Developing Leaders: How Winning Companies Keep On Winning

Grooming in-house candidates for leadership roles is critical for companies that want to stay competitive. Pooling their experience helping companies develop in-house talent, leadership experts Robert M. Fulmer, Philip A. Gibbs and Marshall Goldsmith provide insights about today's best leadership-development practices. They base their observations on a recent study that benchmarked six best-practice companies. Although each has its own approach, organizations such as Arthur Andersen, General Electric, Hewlett-Packard, Johnson & ; Johnson, Shell and the World Bank have much in common -- including a recognition that keeping a steady stream of leaders moving up is important to the strategic vision.

Management professors Fulmer and Gibbs and leadership consultant Goldsmith pinpoint five essential elements of success: awareness (learning about the latest approaches to leadership development), anticipation (using forward-looking scenarios to envision the future needs of the business), action (finding ways to use executive-learning programs to support strategic initiatives), alignment (ensuring that company documents used for performance appraisal, succession planning and education are consistent) and assessment (evaluating how leadership education has improved business results).

Approaches vary. The World Bank gives future leaders a stint in impoverished countries so they can do a better job of supporting the bank's goal of reducing poverty. At GE, the company's famed Six Sigma quality-improvement program and creative ideas for expansion in emerging economies flowed from presentations made at leadership-development events. Arthur Andersen meticulously measures the productivity of partners who participate in leadership-development programs -- and proves that the programs work.

Managers, take note: In the best-practice organizations, the most senior people set an example of support for leadership-development programs. Whether they themselves select the broad topics or the specific business problems to be addressed or whether they lead sessions in person, they make known their belief that education to train leaders is vital to their enterprise's strategic goals.