Cream Rises to the Top, but From a Small Crop

This will come as no surprise to the Dilberts of the world: Corporate leadership stinks.

Just ask the companies themselves. Nearly half the 400 Fortune 1,000 companies responding to a recent survey acknowledged that they have a shortage of leaders. A mere 8% rated their leadership capacity as excellent.

Companies facing the challenges of global competition must overcome this deficiency, said Louis S. Csoka, author of the survey report, titled “Bridging the Leadership Gap.” It was written for the Conference Board, a business-sponsored research organization in New York.

The study found that companies “do not have the leaders needed to take them through the uncertainty and change of tomorrow’s business environment.” Unfortunately, added Csoka (pronounced “choke-uh”), “the leader development scene is littered with too many quick-fix programs, short-term perspectives and outdated views of who should receive leadership development emphasis.”

Where do companies fall down on the job of developing leaders? Among other problems, they fail to identify potential leaders, they put too much emphasis on developing senior-level employees, and they spend too much time training people to manage rather than lead. By that, Csoka means that they fail to address the skills needed to inspire and influence people, to get “ordinary people to do extraordinary things.”

The old-style management model was fine for traditional corporate hierarchies, which were geared to efficient maintenance of processes and systems. But today’s business environment--with its lean organizations, team orientation and do-more-with-less philosophy--demands continuous innovation and improvement.

In a survey last year, the Conference Board queried chief executives from North American, European and Asia-Pacific companies about global growth. Ninety-one percent of them rated leadership highest in importance among a variety of issues affecting global growth--above business, management and environmental factors. The CEOs defined leadership as setting and communicating vision, strategy and goals, along with building the management team.

Companies in the more recent study that gave themselves high ratings for building strong leadership tend to have significantly more competent managers at all levels; they rate significantly higher on effectiveness, efficiency and esprit; and they have managers who engage more often in key behaviors that make them effective leaders. These companies also appear significantly more often at the top of Fortune magazine’s list of most admired corporations.

Senior executives were asked to describe key leadership characteristics for senior, mid-level and front-line managers.

Senior managers, they said, were initiators, with these chief roles:

Pathfinder--creating the vision and direction.

Architect--building capabilities and resources and aligning stakeholders.

Enabler--delegating and empowering throughout the organization.

Mid-level managers were viewed as the translators, the primary brokers of the organization’s teachings and the conduits for its culture. They must be:

Professional--developing organizational expertise.

Definer--providing context for work.

Tactician--translating energy into tactics.

Mentor--guiding and counseling junior leaders.

Linking pin--interpreting the company’s purpose and forging connections among units.

Front-line managers were the executors. They must be:

Executor--executing the direction.

Team builder--building and developing the team.

Coach--shaping and eliciting performance.

Reinforcer--recognizing and rewarding high performance.

Companies are beginning to realize, Csoka said, that they must push leadership development down through the ranks, with training that focuses on how to motivate, coach and make teams more effective.

Respondents identified seven traits that must be instilled in potential leaders through company training and development. The leader must be able to:

* Articulate a vision.

* Define values.

* Manage relationships.

* Build teams.

* Create processes.

* Allocate resources.

* Celebrate success.

In writing the report, the Hungarian-born Csoka, 56, drew on his two decades teaching at West Point, where he learned that it is wise to continually prepare oneself for the possibility of change. He is a case in point, having moved on to become the London-based senior vice president of human resources for New Holland Ltd., a division of Fiat Group of Italy. New Holland makes agricultural equipment.

The bottom line of his research, he said, is that “senior managers are beginning to realize that change is constant and that change will not happen [successfully] with the traditional way of managing.”