Trust in the workplace (part 3): Leadership Development

This post builds on the groundwork set up in my earlier post on “Connections: How Social Capital unlocks Human Capital“.  It completes the trio of practices that are greatly strengthened by adopting a wider-angle view than is common for many HR practitioners.

Leadership is relational and complex

Building leaders is certainly not a quick, efficient process.  If it was, we would not have such a dire shortage of these valuable creatures!  But why is so difficult to do?  Firstly, let us briefly remind ourselves what leadership is. The groundbreaking work of James MacGregor Burns shoots up an illuminating flare (from p.20 in “Leadership”):

…leadership occurs when one or more persons engage with others in such a way that leaders and followers raise one another to higher levels of motivation and morality. Their purposes, which might have started out as separate but related, as in the case of transactional leadership, become fused. Power bases are linked not as counterweights but as mutual support for common purpose. . . . The relationship can be moralistic, of course. But transforming leadership ultimately becomes moral in that it raises the level of human conduct and ethical aspiration of both leader and led, and thus it has transforming effect on both.

Leadership in of it itself is profoundly relational and collective, as Burns (1978) has persuasively pointed out.  This rendering of leadership and followership has provoked me to look at the phrase “field of leadership” with new eyes!

Force fields interacting

It is conceivable that leadership potential is widely present, but deeply buried.  To bring it forth and evoke this gift in others is likely to require significant time and persistent, earnest effort by all involved.

That is the subject we will now fleetingly visit.  This post will take a modest shot at exploring social capital’s catalytic role in the deliberate effort of developing leaders. Even more specifically, we will do a whistle-top tour of the world’s best known corporate university to highlight its key success factors.

Crotonville: The corporate university case-study

General Electric for decades has been the poster child for business schools.  Over the twelve years though GE has faced truly daunting business challenges – the company’s current US$240 billion market capitalisation is around half of what it was at its height. Nonetheless, an indisputable GE core competency is still the way the organisation identifies and develops leaders, as the large number of ex-GE corporate high-flyers, who subsequently became CEOs elsewhere, proves.

GE

GE spends about $1 billion a year on the corporate training of its 300 000+ strong workforce. To put that sum in context: that is more than the South African government spends on training its own one million-plus workforce.

Much of the credit for this enviable “deep bench” of leadership talent belongs to GE’s corporate learning programmes, conducted at their venerable learning facility in Crotonville, New York.  It is the oldest corporate university in the United States, having been started over 50 years ago.  It is also a residential facility with almost 200 executive bedrooms. Intense, face-to-face learner contact certainly seems to be part of the GE success formula (the early Crotonville courses were residential and up to three months in length!)

The previous CEO, Jack Welch truly put Crotonville on the map. “Jack put his time and energy into developing people,” according to Noel Tichy, the management professor who helped Welch revitalise Crotonville.  But the new CEO, Jeff Immelt has definitely not allowed Crotonville to go to seed.

GE’s leadership effort still seek to inspire, connect and develop its current and future leaders.  It does this through the “Crotonville experience” which also gives GE’s training investment a large multiplier effect.  The attendees are directed to go back to their workplaces and do much the same thing – inspire, connect, and develop the people who work for them and who may not be part of Crotonville’s 10 000 annual attendees.

The magnitude of this investment by participants and company is impressive.  What is remarkable is the time-related aspect – both the duration of the courses and the period over which they occur.  It is evident that mutual commitment is essential.  Companies with rapid turnover of talented staff would be insane to make this kind of investment! And they don’t.

By regularly bringing its leaders together to learn and grow, GE can steadily protect and build the social capital of this group. It is a virtuous cycle not easily copied by imitators.

Remarkably, the GE leadership team innately believes that the learning, the effort, the time, the money and the resources GE puts into learning have an inherent payback. Their learning & development teams focus on crafting and fine-tuning curricula and content on how to inspire, connect, and develop leaders instead of figuring out “Did GE make a specific financial ROI from Crotonville?”

Crotonville

Leadership commitment to and participation in leadership development is seen as the critical success factor.  Nigel Paine recounted some Crotonville folklore:

Legend has it that Welch only missed speaking at one top executive programme and that was because he was in hospital having a heart bypass operation. Jack did more than speak at courses, he debated with his top staff for hours on end and made sure that being at Crotonville was neither optional nor an easy ride.  He, apparently, sent hand written cards to those selected for executive programmes.  The card welcomed the individual, suggested that Jack was looking forward to meeting him or her and asked, should the person be unable to attend, to let him personally know, the reason for their absence.  Funnily enough attendance was always 100%!

Jack Welch grasped that building leadership depth requires huge collective effort, with him being the “chief cheerleader”.  Even the new CEO, Jeff Immelt indicates himself as the head of the Crotonville effort.  This is too important to ‘outsource’ to HRD.  It takes leaders to grow other leaders.  It is also a long-term socialisation process (GE top executives spend an average of 12 months at training & professional development events during an average 15 year tenure!).

Not surprisingly therefore, many global organisations have given up on the idea of corporate universities.  Virtual is in.  e-Learning is the future.  But these penny-wise organisations will not reap a great harvest.  They will simply have to (use supply-chain principles to) poach other organisations’ leaders.

Compare this to GE where 90% of their top 600 leaders are promoted from within!

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