versus Private: Competing Pressures

Succession Failure: The Leadership Paradox Revisited

Featured Interview: An External Perspective from Bain & Company* Leadership for the Future

Impactful Leadership Development Directly Tied to Business Performance

24

The Dominant CEO Challenge: Leadership within a Global Economy

Given that companies increasingly operate in a global economy, and vast numbers do not reserve top-level positions for local candidates, how successful are inter-national assignments and what do leaders require to LQFUHDVH�WKHLU�HI¿FDF\�RXWVLGH�RI�WKHLU�KRPH�FRXQWU\"

More than ever before, the 21st century presents businesses of all sizes with the opportu-

nity and challenge of operating in a borderless world; not only do products and services

$ow across geographies, but so too does talent. Organizations routinely face the decision

whether to develop leaders in country or to transfer successful leaders to new geogra-

phies. Participants in the Global Leadership Research Project reveal a slight preference for

the latter, choosing less frequently to reserve top-level management positions for locally

recruited or developed nationals. Overall, 54 percent of survey respondents provide for in-

ternational leadership assignments; clearly public !rms – at 58 percent – impact the results

when compared against private !rms at 49 percent.

The success rates of such assignments, however, prove rather dismal especially for private

companies, who report successful transfers occur only about 55% of the time. Public com-

panies that are often larger and better resourced fair only slightly better at just fewer than

65% successful international transfers.

25

The most frequently reported challenge, by CEOs and HR leaders alike, is the inability of

transferred leaders to adapt to the new cultural requirements posed by the local environ-

ment. Not surprisingly, the overwhelming majority of respondents – 80 percent – point

to inadequate preparation provided to these executives that would serve to support the

cultural assimilation. Additionally, results indicate that they do not receive enough “in situ”

coaching or mentorship to guide them through the sometimes vast di"erences in business

models, laws, values, customs, and politics. Nor do most international assignments allow

su#cient time for the transferred leaders to attain the expected results, given that the

cultural mastery required to achieve success may take as long as three years, particularly

within dramatically di"erent cultural environments.

Training and Development Solutions Focus On:

1. Overview of cultural di"erences 44%

2. Language training 38%

3. Personal coaching 33%

4. Cultural awareness training 27%

5. Mentorship 23%

Along similar lines, language and communication challenges are identi!ed as barriers to

success by 20% of respondents. Data reveals that most expatriates receive no language

training at all, and many receive only the support of translators. Those who do receive lan-

guage training may not progress past the relatively super!cial level of pro!ciency required

to communicate socially and negotiate typical consumer transactions. While these chal-

lenges are less daunting for individuals with a natural proclivity for learning new languag-

es, such criteria are seldom part of the nominating process for international assignments.

CEOs and HR leaders participating in the study suggest that two additional barriers to

success come from a lack of preparedness of a di"erent sort. Local politics within the work

environment may lead to resentment toward the transferred leader who has been selected

26

from the outside and not from within the local operation. In short, too little attention

gets paid to laying the groundwork locally for the new leader. Moreover, 5% of respon-

dents report that basic logistical issues, such as adequate means for day-to-day com-

munication, currency, and cost of living di"erences, are challenges that distract from

the business priorities.

Lastly, while cited by a relative minority of respondents, the above challenges are fur-

ther exacerbated by complications presented by the unique family circumstances of an

executive. They may face the typical issues associated with trailing spouses who have

successful careers of their own, children who resist leaving their schools, friends and

sports, parents and other family members who rely on their support.

Perhaps not surprisingly, when asked to describe what companies do to prepare senior

leaders for the international assignment, we see that the numbers reveal a preference

for surface-level cultural acumen building – 44 percent of training and development

solutions focus on an “overview of cultural di"erences” versus 27 percent that focus on

more in-depth training. However, lest too harsh a judgment be levied against these

!rms, over 20 percent of participating companies report providing “minimal to no

preparation” whatsoever.

One of the top-ranked companies for leaders may provide insight into how to ap-

proach these global leadership challenges in the future. Rather than an either/or

scenario, i.e., local versus transferred leadership, this company leverages the proven

strength of its most successful leaders – regardless of geographic location – in a proj-

ect-based situation to achieve desired business outcomes in a new geography while

boosting the development of local leadership. As opposed to long-term transfers,

these international assignments are characterized by a focused, in-country kick-o" and

subsequent checkpoints that bring together the local leadership and project leader-

ship with the interim periods managed virtually. While not eliminating the requirement

for cultural astuteness, this approach potentially lessens the intensity of the experience

and better positions the two leadership teams to collaborate and capitalize on the

unique strengths of both parties.

27

Public versus Private: Competing Pressures

While recognizing that public and private companies vary widely in the leadership challenges they face, what, if any, are the distinguishing characteristics between the two that shed OLJKW�RQ�WKH�IRUFHV�FRPSHWLQJ�ZLWK�OHDGHUVKLS�GHYHORSPHQW"

When asked to identify the key challenges in developing leaders, di"erent barriers emerge for

private versus public companies. While both struggle with the rate of business change, public com-

panies report signi!cantly more di#culty dealing with the con$ict of immediate tactical business

issues over longer term and often more strategic needs such as executive development, likely due

to the unyielding and relatively short-term pressures applied by external constituencies. Private

companies, on the other hand, struggle more with !nding the !nancial resources and developing a

systematic approach to leadership development.

Organizational Barriers to Leadership Development * Private Public

Di#culty balancing long-term and short-term business requirements 53.85% 76.12%

Limited !nancial resources 57.21% 44.03%

Rapidly changing business requirements so criteria for success is $uid 45.19% 42.54%

No systematic process for identifying and developing talent 30.29% 24.63%

Di#culty attracting top talent 23.08% 23.88%

Di#culty identifying high-potential development prospects 16.35% 18.66%

Di#culty retaining top talent 14.42% 16.42%

Other 11.06% 11.94%

*Note: Respondents were able to select more than one response.

28

Public and Private Companies Weigh Criteria Di!erently

Public Companies Private Companies

Rank Leadership Performance Measure Leadership Performance

1 EBITDA Customer Satisfaction

2 Gross Pro!t Gross Pro!t

3 Income Growth EBITDA

4 Customer Satisfaction Income Growth

5 Cost Cost

6 Stock Price / Valuation Customer Retention

7 Market Share Market Share

8 Customer Retention Employee Retention

9 Employee Retention Stock Price / Valuation

10 Patents Patents

Source: Chally Group Worldwide

This analysis proves consistent with other !ndings about the distinction between public

and private companies. Survey respondents report on the key performance measures that

determine the overall success of the organization and reveal a stark contrast in priorities.

In the case of public companies, the external pressures applied by Wall Street analysts,

public opinion, and a variety of shareholders take precedence over pressures applied by

two other constituent groups – customers and employees. Customer satisfaction, customer

retention, and employee retention rank higher on all counts for private companies than

public companies.

29

Succession Failure: The Leadership Paradox Revisited

With the emphasis on leadership development so strong, what insights can be gained to account for the surprisingly high turnover of executives, as part of a broader trend in the workforce, particularly considering WKH�DVVRFLDWHG�FRVWV"

In 2010, the Global Leadership Research Project con!rmed that leaders do indeed evolve

from a wide variety of backgrounds, experience, and job functions; however it also revealed

that certain functions tend to serve as a conduit for leaders to the position of CEO. When

asked yet again to identify the functional areas most likely to produce C-level executives,

this year, 72 percent of participants choose Operations, with Finance close on its heels at 68

percent and Sales not far behind at 64 percent. Given the economic challenges of the time,

perhaps it is not surprising that CFOs and COOs tie at 71 percent amongst public company

respondents. Specialized functions such as marketing, human resources, engineering, IT, and

research and development were signi!cantly less likely to generate selected candidates for

Chief Executive O#cer.

30

Interestingly, when respondents speak to the competencies essential to the role of CEO,

there emerges a notable divergence from those associated with the roles of COO and CFO.

For example, while the vast majority of respondents – over 90% - view “Creating a Strategic

Vision” as the CEO’s most critical competency, it is not seen as vital to either the COO or CFO

position, nor is the competency regarded as second most important for the CEO, i.e., “Inspir-

ing Others and Maintaining Leadership Responsibility.” In fact, the only competency that

CEOs and HR leaders see as essential to CEOs, COOs, and CFOs is “Developing an Accurate

and Comprehensive Overview of the Business.” This commonality, though limited, cannot be

downplayed however when viewed in comparison to other C-level roles that do not share a

single competency from amongst the most critical for success for CEOs.

These !ndings suggest that succession management e"orts cannot assume that all C-level

positions are created equal as pipelines for CEO candidates nor even that the most probable

sources – COO and CFO – necessarily provide the experiences for building competencies

required by the CEO. The question remains, however, as to how best to prepare candidates

for the role. It would seem that the most critical skills for CEOs – “Creating the Strategic Vision”

and “Inspiring Others and Maintaining Leadership Responsibility” – in fact may be the least

trainable. Both involve intangibles – vision and inspiration – that are not easily de!ned for

those who have not, but are readily identi!able amongst those who have.

31

FEATURED INTERVIEWS: An External Perspective from Bain & Company*

The following are excerpts from interviews with Russ Hagey,

6HQLRU�3DUWQHU�DQG�:RUOGZLGH�&KLHI�7DOHQW�2I¿FHU�RI�%DLQ��

Company, and John Donahoe, former Worldwide Managing

'LUHFWRU�DW�%DLQ��&RPSDQ\��DQG�&KLHI�([HFXWLYH�2I¿FHU��3UHVL-

dent, and Director of eBay.

The Global Leadership Research Project secures additional analysis and insights from lead-

ing thinkers in the world of talent management. In a discussion about the potential pitfalls

of CEO leadership, Russ Hagey and John Donahoe rea#rm the unique role of the CEO in

creating a strategic vision and inspiring others through leadership. While CEOs exercise

ultimate authority within an organization, their ability to lead through others, employing

sophisticated interpersonal skill, is paramount. It is not about “emotional intelligence” but

a strong sense of self. The CEO role can be an isolated one, independent from others in the

organization and subject to their critical eye. He or she must have the ability to stick with

decisions in the midst of dissension and deliver pointed, while appropriate, communica-

tions about the way forward without appearing too arrogant or ignoring the corporate

culture. Successful CEOs provide the organization a candid but careful sharing of informa-

tion and clear statements of the vision that information directs.

32

Particularly striking in public companies, CEOs must expand their role to include

the exceptional burden of governance, for which a plurality of new CEOs are poorly

prepared. They often lack the necessary experience to e"ectively manage stakeholders

and other external constituencies beyond the customer. Good governance requires

the CEO to establish relationships with the board that are open and non-judgmental.

They must work with the board individually and independently as personal advisors,

as well as in their traditional !duciary oversight role. Doing this requires establishing

the contribution each can make, connecting the board members individually to key

functional groups, and helping the board to spend time on succession management,

thereby assuring a strong leadership pipeline. The most e"ective boards spend per-

sonal time with succession candidates to ensure that development experiences target

the governance gap by including opportunities to interact with constituencies outside

the company’s four walls, such as unions and governments, and to participate in non-

pro!t or smaller company boards.

By no means novel, yet nonetheless notable, the pace of change, particularly in the

realm of technology, presents the CEO with an added challenge. Leading this change

has become the dominant corporate requirement of these times. The established in-

ternal operating norms that were formerly appropriate and successful no longer match

the emerging forces from new markets and competition. “What got us here won’t work

anymore.” Today’s success requires balancing constant innovation with “su#cient”

quality at an increasingly rapid rate. The new and still changing fundamentals become

increasingly unclear. Internal candidates often do not have the appropriate experience

to face the signi!cant external market changes which require a di"erent or broader

perspective than the traditional corporate culture or business priorities provided.

The speed of learning becomes critical and new CEOs, who do not have an insatiable

curiosity about the market, struggle. Ego, arrogance, and an exaggerated sense of self,

especially as a barrier to continually learning from others, can be fatal. Yet the strong

but realistic sense of self remains key to the boldness required to cannibalize their own

products before the competition does.

33


There exists a general consensus that leadership development

merits organizational attention; however, particularly in times of

HFRQRPLF�FKDOOHQJH��LW�FDQ�SURYH�GLI¿FXOW�WR�MXVWLI\�WKH�H[SHQGLWXUH�

without the ability to demonstrate a direct return on investment.

As indicated above, for two years in a row, almost two-thirds

RI�UHVSRQGLQJ�FRPSDQLHV�LGHQWLI\�¿QDQFLDO�OLPLWDWLRQV�DV�D�

competing pressure against leadership development initiatives.

Data from the Global Leadership Research Project, however, suggests that an organizational com-mitment to leadership development correlates directly with business performance. The comparison covers 10 years from 2001 to 2011, a period long enough to minimize short-term and situational $uctuations. The correlation is dramatic (see table, below). The top companies for leadership show signi!cantly greater growth than the lowest companies as measured by market capitalization. While the relationship cannot be declared causal, the connection between the two should be regarded as compelling enough to bolster claims that an investment in leadership development makes good business sense.


Organizational Commitment to Leadership Development Average % Market Capitalization Growth

Top 15% of participating companies +22%

Bottom 15% of participating companies -23%

*Includes companies where public data is available for 1999 to 2009. Reasons for unavailable data include merger, acquisition, or start-up within the period.

35

The Global Leadership Research Project Participating Partners

36

Chally Group Worldwide is a sales and leadership talent management company that

was founded in 1973 through a grant from the United States Justice Department. The

grant funded the creation of actuarial assessment techniques and a validation technol-

ogy that accurately predicts on-the-job e"ectiveness. Chally’s talent analytics has been

improving productivity and reducing turnover for customers in over 49 countries. Cus-

tomers choose Chally’s talent measurement process for improved candidate selection

and employee and organizational development. Chally continues to fund and develop

comprehensive research in sales and management development including the Best

Companies for Leaders and World Class Sales Research, which has been conducted for

several years.

Chief Executive Group was founded in 1977 to create and foster opportunities for CEOs

to share their experiences and expertise within a community of peers. It serves its CEO

audience in a variety of media including print, in-person, and online, which in turn pro-

vides advertisers and sponsors multiple opportunities to develop long-term relationships

at the Chief Executive level. In addition to publishing Chief Executive magazine and www.

chiefexecutive.net, the Chief Executive Group brings CEOs together through its annual

CEO2CEO Conference, open to C-suite executives, and its by-invitation-only CEO Round-

tables, Symposiums, and Global Events.

Right Management (www.right.com) is the talent and career management expert within

Manpower, the world leader in innovative workforce solutions. Right Management helps

clients win in the changing world of work by designing and executing workforce solu-

tions that align talent strategy with business strategy. Our expertise spans Talent Assess-

ment, Leader Development, Organizational E"ectiveness, Employee Engagement, and

Workforce Transition and Outplacement. With o#ces in over 50 countries, Right Manage-

ment partners with companies of all sizes. More than 80% of Fortune 500 companies are

currently working with us to help them grow talent, reduce costs, and accelerate perfor-

mance.

9PNO[

4HUWV^LY.YV\W

4HUHNLTLU[

37

American Management Association is a world leader in professional

development, advancing the skills of individuals, teams, organizations, and govern-

ment agencies. With over 85 years of experience delivering 140+

training seminars throughout the country, AMA has re!ned their training

programs to meet today’s challenges. AMA promotes the goals of individuals and

organizations through a comprehensive range of solutions, including business seminars,

blended learning, Web casts and podcasts, conferences, books, whitepapers, articles and

more.

Imperial Consulting represents the American Management Association (AMA) in Singa-

pore, Malaysia, Philippines, Indonesia, India, and Australia. In partnership with AMA, our

mission is to provide managers and their organizations with the knowledge, skills, and

tools they need to improve business performance, adapt to a changing workplace and

prosper in a complex and competitive business world.

MCE was established in Brussels in 1961 as the European headquarters of the Ameri-

can Management Association (AMA), and provides high quality and

consistent management development solutions across Europe and globally.

We cover the three areas of leadership, managerial, and business functions.

ProActive, Ltd. is a Scandinavian based business consultancy company that o"ers

customers expertise when auditing and evaluating strategic competence to enable

growth. Proactive focuses on competency assessment, strategic planning, manage-

ment issues, and strengthening the corporate image. We help organizations clarify

needs and initiate the evaluation and development process.

Turning Point has been addressing various needs in Sales, Customer Service, Leader-

ship, Vision-Mission, Balance Score Card, Reengineering, and Implementation in di"er-

ent organizations since 1999. The company’s international pool of consultants in India

and the Middle East have specialized capabilities in the above-mentioned segments.

Over the past several years, Turning Point has established a name for itself in achieving

levels of excellence for its clients.

39

Global Leadership Research Project Survey Response Summary

40

Our Company is most known to our customers as a: Brand Leader with desirable upscale brands=1

Custom-Made Solution Leader with individualized turnkey solutions=2

Value Leader with cost e#cient, quality o"erings=3

All (%) Public (%) Private (%)1 brand leader 32.9 38.9 29.0

2 custom made solutions 26.8 23.5 30.4

3 value leader 40.3 37.5 40.6

Rank the key performance measures your leadership tracks to determine the overall success of the organization? 1 as most important to 11 as least important

All Public Private

Retention 5.0 5.9 (8) 4.4 (5)

Customer Satisfaction 4.0 5.0 (4) 3.4 (1)

Employee retention or Turnover 6.1 7.1 (9) 5.6 (8)

Income growth 4.3 4.3 (3) 4.3 (4)

Market share 5.7 5.8 (7) 5.6 (7)

Patents 9.0 8.9 (10) 9.1 (11)

Stock price 7.7 5.6 (6) 8.8 (10)

Costs 4.7 5.1 (5) 4.5 (6)

EBITDA 4.0 3.6 (1) 3.9 (3)

Gross Pro!t 3.8 3.7 (2) 3.6 (2)

Publications 8.7 9.5 (11) 8.4 (9)

At which level(s) does your company track pro!tability? (Check all that apply.)

All (%) Public (%) Private (%)

Per transaction 47.4 40.7 47.9

Per customer 62.6 60.0 61.2

Per market segment 67.2 71.1 61.2

Per geographic area 60.6 72.6 49.8

Per product o"ering 73.9 73.3 70.8

41

Does your organization have a formal process for developing leaders?


No 32.1 20.6 38.3

Yes 67.9 79.4 61.8

Does your company have international operations?


No 37.9 16.9 47.0

Yes 62.1 83.1 53.0

What development opportunities are included in it? (Check all that apply.)


Coaching and mentoring 95.6 95.5 96.9

Action learning/developmental assignments

86.7 90.9 82.7

Assessment and feedback 92.7 91.9 94.5

High-potential programs 70.9 83.8 59.8

International assignments 48.4 67.6 32.3

Cross-functional team projects 75.0 78.4 72.4

Exposure to senior executives 85.1 84.7 85.8

Exposure to internal and external thought leaders 60.9 55.9 63.8

Formal classroom training 81.9 87.4 75.6

External workshops and training 79.8 80.2 77.9

Tuition Remission 60.5 63.9 56.7

Other: please specify 13.7 13.5 14.2

What does your company do to ensure it has a good leader pipeline? (Check all that apply.)

All (%) Public (%) Private (%)Provide informal development opportunities to key internal people

57.5 52.2 59.3

Rigorously recruit and hire external candidates who have the potential to become top-level leaders to !ll speci!c position openings

69.9 73.9 67.9

Maintain a network of potential external leadership

candidates38.1 43.5 38.3


42

What percent of your current senior management team was recruited internally?All (%) Public (%) Private (%)

0 3.3 1.5 4.3

10 5.0 5.3 3.9

20 7.5 5.3 8.7

30 7.5 6.0 7.7

40 7.2 4.5 7.7

50 11.4 9.8 13.5

60 10.6 11.3 10.6

70 11.1 10.5 11.5

80 14.4 22.6 9.1

90 13.9 18.8 12.0

100 8.1 4.5 11.1

What percent of your current next level under senior management was recruited internally?


0 3.1 3.8 2.4

10 3.6 3.0 3.9

20 5.6 3.8 5.8

30 6.4 3.8 7.2

40 4.4 3.0 5.8

50 11.1 8.3 13.5

60 12.5 11.3 13.5

70 15.6 22.6 10.6

80 16.9 21.0 15.4

90 11.7 14.3 10.1

100 9.2 5.3 12.0

Which functional areas are most likely to produce your C-Level executives? (Choose the top FOUR.)

All (%) Public (%) Private (%)Engineering 27.0 34.8 22.5

Finance 67.8 71.9 66.5

Human Resources 20.7 20.0 19.6

IT 10.5 6.7 11.0

Operations 71.6 71.1 72.7

R & D 12.9 20.0 9.1

Sales 63.6 67.4 65.1

Marketing 47.1 51.1 46.4

Other 16.3 14.1 16.3

43

Do you reserve key top-level management positions within foreign countries for locally recruit-ed/developed nationals?


No 54.0 58.0 49.0

Yes 45.9 41.9 50.9

How would you rate your organization’s ability to develop leaders?

All Public Private

Average 3.1 3.2 3.1

(%) (%) (%)

Poor 6.6 2.2 8.7

Average 27.4 28.2 26.9

Good 28.7 32.6 26.4

Very Good 25.1 25.9 24.5

Excellent 12.2 11.1 13.5

What challenges do you face in developing leaders within your organization? Check all that apply.


Limited !nancial resources 52.1 44.0 57.2

Di#culty balancing long-term and short-term business requirements

61.8 76.1 53.9

Rapidly changing business requirements so criteria for success is $uid

43.2 42.5 45.2

Di#culty identifying high-potential development prospects

18.6 18.7 16.4

Di#culty retaining top talent 15.5 16.4 14.4

Di#culty attracting top talent 24.7 23.9 23.1

No systematic process for identifying and developing talent

28.3 24.6 30.3

Other: please specify 11.1 11. 11.1

44

What percent of your time is spent engaging in other’s development activities?

All (%) Public (%) Private (%)Average of What percent of your CEO’s time is spent

engaging in other’s development activities?25.7 24.3 27.0

Average of What percent of your CEO’s time is spent

on their own personal development?17.3 15.8 18.4

In which of the following development activities do you get personally involved? (Check all that apply.)


Teaching formal training classes 26.5 22.9 27.8

Guest appearances in training classes 61.2 68.2 55.9

Mentoring one-on-one 64.5 57.8 69.4

Coaching and feedback for skill development 61.7 57.8 65.1

Informal information exchange sessions 75.8 74.8 77.0

Other, please specify 11.0 13.3 8.6

Other companies actively try to recruit our organization’s leaders.

All Public Private

Average 3.8 3.9 3.7

(%) (%) (%)

Strongly Disagree 3.6 2.9 3.4

Disagree 8.1 7.5 7.7

Neither Agree nor Disagree 19.4 15.7 22.9

Agree 45.0 40.3 48.3

Strongly Agree 23.9 33.6 17.7

45

Retention of key talent is a formal performance metric for our managers.

All Public Private Average 3.3 3.3 3.3

(%) (%) (%)Strongly Disagree 6.4 4.5 7.7

Disagree 25.4 26.9 23.4


Agree 34.3 32.1 35.9


My company has a su"cient number of quali!ed internal candidates who are ready to assume mid-level manager positions.

All Public Private

Average 3.3 3.3 3.3

(%) (%) (%)


Disagree 23.7 25.6 22.5


Agree 43.7 38.4 46.4


My company has a su"cient number of quali!ed internal candidates who are ready to assume senior manager/executive positions.


(%) (%) (%)Strongly Disagree 6.4 3.7 6.7

Disagree 37.9 37.3 39.4


Agree 28.8 29.9 28.9


46

Upper-level managers recruited externally have been successful.

All Public Private

Average 3.6 3.6 3.7

(%) (%) (%)




Agree 52.7 48.9 53.1


Mid-level managers recruited externally have been successful.


(%) (%) (%)

Strong Disagree 0.8 0 1.4



Agree 60.8 61.1 59.8


HR is an e#ective partner in the leadership development process.

All Public Private

Average 3.8 3.9 3.7

(%) (%) (%)


Disagree 10.8 2.8 13.9


Agree 39.2 41.7 36.9


47

Sector: All (%)

Publicly Traded 37.8

Privately Held 57.8

Government Entity 4.4

Industry (Check all that apply)

All (%) Public (%) Private (%)Administrative & Support & Waste Management Services

1.1 1.6 0.9

Agriculture, Forestry, Fishing 3.4 5.4 2.4

Arts, Entertainment & Recreation, Accommodation and Food Services

2.3 2.3 1.9

Health Care 11.0 5.4 14.4

Professional, Scienti!c and Technical Services

15.6 12.4 18.2

Transportation & Warehousing 7.7 6.2 8.1

Information, Media, Telecommunications 7.4 6.9 7.7

Mining, Utilities, Construction 8.5 8.5 8.6

Finance, Insurance, Real Estate 12.2 9.3 13.9

Wholesale Trade & Retail Trade 10.8 9.3 12.4

Manufacturing 24.4 32.6 21.1

Other 17.9 17.0 15.8

HR SURVEY

What type of preparation do you provide to managers before a transfer outside their home coun-try? (Check all that apply. )


In-depth cultural awareness training 27.4 37.1 16.3

Language training 37.6 47.4 27.5

Personal coaching 32.8 43.3 21.3

Ongoing mentorship 22.6 29.9 16.3

Overview of cultural di"erences 43.6 56.7 31.3

Minimal to none 20.9 17.5 26.3


48

What percent of such transfers have been successful?

All (%) Public (%) Private (%)Average 58.7 64.1 54.1

What have you found to be most e#ective for developing a global mindset?


Living and working abroad 40.5 47.9 34.5

Exposure to International assignments 39.5 35.4 45.2

Other 20.0 16.7 20.2

How do you currently evaluate a recruit’s !t with your company’s culture? Check all that apply.

Recruit All (%) Public (%) Private (%)Structured interview 86.6 84.7 89.7

Psychological assessment / tests 37.6 37.8 35.6

References 69.1 70.4 66.7

Personal recommendations from trusted sources 60.8 55.1 65.5


How do you currently evaluate an employee’s !t with your company’s culture? Check all that apply. Employee All (%) Public (%) Private (%)

Don’t do it 17.9 14.3 19.5

Multi-rater evaluation like 360 40.3 55.1 25.3

Past performance reviews 56.6 62.2 52.9

Wide visibility or reputation as a champion of the

company’s culture?32.1 37.8 29.9


Do you have a formal de!nition of high potential?


No 44.2 33.3 52.9

Yes 55.8 66.7 47.1

49

What are the two best ways to identify hi-potential talent? (Check the Top TWO.)


Credentials 21.4 21.2 20.9

Recommendations from superiors 74.5 79.8 69.8

Peer Nominations 24.5 20.2 30.2

Completion of minimum identi!ed assignments or course work

20.4 19.2 22.1

Assessment Tests 20.4 15.1 26.7

Assessment Centers 28.1 30.3 24.4


How far down in your organization do you go in identifying and track high potential leaders?

All (%) Public (%) Private (%)Individual Performers with no Management Responsibility

34.0 34.3 34.5

First-level supervisors 22.3 22.2 18.4

Middle Managers 29.4 33.3 26.4

Upper level managers 11.7 9.1 16.1

Other 2.5 1.0 4.6

What processes do you use to recruit and hire top external leadership talent? (Check all that apply.)


Use specialized recruiting !rm 82.9 86.7 81.6

Recommendation from internal managers/executives 70.1 69.4 70.1

Recommendation from external executives 50.5 55.1 43.7

Networking at industry events 50.5 51.0 48.3

Assessment Process 33.5 31.6 35.6

General Interviews 50.0 45.9 52.9

Structured Interviews 64.9 64.3 64.4


50

What on-boarding processes do you use for top-level leaders? (Check all that apply.)


Assigned a mentor 41.9 43.6 39.5

Planned rotation of meeting key individual 77.2 80.9 72.8

Short-term assignments in di"erent functional areas 21.2 22.3 19.8

Other 20.1 21.3 19.8

Which of the following are most predictive of leadership success? (Check all that apply.)


Previous experiences 76.6 81.7 72.4

Educational background 14.4 11.8 16.1

Interpersonal skills 92.02 93.6 93.1

Fit with company values and culture 86.7 89.3 83.9

Motivation to lead 78.2 82.8 73.6

Lack of derailers 35.6 41.9 27.6


Are you the most senior level HR/sta# executive responsible for corporate-wide leadership development in your company?


No 47.6 50.0 47.1

Yes 52.4 50.0 52.9

global leadership 2011 2012

Documents

leadership strategies

leadership developmentfocused

theyin leadership development

research process

tomorrows research

business leaders

ongoing research study

global economygiven