Leadership Development and Performance Management

Leadership Development in the present century has become a buzzword and many organizations use this as a crucial tool for gaining a competitive advantage in the business. Developing leadership talent is one of the most crucial functions of performance management today, as the system has evolved from an evaluative to a developmental and result driven framework. The inputs from the personal development plans, performance appraisals, and competency frameworks provide necessary information for identifying the top leadership talent in an organization.

According to the survey findings of Ninth House Co., Jan 2006, about 90% of leading organizations integrate their leadership development programmes with performance management and succession planning. The same survey results also reveal that about 95% of the respondents appoint external executive coaches for conducting leadership development programmes and almost 85% deploy 360 degree feedback tools.

The survey results prove that different organizations adopt multidimensional approaches towards leadership development by utilizing a variety of learning techniques which is again dependent upon the levels of management.

Leadership development is an integrative framework and is interconnected with the other processes of an organization. In the opinion of Raelin (2004), leadership development should be integrated with the major organizational strategies, culture and the other crucial processes and sub processes for attaining the predetermined objectives.

Today organizations, pay a heavy importance to the measurement of return on investment (ROI) subsequent to the implementation of any leadership development programme in terms of improvements in current performance and of the future as well (Kincaid and Gordick, 2003).

Organizations like Pepsi Co., Johnson and Johnson and many others have introduced newer modalities for measuring the benefits of leadership development efforts in quantifiable terms.

Organizations today use a plethora of assessment tools to identify and develop the individual talents and the talent pool for successfully meeting their current people requirements and for their future.

The Competency model has proven to be one of the most effective tools as it uses performance matrix, promotability matrix and multi rater 360 degree feedback tools for gathering information on the organizational talent pool.

For example, Mc Kinsey recommended a three tier system for sorting the talent base in an organization. The ones in the top group are deployed in a fast track to leadership in terms of both responsibilities and compensation. The ones in the middle group are encouraged to progress towards the future group of leadership whereas those in the bottom are pressurized or forced to either “shape up” or “ship out”.

Some of the most commonly used techniques adopted by the contemporary organizations in the leadership programmes are mentoring, 360 degree feedback, project assignments, job rotations, team assignments, on the job training, coaching, etc.

According to the latest survey findings from Fortune (September, 2007) on top companies for leaders, most of the organizations offer internal training to their executives for grooming future leaders. Some of the crucial findings of the survey report of fortune are provided below:

  • Many reputed companies prefer to invest their major time and money on leadership for gaining a competitive advantage.

    For example, in Mc Donald’s the CEO personally reviews the top 200 managers and similarly at GE, the top 600 managers’ performances are reviewed by the CEO. GE spends heavily upon the leadership development programmes by representing the high potential employees to Crotonville, New York, leadership development center.

  • Organizations like Whirlpool and Natura Cosmeticos, stress on consistent feedback and support through mentoring and coaching in the leadership development process.

  • Organizations like GE and Nokia aim at developing teams instead of just the individuals. Nokia adopts a Finnish culture which focuses upon leadership instead of just the leaders. Similarly, P&G runs inspirational leadership development programmes for inspiring leaders at the top.

Leadership development process today has evolved as a facilitative and a strategic process aiming at improving the organizational and individual performance by identifying and developing the leadership talent in a planned and integrated manner.

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