Role Concept

This dimension is defined as the way an individual thinks about and approaches his or her role. How an individual views his or her role has a direct impact on his or her behavior and, specifically, on how the individual allocates and invests his or her time.

As individuals move into a management/leadership role for the first time or as they move from one level of management to the next, they face two related challenges in adopting an appropriate role concept. First, there is the need to understand and accept that the management/leadership role is, in some ways, more ambiguous than and fundamentally different from that of a technical professional or “doer.” Second, there needs to be a significant shift in how the individual allocates and manages time.

A fundamental and profound change should occur when an individual makes the transition from performing some technical job to doing the job of a manager. It is analogous to going from a player's role to a coach's role in some sport. The player's role is analogous to the doer's role, while the coach's role is analogous to the first-line supervisor's role. Unfortunately, unlike the coach's role in a sport, the manager's role is much more ambiguous in nature. Many new managers are not entirely sure what they should be doing; that is, they don't understand that this new role is truly different from the technical role previously occupied. They therefore continue doing what they have done in the past and hope for the best.

While the ambiguity of the management/leadership role is a particular challenge for new managers, it can be a problem for managers at all levels. If this challenge is not addressed when the individual is in a first-line supervisory role, problems will only increase as the individual continues “doing” work versus managing it.

This first challenge can be addressed by clearly defining roles and then taking the time to ensure that the occupant of each role understands what is expected of them. Key result area-based role descriptions (described in Chapter 7) can be used to help managers at all levels understand what they should focus on and how much time should be devoted to each of their key result areas. In doing so, these role descriptions help take the ambiguity out of the role. When an individual moves into a new management/leadership role (whether the individual is becoming a manager for the first time or is being promoted to the next level), there should be an orientation process that includes reviewing and discussing the expectations of the new role—using the role description as a guide.

The second, related challenge relates to time use. A manager/leader needs to spend a significant amount of time supervising the work of others and managing his or her area of responsibility. Time needs to be allocated to activities like planning (deciding what to do, when to do it, who should do it, and so on), reading materials and reports, meeting with people, training and coaching direct reports, working with direct reports to set goals, and monitoring performance against goals. These are very different types of activities from the performance activities of jobs such as engineer, accountant, and salesperson. And, as the individual moves beyond the first/front-line supervisory role to other levels of management/leadership, the amount of time that is allocated to these activities should increase.

To effectively invest and manage time as a manager/leader, an individual needs to overcome a “bias toward action” and replace it with what might be termed a “bias toward strategic thinking and planning.” When confronted with a task, the natural tendency for most people is to “jump in” and start working on the task. This is a “ready-fire-aim” mentality. It is consistent with what we term a “doer” role. It feels good to move into action mode toward solving the problem or completing the task; it is psychologically rewarding because it seems to accomplish something. Unfortunately, this is not an effective approach for managers/leaders because their role is to effectively deploy their team to accomplish the work and achieve the goals. If the manager/leader individually or with his or her team starts “doing the work” before the situation has been assessed and a plan has been developed for addressing it, valuable resources may be wasted. Managers/leaders need to accept that their role is more strategic and involves focusing their time on planning, goal-setting, developing their team, and so on, where the pay-off of this effort might not occur immediately.

Well-developed key result area-based role descriptions can help an individual understand what the expectations are with respect to how he or she should allocate time to achieve the best results. In addition, it is sometimes useful for the individual in the role to periodically track their actual time use. We typically recommend that this be done for a minimum of two weeks. The output of this time tracking will be the actual percentage of time that is being allocated to each key result area. A comparison of this information with the time allocations included in the role description can be used to identify areas where the individual is spending too much or too little time. An action plan can then be developed to help the individual move from current (reflected in the time-tracking results) to desired (presented in the role description) time utilization. Chapter 13 presents a case study of Bob Bennett, founder and CEO of GroundSwell Resources, Inc. who discusses the process of leadership development and the related “reprogramming” required to effectively manage role concept and the other two dimensions effectively.

Role concept is, in many ways, the foundation of becoming an effective manager/leader. As described above, effectively managing this dimension involves understanding the role and allocating time effectively. Once this is understood, the individual needs to accept, embrace, and learn to like this role.

Management/Leadership Skills

The vast majority of management and leadership education focuses on this dimension, which we define as “the people management, organizational management, and organizational development skills that an individual at a specific level of management/leadership needs to effectively execute his or her role.” People management skills include motivation, communication, time management, delegation, and training. Organizational management skills include meeting management, decision making, project management, and team-building. Organizational development skills include strategic planning, structure management, performance management, leadership development, and organizational culture management. These are very different skills from those required to be effective in a technical or doer role.

Based on extensive work with managers and organizations over more than 40 years, we have developed a framework called the Pyramid of Management and Leadership Development (shown in Figure 9.1) that identifies the key skills required at each level of management and leadership—from first-line supervisor to CEO. The foundation of this Pyramid is role concept (which means that a first step in successful skill development is to have a clear understanding of and a willingness to embrace one's role as a manager/leader). Building on this foundation are five different levels of skills that managers must develop over their careers to be effective in their roles. These five levels are (1) core management skills, (2) operational management skills, (3) organizational management skills, (4) organizational development skills, and (5) transition management skills. As an individual moves from one level of management/leadership to the next, he or she needs to develop successively higher levels of skills (as defined in the pyramid). This means that someone in the CEO or a COO role should be able to effectively use all of the skills in the pyramid.

The core management skills are the skills required of all managers at all levels and within all organizations—whether it is Apple, Nike, Starbucks, or a 10-person start-up. These include communication, problem-solving and decision making, time management effectiveness, delegation effectiveness, interpersonal effectiveness, and operational leadership effectiveness (which we will describe in more depth in Chapter 12). These should be thought of as the foundational skills upon which all other skills are built.

At the next level of skills in the Pyramid of Management and Leadership Development are the operational management skills. These are skills required to manage day-to-day operations and supervise people. They include recruitment, selection, training and coaching, day-to-day supervision of people, motivation, performance appraisal, and management of meetings. Together with the core management skills, these are the skills needed by first-line supervisors to effectively fulfill their roles.

At the next level are organizational management skills. These skills include operational planning (including how to set SMART goals and develop action plans—discussed in Chapter 6), organizing people (including understanding how to develop and use role descriptions—discussed in Chapter 7), designing and effectively using performance management systems, developing management capabilities (because this is the first level that involves “managing other managers”), financial management, and team building. Middle managers need to possess these skills along with the core and operational management skills.

In addition to having the skills at the core, operational management, and organizational management levels, senior managers need to develop and be able to effectively employ organizational development skills. These skills include strategic planning (see Chapter 6), organizational planning (which involves understanding and managing the organization's infrastructure—that is, the Pyramid of Organizational Development), strategic leadership (that is, creating and managing a leadership molecule, as described in Chapter 12), and corporate culture management (see Chapter 10). These are “leadership” versus “management” skills because they focus on the long-term development of people and the organization.

To effectively execute the CEO and COO roles, an individual needs to have developed and be able to effectively use all of the skills in the Pyramid of Management and Leadership Development, including transition management skills. Developing transition management skills involves understanding how to identify the need for and how to manage individual and organizational transitions. Basically, these skills involve understanding how to manage change. This, too, is a leadership rather than a management skill.

While role concept relates to an individual's behavior, this second dimension relates to helping individuals develop the ability and knowledge needed to effectively execute their roles. Developing or enhancing management and leadership skills involves identifying educational opportunities that will provide the individual with what he or she needs to perform his or her role effectively. Methods to develop or enhance skills—which we will discuss later in this chapter—can range from in-house leadership development programs, to reading a book, taking a course, or working with a coach. The outcome of these efforts should be that the individual develops a clear understanding of what the skill in question is and knowledge of how to use it effectively.

The Pyramid of Management and Leadership Development framework has been the basis for programs used by many of our clients over the years, including Bell-Carter Foods (where it has been used for over 20 years), Navistar and its International Truck dealership network (as will be described later in this chapter), American Century Investments, GroundSwell Resources, Inc., Pardee Homes (then a subsidiary of Weyerhaeuser), Surgitek (a subsidiary of J & J), Techmer PM, and several Head Start agencies in the nonprofit space.

The Inner Game of Management²

This third dimension of the management/leadership effectiveness framework focuses on the individual's mindset and psychological needs. It is defined as “the way that the individual manages his or her need for control, source of self-esteem, and need to be liked.” This is not about personality. Instead, it is about learning to think like an effective manager/leader. Actors understand that to effectively play a role (and management is, by definition, a role), they need to learn how to think like the character they will be portraying. Although we are not suggesting that individuals in management roles adopt the role of another person, we are suggesting that by understanding how effective managers/leaders think, they can greatly increase their effectiveness, while at the same time infusing the role with their own personality.

With respect to the need for control, those in management/leadership roles need to feel comfortable having indirect versus direct control over results—because they need to work through and with other people to achieve specific goals. In a technical or “doer” role, control over results is at a maximum. For an accountant, computer programmer, engineer, or salesperson, personal performance frequently determines the results. However, as soon as the position of first-line supervisor is reached, the relationship between personal effort and control over results becomes more indirect and tenuous. This fact is difficult for many (if not most) people to accept, and yet it must be accepted if they are to be successful in their roles as managers/leaders.

When this “decreasing degree of control” phenomenon is not accepted, a manager/leader typically tries to reestablish the feeling, if not the reality, of control. For example, the manager may want to be involved in everything or have all significant decisions checked before they are finally made. The results are typically negative in two respects. First, the manager is bogged down in detail and, in reality, is doing not just his or her own job but the work of other people as well. Second, the procedure can lead to lower productivity on the part of direct reports who are continually checking with their supervisor, as well as to their reduced motivation and professional development. The manager copes with these problems by working harder and harder.

The desire-for-control syndrome is a fundamental problem for many managers. It gets worse as a person moves higher and higher up in the organizational hierarchy, and there are CEOs of some major corporations who never fully make the psychological transition. There are, for example, CEOs of $100 million–plus companies who feel that they must know “every detail” and who expect their senior executives to do the same because this is the way they satisfy their need for control.

The second aspect of the Inner Game of Management concerns the individual's source of self-esteem. A manager needs to learn to derive a sense of self-worth from being the best manager/leader instead of being the best doer or technical professional. Because a manager's job is to make use of others to achieve organizational goals, the individual must increasingly derive personal satisfaction from the performance of direct reports. This is analogous to a basketball coach who derives self-esteem from the team's ability to win a championship rather than from his or her personal ability to play offense or defense.

Managers/leaders also need to learn how to feel comfortable having direct reports who possess greater technical knowledge or skills than they do—that is, they need to learn that they do not need to be the technical “star” of the team. It is a personal challenge to accept and feel comfortable in such a situation. However, the best managers/leaders understand that their success does not depend on their own technical ability. Instead, it depends on the abilities of those who work for and with them. Therefore, they seek to surround themselves with star performers who can do the work, while the manager focuses on being the best manager. People who are unable to effectively manage their source of self-esteem—that is, who believe that they need to be the “technical” star—tend to hire only weaker people, and this, in turn, can lead to team productivity problems, declining morale, and possibly failure.

While effective management of the need for control involves giving something up (control) and effective management of the source of self-esteem involves making a transition (from being rewarded by being a doer to being rewarded by being a manager), effective management of the need to be liked involves striking the right balance between striving to have everyone like you and doing what needs to be done to effectively fulfill the management/leadership role. Put another way, to be an effective manager/leader, an individual needs to learn how to manage the need to be liked so that it does not interfere with the ability to do the things that effective managers do—like provide constructive criticism, ask direct reports to do things that they may not want to do (but that are in the best interests of the team or organization), and surface and deal with conflict. If a manager's need to be liked is too high, direct reports may “walk all over” the manager and, in the final analysis, may neither like nor respect him or her.

As people are promoted to higher levels, managing the need to be liked becomes increasingly important. Senior managers must sometimes make decisions that are unpopular, but that are necessary for survival of the business. In addition, senior managers set the “tone” for the rest of the organization: If they are uncomfortable dealing with conflict or making difficult decisions, the rest of the organization will be uncomfortable as well.

The first step in effectively managing the Inner Game of Management dimension is to develop a very clear understanding of what is expected in the current role. Effective key result area (KRA)–based role descriptions—which include specific time utilization targets and clear definitions of each KRA—can be used as a tool in this process. In addition, the individual's supervisor should meet with him or her to review and discuss what the role description means in practice.

Next, there may be a need for the individual to develop or enhance his or her skills. For example, learning how to delegate effectively can help those with a high need to control a situation to “let go.” Learning how to provide effective feedback (both positive feedback and constructive criticism) and manage conflict can help those with a high need to be liked to better manage this aspect of the Inner Game of Management. Learning how to effectively develop others (that is, train and coach) can help individuals feel rewarded by the role they play in growing their team and in their roles as managers/leaders (that is, this can be helpful in managing the source of self-esteem).

Finally, the individual can use a variety of tools to promote effective management of the Inner Game of Management. For example, an “individual management system”—consisting of reports from and meetings with direct reports—that provides information about progress against projects and goals can help promote indirect versus direct control. Using clear standards of performance or SMART goals as the basis for feedback makes the feedback less “personal” and can be an important tool for individuals that have high needs to be liked. Having time-utilization targets and working to achieve them can be rewarding and can, in turn, help individuals derive a sense of self-worth from managing versus doing.

Finally, it is important in managing the Inner Game of Management that each individual honestly assess how his or her needs might be interfering with the ability to effectively perform the management/leadership role. Then, the individual should develop an action plan for overcoming the problems identified.

Enhancing Management and Leadership Skills

The focus of most leadership development programs is on skill development. However, as discussed earlier in this chapter, the ability of individuals to apply these skills in practice is influenced by the concept of their role and their mindset. Leadership development programs that focus only on skills may not produce desired results, as skills are only part of the equation for creating effective managers and leaders.

The true test of whether a leadership development program has been successful is evidenced in an individual's ability to apply these skills in practice to achieve desired results. In other words, the desired outcome from any leadership development program is behavioral change.

Shaping the Corporate Culture

One of the most powerful uses of leadership development programs is to help articulate and communicate the corporate culture. Programs may communicate culture by various means, such as by using example cases to describe “the GE way” or “the HP way” and identifying “heroes” who personify corporate values and serve as models to be emulated.

The very act of implementing a leadership development program communicates that the company values personal development and that it expects the management team to work to continuously improve its skills. These are both values that can greatly assist an organization as it continues to grow and develop. A classic example is Starbucks. During the early years of its development, Eric Flamholtz was invited to coach the top three senior leaders at Starbucks. This signaled the personal commitment of the most senior leaders to their own growth. Later, others participated in similar coaching programs. Another more recent example is at Guggenheim Partners, where Scott Minerd, Global Chief Investment Officer, volunteered to participate in a pilot coaching process in his business unit, Guggenheim Partners Asset Management. Later, all of his direct reports and some of their direct reports participated in similar processes involving “360 reviews” and one-on-one coaching.

Promoting Leadership Style

Another major function of leadership development is to communicate the leadership style that is acceptable in the organization. Many companies promote a version of “contingency theory,” which postulates that the appropriate style of leadership depends on the nature of the situation. (This approach is described in Chapter 12.) Other organizations promote a single style of leadership. One $500 million medical product manufacturer, for example, devotes time in their leadership development programs to helping leaders and managers at all levels understand how to lead the team decision-making process because collaboration is an important value.

Rewarding and Recognizing Present and Potential Managers and Leaders

Some organizations use participation in leadership development programs as a reward. Individuals are selected for participation in the program based on their performance or their potential. In some cases, organizations may even ask individuals to apply for admission to the program (much like college). A senior management team reviews applications, with participants being selected based on their merit. This approach has been used successfully at Techmer PM—a privately held company that provides design and technical support for colorants and various additives that modify and enhance the end use performance of plastic products that are used by automotive, home furnishing, hospital suppliers, food packaging, and many other industries.

In 2011, we partnered with John Manuck, Techmer's founder and CEO, to design a five-session leadership development program for current and future leaders. It was decided that the program would be limited to 25 participants—including the nine members (at that time) of the senior leadership team. Those interested in participating in the program needed to complete an application that asked the individual why he or she wanted to participate, what the benefits of the program would be to them, and how they saw their participation benefiting Techmer. Competition for the program was intense. People viewed it as a privilege and a reward to be selected. Over the next three years, the program was offered three more times so that all those in management/leadership positions and all those who had potential to be managers could develop the skills needed to be effective in their roles.

Principle #1: Clearly Define the Goal or Focus of Leadership Development

While the overall goal of any leadership development effort is to “improve or enhance the organization's management/leadership capabilities,” the specific focus can be very narrow or quite broad. Building upon the framework described earlier in this chapter, it is actually possible to create a specific progression of goals that leadership development efforts should meet. The first or foundational goal of any effort needs to be that managers/leaders at all levels understand their roles (role concept). This can, in fact, be the overall goal of the program. At Princess Cruises, for example, a program was designed and delivered to help all managers/leaders (both at corporate—beginning with the CEO and his direct report—as well as on the ships) clearly define and execute their roles. A primary focus of this effort was on developing and using key result area-based role descriptions as guides for behavior and as performance management tools.

Once this goal is met, the program can then focus on people, team, organizational management, and/or organizational development skills and the mindset required to execute them effectively. This will depend on the organization's current level of management/leadership capabilities, as well as the anticipated future growth and development of the enterprise (that is, what the organization will need in the future).

As explained in Chapter 6, Navistar and its dealer network recognized that as competition increased and as dealerships continued to consolidate (making them much larger and geographically dispersed businesses), there was a need to ensure that executives had the skills required to successfully take their businesses into the future. They also believed that even those who were reasonably effective could benefit from “refreshing” their skills and from interaction with their peers in other areas of the country. Another goal was that the executives who participated in the program would take what they had learned back to their dealerships and train others—thus fostering the development of the entire organization's leadership capabilities. The program, therefore, had the goal of helping participants develop the ability to use all of the skills in the Pyramid of Management and Leadership Development.

Principle #2: Design the Program to Meet Targeted Participant and Organizational Needs

Companies of all sizes invest valuable time and money conducting or sending managers and leaders to programs that have no real payoff in terms of providing tools that participants will actually use. The bottom line: To maximize the value of the investment in leadership development being made by the organization, the program needs to be designed to meet that organization's specific needs. This involves identifying the topics or skills to be focused on, selecting or developing content (including frameworks and tools) that will be used to help participants develop or enhance the identified skills, and then creating materials that will be used to support learning in the program.

The overall goal or focus of the program can help determine the nature of the skills or the topics that should be included in or focused on in the program. Sometimes, the goal of the program can result in a focus on a very specific skill set—as was true at Princess Cruises (described above). In other cases—as was true of the International Truck dealer leadership development program—the goal led to the focus on including a broad range of topics and skills.

Once topics are identified, the actual content to be included can be “off the shelf” (it is the same regardless of who it is delivered to) or can be customized or tailored to the specific audience. Our experience suggests that some customization is usually appropriate and that it helps to enhance the overall program's effectiveness. This typically occurs through using language that is familiar to the audience, developing case studies that are built upon actual incidents that might occur within their businesses, or creating workshops designed to address specific issues that are relevant for them.

Principle #3: Design the Program to Provide Participants with Frameworks, Tools, and the Opportunity for Application

There needs to be an underlying framework or model for each skill included in the program because this provides participants with something they can actually use. For example, the framework underlying our approach to management/leadership effectiveness has three factors—role concept, skills, and the Inner Game of Management—that need to be managed. We define each of the three factors, explain what they look like in practice, and also provide strategies for effectively using them.

Participants also need to be given the opportunity to apply what they are learning or have learned in practice. This can occur during the session in which the skill is being addressed or as a follow-up. As they put into action what they are learning, they also need to spend some time thinking about and/or discussing the results that they are achieving by doing so. When problems are encountered in using a specific skill, time needs to be devoted to identifying what might be done or done differently to address them. The bottom line: New skill development requires practice and this must be built into any program—whether it's one-on-one coaching, self-study only, or a comprehensive program like that delivered to the International Truck dealers.

Principle #4: Identify the Best Ways to Deliver Program Content

Program delivery methods can include reading articles or books, online (e-learning), one-on-one coaching, small informal learning sessions, and larger group-based training sessions. All of these methods, in fact, can promote and support leadership development. Selecting the best way to deliver the program depends on the amount of resources (including people's time and dollars) that the organization has and is willing to invest in the development effort and on understanding what will work for the targeted audience. For very small organizations (under $1 million in revenue), this might mean that leadership development is promoted through readings and “brown bags” during which participants can discuss how they will apply what they have learned. In $500 million plus companies, this might mean that there are semiannual educational programs for managers and leaders at all levels that are supported by e-learning and individual coaching.

Regardless of the methods used and the size of the organization, a key to any successful program is ensuring that it supports the notion that leadership development is a process versus an event. The message should be: Leadership development is not a one-time session; instead, it is a continuous process of learning and development.

Our experience suggests that there is a need to include in any leadership development program some face-to-face (in the “classroom”) training experiences. This provides the opportunity for participants to fully engage with each other and with the instructor in discussing key concepts and in actively working together to complete specific activities that will contribute to their learning and development. Leadership involves managing people, and it is impossible to learn about managing people in complete isolation from others. Given the importance of this face-to-face learning in promoting leadership development, it is important to carefully select program faculty. Faculty need to be able to present and discuss concepts and tools, provide practical examples of their use in the context of the specific organization, engage participants in discussing strategies for using concepts in practice, and provide recommendations for addressing any problems being encountered.

The Leadership Development Principles in Action

The International Truck dealership leadership development program (called the Executive Dealership Leadership Program or “EDLP”) was built on these four core design principles. Members of the program design team visited dealerships to learn about how they operated and to hear from executives about some of the challenges that they faced. This information was used as input to creating case studies and tools that could be used by participants to apply what they were learning in their dealerships. These visits also helped program faculty tailor their presentations and their facilitation process to this audience.

The EDLP was a six-week program that was designed to be delivered over a period of two years. There were four separate groups of approximately 25 participants, with the first group beginning the program in 2007. The size of the group was purposefully limited so as to promote sharing, discussion, and small group coaching that was provided by program faculty. Sessions were conducted approximately every four months, with each session being held in a different part of the United States—typically at a hotel or resort. This was done both to “keep things fresh,” but also to vary the travel time and expense for participants. While Navistar subsidized the cost of program development and delivery, each participant was required to pay a fee to be a part of the program.

During each week of the program, there was a focus on developing or enhancing the skills needed to manage direct reports, as well as the skills needed to effectively manage and develop the business. There was also a focus on enhancing team effectiveness. Following each week of the program, participants were given specific assignments to complete that would help them apply what they had learned to enhancing their own or their organization's effectiveness. During the next week of the program, there were opportunities to share the results of applying what had been learned in practice. This included discussing any problems that were being encountered and then working with both program faculty and other participants in addressing them. An outline of the first two weeks of the program—which occurred in February and June 2007 (for the first group of participants)—is presented in Exhibit 9.1.

Included in the program were a number of tools that participants could use to assess their own and their dealership's effectiveness. These included four surveys to assess management and leadership effectiveness that were completed by the participant and a sample of his or her direct reports—one focused on assessing the extent to which the individual is effectively managing the three dimensions of management effectiveness discussed in this chapter (called the “Management Effectiveness Survey” or “MES”), another on assessing their operational leadership effectiveness (which will be discussed in Chapter 12), a third on assessing their time management effectiveness, and a fourth on assessing their effectiveness as a delegator. Each participant also completed and had a sample of his or her company's leadership team complete the Growing Pains Survey (presented in Chapter 5) and Organizational Effectiveness Survey (described in Chapter 2). Participants were provided with surveys and other tools for assessing the effectiveness of their organizational structures, meetings, performance management systems, and organizational cultures. They were also provided with tools that could be used to collect the qualitative information needed to develop their strategic plans (that is, as described in Chapter 6, to complete the environmental scan and organizational assessment). The information from each of the surveys was presented and discussed. And, most importantly, each participant was asked to develop specific action plans for addressing any issues identified.

There were several specific assignments that participants were required to complete and submit to program faculty for review. The purpose of this step was, in part, to promote the actual implementation of specific tools within the businesses represented in the program and, in a very real sense, to hold participants accountable for actually using what they were supposedly learning. More important, however, this allowed each participant to receive feedback from an expert who could help ensure that they understood and were using the tool effectively to support their own and their business's success. Typically, this feedback was provided in either a one-on-one or a small group setting, where participants could ask and have their questions answered. Members of the program faculty were also available in between sessions to address participants' questions.

A specific deliverable from the first year of the program was a completed strategic plan for the business, which was submitted and then reviewed by program faculty. During the second year of the program, participants were asked to identify a specific business challenge or issue that they wanted to address and then use what they had learned in the program to address it. As a requirement for graduation, they needed to submit a report that summarized the issue that they focused on, how they used the tools presented in the program to address it, and the results that were obtained. These final projects were evaluated by members of the program faculty and by members of Navistar's Dealer Operations team (which is the unit that works most closely with the dealer network). Awards were given for the best projects. These were presented during a graduation ceremony that was at the conclusion of the sixth week of the program.

As discussed above, the EDLP was designed to help participants apply what they were learning in their business. Each session of the program was highly interactive. After a specific concept or tool was presented, participants were given the opportunity to apply it to themselves or their business (e.g., by analyzing a case study, completing an exercise, discussing it with fellow participants). Instructors encouraged participants to share their ideas and to ask questions if something was not understood. And, this was followed by specific assignments for applying what had been learned in their dealerships. Participants were also asked at the end of each day to provide feedback to instructors about what worked and what didn't work during that day. Based on what was learned from delivering the program to the first group, a few program modifications were made.

Instructors for the program were carefully chosen for both their expertise in specific topic areas, as well as for their ability to adapt their delivery to the specific audience. The primary instructors for the program came from our firm, Management Systems (including the authors of this book). During each week of the program, at the request of the dealer network and Navistar, a half- to a full day was devoted to managing the financial aspects of the business. A member of Navistar's Dealer Operations team was selected to conduct these sessions because he could not only describe important concepts and tools, but could also effectively show participants how they could be used within their dealerships—frequently using tools and information that Navistar could provide to them. Other program faculty included two principals from a marketing firm whose focus was on dealership marketing and branding; and three faculty members from UCLA's Anderson School who each presented a half-day session during the sixth week of the program (which was held on UCLA's campus).

Program Deliverables and Results

While there were individual differences in terms of the extent to which participants successfully implemented what they had learned in the program, there were several changes that nearly all participants made in their business. One of the most powerful changes—very much discussed during the sixth week of the program—was that they had developed significantly new ways of thinking about their role and their business. This was based on using the frameworks and models presented in the program—including the Pyramid of Organizational Development, the concept of SMART goals, the three dimensions of management effectiveness, and many others.

Second, all participants had developed and begun implementing a strategic plan for their business (as described in Chapter 6), and some were already seeing positive results by the time the program concluded. Third, most were approaching their leadership roles very differently—that is, they were focusing more time on managing versus doing. Fourth, many suggested that organizational and team effectiveness had been increased by developing and implementing key result area-based role descriptions—in brief, there was greater clarity about “who was responsible for what.”

Finally, some participants had begun (some of them early on in the program) training others in some of the concepts that they had learned in the program. There was such a demand, in fact, for assistance in “taking these concepts to the next level of leadership” that a two-week program focused on departmental leadership was designed and delivered to direct reports of EDLP participants by the authors, who were the lead faculty for the EDLP.

Some participants, like Don DeVivo, President of DATTCO (an IC Bus dealer that also provides school bus, motor coach, and other transportation solutions), implemented formal management development programs within their dealerships for their own team of managers and leaders. Don described this process by saying, “It was important to get key staff to buy into the process, and we drove it down to the (front line) managers.” This was accomplished by having all managers and leaders on his team participate in a formal leadership development program that was conducted by one of the faculty members from the EDLP. Leadership development has become a process within DATTCO that is focused on in the meetings that Don has with his management team “two to three times a year.” He says that this helps keep “leadership development alive.” He goes on to say, “The whole process that EDLP put in place is embedded in our company—particularly the SMART Goal setting process.” Don also implemented and has continued to use the strategic planning process (described in Chapter 6) that he was introduced to as a part of the EDLP. He says, “There was a huge impact [on our business]—our whole management process was task-driven, not strategic. As we were growing, we were able to manage the growth.” And, the results speak for themselves: Over the six years following his participation in the EDLP, Don's business grew significantly in terms of both revenue (up 50%) and profit (up 40%).

Stage I

At the earliest stage of growth, most organizations do not have formal management development programs for their people. Management development takes place, if at all, through on-the-job training or through self-learning (e.g., reading a book, taking a course). While establishing an in-house training program is usually prohibitive and not really needed at this point, the company's founder (who might be, at this stage, the only “manager”) might be devoting some of his or her time to self-directed learning.

Stage I is a good time for the entrepreneur (and other members of the leadership team, if they exist) to begin establishing the organization's cultural attitude toward leadership development. For example, the leadership team might devote one to two hours each quarter to a specific leadership skill. This might involve reading an article or book and then discussing its application in practice within their business. The founder and other members of the leadership team might also be using the benefits of membership in membership-based organizations (like the National Association of Women Business Owners) to help enhance their leadership skills. Most significantly, the founding entrepreneur can serve as a role model and can stress, through words and action, that leadership development is important to the organization's long-term success.

Stage II

During the early part of Stage II, an organization can continue the same approach to leadership development that was recommended for Stage I. However, there are exceptions. Dr. Tim Bain, who was discussed in Chapter 5, engaged the authors to coach him in managing and scaling up his firm. Specifically, Dr. Bain was coached in the understanding of growing pains and their risks, the process of strategic planning, the process of performance management, and the process of culture management. This coaching provided the managerial competencies for him to scale his company successfully, as described in Chapter 5.

By the time it reaches approximately $5 million in annual revenues, a company is probably ready for and can afford some form of more formal management and leadership development as well. Investment in acquiring these capabilities provides both an “insurance policy” against organizational failure as well as the tools for successful development of a business.

The principal goal for a Stage II company is to ensure that all those in management and leadership roles (including the CEO) understand their roles, have developed and can effectively deploy the core management skills, and have adopted a mindset consistent with that of an effective leader. In addition, members of senior leadership should be working to build the skills needed to effectively fulfill their roles as senior leaders—including the skills needed to implement basic strategic plans and performance management systems.

The program for helping managers/leaders develop these skills can take many forms. At a minimum, it needs to include a specific focus on clearly defining roles (e.g., using a key result area-based approach) and on providing managers with frameworks and tools to effectively delegate, manage their time, make decisions, maximize their interpersonal effectiveness as managers/leaders, and effectively influence people to achieve goals (that is, develop their operational leadership skills). Content can be delivered using any of the methods described above, but the organization should be moving toward creating its own program that can be used on a continuing basis to develop its current and future managers. The program should include ample opportunities for managers and leaders at all levels to discuss their progress and work together to solve problems. Another advantage of using a team-based approach to leadership development is that participants will, as a result of their efforts to apply what they are learning, uncover organizational issues that need to be addressed, which, in turn, can help promote long-term organizational success.

Stage III

By the time an organization has reached Stage III, it should be well on the way to establishing an in-house program of leadership development. At this stage, the key organizational development issue is professionalization, which, in turn, means implementing effective management systems (and, this will involve helping those in senior management roles develop the skills at the fourth level in the Pyramid of Management and Leadership Development—including strategic planning, organizational development, and strategic leadership).

At this stage, there will typically be multiple levels of management and leadership, and those at each level need to understand, embrace, and be able to execute their unique roles. The founder/entrepreneur (if still present within the organization) or the CEO needs to feel comfortable having very indirect control over results—working through a team of senior managers. The entrepreneur or CEO must learn to trust his or her direct reports to perform their roles, and to manage through their direct reports (other managers) to accomplish organizational goals. This, in turn, means that these people will have to think like entrepreneurs or businesspeople rather than simply as functional specialists.

Assuming that the organization has already laid the foundation for management development in Stage II by focusing upon core management and possibly operational management skills, a major goal for a Stage III company will be to reinforce and continue to build these basic skills. Such skills are not simply learned once and then fully retained. People get into and out of habits, and skills must be reinforced. For example, one function of the five-year driver's license renewal test is simply to motivate people to read the test booklet again and remind themselves of what they ought to be doing. Although most people probably consider it a nuisance to go through the test, it is likely to make them remember long-forgotten parts of the rules of the road. Doing so reinforces the way they ought to be driving.

Reinforcing basic skills can involve designing and implementing new programs —perhaps consisting of workshops, self-directed learning, or coaching. Continuing to build management and leadership skills will involve delivering existing programs to new members of the leadership team and to those who might occupy management and leadership roles in the future; and developing new programs that focus on helping participants develop “new” skills.

During Stage III, the frameworks, tools, and language of leadership development being used by the company in its leadership development programs should become “a part of the way that we do things.” All managers and leaders should have the same understanding of what it means to be effective in the performance of each skill in their business. For example, when someone says, “management effectiveness,” all members of the leadership team think, “role concept, skills, and the Inner Game of Management.” And, more importantly, all members of management and leadership understand how to assess effectiveness against these three factors and can identify possible steps to enhance effectiveness.

During Stage III, the organization needs to implement programs for building all of the skills in the Pyramid of Management and Leadership Development. There can be different programs for each level of management and leadership (which focus on the specific skills needed to effectively execute their roles), or all managers and leaders can participate in the same or a similar program. The four principles for creating effective leadership development programs should be used when developing these programs. At this stage, the CEO and other members of senior leadership might also be involved in individual one-on-one coaching programs that can help them both continue to develop the skills needed to perform their roles and address specific organizational development issues.

Stage IV

By the time an organization reaches Stage IV, leadership development should be a way of life—for both the organization and for its managers and leaders at all levels. There should be very specific programs or processes in place to prepare future managers for their roles and to help individuals develop the capabilities needed to assume the next level of management or leadership. These processes might include participating in specific outside training, in-house group training, self-study, and/or one-on-one coaching. There should also be processes in place to recruit and select, as appropriate, individuals with the skills needed to fulfill specific roles when there are no internal candidates available. Personal or leadership development might also be included as a specific area of focus in the individual performance management process.

Wise senior executives planning for the successful long-term development of their enterprises will focus on identifying what is needed to build the capabilities of their human assets and then will be willing to make the needed investment to do so. They will realize that their companies are competing not merely in products and technology but in people as well.

A Stage IV company might have its own human resources (or human resources and organizational development) department and staff who will take a leadership role in identifying the company's leadership development needs and in securing resources to meet these needs. In some cases, leadership development programs will be designed and delivered by internal resources. In other cases, the organization will draw upon the expertise of either outside university educators or consultants to help design and deliver management development services.

A specific focus of leadership development in Stage IV should be culture management, as this is the stage at which this key building block of success becomes most critical. As will be described in Chapter 10, leaders at all levels need to understand the important role that they play in the culture management process, and they need to develop the ability to use specific culture management tools to help culture become a strategic asset.

A Stage IV organization is large and complex. To continue its success into the future, managers and leaders at all levels need to have the skills to manage both day-to-day operations and the company's longer-term development. In brief, managers and leaders of a Stage IV company need to adopt a holistic perspective. They need to think in terms of the Pyramid of Organizational Development both for the care and feeding of the existing enterprise and for the development of new entrepreneurial ventures that will help the company move into Stage V.

Stage V

A company in Stage V needs to continue providing and refining, as needed, leadership development programs and processes that help individuals at all levels of management/leadership develop the skills needed to effectively execute their roles. In addition, a company at this stage needs to have specific programs and processes in place to build true general management capabilities.

A Stage V company is in the process of creating or has already created divisions—with each division operating in a very real sense as a business within a business. The leaders of each division—general managers, divisional presidents, and so on—need to have the skills and capabilities to manage their own businesses, but to do so in the context of a larger enterprise. Senior and middle managers within the division also need to understand how to effectively lead within a divisional structure.

As a company divisionalizes, it needs to clearly define the role of corporate and the role of each division (as described in Chapter 7). This, in turn, will influence the type of leadership development that is required to support effective implementation of the structure and the organization's overall long-term success. For example, in some divisionalized structures, there are corporate functions (e.g., legal, human resources, sales/marketing) that are responsible for establishing policy and for identifying best practices. In these structures, the senior leaders who represent these functions within the divisions need to develop the capabilities to work effectively with their divisional CEO, while at the same time working with and representing the function within their division. In all divisional structures, senior leaders of the division and of the holding company need to develop the skills needed to work effectively with each other.

Stage VI

The leadership and management development programs created in Stage V need to continue into Stage VI—that is, there needs to be a continued focus on developing general management capabilities and the capabilities needed to work within a divisionalized structure. There also needs to be a focus on sharing and using best practices across the divisions. Even when it is a holding company—where each division provides very different products or services, or operates in very different markets, or both—the organization can benefit greatly from identifying the best management and leadership development programs and processes and then utilizing them in all divisions.

In addition, if the organization has diversified or plans to diversify through mergers or acquisitions, there needs to be a focus on helping managers and leaders at all levels maximize the advantages and minimize the limitations that can result from combining two (or more) different enterprises. For senior executives, these skills include how to conduct or oversee the due diligence process, how to effectively integrate operational and management systems, and how to maintain a strong, positive culture as two (or more) companies are combined into a single entity (in a merger) or as they are acquired under a holding company structure.

Stage VII

An organization facing revitalization does not have the time or the resources to devote to management and leadership development programs because its overarching mission is to survive. Unfortunately, if company leaders and managers do not have the skills needed to effectively perform their roles at this stage, their company is probably doomed to fail. However, if there is a turnaround or revitalization team in place, it is possible for selected managers to get on-the-job experience in this process as it actually unfolds. A revitalization effort is of the level of risk and complexity of open heart surgery. Neither open heart surgery nor a revitalization process should be done by inexperienced amateurs. Unless the process is led by highly skilled and experienced professionals, the “patient” is likely not to survive.