Strategy Activation: Develop your leaders in context

CEOs may consider many ways of steering the workforce toward a new strategy, but overlook leadership development as a primary tool. It should be at the top of every CEO’s list, however. Leadership development can be used to put the best minds in a company to work on real, current business problems.

This context is key. Leaders learn best when they connect new information and skills to their own experience (Hull 1993), and 30 years of study show the effectiveness of real-world learning (Carraher, Carraher, and Schleimer 1985; Lave, Smith, and Butler 1988). Despite this, this still isn’t the norm for leadership development.

Most executives, when asked where leadership development happens, think primarily of the classroom. However, when executives are asked what shaped them as leaders, most cite real-world, on-the-job experiences.

An Asia-based financial services firm recently introduced a new approach to corporate innovation and used a leadership development approach to implement it. For a week, 25 of the organization’s senior leaders gathered to hear presentations and brainstorm. One-on-one feedback as well as coaching sessions encouraged them to set aside old beliefs about what was possible and to present their best new ideas.

However skeptical they were at the start, all participants asked questions and built on the ideas of their co-workers. The group compiled 10 ideas ready for further exploration. They also exhibited a new level of collaboration and energetic can-do attitude. By integrating leadership development into this strategy summit, these leaders began to adopt, practice, and demonstrate the creative thinking the organization needed.

Likewise, “leadership development” can be integrated into sessions focusing on growth strategy or developing new business ideas. Gathering people to ask for solutions and involvement is relatively simple but can have impressive results. Over time, even reluctant senior leaders warm to the idea that business growth and individual learning are intertwined. The results are transformative for both individuals and for the organization.

The benefits of contextual learning.

Leadership development is a potent way to implement new strategy and even transform culture. Steeping development in the real-world context of the business yields highly motivated people who are positioned to lead by example. Here are four benefits typically found in this approach:

• Strategies get communicated clearly beyond the boardroom. Many leading companies develop concise messages that communicate their aspirations, their targeted customers, and what they want to be considered best at doing. But then that message never goes anywhere. But leadership development sessions are an ideal place to articulate such a cohesive message, so that it spreads through all the leaders and top talent. 
• Straightforward plans are created for solving problems. Though leaders often know how to leverage a company’s strengths, many aren’t prepared to handle weaknesses such as underperforming people and underinvested functions. When leaders are offered a clearly articulated strategy and understand what’s behind this new action plan can, it gives them clarity around what they need in terms of talent and resources. 
• Pioneering ideas get prioritized. Individuals make assumptions about what their organizations or supervisors value. Creating a development program where they can pursue new directions liberates them from such assumptions and opens up channels to new ideas. Leadership development essentially becomes the safety net for innovation and experimentation. 
• A network of leaders is born. Gaining a breadth of perspective only happens when leaders build relationships across business units. Unfortunately, many leaders feel stuck in their silo: they only get part of the story. That makes cross-functional problem solving difficult. Crash-courses on communication across borders improve understanding and awareness.

One area for learning comes up again and again: finance. External trainers frequently use a company’s own financial information as the source material for teaching, but lessons truly sink in when delivered by the most credible experts from within the company. It cuts through the skepticism to hear about finance from the CFO, or customer knowledge from the head of sales. Top talent feel more included and valued when their company leaders have taken the time to share their perspectives personally.

Top talent stays with an organization as long as they feel like they are contributing and learning. When these drives are paired up during a leadership development process, it can be transformative for businesses. Companies known for developing leaders have outperformed their peer groups for decades: P&G, GE, Kraft, Goldman Sachs, IBM, Whirlpool, and American Express, to name a few. What these very different companies have in common is the practice of leveraging people development to help drive contribution to their businesses.

Once up and running, a leadership development system like the one we’re describing generates benefits that far exceed start-up costs. Nurturing talent becomes part of the organization’s culture, and builds in impact over time. Leadership development ignites human potential. Done well and connected to strategy, it also delivers results for the organization.