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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
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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
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KEY TAKEAWAYS
leadership development
24 CHIEFEXECUTIVE.NET JANUARY/FEBRUARY 2012
GETT
Y IM
AGES
“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.
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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
1726 CHIEFEXECUTIVE.NET JANUARY/FEBRUARY 2012
leadership development
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
1928 CHIEFEXECUTIVE.NET JANUARY/FEBRUARY 2012
leadership development
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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Public and Private Companies Weight Criteria Di!erently
ISTO
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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
2130 CHIEFEXECUTIVE.NET JANUARY/FEBRUARY 2012
leadership development
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
22
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
Impactful Leadership Development Directly Tied to Business Performance
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.
Impactful Leadership Development Directly Tied to Business Performance
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.
34
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.
38
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?
All (%) Public (%) Private (%)
No 32.1 20.6 38.3
Yes 67.9 79.4 61.8
Does your company have international operations?
All (%) Public (%) Private (%)
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.)
All (%) Public (%) Private (%)
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
Other: please specify 11.5 13.0 11.1
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?
All (%) Public (%) Private (%)
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?
All (%) Public (%) Private (%)
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.
All (%) Public (%) Private (%)
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.)
All (%) Public (%) Private (%)
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
Neither Agree nor Disagree 19.2 21.7 17.7
Agree 34.3 32.1 35.9
Strongly Agree 14.8 14.9 15.3
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
(%) (%) (%)
Strongly Disagree 4.7 2.3 5.7
Disagree 23.7 25.6 22.5
Neither Agree nor Disagree 17.8 21.8 15.8
Agree 43.7 38.4 46.4
Strongly Agree 10.0 12.0 9.6
My company has a su"cient number of quali!ed internal candidates who are ready to assume senior manager/executive positions.
All Public Private Average 2.9 3.0 2.9
(%) (%) (%)Strongly Disagree 6.4 3.7 6.7
Disagree 37.9 37.3 39.4
Neither Agree nor Disagree 19.8 20.9 18.3
Agree 28.8 29.9 28.9
Strongly Agree 6.9 8.2 6.7
46
Upper-level managers recruited externally have been successful.
All Public Private
Average 3.6 3.6 3.7
(%) (%) (%)
Strongly Disagree 1.4 0.8 1.9
Disagree 7.5 9.8 6.7
Neither Agree nor Disagree 27.6 30.8 26.8
Agree 52.7 48.9 53.1
Strongly Agree 10.9 9.8 11.5
Mid-level managers recruited externally have been successful.
All Public Private Average 3.7 3.8 3.7
(%) (%) (%)
Strong Disagree 0.8 0 1.4
Disagree 6.7 6.1 7.2
Neither Agree nor Disagree 22.7 22.1 23.9
Agree 60.8 61.1 59.8
Strongly Agree 8.9 10.7 7.7
HR is an e#ective partner in the leadership development process.
All Public Private
Average 3.8 3.9 3.7
(%) (%) (%)
Strongly Disagree 3.6 2.8 3.3
Disagree 10.8 2.8 13.9
Neither Agree nor Disagree 18.1 22.2 17.2
Agree 39.2 41.7 36.9
Strongly Agree 28.3 30.6 28.7
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. )
All (%) Public (%) Private (%)
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
Other, please specify 25.8 17.5 31.3
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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?
All (%) Public (%) Private (%)
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
Other, please specify 5.2 7.1 3.5
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
Other, please specify 22.5 19.4 26.4
Do you have a formal de!nition of high potential?
All (%) Public (%) Private (%)
No 44.2 33.3 52.9
Yes 55.8 66.7 47.1
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What are the two best ways to identify hi-potential talent? (Check the Top TWO.)
All (%) Public (%) Private (%)
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
Other: please specify 15.8 18.2 13.9
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.)
All (%) Public (%) Private (%)
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
Other: please specify 5.2 8.2 0.0
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What on-boarding processes do you use for top-level leaders? (Check all that apply.)
All (%) Public (%) Private (%)
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.)
All (%) Public (%) Private (%)
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
Other: please specify 11.7 11.8 11.5
Are you the most senior level HR/sta# executive responsible for corporate-wide leadership development in your company?
All (%) Public (%) Private (%)
No 47.6 50.0 47.1
Yes 52.4 50.0 52.9
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