RealTime Leadership

Leadership development has long been considered a discretionary expense.  During economic downturns it is often one of the first budget line-items to be cut.  However, there was a different feeling this time around.  As we entered the recession in 2008 and 2009  there was hope, and some evidence, that  companies had learned from past downturns.  Eliminating leadership development only left them further behind when the economy did start picking up again, as it inevitably does.

In the Wall Street Journal last week, an article reports that training budgets over the past two years have been down 11%, but now there is signs that it is coming back.  It appears that the companies that did scale back training are now scrambling to catch up:

Already, some companies say they are finding they don’t have the managers to spearhead new projects or step in for departing executives, a problem as companies try to shift into growth mode.

The article goes on to report that companies like Amway and Rockwell Collins are re-launching leadership programs that were cancelled during the downturn.  The goal is to accelerate the development of internal talent while they hire experienced managers from the outside to meet the increased demand to fill vacancies.

Unfortunately the article does not contrast the experience of Amway and Rockwell with one or two companies that continued to invest in leadership development at a steady or increasing pace over the past two years.  Companies like O’Neal Steel remained committed to training and entered 2010 with a strong talent pipeline and engaged employees.  These organizations are better suited to take advantage of the opportunities for growth in 2010 and 2011.

As for the other companies, well, hopefully they learned their lesson; cutting spending on leadership development is more expensive in the long-term.

Often when working with clients to design and deliver leadership training, I’m told to create an experience where participants have fun, are fully engaged in the program and learn new skills.  Recently, I partnered with a client, a major U.S.-based insurance company, that decided to raise the bar and set the expectation that learners would also apply what they learned back on their job in a way that impacts business results.  

To achieve this goal we applied the 5As Framework to the design and implementation of a training program for a group of  high-potential managers as part of a regional leadership conference.  The program we delivered was Interplay, a one-day business simulation where groups of 4 to 5 learners work together as a team to manage a business.  In this case, the management teams where running small start-up organizations that were competing with large established insurance companies. 

Interplay is a demanding program that keeps participants engaged at a high-level.  The friendly competition between teams allows for a lot of fun with cheers for the winning team and collegial encouragement for the teams that are struggling.  And throughout the day there are multiple opportunities to learn new skills around business acumen, teamwork, communication, decision making and strategy.  The most important and most powerful learning objective is for participants to understand how their decisions impact a company financially and drive value for shareholders.  Thus, Interplay met the criteria of being fun and engaging, and also taught new skills.  However to ensure the skills where applied and business outcomes where impacted, we applied the 5As Framework:

Anticipation

An SVP  kicked off the event by communicating to the participants how important this training is to their success.  The leader reinforced that the individuals in the room were selected for their management and leadership skills, and the company truly believed in their potential.  The SVP also set the expectation that the participants were expected to learn new skills, apply them back on their job, and help their department and the company achieve it’s business goals.  This short speech helped participants anticipate success and open their minds to the possibility of learning new skills.  It also reminded participants that they are expected to both apply new skills and achieve results. 

Alignment

The first exercise of the day invited participants to review 10 learning outcomes from Interplay and select the 2-3 that are most important to them personally.  In addition, we invited participants to share within their groups why these outcomes where so important, especially with respect to their current jobs and responsibilities at the company.   Already, the participants were aligning learning outcomes with activities and results on their job, yet in a traditional sense, the “learning” had not yet started.

Alliance

There were six vice presidents and six Interplay teams participating in the program.  Throughout the day, the vice presidents rotated from team to team, so they got a chance to observe and engage with each team.   The V.P.s offered feedback, coaching and guidance, enriching the learning process.  Later that evening, each V.P. was assigned a group of participants where, over dinner, they continued to coach and reflect on the learning.

Application

At the end of the day, when the energy and excitement was at its peak, we asked participants to personally reflect on their own Interplay Success Map.  A Success Map is a document that explicitly identifies the linkages between the learning outcomes of Interplay, applications of that learning on the job and organizational results.  For example, one participant identified the following linkage:

Interplay Learning Outcome: Understand how an investment in people development impacts business results.

Application on-the-job: Spend more time and resources at my regional office, getting to know my employees better, taking the time to coach and development them, and invest in employee development.

Impact on Results: Higher retention and increased employee productivity.

This participant now clearly understands the linkage between the learning outcome of Interplay (importance of people development) on the business outcome (employee productivity).

Accountability

Once the Success Maps were created and discussed at each team, we announced the “winners” of the Interplay simulation to great cheers.  Thus we ended the day on a high-note with a burst of positive energy.  But there was one more important message to be delivered before participants walked out the door.  The SVP took the stage again and challenged everyone in the room to take the Success Map back to their offices and share them with their direct supervisors.  If additional ideas or thoughts came to them on the plane, continue to add to the document.  And finally, the SVP let them know that he was personally going to follow up with their supervisors to ensure that a conversation took place, and results where being measured.

The high-potential leaders in the room were not daunted, rather they were motivated to truly apply their new skills and achieve business success.  They wanted to be accountable for their learning.  In fact, they expected nothing less for their leaders and their organizations.

In July, the U.S. Army broke with long-standing tradition and began encouraging all personnel to contribute to U.S. Army Field Manual.  The Army Field Manual, which contains detailed information and how-to’s, serves as a playbook for soldiers operating in the field.  The New York Times reports:

The goal, say the officers behind the effort, is to tap more experience and advice from battle-tested soldiers rather than relying on the specialists within the Army’s array of colleges and research centers who have traditionally written the manuals.

This is a major cultural shift for the quintessential “hierarchical” organization.  When people think of “top-down” management, the military is almost always one of the examples cited.  Now, the military is leap-frogging many U.S. corporations by opening the field manual to be authored by any and all personnel.  The director in charge of the project says:

For a couple hundred years, the Army has been writing doctrine in a particular way, and for a couple months, we have been doing it online in this wiki.  The only ones who could write doctrine were the select few. Now, imagine the challenge in accepting that anybody can go on the wiki and make a change — that is a big challenge, culturally.

I applaud this cultural shift by the military, and I think we are only scratching the surface with respect to how technologies like wikis, blogs and twitter will eventually flatten our organizations and empower the people on the front lines to make more and better decisions. 

 The wiki-Army Field Guide is an extension of the trend that started in 2001 when Jimmy Wales and Larry Senger applied the wiki concept to the encyclopedia.  At that time, the “select few” who were allowed to author encyclopedias were academics and researchers hand-picked by the editors.  While the information provided in the old format was often very good, it became outdated quickly and the total number of articles was limited by the size and cost of the books themselves.  Now, Wikipedia, has over 3 million articles in English alone, and is continuously updated as new information becomes available.  It will be interesting to see if the Army Field Manuel experiences a corresponding increase in size.  No doubt, the wiki Army Field Guide will be much timely and up-to-date.

 There is also a trend to watch here for leadership development.  In the past, many companies have handed out Leadership Resource Guides to their managers.  Some of these were written by “experts” within a company, but most often they were books written by the “select few” from consulting companies.  The Successful Managers Handbook from PDI and For Your Improvementfrom Lominger are two popular examples.  I consider both of these books to be analogous to the Encyclopedia Britannica before 2001 and the Army Field Guide before July 2009.   These books are being displaced by fast-growing  wiki leadership resource guides like Leadershipedia.  Any registered member of the Leadershipedia community can access and edit a comprehensive resource guide with tips, articles, books, blogs, podcasts and videos related to leadership and management.  If you’re not already a member, I encourage you to become one today by registering. 

At RealTime Performance we have also seen a trend in companies interested in developing a custom version of Leadershipedia that aligns with their own organizational culture and values.  Ross Smith of Microsoft developed the wiki-based Manager’s Playbook with tips and suggestions on how to build trust and become a better leader at Microsoft,  RealTime Performance recently started a project with Johnson & Johnson to develop a custom wiki-based resource guide for IT leadership development.

The bottom line is that wikis take authorship away from the “select few” experts and open up authorship to everyone. This changes the flow of knowledge from a top-down model to a network model, where everyone has the potential to be both student and teacher.  This, in turn, fosters collaboration and teamwork.  And in the end, better information gets into everyone’s hands, and the quality of decision making goes up across the board.

In October 2006, Netflix announced a competition to significantly improve the recommendation system currently used at the popular movie rental site.   Teams and individuals were competing for a $1 million prize.   Last week, an article in the New York Times reported that two finalist teams have been selected and a winner will be declared in September.

There was no shortage of entries for this competition, so what was it that contributed to the success of these two teams?  When pressed, these teams did not credit some brilliant insight, rather they pointed to the power of teamwork and collaboration. The article notes:

“…the formula for success was to bring together people with complimentary skills and combine different methods of problem-solving.”

One of the leading teams is from AT&T Research and is comprised of statisticians, machine learning experts  and computer engineers from four different countries.  The other leading team is actually an conglomeration of over 30 people called the Ensemble, the result of team combinations as the contest progressed.  It turns out, as more and more teams combined their best ideas, the solution got better and better.  One of the contestants, David Weiss, says:

“the surprise was that the collaborative approach works so well, that trying all the algorithms, coding them putting the together far exceeded our expectations.”

And Weiss might add that the combined solution worked better than any one team’s approach (with the possible exception of AT&T Research) and certainly better than any one individual’s approach. 

This kind of competition, and the incredible innovation it is driving for Netflix is the tangible result of several trends that we, in the leadership development community, must be aware of and adapt to:

1. Technology enables greater collaboration.  The kind of collaboration and teamwork required to conduct a competition like this is only possible because of the rapid changes in technology.  It is much easier and simple now for teams to work remotely and share information in real-time.   As Web 2.0 tools become more ubiquitous, the successful organizations will be the ones that are able to rapidly build high performing teams in a way that is faster and more effective than the competition.
2. Diversity of thought and perspective leads to the best solution.  In the past, diversity has been viewed by many in our field as a compliance issue.  What the Netflix competition highlights is that diversity of thought and perspective is a crucial ingredient for any team or organization that is attempting to solve problems and find optimal solutions.  This idea, although not new, is thoroughly explored in the book The Difference by Scott Page.
3. Successful companies manage talent both internally and externally.  Traditional talent management is about attracting and developing talent within the organization, but that is starting to change with the advent of crowdsourcing.  When you think about it, what Netflix has accomplished here is the successful outsourcing of an incredibly complex research and development problem.  From a talent management perspective, we need to give Netflix credit for attracting and motivating some of the best minds in the world to work on their problem, and the net investment was only $1 million.   In return Netflix has gained two great solutions and a lot of free publicity.   Motivating  talent outside of your organization to solve difficult and complex problems is a growing trend and a major shift in how organizations have traditionally viewed leadership and talent management.