Strong leadership is more than a competitive advantage. It separates world-class companies from the rest.
In 2011, AON Hewitt released the results of a study conducted to identify key trends in strategy, leadership, talent and sustainability. In addition to the completion of a survey questionnaire, their research included interviews with 900 executives from top performing companies around the globe, to determine what they are doing to achieve “Top Company” success.
Leadership is the key defining variable. Michael Useem, professor of management and director of the Leadership Center at Wharton School, states that, “a culture of leadership development from the top down defines this year’s Top Companies…” These companies are willing to walk the talk. They emphasize the value of growing leadership capabilities at all levels of the organization.
What are leaders in Top Companies demonstrating?
The results of interviews with the 900 executives around the world surfaced key trends for leadership and organizational success that include:
- The emotional side of leadership as critical to maintaining calm and focus in times of permanent and disruptive stress.
- Differential investment in top talent leverages scarcer resources to assure key talent is recognized, retrained and developed, even when fewer total resources are available.
- Leadership programs and practices are highly integrated and embedded within their organizations.
- Increasing diversity among the executive team and the leadership pipeline is of critical importance, and companies are feeling the urgency to take action.
- Cultural agility is paramount to success – leaders must think globally, but act locally.
Emotional side of leadership
In our work with leaders, we utilize the language and concepts imbedded in the body of knowledge now referred to as Emotional Intelligence. It is the result of 30-plus years of research that continues to evolve on the science of the brain. What we know is that in times of “permanent and disruptive stress,” leaders must exercise their emotional intelligence to counteract the fight or flight reaction. It is a physiological response to stress that reduces our ability to think. The results of the AON Hewitt study reinforces the emerging awareness that IQ and technical skills are baseline skills. It is the integration of emotional intelligence competencies that set the best leaders apart from the rest.
Doris Kearns Goodwin, in an interview with a journalist, described President Abraham Lincoln as a leader who demonstrated a high level emotional intelligence. “What Lincoln had going for him was a core of emotional strengths that today are called emotional intelligence. When rivalries sprung up, he was able to stand in the center of the storm. He wrote letters asking for forgiveness for speaking in haste. He wrote what we called a ‘hot letter’ when his temper flared and then stamped them, never signed, never sent. He invited rivals to go for a walk or a carriage ride. In essence, he was kind. Somehow he knew that human relations are the core of success. He managed people who did not sit with him or speak with him with sensitivity and kindness.”
Leadership programs and practices are highly integrated
As we have learned from the AON Hewitt research, creating a culture of leadership requires a commitment to consistent development at every level of the organization. Peter Senge, author of “The Fifth Discipline: The Art and Practice of a Learning Organization,” popularized the notion of a learning organization. Learning organizations are described as organizations “where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning to see the whole together. The basic rationale for such organizations is that in situations of rapid change only those that are flexible, adaptive and productive will excel.”
In order for an organization to become an organization where development and leadership are nourished at every level, leaders must be willing to commit the financial resources, time and space. Often, when the financial health of an organization is challenged, the commitment to development is broken. Ironically, this is the time, for the sake of the long term success of the organization, that dollars need to be invested in development. As sited in the report, Top Companies provide “differential investment in top talent … to assure key talent is recognized, retrained and developed, even when fewer total resources are available.”
Increasing diversity and cultural agility
Like President Lincoln, leaders do best by inviting people with diverse thought as well as racial, gender and cultural diversity to sit at their tables.
The opportunity for broader vision; creative problem solving, and innovation is significantly increased when we welcome diversity. It requires a level of self awareness and appreciation in order to invite differences. And yet, we have confirmation that top performing companies engage leaders with the capacity to “stand in the storm.”
Wayne Calloway, former chairman of Pepsico Inc., one of the Top Companies referenced in this report, says: “I’ll bet most of the companies that are in life-or-death battles got into that kind of trouble because they didn’t pay enough attention to developing their leaders.”
Top Companies invest in learning at all levels of the organization. They seek and identify talent and provide the necessary tools for them to be successful. Top Company leaders welcome the challenge and the creativity that diversity brings. They recognize the significance of developing emotional skills to respond to permanent and disruptive stress. Top Companies are a step ahead of the rest and they are not willing to settle. They know that there is always more work to be done and they welcome the next horizon with confidence and commitment. They know what they need to do to be successful and they are relentless in their efforts.
To review the entire report on Top Companies see: www.aon.com/topcompanies/.
Karen Vernal is the president of Vernal Management Consultants LLC, a Milwaukee-based leadership and organizational firm dedicated to “igniting the spirit and skills of leaders.” The company is one of two firms in the nation to be certified in Emotional Intelligence through the Institute for Health and Human Potential. For additional information, visit www.vernalmgmt.com.