In some cases, these same CEOs have just come off a winning streak at other companies, but underperform in a new environment. It begs the question: What makes or breaks a leader? Is leadership an intrinsic trait? Are some people just born leaders or does leadership require skills that must be continuously learned and nurtured?
Leo Apotheker had significant success while leading SAP. During his tenure there, he transformed R&D, enhanced technology platforms, and expanded various business models and customer segments. He also helped lead SAP to 18 consecutive quarters of double-digit software revenue growth. However, once he became CEO for HP, he failed miserably, leading the company to a loss of more than $30 billion in market capitalization. How is it that leaders shine in one situation and fail in another?
The question of whether leaders are born or made has been hotly debated for decades, evoking very strong opinions. Some people think leaders are born that way – naturally intelligent, strategic, visionary and charismatic, able to articulate a plan and rally their teams around it. Others believe that leaders are made – needing ongoing experience, training, development and coaching/mentoring. Some say that leaders are both born and made – naturally intelligent and extroverted, enhanced with education, training, coaching and experience
Center for Creative Leadership, a research firm, surveyed top leaders globally and found that the majority (52.4%) believed leaders were made, believing that leadership is more than just “genetics.” A minority (19.1%) believed that leaders were simply born. The remaining 28.5% believed it to be a combination of these factors – that leaders may have some intrinsic leadership skills (outgoing, intelligent and confident) but have also worked hard to gain valuable experience, perspective and knowledge to maximize their successes.
Leaders are delusional if they think they no longer need any development or coaching once they reach the C-suite. When leaders get complacent – feeling too comfortable in the top job – their successes decline rapidly. Conversely, when leaders depend on trusted advisors, executive coaches and other senior-level minds for counsel and honest feedback, they tend to be more in touch with the realities of their positions, teams and constituents.
This explains why the field of leadership development has grown to the billion dollar market it is today. In the past, C-level executives had limited opportunities for personal or professional growth. Hiring an executive coach was seen as a dirty little secret, as executives didn’t want to show any kinks in their armor. But today, hiring executive coaches no longer carries a “stigma.”
The wisest leaders understand that the business environment has changed, and executives have the added stressors of global issues to manage, ever-evolving technologies, a tremendously competitive marketplace, and being “on call” 24/7. They recognize that their senior position creates isolation – their team might be reluctant to provide honest, objective feedback that’s necessary to help their leaders evolve. CEOs that work with executive coaches are often regarded as eager to learn, ready to accept honest feedback and willing to be held accountable for their actions – all qualities of a leader who will stay on top.
One of the most revealing looks in the use of executive coaches was a Harvard Business Review article that discussed Michael Dell and his executive coaching . Faced with the first major technology downfall in 2001, Michael wanted to ensure he and his leadership team worked more cohesively, and he wanted to change the culture at Dell. He felt that changestarted with him, so he asked for a 360 degree survey and got some tough feedback about how his style put people off and was not inspirational. He made a commitment to change his style to be more appealing and inspirational.
Today, Dell still uses assessments for most of their managers, providing annual feedback for their development. Since then several CEOs have publicly stated the value of executive coaching during their careers, including eBay’s Meg Whitman, Pfizer’s Henry McKinnell, Unilever Group Co-Chairmen Anthony Burgmans and Niall FitzGerald, and Belo’s Robert Decherd, whohave all successfully worked with coaches. Former Bain & Co. CEO Tom Tierney found his coach so helpful that he sent his wife Karen to see him, too. And Treasury Secretary Paul H. O’Neill hired a coach to help him transform the lumbering department into a more responsive branch of government.
Successful CEOs start with a set of leadership traits that have been associated with strong leaders, such as ambition, drive, emotional stability, emotional intelligence, and extraverted personalities that can rally support and action. However, just possessing these traits doesn’t mean you’ll be a great leader. Leaders must also learn from experience. To prepare for the requirements of their challenging roles, they should develop the prerequisite competencies – shaping strategy, business acumen, seasoned judgment, powerful communications, operational excellence, and the ability to inspire others – which is learned by doing.
The Center for Creative Leadership researched proven methods that enable organizations to develop their leaders, which include, from most to least effective:
- Moved into new and challenging roles
- Given temporary assignments
- Implemented projects and taskforces
- Received 360 feedback and coaching
- Participated in classroom training
Combine the best practices to help your company successfully develop your next generation of leaders:
Your own beliefs about leadership will impact your leadership effectiveness and the culture of your company. While it’s helpful to have been born with some necessary leadership qualities, that’s only part of the equation for success. Hiring the best leaders and providing ongoing development helps ensure that you can “make” the best leaders possible for your company.
Your organization should allocate time and resources toward hiring and developing leadership talent. Elevate your team – and your organization – by ensuring:
- Strategic connections – Leadership training is integral to the strategic plan and recognized as a competitive advantage for the company – directly relevant to the current and future states of the organization.
- Advanced processes – The talent identification and development processes should use best practices to create substantial leadership pipelines that enable the company to achieve their strategic goals. Succession planning and performance management support the development of leaders at every level.
- CEO personal time – Leaders should spend personal time in development, including leading talent reviews, grooming and coaching high potentials, leadership education, and modeling successful leadership development for the company.
- Culture of development – Leaders must create cultures where development is valued and rewarded, and learning is a key part of the business processes.
- Leadership philosophy – Leaders should encourage a “promote from within” practice to ensure that there’s continued emphasis on leadership development.
- Structure – There should be career paths outlined for critical roles in the company.
- Rewards – Incentives should clearly outline expected results, how results will be accomplished, and the leaders’ track records for exporting talent. Leaders should only be promoted if they have demonstrated all three of these outcomes.
- Accountability – Leaders must be held accountable for talent development, and be appraised and rewarded for success in this area.
- Commitment – Leadership development is a necessity even when economic times are poor. The investment in leadership development must stay constant across business cycles.