Business

Saturday October 10, 2009

Hot shots in grooming leaders

By ERROL OH


MANY of the world’s largest companies recognise that if they fail to continuously cultivate in-house talent to lead their businesses, they risk losing ground to competitors. Certainly, it is large enough an issue that there are at least two major international surveys that look at corporate leadership development.

In 2001, human resources (HR) consulting firm Hewitt Associates initiated the Top Companies for Leaders study, which focuses on what it calls leader building – “the discipline of creating a robust pipeline of leaders for future success”.

Hewitt is collaborating with Fortune magazine and The RBL Group, another HR services outfit, on this exercise. The 2009 list will be announced in winter. The previous instalment of the biennial study was in 2007, with General Electric ranked No.1.

Management consulting firm Hay Group began researching the Best Companies for Leadership in 2005. Last year’s survey saw 3M Co taking the top spot. The results of this year’s survey, being undertaken in partnership with BusinessWeek magazine, will be out in early 2010.

Previously, the Best Companies for Leadership study zoomed in on how companies planned to address a likely leadership shortage caused by the double whammy of the growth of emerging markets and the retirement of the baby boomers.

This year’s exercise is tweaked to take into account the impact of the global economic downturn. As such, the emphasis is on understanding the evolution of leadership.

“With organisations facing new challenges, many are struggling to determine how best to develop their talent to meet new and changing organisational needs. The goal of our survey is to understand the future challenges of leaders and employees given this new, diverse landscape,” Hay Group explains at the start of the 2009 online survey.

Those companies that are named in the Top 20 will undoubtedly claim bragging rights, but Hewitt points out that its survey is more than about compiling lists.

“The study not only provides an opportunity for organisations to be recognised for their leader building efforts, it also provides valuable intelligence for all organisations seeking to improve leadership capabilities, regardless of sophistication or size,” says the firm on its website.

“Past participants have said that simply completing the questionnaire was thought provoking, and resulted in new ideas and insights.”

The methodologies for the two surveys are significantly different. For the Top Companies for Leaders study, Hewitt selects finalists by screening survey submissions for responses that are consistent with strong leadership practices. The firm does not make public the screening criteria so as “to elicit honest answers and maintain the integrity of the methodology”.

The Top Companies lists are decided by an independent panel of judges in each of the four regions – Asia Pacific, Europe, Latin America and North America.

The judges include authors, academics and business journalists. They will utilise findings including organisation and leader survey data, interview data, financial measures of performance and organisational reputation.

(There was a dash of Malaysian flavour to the Asia Pacific section of Hewitt’s 2007 survey. Asian Strategy and Leadership Institute CEO Datuk Michael Yeoh was a judge and Sunway Holdings Inc Bhd was No. 6 in the region.)

Hay Group says the study findings are reviewed based on the organisations’ survey responses regarding their practices and effectiveness of identifying and developing future leaders, and the respondents’ selections of three organisations that they believe are the Best Companies for Leadership.

Clearly, the two studies have elements of subjectivity. Also, neither examines the organisations’ record for producing CEOs.

Capital IQ, a provider of fundamental and quantitative research solutions, did this as part of a January 2008 article in USA Today.

Its list shows the 19 US companies that had produced the highest number of CEOs (of publicly traded companies with market value of US$2bil or more) as a proportion of their employee population. However, this too is an imperfect indicator because it tends to favour companies with a large percentage of white-collar professionals.

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Groomed to lead

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The GE effect

Short cut to the top

Syed Faisal: A number tells a thousand stories

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