Grooming Next-Generation Leaders

Organizations succeed by identifying, developing, and retaining talented leaders. Professors W. Earl Sasser and Das Narayandas, who teach leadership development in one of Harvard Business School's Executive Education programs, discuss the fine points of leadership development. Key concepts include:
  • Talent provides organizations a key competitive advantage, but there must be managers and a process in place to identify and nurture next-generation leaders.
  • Large and small companies may have a leg up in leadership development. Medium-sized organizations have the most difficulty with talent identification because these companies often lack the infrastructure and human resources capabilities.
  • What separates true leaders from the merely capable is flexibility in leadership styles in order to meet challenges of the global economy, rapid commoditization, and hyper-competitive environments.
by Martha Lagace

Finding and nurturing future leadership talent is a primary concern for most organizations. How can they identify top people, train them, and—here's the catch—retain them? And do so in the face of ever-increasing global challenges?

Harvard Business School professors W. Earl Sasser and Das Narayandas, faculty of the School's Executive Education offering "Program for Leadership Development (PLD): Accelerating the Careers of High-Potential Leaders," are experts on the subject. PLD invites executives with ten to fifteen years of experience to attend four modules that focus on such areas as foundational skills, critical business functions, strategy formulation and implementation, and personal leadership.

For the organization, according to Sasser and Narayandas, talent is key to competitive advantage. And for the talented employee, a huge challenge is to rise above a single function and gain a broad understanding of the business, especially as it operates globally.

In separate interviews, Sasser and Narayandas discussed talent identification, leadership in action, and what PLD does to help hundreds of executives grow.

"Leadership by definition is a multifaceted term," says Narayandas, the James J. Hill Professor of Business Administration and Chair of the Program for Leadership Development. "Are you managing yourself, are you managing upwards or the people below or laterally, or the firm, industry, society? You can lead at so many levels. That complexity is only going up. It's just not a question of leading a small team. It's about leadership in ideas, in actions.

"Add that to the fact that in most situations people are dealing with the global economy, rapid commoditization, and hyper-competitive environments. So to be able to be flexible and use the right approach at the right time and change as the situation demands is going to be tough. Not everybody can do it. That's going to distinguish the true leaders from people who are capable but not leaders."

Targeting Talent

Employees in large and small organizations share one advantage, according to Sasser, a Baker Foundation Professor. These employees enjoy access to talent-identification systems. Big organizations can point to formal programs led by individuals whose sole responsibility is to find and mentor up-and-comers. And small companies can shine in talent identification too, as CEOs take note of future stars. But medium-sized organizations have the most difficulty with talent identification because these companies often lack the infrastructure and human resources capabilities, says Sasser.

With or without talent identification programs, how likely are future leaders to recognize leadership qualities in themselves?

It's about leadership in ideas, in actions.

"There are some that can see it in themselves; there are some that need to be informed," says Narayandas. "Talent needs to be nurtured: Many times it takes someone else who can recognize that an individual can think beyond their job, can think bigger, and has the potential to make a bigger impact. It's a combination of the environment, talent seekers, and raw talent together that bring the right kind of people to our program."

What Should Future Leaders Learn?

People often have a true deficiency in finance and quantitative methods, says Sasser. While PLD students learn a variety of business specialties including strategy, finance, marketing, and innovation, the point is that future leaders often need to break out of a function where they excel and aim for a bigger picture of the organization and its world.

"If they are not trained the right way, they can spend the next twenty years building deeper and deeper skills in a narrow aspect," Narayandas says. "What they might not be asking themselves, or pushing themselves to ask, is: 'What if I had knowledge of other aspects of the business? It would actually inform my decisions in a better way. I could pursue more productive lines of action for the firm.'

"Business is only getting more complicated. Understanding the interactions of various aspects of business becomes very important."

"Let's assume we have fantastic R&D people," he continues. "They are building ideas. They might never ask the question, 'Is this relevant to the company, customers, and marketplace?' Sometimes they might just work with the budget they have on a potential innovation rather than frame a problem in a more informed way and be able to go to management and say, 'Look, here's the business plan. Here are the resources I would like. This is what I think we can show.'

"So someone who has an understanding of the capital budgeting process would be immediately more likely to go down that line of action rather than say, 'I've been given $50,000, now let me try to do the best I can.'"

You have to understand what you're leading, adds Sasser. Expertise in only one area—think John Sculley's unsuccessful jump from Pepsi consumer marketing to the top of Apple—can be a handicap.

After your organization trains and mentors leaders, how can it retain them? Talented employees thirst for challenging assignments, and they need to be listened to, says Sasser. "If you invest in these people, you must give them significant work. In a top management group there are never enough leaders. Something is always a stretch for someone.

"There are often conflicts between how fast you can move and how fast the organization can move you. If someone doesn't see mobility, they may leave."

Adapting A Leadership Style

Not everyone is going to be another Jack Welch, nor does everyone want to be, says Sasser. Not everyone will be CEO some day, and having an enjoyable and challenging career doesn't have to mean becoming CEO. The key to career success is to draw on a variety of leadership styles at appropriate times. Actionable Leadership, PLD's fourth and last module, effectively holds a mirror up to students and, with input from coaches and self-assessments, encourages them to move out of their comfort zone and explore the personal complexities of leadership.

"The unit of analysis is themselves," says Sasser.

In a top management group there are never enough leaders.

"The people we are training are in positions of power, not running companies so much as executing the vision," explains Narayandas. "What is critical for them is to understand different leadership styles that apply in different situations. It's actionable and adaptive. 'When should I be a good follower, a team member; when should I lead from the front?' Those are the kinds of skills that we want to build in our PLD program.

"Many a time strategy gets set [several] levels above and has to get implemented effectively. These are the people who execute it. So leadership in their context is as much about following as it is about leading. It's all about managing change, but change in a given context. They're not at the stage of changing companies. What they're doing is challenging status quo. And so what we teach them is that there is no unique leadership style; there are different styles, each of which applies in different situations."

Teaching Leadership

Teaching in PLD is a highlight of his work at Harvard Business School, says Narayandas. This is due to the students' depth of knowledge, their professional experience and energy, and their desire to learn. "PLD is unique in that it is more 'MBA-ish' that any other executive program and yet at the same time more 'executive-ish' than the MBA program. The people who come to PLD have the same hunger for learning all aspects of management that the MBAs do. They are open to new theories; they're not focused on specific problems.

"Yet at the same time, compared to the average MBA class, the PLD class has richness. There are decades of experience in each class. People share contexts; they live many of the problems. It's exciting in that manner in how it is different from an MBA class. I just thoroughly enjoy it."

Even a marketing class becomes an opportunity to explore the complexities of leadership, he reflects.

"I walked into class last week in my first session of PLD for the first case, and I said, 'Who would like to open this case discussion? What I'd like from the opener are the answers to three questions:

  • What do you want to do in this situation?
  • Why do you do it?
  • What concerns have you with your own plan of action?

"I said, 'The reason why I'm asking you to do it in that way is that it's a way to build up the unique characteristics of a leader. A leader has vision: Here's what we're going to do. A leader has reason: Here's why we're going to do it. And a leader has concerns. Every journey is fraught with issues and troubles. A good leader is someone who anticipated them.'

"People like to follow people who have vision. People like to follow leaders who can explain why we're doing something. And people like to follow people who have said, 'You know what, it's not going to be an easy journey; we're going to have a lot of adversity, but here's why I think we can get it done.'

"And this resonated with the students. You could see when they began to discuss cases later in the program that they were following the framework. We were doing marketing that day, yet we were doing leadership that day too."

About the Author

Martha Lagace is senior editor of Working Knowledge.