Every Leader Needs a ‘Leader’s Scorecard’
Leadership is without question one of the most important traits that any manager can exhibit, one of the hardest to quantify and measure and a skill that takes years to develop and refine. There are as many different ways to look at leadership development as there are people in any organization. If it were simple to train and develop leaders, there would be a lot fewer than the 130 million results a Google search for “Leadership” yields.
So, where should a CEO or senior business leader start, exactly? How does someone go about developing leaders, evaluating the effectiveness of leadership development programs, and determining if someone has the “right stuff” to take on more responsibility?
Organizations commonly employ dashboards and scorecards that measure hundreds of indicators tied to corporate performance. Seldom, though, do you see a scorecard that tracks the “Leadership Climate” of the organization. It can be done, though, using just one sheet of paper, or even a 3×5 card. If you are a senior executive responsible for leading people and getting results, and most certainly if you are the CEO, not having a scorecard to measure the “state of the state” of your leadership development process is like going to sea in a sailboat without a rudder.
To help gauge leadership climate, ask yourself how your organization is doing in the following seven key areas, and put them into a scorecard that works for you. I would recommend a rating of one to 10 for each area:
Driving and Managing Change. Greek philosophers as early as 600 B.C. taught that change is the only constant in the universe. Managing change is a fact of corporate life and an effective management team is very good at anticipating change, adjusting to it and communicating down through the organization what must be done to adapt. Do not underestimate the power of communication in managing change. How would you rate the ability of your team to clearly communicate to all of your employees the objectives, goals and purpose of the changes that occur in your organization?
You could start by asking one of your frontline employees if they are aware of the new loan product that was just launched and the importance of his/her role in making it succeed. Their response will tell you how well information filters down to where it is needed most in your organization.
Talent Management. Having “quality people” in place to achieve your organization’s objectives is mission critical. Leading institutions have created entrepreneurial cultures that understand and emphasize the importance of continual learning, sharing of knowledge and collaboration to develop their people.
A talent management survey of bank CEOs conducted jointly by the American Bankers Association and the Corporate Executive Board revealed that one in four high performers expected to leave their banking institutions within one year. What is also quite striking from the same survey is the fact that 60% of banks are expecting to fill their open positions internally. That will not happen with such a large percentage of high performers leaving annually. Do you, as the senior leader, have a firm grip on talent management? Do you know the attrition rate of high performers in your organization, and even more importantly, the reasons why they are leaving?
Identifying and Developing Future Talent. How would you rate the effectiveness of your organization’s ability to identify and develop future talent? Before answering this, ask yourself if you actually have a process to do it in the first place. From the same talent management survey, only 50% of CEOs could identify the high performers in their organizations and less than 30% of the high performers they could identify actually had management development plans. Who are the top 10 “high potential” managers, or management candidates in your organization? Can you name them in less than a minute?
Leadership Development Plans. Does every manager have a written leadership development plan in place? Do your other high potential non-management employees as well? If so, are you aware of how these people are progressing? Are they on target, or are they not? If they are not on target, you need to understand why and do something about it. You do not want to waste precious training and development dollars on people who aren’t going to be able to get you to the next level.
Creativity, Innovation and Employee Empowerment. Great leaders push themselves, grab the “ball” when you need to get over the goal line and hold themselves to the highest professional standards. Do you challenge your team to take on new tasks and duties that are outside of their comfort zones and let them run with them? You need leaders who don’t require a kick in the tail, but those that have to be held back with a leash. In your own career, when did you really learn and grow as a leader? In mundane, well defined and routine jobs, or in those where you weren’t sure you could succeed but were willing to try? Why should it be any different for the talented people on your team?
Values. Is it possible to build a high performing bank focused merely on getting results? For leading banks, the leadership team embodies and emulates the values that are the foundation of what the bank is and what it stands for. As CEO, do you know if your leadership team demands the same of the people in their functional areas of responsibility?
Metrics of Success. Leadership development needs to have a return on investment (ROI) measurement mechanism like every other investment. Does your organization have the metrics in place that correlate the effectiveness of your leadership development programs directly to business results and performance? One metric might be the amount that you spend per full-time equivalent (FTE) on external training. The Cornerstone Report: Benchmarks and Best Practices for Mid-Size Banks reveals that the top performer spends more than three times the amount for external training than the lower performer, $470 vs. $145. Top performing organizations understand that training their people is an investment. Does your organization look at it the same way?
Focusing on these key leadership tenets, and weaving them into the framework of your leadership development process will help to nurture and sustain a healthy leadership climate in your organization.
Mr. Craven is a managing director at Cornerstone Advisors, Inc., a Scottsdale, Ariz., based consulting firm specializing in bank management, strategy and technology advisory services. He can be reached at [email protected].