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Best Companies for Leaders:

Admin | 04.03.2014

The search intake meeting with our clients is one of the most important aspects of getting an executive search project off to a successful start.  Among the many varied topics that are discussed in an intake meeting is possible source companies for talent relevant to our client’s needs.

Chief Executive Magazine’s 2014 Annual Survey


The search intake meeting with our clients is one of the most important aspects of getting an executive search project off to a successful start.  Among the many varied topics that are discussed in an intake meeting is possible source companies for talent relevant to our client’s needs.

The criteria for compiling a list of source companies can make up an article all by itself.  For the purposes of this blog post, I’d like to highlight an organization’s perceived value for developing leaders worthy of being recruited (or retained if you’re the source company!).

By better understanding which organizations are providing optimal leadership development, we are better able to measure, prioritize and strategize on recruiting key talent that our clients need.  We are constantly seeking to improve our market knowledge, organizational insight and market intelligence and we use more methods than this blog post can do justice to.  However, the January/February 2014 issue of Chief Executive featured their annual survey of leadership development and some related topics that seemed to be the perfect kick-off from which to draft a blog post to help provoke thought from the thousands of companies that didn’t make the list.

Here is a summary of findings on leadership development from Chief Executive’s Annual List of the Best Companies for Leaders.

Companies that were ranked in this survey were scored on five key criteria:

1.  Having a formal leadership process in place.

2.  The commitment level of the CEO to the leadership development program, as measured by the percentage of time spent.

3.  The depth of the leadership funnel, as measured by the percentage of senior-management positions filled by internal candidates, as well as the percentage of middle-management positions filled by internal candidates.

4.  The number of other companies that report recruiting from the company being evaluated.

5.  A shareholder value-performance metric based on 10 year growth or decline in market capitalization.

Interestingly despite having a change of CEO’s, Procter & Gamble (P&G) topped the list as the Best Company for Leaders for the second year in a row with IBM in second place and GE in third place.  These top three companies have different but parallel methods for developing talent.

P&G and IBM’s preferred method of people development is from doing so within the company.  All senior managers at P&G are judged by their ability to develop the people who report to them.  GE’s Jeff Immelt on the other hand believes that relatively simple actions, such as attending his own instructional courses at their John F. Welch Learning Center in Crotonville, NY is what works best for GE.  GE’s Crotonville center is considered to be the equivalent of Annapolis and West Point for executive development.  GE executives generate “Imagination Breakthroughs” during twice-a-year meetings of senior executives.

40 BEST COMPANIES FOR LEADERS LIST 2014                                                        2013 RANK    COMPANY/CEO                           RANK    COMPANY/CEO 1         P&G / A.G. Lafley                             1          P&G / Robert McDonald 2        IBM / Virginia Rometty                      3          General Electric / Jeffrey Immelt 3        General Electric / Jeffrey Immelt        2          IBM / Virginia Rometty 4        Accenture / Pierre Nanterme              New     Dow Chemical / Andrew Liveris 5        Unilever / Paul Polman                       New     Verizon / Lowell McAdam 6        Dow Chemical / Andrew Liveris          4          Caterpillar / Douglas Oberhelman 7        McDonald’s / Donald Thompson         18        Hitachi Data Systems / Jack Domme 8        Monsanto / Hugh Grant                     11        Arthur J. Gallagher / J. P. Gallagher Jr. 9        Hormel Foods / Jeffrey Ettinger          New     Boeing / W. James McNerney Jr. 10      General Mills / Kendall Powell              15         3M / Inge Thulin 11      VF Corporation / Eric C. Wiseman      New      Monsanto / Hugh Grant 12      W.W. Grainger / James T. Ryan          New      PepsiCo / Indra Nooyi 13      Caterpillar / Douglas Oberhelman        6        Royal Caribbean Cruises / Richard Fain 14      Verizon / Lowell McAdam                    5       The Cooper Companies / Robert Weiss 15      TJX Companies / Carol Meyrowitz       New     General Mills / Kendall Powell 16       Sprint / Daniel Hesse                         16        Sprint Nextel / Daniel Hesse 17       Maxim Integrated / Tunc Doluca        37      Bridgestone Americas / Gary Garfield 18       Southwest Airlines / Gary Kelly          New      McDonald’s / Donald Thompson 19       DENTSPLY International / Bret Wise  New      ADP / Carlos Rodriguez 20       ADP / Carlos Rodriguez                       19         Shoppers Drug Mart / Domenic Pilla 21       HNI / Stan A. Askren                          New  Bayer MaterialScience /Patrick Thomas 22       McKesson / John Hammergren            New      Barnes Group / Gregory Milzcik 23       3M / Inge Thulin                                 10         NOVA Chemicals / Randy Woelfel 24       Konecranes / Pekka Lundmark            30        Bristow Group / William Chiles 25       Ecolab / Douglas M. Baker Jr.              28        Cardinal Health / George Barrett 26       EMC Insurance / Bruce Kelley             35        BP China / Robert Dudley 27       Cardinal Health / George Barrett         25        Dimension Data / Brett Dawson 28       Green Mountain Coffee / Brian Kelley  New      Ecolab / Douglas M. Baker Jr. 29       RPM International / Frank Sullivan      New      Johnson Matthey / Neil Carson 30       Emerson Electric / David Farr              New      Konecranes / Pekka Lundmark 31       Comcast / Brian Roberts                      New      Olympic Steel / Michael Siegal 32       Shoppers Drug Mart / Dominic Pilla      20        Phillips NV / Frans van Houten 33       Barnes Group / Patrick Dempsey          22        Autoliv / Jan Carlson 34       Cash America Int’l / Daniel Feehan       New      Hyatt / Mark Hoplamazian 35       Dangote Cement / Aliko Dangote          New      EMC Insurance / Bruce Kelley 36       The Cooper Companies / R. Weiss       14   Harman International / Dinesh Paliwal 37       Huntington Bancshares / S. Steinour    New     Maxim Integrated / Tunc Doluca 38       Citigroup / Michael Corbat                      New      Libbey / Stephanie Streeter 39       Paychex / Martin Mucci                           New      ResMed / Peter Farrell 40       Esterline / Curtis Reusser                       New      Kelly Services / Carl Camden   TOP 10 SKILLS NEEDED FOR EFFECTIVE LEADERSHIP

The annual survey showed that the top ten skills for effective leadership remained the same as 2013, however the attribute “adaptability to change” ranked higher which reflects the importance of being able to navigate today’s constantly evolving business landscape.

  SKILL                                                               2014                 2013 1        Adaptability to change                            60%                   54% 2        Strategic thinking                                    55%                   57% 3        Integrity                                                  48%                   51% 4        Very good communicator                         40%                   50% 5        Being trustworthy and open                    38%                   43% 6        Vision                                                       35%                   32% 7        Develops and fosters diverse teams          33%                   20% 8        Delegation                                                 28%                   41% 9        A positive mind-set                                   26%                    31% 10      High self-awareness                                  26%                   20%   GREATEST CHALLENGES TO DEVELOPING LEADERS

The survey shows that the biggest hurdle to nurturing leaders for both public and private companies is the difficulty in balancing long-term and short-term business requirements.  Chief Executive magazine stated that the three commonly cited challenges cited below indicate that many leaders see room for improvement.  More than one-fifth of the survey respondents rated their companies as “poor” or “average” at developing leaders and just 66 percent of CEO respondents agreed that HR is an effective partner in leadership development.

 2014                                                            2013 Difficulty balancing long-term and     60%         Difficulty balancing long-term and     71% short-term business requirements                     short-term business requirements   Rapidly changing business                50%         Financial challenges                       54% requirements, so criteria for success is fluid   Financial challenges                           40%         Rapidly changing business              48%                                                                        requirements, so criteria for success                                                                         is fluid