THE ACTIVE involvement of CEOs is a critical factor in building leadership quality and depth, according to a study of more than 200 companies across the Asia-Pacific.
THE ACTIVE involvement of CEOs is a critical factor in building leadership quality and depth, according to a study of more than 200 companies across the Asia-Pacific. Conducted by Hewitt Associates, it found that the CEO was actively involved in developing leadership talent at the top 10 companies named in the study, while this was the case in only 77 per cent of other companies.
It also found that support for leadership development from the board of directors was also considerably higher at the top companies, with some 80 per cent believing their board was actively involved in building leadership talent and committed the necessary resources to develop leaders. The corresponding figures for the other study companies were 39 per cent and 41 per cent, respectively.
“This is a very positive sign because when senior management takes accountability for developing their best leaders, that’s when this process is most effective,” said Marc Effron, global practice leader for Leadership Consulting at Hewitt. “Our financial analysis of this data shows that CEO involvement is much higher in financially successful firms. The best CEOs spend 25 per cent or more of their time building leadership”
The study found that in all, 70 per cent of the top 10 companies identify high-potential leaders from their performance management process, while 65 per cent of the others do this. Yet, while 90 per cent of the top 10 companies’ CEOs are sourced internally, this figure is 63 per cent for other companies. Similarly, the top 10 companies groom 76 per cent of their total leadership internally and hire additional 24 per cent from outside, versus the others which fill up to 41 per cent of their leadership roles with external hires.
The top 10 companies effectively implement a wide variety of leadership practices to develop high-potential leaders. Eighty per cent of these companies use rotational assignments at least two-thirds of the time, to develop their high potentials, while only 31 per cent of the other companies regularly use rotational assignments. Seventy per cent of the top companies regularly grow high potentials’ capabilities through developmental assignments, while only 35 per cent do so at the other companies.
All of the top 10 companies in Asia Pacific said they had a specific strategy for developing leaders, compared to 72 per cent of the other study companies. Ninety per cent of them had a strategy for selecting leaders internally.
