(2000), "Hay survey reveals commitment to developing leaders underlies the success of the 'world's most admired companies'", Leadership & Organization Development Journal, Vol. 21 No. 2. https://doi.org/10.1108/lodj.2000.02221bab.002Download as .RIS
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Copyright © 2000, MCB UP Limited
Hay survey reveals commitment to developing leaders underlies the success of the 'world's most admired companies'
Hay survey reveals commitment to developing leaders underlies the success of the "world's most admired companies"
Keywords: Perception, Leadership, Survey
According to a survey carried out by Hay Management Consultants, "the world's most admired companies", as ranked by Hay, and Fortune magazine, have a far greater focus than their competitors on developing leaders. With the only UK company in the 1998 top 25 (British Airways) falling off the list, these findings should be compulsory reading for UK business.
The world's most admired companies were more confident in their ability to train their leaders than the companies who did not make the grade. Only 25 per cent of the most admired companies were uncomfortable with their leadership development programmes, compared with 50 per cent of the peer group. They are 26 per cent more likely to use planned career assignments, where an employee determines a particular task or placement, in order to equip himself/herself with a particular skill (for example, opting to spend six months in the strategy division, to develop strategy skills). They also stress the importance of executive coaching of their executives, being 35 per cent more likely than their peer group to use one to one coaches to develop leadership potential.
The commitment of the most admired companies to developing leadership skills is reaping dividends, not only in how others perceive them but also in how they perceive their own management. A total of 91 per cent of the most admired companies were satisfied with the quality and breadth of their executive level leadership, compared with 72 per cent of the sample peer group. At a slightly lower level, 83 per cent of the most admired companies were satisfied with their senior management, compared with only 54 per cent of their peer group.
David Patterson, managing director of Hay, commented: "To be a leading international company, it is crucial to develop an organisation of global leaders. Cross border mergers and acquisitions are driving demand for dynamic international executives, and call for a special kind of leadership.
"In today's environment, effective leaders must do far more than merely meet financial targets. To implement strategy effectively, they must put people first and continually connect with and motivate their human capital. The commitment of the most admired companies to developing and coaching their leaders obviously is critical to their success."
The third annual ranking of "The world's most admired companies" was published in the 11 October 1999 edition of Fortune magazine. The ranking is based on a survey of executives throughout industry, along with Wall Street analysts.
The top 25 was again dominated by US companies, with General Electric taking the number one spot, followed by Microsoft, Coca-Cola, Intel, Berkshire Hathaway and IBM. The highest rated UK companies, none of which made the top 25, were (in descending order) BP Amoco, Shell Group, Unilever, British Airways and Reuters Group. Other than these, Glaxo Wellcome, SmithKline Beecham, Reed Elsevier, United News and Media, Marks and Spencer, Reckitt and Coleman and BT were the only British companies to make it into the lists of the top 12 companies in each industry sector.
Hay's research also revealed that the most admired companies also made greater use of competency models to identify and develop leadership talent. All of the most admired companies agreed that the social and emotional skills which constitute emotional intelligence, were very important to leadership success. Technical skills were rated as less than half as important as social and emotional skills.
David Patterson added: "The Hay survey shows that social and emotional competencies, rather than technical skills, are what sets outstanding leaders apart from the average. Cultural awareness and the ability to deploy a range of leadership styles are critical to creating a climate in which all employees are motivated to give of their best. This is a powerful source of competitive advantage that will become even more significant as globalisation of the business environment gathers pace.
"The message for UK business is clear: the way in which we identify, select and develop our business leaders has a tangible effect on our international competitiveness, and, in this respect, we are lagging some way behind our overseas rivals", he concluded.