Lessons in leadership development from the worlds best….

Fortune worked with human resources consultants Hewitt Associates and RBL Group to rank the world’s companies that do the best job of developing strong leaders, their research listed the following top 20 best companies at developing leadership:

1. General Electric, Fairfield, CT, U.S.
2. Procter & Gamble, Cincinnati, OH, U.S.
3. Nokia, Espoo, Finland
4. Hindustan Unilever, Mumbai, India
5. Capital One Financial, McLean, VA, U.S.
6. General Mills, Minneapolis, MN, U.S.
7. McKinsey
8. IBM, Armonk, NY, U.S.
9. BBVA, Bilbao, Spain
10. Infosys Technologies, Bangalore, India
11. Inditex, S.A., Arteixo, Spain
12. Medtronic, Inc., Minneapolis, MN, U.S.
13. Eli Lilly and Company, Indianapolis, IN, U.S.
14. McDonald’s Corporation, Oakbrook, IL, U.S.
15. Whirlpool Corporation, Benton Harbor, MI, U.S.
16. Natura Cosméticos,Itapecerica da Serra-SP, Brazil
17. GlaxoSmithKline, Brentford, Britain
18. Australia and New Zealand Banking Group, Melbourne, Australia
19. ICICI Bank, Mumbai, India
20. WIPRO, Bangalore, India

"Hewitt’s Gandossy: ‘Companies that provide people with opportunities to learn and grow become talent magnets, drawing scarce talent in droves.’ By continually attracting the most promising graduates and then developing them, these firms become higher-performing organizations, enhancing their ability to attract the best – a self-reinforcing cycle that makes the company more dominant every year."

The Fortune article "How top companies breed stars" provides some insight into how these companies go about developing leadership.

• Invest time and money – "You don’t build leaders on the cheap, and you don’t just bolt a development program onto existing HR procedures. Indeed, the biggest investment involved may be the time of the CEO and other executives. At McDonald’s, CEO Jim Skinner personally reviews the development of the company’s top 200 managers. At GE, Immelt reviews the top 600. Bill Hawkins of Medtronic (No. 12) spends 50% of his time on people issues, and many of the other CEOs report similar percentages – making it the largest commitment of time they have……. Lots of companies claim they’re interested in developing leaders, but the University of Michigan’s Noel Tichy, a top authority on the subject, says that checking their commitment is easy: "Just show me the CEO’s calendar."
• Identify promising leaders early – "’We begin to evaluate leadership capability on day one of employment,’ says GE’s John Rice….. Spotting leaders early means working on their development early. That’s a big change at most companies, where programs were long reserved for an elite group several years into their careers.
• Choose assignments strategically – "John Lechleiter, president and COO of Eli Lilly, offers a typical model: About two-thirds of leadership development comes from job experience, about one-third from mentoring and coaching, and a smidgen from classroom training…. Organizations tend to assign people based on what they’re good at, not what they need to work on."
• Develop leaders within their current jobs – "Many CEOs report new tension between the need to develop people by moving them through different jobs and the need to develop their expertise in certain domains by leaving them put. One reason: A division has a tough time competing when the boss moves on after just 18 to 24 months, a typical pattern…… One technique: short-term work assignments. Managers don’t leave their jobs, but they take on an additional assignment outside their field of expertise or interest.
• Be passionate about feedback and support – "It’s the most elementary principle of learning: If you don’t know how you’ve performed, you don’t learn and you soon stop caring. Yet at many companies, feedback is rare, candid feedback even rarer. The companies on our list combine frequent, honest assessment with plenty of mentoring and support. So when people are told what skills they need to improve, they’re also offered programs or coaching for doing it."
• Develop teams, not just individuals – "’At the GE I grew up in, most of my training was individually based,’ says Immelt. That led to problems. He’d attend a three-week program at Crotonville, but back at work ‘I could use only 60% of what I’d learned because I needed others – my boss, my IT guy – to help with the rest.’ ….Now GE takes whole teams and puts them through Crotonville together, where they make real decisions about their business. Result: ‘There’s no excuse for not doing it.’"
• Exert leadership through inspiration – "Yes, you can make people do what you say by firing and demoting. We all know how well that works. It works even worse in today’s information-based economy, where most employees aren’t turning wrenches but instead are using knowledge and relationships with results that may not be easily observed day to day. Try making them do what you say, or even telling them exactly what to do. Says Lafley: ‘The command-and-control model of leadership just won’t work 99% of the time.’"
• Encourage leaders to be active in their communities – "The advantages are many. Most companies have enunciated values that include respect for the individual, good citizenship, and integrity. When company leaders also become leaders of charities, schools, and other nonprofits, they show their commitment to those values, encouraging and inspiring employees. Other benefits are more pragmatic. Most employees will never serve on the company’s board or on any major corporate board. But many of them can serve on a local nonprofit’s board, and the experience is an excellent leadership developer."
• Make leadership development part of the culture – "Though executives at these companies talk about their leadership-development programs, they realize the term isn’t quite right. Developing leaders isn’t a program; it’s a way of living. For example, honest feedback has to be culturally okay. At many companies it isn’t. Devoting significant time to mentoring has to be accepted. Working for nonprofits has to be encouraged, not just tolerated."

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