In conversation with Tommy Weir, Ph.D., Vice President Leadership Solutions, Kenexa on the basics of building leadership capabilities for sustainability

Companies across the world have realized that identifying and developing leaders will drive superior performance. Does the process of leadership identification and development go beyond performance to become a matter of sustainability and survival?

Many organizations misunderstand the difference between having people in leadership positions (like Vice-President or CEO) as opposed to having ‘leaders’ fill these positions. Unfortunately, there are many LINOs (leaders in name or position only) occupying those positions and that does not lead to sustainability. In emerging economies, the danger of this situation is even higher because business performance is showing YOY growth, mostly due to a fast growing environment and not necessarily driven by the leaders in the organization.

Everybody is in a job and seems to be doing exceptionally well. The problem arises when the economic situations change, business pipelines dry out and those leaders are neither able to achieve performance nor run the business. Majority of companies today do not spend the time and effort for leaders to practice becoming leaders. There are two main dangers to sustainability. First danger is when companies grow beyond their financial capabilities and second, when they grow beyond their leadership capabilities. And according to me, both are equally important situations.

How is this situation different for emerging markets? What is the uniqueness of emerging economies when it comes to identifying and managing talent effectively?

The concept of a leader, by definition, comes from the basic framework of leading people. A leader can only lead people and not customers, systems or processes; the process of leading only applies to people. In this context, it is very important for leaders to understand the nature of people they are leading. In India, a lot of youth from the agricultural background are beginning to join the corporate world. These are the people who have grown up in an environment with limited exposure to the corporate world as it is today. The leaders in these organizations however are mostly highly educated people with highly exposed backgrounds who have studied or worked abroad and are used to the corporate environment from previous generations. The success or failure of these leaders will lie in their understanding of the people they are leading, considering the kind of diversity which exists among them.

Is investment in Leadership correlated to successful performance in the short term, or is it an investment of mid/long term?

Good leaders are able to achieve short term business performance as their leadership capabilities can extract performance from employees. In the long term, however, leadership brings the capabilities to be able to grow a business. Investment in leadership in the short term will bring higher performance per employee and in the long term, will bring sustainable growth as the organization will have the internal capabilities to take the business ahead.

In many organizations, especially those with less number of employees, the exercise of identifying and grooming leaders happens because of the CEO or Top Management having an intuitive eye to spot unique capabilities. In a fast growing scenario, this is of course not a sustainable model. How can these organizations design and plan for leadership development processes?

There are several issues with CEO and Top Management exclusively owning the identification of talent, the main one being that their exposure to people is limited to those working around them. It is essential for them to identify that and include other managers down the line in this process. In order to create successful leadership, a company needs to first identify what capabilities they require in a leader and what competencies are required to drive the business. Then these capabilities need to be adapted to each level in the organization and finally should be exercised consistently by linking these competencies across processes. However, the first step remains to create the framework and then actually using this framework across processes and functions, like recruitment, career development, recognition, compensation, et al, take place.

In terms of tracking effectiveness, I think it is important to create assessment mechanism either internally or externally. Especially in high growing environments, it is very easy to let the speed of business take over the implementation and use of these frameworks. Very few business heads stop and asses their processes as a way to validate the effectiveness of their frameworks.

You would agree that all organizations across size and industries need to invest in identifying and developing leadership in a systematic manner. How can one do this when the resources are limited? Is a large budget a requirement for a successful process? What alternatives mid size organizations have?

The process of identifying and developing leaders does not necessarily require a budget, and as I mentioned earlier, it requires a clear framework of the competencies & behaviours we are looking for, and a consistent use of that framework across practices & across levels in the organization. For example, business leaders just need to identify what they require for their business to succeed and the process is simple after that. They can use models like MAWL (model, assist, watch and leave) that do not require any budgets. In the MAWL framework, the leader basically spends time with the mentee so he/she can see and learn from observing behaviours and decisions (model), then creates opportunities for the mentee to help and give his/her inputs in the matters handled (assist), creates opportunities for the mentee to take action under the supervision of the mentor (watch) and finally creates the base for the leader to exit when the mentee is ready for the leadership position (leave). In emerging markets like India where culture is more patriarchic, these models work very well because employees look out for their managers and managers also look beyond the quarter results to invest in the growth of the organization and society.

Tommy Weir, PhD. Tommy Weir is Vice President of Leadership Solutions at Kenexa. He is a thought leader specializing in strategic leadership for fast-growth and emerging markets, a gifted speaker, and author of The CEO Shift - a book that explores the new global business environment and challenges corporate leaders to shift their practices in order to survive in the new economy.