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2009 Best Companies for Leadership

The future of leadership: a spotlight on the best Hay Group Webinar


FEBRUARY 18, 2010 RICK LASH AND CHRIS HUBER

Agenda
1 2 3 4 5 6 2009 survey findings Leadership focus is changing Creating a culture of leadership excellence: lessons from the best Enabling performance Conclusions Questions

2010 Hay Group. All rights reserved

2009 survey findings

The study results apply to all organizations


Regional distribution
Region North America Europe/Middle East/Africa Asia South America Pacific Total Per cent 45.5 29.7 16.0 5.6 3.3 100.0

Revenue distribution
Annual revenue in US$ Under 500 million 501 million to 1 billion 1 billion to 5 billion 6 billion to 10 billion Over 10 billion Total Per cent 31.9 12.1 23.4 7.5 25.0 100.0

Source: Hay Group / Bloomberg BusinessWeek.com | 2009 Best Companies for Leadership study

Source: Hay Group / Bloomberg BusinessWeek.com | 2009 Best Companies for Leadership study

1863 participants from 1109 organizations completed a survey

2010 Hay Group. All rights reserved

2009 Top 20 Best Companies for Leadership


1 General Electric 2 Southwest Airlines 3 3M Company 4 Procter & Gamble 5 Accenture 6 Wal-Mart Stores 7 Nestle 8 Coca-Cola 9 McDonalds Corporation 10 Infosys Technologies 11 IBM 12 Cisco 13 United Parcel Service 14 IKEA 15 ABB 16 Zappos.com 17 Hewlett-Packard 18 Goldman Sachs 19 Unilever 20 General Mills, Inc.
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The Best Companies for Leadership outperform others


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Top 20 produce better shareholder returns than S&P 500


Top 20 vs S&P 500
1 year total return
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3 year total return

5 year total return


8.43

10 year total return

4.02 2.97 Per cent 1.60 0 -0.15 1.02 Top 20 S&P 500

-5.43 -6.91 -10

Source: S&P Compustat data as of 9/30/2009


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Best Companies for Leadership create better leaders

100 80 Per cent 60 40 20 0

94 75

90

87 67 54

Leadership development All employees have the programs enable employees to opportunity to develop and deliver on goals/strategies practice the capabilities needed to lead others

There are a sufficient number internal candidates ready to assume open leadership positions Top 20 All respondents
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Source: Hay Group / Bloomberg BusinessWeek.com | 2009 Best Companies for Leadership study
2010 Hay Group. All rights reserved

Leadership focus is changing

Todays environment is more complex


The competitive landscape has changed

Change isnt ending, its only accelerating Leaders need to be able to manage and lead in unpredictable times

The world is more connected


Global Information Technology Financial markets

We live in unpredictable times


Environmental concerns Political instability Economic volatility

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Leaders need to be: agile learners strategic and tactical emotionally intelligent
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Best Companies for Leadership are looking towards the future


Where companies report they are focusing their efforts now
100 82 80 65 Per cent 60 40 27 20 0 The downturn Recovery Positioning for the future 14 4 8

Top 20
Source: Hay Group / Bloomberg BusinessWeek.com | 2009 Best Companies for Leadership study
2010 Hay Group. All rights reserved

All respondents

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For the first time companies value strategic thinking more than execution
What companies value in leaders
Strategic thinking Execution Inspiring leadership Decision making Team work Influence Technical competence 0 10 20 14 17 29 20 30 40 Per cent All respondents
Source: Hay Group / Bloomberg BusinessWeek.com | 2009 Best Companies for Leadership study
2010 Hay Group. All rights reserved

68 59 48 44 37 27 32 38 31 27

50

60

70

80

Top 20
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Creating a culture of leadership excellence: lessons from the best

Creating a culture of leadership requires: managing and investing in development


What companies do to develop and retain leaders
100 80 Per cent 60 40 20 0 Organization actively manages a pool of successors for mission critical roles Company invests a lot into the people it needs People stay at this company primarily for growth opportunities 94 83 69 72 61 80

Top 20
Source: Hay Group / Bloomberg BusinessWeek.com | 2009 Best Companies for Leadership study
2010 Hay Group. All rights reserved

All respondents

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The best address bigger and broader issues to create a culture of leadership
Areas where the best are doing more than the rest
100 80 66 60 Per cent 60 46 40 20 0 Using corporate social Having a high responsibility to recruit proportion of women in employees senior leadership Making it easy for people to work from home Having an appreciation of global issues is a key job requirement 37 59 95 91 91

Top 20
Source: Hay Group / Bloomberg BusinessWeek.com | 2009 Best Companies for Leadership study
2010 Hay Group. All rights reserved

All respondents
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There is no one way to create an engaging culture

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Types of cultures found in the Best Companies for Leadership


Big, complex, modern global organizations

Global issues are important Pool of successors for mission critical roles

Modern, learning-oriented, fun workplace


Moving between functions is extremely common People are expected to lead, regardless if they have a position of authority Emotions are discussed in the workplace

Collaboration for innovation


Employees are encouraged to take new approaches to solving problems If you see a problem or opportunity, youre allowed to address it Work life balance is taken seriously

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Enabling performance

The real thing leaders do is create environments that drive performance


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Employee effectiveness framework

Employee engagement

Commitment Discretionary effort

Financial success

Employee effectiveness

Customer satisfaction

Employee enablement

Optimized roles Supportive environment

Employee performance

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The business case for engaging and enabling employees


High engagement only High engagement + high enablement

Employee performance
Increase in employees above performance expectations

10% -40% 71.% x2.5

50% -54% 89% x4.5


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Employee retention
Reduction in turnover rates

Customer satisfaction
Customer satisfaction rates

Financial success
Revenue Growth

Source: Based on linkage case studies using Hay Groups global normative database
2010 Hay Group. All rights reserved

Creating a culture of leadership requires: empowering employees to lead and grow


What companies do to enable their employees
100 80 67 Per cent 60 40 20 0 Employees have the opportunity to develop/practice the capabilities needed to lead others Employees are expected to lead, regardless if they have a formal position of authority Employees are encouraged to learn in areas outside their expertise If someone sees a problem/opportunity they are encouraged to address it All respondents
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90

85

86 66 57

89 71

Top 20
Source: Hay Group / Bloomberg BusinessWeek.com | 2009 Best Companies for Leadership study
2010 Hay Group. All rights reserved

Conclusions

Learning from the best

Encourage purpose driven leadership

Identify opportunities for leaders to play a larger role in addressing strategic or company-wide issues that your market and the public see as priorities

Build cross-functional collaboration capability

Treat talent management as a strategic corporate asset (it takes an organization to raise a leader)

Use talent review forums to assess bench strength and make strategic development assignments Identify destination roles for high potentials and allow sufficient time in role

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Learning from the best, continued

Leverage your culture to drive and sustain development


Include culture building metrics in personal scorecards Create culture building cross-functional task groups Establish a culture based on coaching and peer development

Develop strategic thinking skills


Provide the latest thinking in strategy, innovation and collaboration Expose leaders early in their career to senior level decision making

Expect your leaders to teach and mentor others

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What does this years findings mean for organizations and leadership

Leadership more than ever will drive business performance in the future

Ignore Leadership and its development at your own peril

Best Companies for Leadership develop leaders who can operate in an increasingly complex and deeply connected global environment

There is no one way to develop a culture of leadership

Engagement and enablement are key to driving organizational performance

2010 Hay Group. All rights reserved

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Questions

Additional resources
Best Companies for Leadership section on haygroup.com

www.haygroup.com/BCL

Questions?

Rick.Lash@haygroup.com Chris.Huber@haygroup.com

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