July, 2005, Volume 9, Number 10

CONTENTS

Leadership Development:  How Companies Produce It 

Leadership Conference:  Ethics, Integrity and Character 

History as Classroom:  The Lessons of 1776 
 

Leadership Development:  How Companies Produce It 

Some organizations work with the leaders that they have, while others take who they have and develop them further.  To learn how the latter do it, Hewitt Associates, a human-resource consulting firm, conducts a bi-annual survey of how companies build leadership and which do it best.   

In its recently completed 2005 study, Hewitt surveyed 373 human resource executives of U.S. companies, asking about the practices that their companies followed in building their leadership.  Hewitt also constituted a separate panel of experts to identify the twenty best companies for leadership development.  The top twenty are:  

Hewitt found that the top 20 companies differed from the other firms in several key practices.  

1. The chief executive and board directors are more actively involved in leadership development initiatives.   

Of the top 20 companies, 100% of the CEO are engaged, but of the other firms, 65%.  

2. High-potential managers are more often identified, paid more, given greater development, and brought into more frequent contact with top executives.   

Of the top 20, 95% identify high potential managers, but of the others, 77%.  

3. Leadership development programs are more closely tied to compensation.  

Of the top 20, 65% link explicitly leadership capacities to long-term incentive pay, but of others, 23%.  

4. Company executives are held more accountable for leadership development programs.  

Of the top 20, 80% hold management responsible for developing high-potential managers, but of others, 35%.  

The study also found a correlation between aspects of the companies’ leadership development programs and their financial performance.  Better-performing companies were more likely to

1. hold top management responsible for leadership development; 

2. use specific metrics to evaluate the effectiveness of their leadership programs; 

3. offer greater rewards to managers with high potential for future leadership;  

4. have executives and directors directly involved in leadership development programs.  

Source:  Hewitt Associates, How the Top 20 Companies Grow Great Leaders, 2005.  

Leadership Conference:  Ethics, Integrity and Character 

The U.S. Naval Academy hosted a leadership conference on July 28-29, 2005.  Sponsored by Academy Leadership, the Conference Board, and the U.S. Naval Foundation, the conference focused on ethics, integrity and character.  

John J. Brennan, chief of executive of Vanguard Group, an investment company with nearly $1 trillion under management, reported that since a key underpinning of his company’s growth has been customer trust in its management, ethics and integrity are essential qualities for all 11,000 crew members (as employees are called).  As a result, the company places great emphasis on character when it hires, and prospective managers are sometimes taken through more than two dozen interviews before their hiring.  “Personal integrity,” said Brennan, “has to supersede everything else.”  In judging candidates, Vanguard managers apply two critical tests:  Is the person trustworthy beyond any doubt, and would you want your son or daughter to work for the person.   

Eric M. Pillmore, senior vice president for corporate governance at Tyco, and Dennis C. Blair, non-executive director of Tyco, have helped steer the company back from the malfeasance of the chief executive that came to light in 2002.  In their prepared comments for the conference, they stressed that leadership and mentoring “is critical to the ongoing development of high integrity leaders and employees.”  Leaders, they offered, must also have a “web of accountability” around them, and it is the responsibility of both executives and directors to systematically evaluate top management character.  And consistent with the Hewitt study, all this must begin at the top.  “Leaders must model ethics from the top down,” they observed, “and communicate an unyielding commitment to their employees.” 

Note:  The conference agenda can be found here.  
 

History as Classroom:  The Lessons of 1776 

By John Baldoni 

One of the most striking conclusions from reading David McCullough’s 1776, an artfully written history of the seminal year in the American Revolution, is just how many colonists were dead-set against independence.  Popular culture likes to portray the rebellious colonists as falling lockstep into place behind George Washington and the other founding fathers. Yet according to John Adams, one of those founding figures, a third of the population was opposed to separation from Great Britain and another third was neutral.  Many colonists were fearful of living outside the protective sphere of the most powerful nation on earth.  Where would merchants sell their goods?  Who would buy the colonies’ raw materials such as wood, iron, indigo, and cotton?  And to whom would the colonists owe allegiance, a King, a governor, or a new head of state?   

Such fears have parallels in our own lives, and the lessons of 1776 are usefully explored for today’s implications.  

Make the cause tangible.  The Declaration of Independence of July 4, 1776 is eloquent, righteous, and inspiring, but most colonists did not learn of it for upwards of a year.  What drove the colonists to rebellion was the tangible oppression of the Crown’s taxes, tariffs, and restrictions on liberty.  For driving change today, managers require a powerful mission statement for it but also need a articulation of the tangible reasons behind it.   

Communicate the cause frequently.  Rebellious colonists found sustenance in the many pamphlets that articulated British injustices and argued the alternatives.  One of the best known, Thomas Paine’s Common Sense, helped stir the masses to action against the wrongs of British rule.  The rebels were also inspired by frequent letters from home.  Cokie Roberts’s Founding Mothers reports that husbands on the front lines received invaluable sustenance from their wives’ repeatedly expressed zeal for the cause.   

Finance the cause creatively.  Starting the rebellion was one thing; funding it another.  Robert Morris played a critical role in raising funds for the Continental Congress that wrote the Declaration of Independence, and he later found funds to sustain the troops in the field.  A merchant by trade, he creatively kept the money flowing when there otherwise appeared to be none.  

Support the cause courageously.  “We must all hang together or assuredly we will all hang separately,” said Ben Franklin at the signing of the Declaration of Independence.  Had the patriots lost, the signers of the Declaration and many of their followers would likely have been executed.   

Hold for the common cause.  The colonists sometimes distrusted each other nearly as much they distrusted the Crown.  McCullough notes that Washington did not think well of the unruly New England soldiers under his command.  John Adams did not think highly of Thomas Jefferson for his profession of freedom but continued slave-owning.  Still, most subordinated their many internal disputes in pursuit of the common cause.  

Further reading:  

David McCullough, 1776.  New York: Simon & Schuster 2005 

David McCullough, John Adams.  New York: Simon & Schuster 2001. 

Donald T. Phillips, The Founding Fathers on Leadership.  New York: Warner Books, 1997. 

Cokie Roberts, Founding Mothers: The Women Who Raised Our Nation.  New York: William Morrow, 2004.  

Note:  John Baldoni is a consultant and author whose most recent book is Great Motivation Secrets of Great Leaders (2005); he can be reached at john@johnbaldoni.com and www.johnbaldoni.com. 
 

Copyright 1996-2005, Wharton Center for Leadership and Change Management
 University of Pennsylvania.