Investing in leadership development to drive business success

Institute of Leadership & Management

Overview

What is leadership development?

Why it matters?

Developing leadership capability

How to implement it

What is leadership?

Leadership is about the ability to influence

others and motivate them to perform

certain actions

Good leaders are visionary, innovative and

inspire people whilst building trust so

people follow them, even if risk is involved.

What is leadership development

compared to management development?

‘Management development is about learning how

to do things right, whereas leadership

development is learning to do the right thing’

(Warren Bennis)

Management development

enhances performance on

known tasks through the

application of proven solutions

Leadership development

builds an individual’s capacity

into ‘being’ a better leader

(Day, D Leadership development: a review in context Leadership

Quarterly Vol.11, Issue 4, 2001)

Just how important is effective

leadership for business success?

There is strong and consistent evidence

that leadership and management

performance drives business success

Evidence shows UK businesses

under-perform due to deficiencies in

leadership and management

The UK Government’s growth strategy

identifies leadership and management as

a priority for businesses.

Best practices in leadership and management

strongly correlates with business performance

Source: Bloom & Van Reenan (2010) Why do

Management Practices Differ Across Firms &

Countries Centre for Economic Performance, LSE) 2.4 2.6 2.8 3 3.2 3.4

US

Japan

Germany

Sweden

Canada

UK

Italy

France

Australia

Mexico

Poland

Ireland

New Zealand

Portugal

Chile

Argentina

Greece

China

Brazil

India

Average score across 18

management practices by country

US

Japan

Germany

Sweden

Canada

UK

Identical in order to those

listed for high productivity

Organisations that don’t

invest in leadership

development:

Have a comparatively low rate

of adoption of new practices

Adopt fewer new practices

than their counterparts.

Source: Porter, M. and Ketels, C.H.M. (2003).

UK Competitiveness: Moving to the Next Stage. AIM Management

Research Forum, Summary Report 6. London

Leadership

development matters!

According to Association of

Business Recovery Professionals,

60% of corporate failures

is due to ‘incompetence…

of company leaders’

60%

"If you want to keep your company in the lead, you need to invest

in your people. Now more than ever.” Rupert Murdoch

Benefits of leadership development

Better qualified leaders means:

More effective managers

A better performing workforce

• Supports business growth

• Increase in efficiency of the production

of products and services

• Higher quality products and improving

the quality of existing products.

Bosworth, Davies and Wilson (2002) Managerial Qualifications and Organisational

Performance Department for Education and Skills: Research Brief No: RBX 05-02

How can leadership development

drive performance?

Encourage innovation

Being more visionary

Challenging old ideas

More creativity

Improved customer service

Focusing on customers

Pursuing excellence

Empowering front line staff

Support effective team working

Greater flexibility

Efficiency

More engaged workforce

How do I develop

leadership capability?

Some key principles

to consider…

Leadership development is about

changing behaviour and involves developing:

An understanding of what good leadership

looks like - understand what you want and

the changes you want to create

Insights into yourself – how you currently

behave and its effectiveness

Improving behaviours in getting people to

work co-operatively.

ILM calls this approach the

Knowing – Being – Doing model

Knowing is about understanding best practice, and the

theories and principles that shape that practice

Being is the self-awareness and personal insight that

enables leaders to use this knowledge to shape their

own behaviour in ways that work for them

Doing is the ability to translate these two dimensions

into effective practice.

Doing

Being

Knowing

Leadership at all levels, not just at the top

Distributed leadership means

that people at all levels have

the ability to:

Engage the people they lead

Inspire them to share the

vision for the future of the

organisation

Empower them to take

responsibility for making

it happen.

“At Tesco we didn’t have one

leader… we had thousands of

leaders.”

Sir Terry Leahy, former CEO of Tesco

How to implement effective

leadership development?

There are various models of leadership development.

ILM research has identified the key elements that will

maximise the impact of leadership on performance.

1

2

3

4

5

Five key elements to leadership development:

Use robust diagnostics and collect performance feedback

Use these insights to identify why you behave as you do and your objectives

Link your learning to these insights

Bring the workplace into your learning (e.g. through Action Learning)

Take your learning back into the workplace

Support development

over time to establish

sustainable behaviours

and capabilities,

creating a longer but

more rewarding

investment.

Driving business success

through effective leadership

Seek out global best practice

Develop leadership capability at all

levels of your organisation

Set major transformational goals to be

ahead of your competitors

Develop leadership and management

capability to make and sustain the

transformation.

So what happens when

you get things right?

Case study 1

BDR Thermea (a £1bn Anglo-Dutch

manufacturer of heating equipment)

completed an ILM leadership

development programme

The programme involved: • 10 taught days delivered over 15 months to 30 managers

• One-to-one coaching sessions.

The result: • Three major innovation projects developed, leading to a

25% growth plan between 2010-2013

• Improved strategic and leadership skills.

“This programme really

is worth its weight in

gold … the ILM

accreditation is useful

for the credibility it gives

to organisations and

individuals, (but) the

real benefit is the

learning process itself

and its legacy.”

Yan Evans,

Technical Director.

Case study 2

Macdonald Hotel Group put 12 employees

through an ILM first line manager leadership

development programme

The programme involved:

• An introduction to the basic skills, knowledge, and understanding required by today’s first line manager

• Practical techniques for tackling managerial problems

• Effective communication of outcomes.

The result:

• Two years later 8 of the 12 staff have been promoted to Operations Manager positions

• Avoiding the need to use expensive external recruitment

• Ensuring high levels of employee engagement and retention.

“ILM has added

value to our business

and helped achieve

our vision of growing

our people within.”

Marie Pollock,

Training and

Development

Manager.

Good leadership development can improve business

performance

Summary

When investing you need to remember: Leadership is similar but not the same as management

The support and application needs to be grounded in practice

Time for impact will be longer as you are changing people’s behaviours

It is an essential investment – but it is one with

a return over months, not weeks, so set expectations within

your business.

Final thoughts

You need good managers to keep

doing well what you are currently doing

You need good leaders to do new

things better

You need great leaders to do things

nobody else thought of better than

anyone else imagined was possible.

The Institute of Leadership & Management (ILM) is Europe’s leading management organisation.

We believe that good leadership and management holds the key to organisational effectiveness

and social and economic prosperity.

For more information visit our website www.i-l-m.com

Thank you