Tuesday, December 07, 2004

Corporate Leadership Development

Douglas Ready says companies must nowadays synchronize the actions of business units and the goals of the enterprise as a whole more tightly than ever. As a result corporations need people capable of running business units AND who can focus on broader corporate goals at the same time (HBR Dec04).

However developing corporate leaders is far from easy. As soon as a company becomes large enough to offer multiple lines of business in various regions, it begins to face tensions regarding how to go to market, who has primary accountability for which customers, and how to factor revenue and profitability into performance measurement.

Growing corporate leaders takes a sustained effort, Business Unit - Enterprise tensions are quite real. Mr. Ready provides the following advice on how corporate leadershop development can be organized and how the tensions can be dealt with:
  • Air the tensions by communicating extensively about the tensions in the form of leadership dialogues, leaders exchanges, task forces. Aknowledge the tensions exist and open them up for discussion, practice how to deal with them)
  • Cross-fertilizing talent across unit boundaries (Executive job rotation)
  • Targeting rewards to shape performance (use both economic rewards and noneconomic rewards, such as rewards in the form of prestigious roles or placement in the task force)