Companies Maintain Global Leadership Development Programs

The percentage of companies that report having global leadership development programs, as well as the components considered critical to the programs, have remained stable since 2010, according to an American Management Association (AMA) survey report released May 23, 2011. However, the study shows that key global leadership competencies—agility and the ability to manage change and implement global strategies—are proving to be difficult for executives to master.

Approximately one-third of the 1,750 organizations surveyed reported that they have global leadership development programs, notes Developing Successful Corporate Leaders: The Second Annual Study of Challenges and Opportunities 2011. The study was sponsored by The Institute for Corporate Productivity (i4cp), Training magazine and AMA Enterprise, the newly branded talent management division of the AMA. Survey participants included members of the AMA and its global affiliates, i4cp’s global survey panel and Training subscribers. Respondents represented companies with headquarters in 56 countries.

Fifty-eight percent of companies categorized as high-performing reported having introduced some form of global leadership development program, compared with only 34 percent of low-performing organizations.

“High-performing organizations recognize that the talent now and into the future has to have a global view to ensure that they remain competitive,” Sandra L. Edwards, senior vice president for AMA Enterprise in New York City, told SHRM Online. “It is a very important subject that we need to get right because the future of global business depends on what we do with the talent inside our organizations today.”

The study looked not only at global leadership development programs but also at their links to market performance based on factors such as revenue growth, market share, profitability and customer focus. Business leaders agreed that a combination of “soft” cross-cultural competencies and “hard skills” associated with such areas as supply-chain management and virtual technology should be the focus of global leadership development programs in the coming decade, the report notes.

Key Findings

The most widely taught competencies remained:

• Critical thinking, problem-solving.
• Change management.
• Leading cross-cultural teams.

However, program components that address certain key competencies, such as managing change, exhibiting agility and developing global strategies, were cited in the report as areas that need improvement.

“The lack of mastery is the big thing, and we have a long way to go in terms of that mastery,” Edwards said. “We have identified the right competencies. We just need to get better at them.”

High-performing multinational and global companies offer global leadership development opportunities to a broader segment of their workforce as opposed to limiting such training to high-potential employees. They’re more than twice as likely as low-performing companies to include “any manager who expresses interest in global leadership development” in their program.

In addition, senior executives are becoming more directly involved in their organizations’ global leadership development programs, notably regarding business needs and communicating how the program relates to the business goals. Such involvement “significantly correlated to overall business performance, particularly when the executives are active in the creation of the program, involved in establishing business goals for the program, and in creating evaluation metrics.”

Cultural components are expected to dominate new competencies that will be required over the next decade. More than half of the responding companies identified 10 key competencies that they thought should be added to their global leadership development curricula, with multicultural skills and global workplace management skills topping the list. Working collaboratively and remotely and using data analysis and the latest virtual technologies also were cited as important skills.

Other Findings

The study provides insight into outside vendors, metrics and budgets with respect to global leadership development programs. Among the findings:

Demand for outside vendors and other content experts to create and implement global leadership development programs is growing. In 2011, 74 percent of the respondents said they used some vendor or outside content expert, up from 65 percent in 2010. The study found “a small but notable” increase in the desire for vendors to have representation in multiple geographic regions (39 percent in 2011 vs. 30 percent in 2010).

Organizations use a variety of metrics to measure global leadership development programs. More than half of responding companies use some combination of five key evaluation metrics from traditional evaluation measures (such as participant satisfaction ratings) and strategic business-focused measures (such as sales and productivity). High-performing multinational and global companies use traditional measures far more frequently than their low-performing counterparts. Business performance measures are far more likely to be used by low-performing companies.

High-performing companies spend a larger percentage of their total learning budgets on global leadership development. More than 10 percent of high-performing companies spend at least a quarter of their annual learning budgets on global leadership development, compared with less than 5 percent of low-performing companies.

High-performing companies place a higher premium on multilingual skills than do low-performing companies. Managers being groomed are more likely to be encouraged to be multilingual and to be provided language training. However, language skills aren’t “a deciding factor in these assignments,” the study notes. Approximately 28 percent of high-performing companies look for language skills as a competency of global leaders, compared with 17 percent of low-performing companies.

High-performing companies are more likely than low-performing companies to customize global leadership development programs to local geographies or countries. Forty percent reported that they customize their global leadership development programs by region or country to a “high” or “very high” extent, compared with just 25 percent of low-performing companies.

Pamela Babcock is a freelance writer based in the New York City area.