using business strategy to drive leadership development

Employment Relations Today Winter 2002 61

Using Business Strategy to Drive Leadership Development

Jan Gordon, SPHR, is apartner in Business Lynx, ahuman resources consultingfirm based in Oakland,California, focusing onstrategic planning, staffing,and development. She hasover 15 years of operationsand HR experience. Themodel outlined in this articleis adapted from the productdeveloped by Business Lynxcalled WorkForce Planner.The author may becontacted [email protected].

© 2002 Wiley Periodicals, Inc.DOI: 10.1002/ert.10016

USING BUSINESS STRATEGY TO DRIVELEADERSHIP DEVELOPMENT

Jan Gordon

The right leadership can make the difference in whether yourcompany stays in business or becomes one of the lateststatistics on the list of failed companies. Strong leadership

and leadership planning can pull an organization together in timesof crisis and identify direction during changes and uncertainty.When leaders leave, the organization’s stock can be adverselyaffected, and other talented people may walk out the door if youdon’t have good leaders ready to fill the void.

This is not news. It makes perfect sense. The challenge is howto make sure your organization can respond when new or differentleadership is needed. HR can play a significant role in making surethat leaders are in the right place with the right skills to achievebusiness goals and that there is adequate bench strength in thetalent pool.

So what is the solution, and what role can HR play? HR has areal opportunity here to be part of the strategic management team.The key is to start where your business leaders will start: with thebusiness problem. Add your insight to their perspectives by

Helping them define and clarify the business problem andneed andWorking with them to identify the business strategy to meetthat need.

Then use your HR expertise and work with your leaders to

Build the human resources strategy that supports the busi-ness strategy (for purposes of this article, we focus on HRstrategy supporting leadership development) andCreate the actions needed to implement the strategies.

PLANNING PROCESSHere is a simple business model taken from Business Lynx

WorkForce Planner (1998) that can be adapted to any organization

Jan Gordon

62 Winter 2002 Employment Relations Today

and many HR issues. The foundation, as was mentioned above,is to identify the business strategy and then create the humanstrategy to support it. Because we are focusing in this article onleadership development, the next two components are leader-ship success criteria and the leadership talent pool. The modelis based on asking the right questions to create a dialog so thatHR and other members of the organization’s leadership teamhave a common understanding about what is needed to moveforward. At this point, asking the right questions is critical, nothaving the right answers. The checklist that follows can helpget you started.

Identify the key business strategies for success. By startingwith the business issues, you get a clear line of sight to theorganization’s business priorities and future needs. Youalso gain higher credibility as a strategic business partner.Review the organization’s priorities and business plans.Here are a couple of key questions to stimulate the dialogueto get the big picture from the top leadership:

• What are the major business challenges?• What changes do you anticipate in future markets and

products provided?

Articulate the key human strategies that support the busi-ness direction. Get your leaders involved in a dialogue sothat they clarify in their own minds how valuable andnecessary it is to have a leadership-development plan.Work with your leadership to identify the positions ormanagement areas that are most critical for developingbench strength. Begin working with leaders in the mostcritical areas of need. Start with the following questions:

• What are the core values on which to build the leadershipcapability?

• What are the critical competencies for future success—technical, organizational, and managerial?

Work with your leadership team to come to agreement onthe leadership criteria needed for leaders of your organiza-tion to be successful in the future. Based on the key issuesin your organization and the organization’s values, thereare a number of success criteria that may be important toyour leadership-development planning. Exhibit 1 lists someleadership criteria that typically are critical.

By starting with thebusiness issues, youget a clear line ofsight to theorganization’sbusiness prioritiesand future needs.



All current and potential leaders in the organization need aclear definition of the business strategy and what competenciesare expected to achieve this success. The better the understandingthese individuals have of what is required and expected to besuccessful in the organization, the higher the probability that theirdevelopment efforts will hit the goal.

Use the criteria to identify and evaluate high-potentialemployees for targeted development.

Seek nominations from

• current leadership and incumbents

CompetencyTrustworthiness

Avid Learner

Comfort with Change

Innovation Champion

Relationship Building

Taking Action

Self-Awareness

Foster Development

Achieving Results

RelevanceThis is key to credibility. Ability to inspire, motivate, andimplement. People respond to who you are as much aswhat you do.Always looking for ways to be more effective. Ability tolearn from new situations and apply that learning tofuture direction.Keeping your cool when the game rules are changing,even though no one knows exactly what the new rules are.Ability to work and/or create change to your advantage.Keeps you in the game. Successful leaders don’t need tocreate all the new ideas themselves but need to nurture anenvironment where all employees can uncover opportu-nities.This is important in both one-to-one and one-to-manysituations. When people feel connected to each other, theycan get extraordinary things done.This gives people a sense of progress and hope. Makingthings happen, not waiting for permission to begin.Understand how one affects others and the organization.This is critical to being able to leverage strengths andshore up vulnerable areas.Develop new leaders by maximizing the potential of yourteam, passing on your experience to accelerate others’learning.Ability to set goals, create measures, and follow progressto achieve goals through others.

Exhibit 1. Critical Leadership Criteria

Jan Gordon


• HR staff• supervisors• peers• your own observations• any combination of the sources above

After the nominations are collected, you may need anotherscreening process to narrow the number of candidates and toensure that only those candidates with the highest potentialare selected for inclusion in the plan. This process may include

• screening résumés• facilitating performance discussions with leaders• reviewing written assessments of performance and career

potential from supervisors, leaders, high-potential candi-dates, and/or your own observations

• previous assessments or simulations• interviews—either panel interviews or a 360-degree-type

process, where the supervisor/manager, peers, and subor-dinates are interviewed about the candidate’s strengths,performance, and areas for development

• tiering, in which leaders rank the candidates according totheir performance and potential to meet the competenciesrequired in the future

Work with the leadership team and the individuals tar-geted for development to create individual developmentplans. This step is usually difficult and often not imple-mented. To increase the probability of implementation,involve the individual and select areas for developmentthat interest him/her and are supported by upper manage-ment. Include a variety of options such as on-the-job expe-rience (projects, new jobs, committee work), learning fromother people (e.g., bosses, mentors), and courses/semi-nars/workshops/conferences.

Review the individual development plans to assess whetherthere are any common development needs that could beaddressed. These areas may be ideal for a leadership work-shop, action learning exercise, or self-paced course.

Put an evaluation process in place to monitor results of thedevelopment plans. Once development plans are created,many times there is no follow-up to capture the progressthat is made.

To increase theprobability ofimplementation,involve the individualand select areas fordevelopment thatinterest him/her andare supported byupper management.



Develop a mechanism for upper management to have easyaccess to the information and to be able to use it whenvacancies occur and when there is a need to plan forreplacement or new leadership positions. This allows forthe effort to be dynamic and practical because it can bereadily used when a placement opportunity occurs. Theratio of placements made using the plan versus total place-ment opportunities can be used as a metric to show successand return on the investment for doing a leadership-devel-opment plan.

Develop and put in place a process to regularly review andupdate the information. This keeps the information fresh,current, and usable when needed.

BUSINESS GOALS DETERMINE LEADERSHIP CRITERIA“If you don’t know where you are going, you’ll likely end up where

you don’t want to be.” Similarly, you need to assess the currentbusiness situation and set business goals and strategies beforetrying to select leaders who possess the success criteria needed foryour organization. The examples below briefly describe two hy-pothetical organizations to illustrate the point that different busi-ness strategies require different leadership success criteria.

Organization ACurrently, Organization A is facing increasing competition.

This has created the need for closer budget scrutiny, more-effi-cient processes that cross department lines, and a higher degree ofinnovation and risk taking. The business strategy to address thissituation includes

• reducing costs to stay within budget• identifying inefficiencies and overlaps• streamlining processes within and across departments• implementing new ideas for better operations, product

improvement, and new products and markets

Organization A needs to develop new leadership behavior toimplement its business strategy. Currently, leaders compete againsteach other, and some are rewarded for setting and meeting theirown goals rather than those agreed on by all business units. In orderfor the organization to be successful in the future, leaders must beable to work as a team and support each other. Success for one issuccess for all; failure of one is failure for all. They need to create anenvironment where new ideas are encouraged and accepted.

Similarly, you needto assess the currentbusiness situationand set businessgoals and strategiesbefore trying to selectleaders who possessthe success criterianeeded for yourorganization.

Jan Gordon


Examples of needed leadership criteria are

• teamwork—working collaboratively to support businessgoals, including assisting other departments when needed

• relationship building—spending time with other leadersin order to understand their perspectives and issues and tobuild mutual trust

• innovation championing—encouraging and accepting newideas from all employees and implementing the best

Organization BCurrently, Organization B is struggling with falling produc-

tivity. Employees do not trust management, and turnover isincreasing.

Leaders communicate mainly through e-mail. They hold orfilter information from the top of the organization, ascribing to thephilosophy that “knowledge is power,” and they are not willingto share either. Developmental opportunities and training aregenerally not supported unless legally mandated.

Organization B’s business strategy to reverse its situationincludes

• increasing productivity to capacity• creating an environment where employees feel supported

by management

Organization B’s human strategy is to improve communica-tions between leaders and staff. Leaders must communicate morefreely in various ways, including, where possible, increasing face-to-face communication. Information must flow from top to bot-tom. Employees must be given challenging opportunities andtraining to learn new skills. Productivity goals must be defined,measured, and rewarded.

Examples of needed leadership criteria are

• open communication—freely sharing information with allemployees in order to develop trust and confidence inleadership; creating an open dialogue with employees toclarify communication and rout out rumors

• foster development—discussing developmental opportu-nities and interests with employees; providing develop-mental experiences, coaching for improved performance,and support for external learning opportunities such asworkshops, classes, and conferences

• achieving results—creating clear goals and measurements;

Leaders mustcommunicate morefreely in variousways, including,where possible,increasing face-to-face communication.



setting clear expectations for accomplishment of goals; andidentifying rewards for met goals

LEADERSHIP CRITERIA MUST SUPPORT BUSINESSOBJECTIVES

In either Organization A or B above, the leadership criteriacould be used to select new leaders, create performance expecta-tions, and modify individual development plans. The selection ofleadership success criteria was tailored to suit the business needsof the organizations. However, individual personalities and man-agement styles are not so easily compartmentalized. In truth, to beeffective, leaders should possess all of the leadership qualitieslisted in Exhibit 1, at least to varying degrees, and be able to call upthe strengths that are needed to move the business forward. Aleadership-development plan can help an organization articulatebusiness objectives and match them to needed leadership strengths.

A leadership-development plan can create bench strength foryour key positions and/or leadership levels in your organization.This process will lay the foundation for you to

• focus the development of your current leadership to sup-port the business needs,

• select and recruit the right people for leadership positions,and

• enable the organization to move in the desired businessdirection. �

using business strategy to drive leadership development

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