21 Feb
This article was previously published in Harvard Business Review on April 12, 2016. It was co-authored by Ron Ashkenas, Partner Emeritus at Schaffer Consulting.
Leadership development represents a huge and growing investment for most organizations. Industry research, for example, shows that companies spent more than $24 billion on leadership and management training worldwide in 2013, an increase of 15% from 2012.
The question is whether companies will get a worthwhile return on this investment. In past years leadership development has always been treated as a discretionary expense or even a luxury, and therefore something that could be pared down or eliminated in hard economic times. Underlying this notion was the lack of tangible results that could be attributed to management training. Without real results, leadership development becomes at best a leap of faith, and at worst a waste of time and money.
A number of companies are starting to address this issue by reversing the traditional leadership development “equation,” which essentially posits that if you give leaders the right skills and experiences, they will change their behaviors and produce better results. Reversing this means that companies start at the end — with results. In other words, leadership development begins with a real business challenge that leaders need to solve, instead of with a hypothetical case study or simulation. In order to succeed, they have to act, reach outside of their comfort zone, and adapt their approach.
Over the past couple of years, we have collaborated with the leadership development team at Cargill, one of the world’s largest global agricultural processing and distribution companies, to apply these ideas in a program for high-potential managers called “Leading in a Complex World.” Here’s how it worked:
At the beginning of each program, participants identified a challenging and complex problem in their business or function (e.g., product pricing, operational efficiency, customer service, etc.). Participants were then assigned to meet with people on the front lines of the issue both inside and outside the company (innovators, “future‐seers,” provocateurs, and stakeholders whose voices aren’t normally heard) to open up their thinking about possible solutions.
After reflecting on this input, each manager was required to carry out at least one safe-to-fail experiment. The small-scale project would test a possible solution in a low-risk way, in 100 days or less, and without the pressure of having to be right. In other words, the main purpose was to quickly learn about what does or doesn’t work. For example, one participant focused on creating a new pricing scheme. Another tried generating operational efficiencies through a different supply chain control tower process. Someone else designed an experiment to get a plant operation down to zero accidents.
As the experiments were proceeding, each manager worked with another member of the cohort to get peer feedback. This helped ensure that the experiments had clear measures of success or failure.
Of the 75 participants, 80% completed their projects and produced tangible results and business insights. One experiment generated a 2.6% reduction in work orders, which equated to $342,000 over the course of three months. Using the continuous process improvement methods that were developed for the experiment, the manager is now working to reach a 30% reduction goal over a longer time frame.
Another experiment was about achieving some cost leverage by testing the viability of a strategic partnership with another organization. When the manager shared proprietary information with the potential partner, however, he discovered that starting with a full partnership was not the right way to go because the relationship lacked “mutual trust and transparency, which takes time.” As an alternative, the manager began to test other ways of collaborating, short of a full joint venture. He reported, “Through this learning about cooperation in partnerships, we are running several new projects in the fields of sourcing and coproduction.”
Participants also reported learning how to be more effective leaders in fast-changing environments. As one person noted in her after-action review, “By doing our experiment at one site instead of implementing at all 30 of them at once, it took the pressure off. We could see what the data said, and it was all right if it wasn’t perfect. Then we adjusted before moving on to other sites.”
Of course, Cargill is not the only company that has reconfigured leadership development programs to start with a business problem. One of us (Robert) is leading a Health Science Leadership Academy in the Texas Medical Center in which clinical and administrative health professionals are using business experiments to help build resiliency to improve health outcomes. In addition, Ascom, a Swiss-based global communications company, has incorporated “rapid results initiatives” into their high potential leadership program for several years, forcing participants to apply their learnings on business challenges given to them by C-suite sponsors.
What all of these programs have in common is the belief that by focusing on constant experimentation, leadership development can be a driver for strengthening organizational capability and business success.
If your company already subscribes to this approach, you can use a leadership development program both to become a better manager and to accelerate progress on one of your most critical business challenges. If you are participating in a leadership program that doesn’t require this kind of hands-on experimentation, try doing it on your own.
Pick a business challenge that’s already on your plate — perhaps how best to introduce a new product or how to insure the efficacy of a new safety procedure. Then think about how you can shape a shortterm, safe-to-fail experiment that uses some of what you’re learning in the program. For example, introduce the new product in one region or to one “friendly” customer first, get feedback, modify as needed, and then scale your approach. With the safety procedure, you could test it quickly in a controlled environment to make sure it works as expected before rolling out to a wider group. You’ll be amazed at how leadership lessons become more real when you test them on an actual challenge.
Leadership experiments can lead to breakthroughs in your organization. To learn how to plan breakthrough projects, download our white paper “7 Elements for Chartering a Breakthrough Project”.
In it you will learn:
- what a ‘Breakthrough Project’ is and why it’s critical to organizational transformation
- why creating a ‘charter’ is a critical step in the process
- the critical roles that key people must play in the project to enhance success
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