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AustralianExecutive Development Trends

Research ReportNOVEMBER 2007

Report AuthorDr Scott M. BourkeSRD Consultingwww.srdconsulting.com.au

Research PartnersExecutive Development Associates 13431 N Broadway Extension, Suite 104 Oklahoma City, OK 73114 USATel: 866 / Exec Dev (866 / 393-2338) or 405 / 751-3300Fax: 877 / 214 - 4039 or 405 / 721-3313Web: www.executivedevelopment.comContact: Jim Bolt – ChairmanEmail: [email protected] Contact: Bonnie Hagemann - CEO & President Email: [email protected]

The Leadership ConsortiumLevel 29, IBM Centre 60 City RoadSouthbank Vic 3006 AustraliaTel: 61 3 9626 6602Fax: 61 3 9626 6145Web: www.theleadershipconsortium.com.auContact: Christopher Bell - CEOEmail: [email protected]

Design and LayoutChristian DevereuxTen Four Creative Studiowww.ten-four.com.au

SRD Consulting Brisbane Office 8/32 Park Road Milton Qld 4064 AustraliaTel: 61 7 3876 6400Fax: 61 7 3876 6422Web: www.srdconsulting.com.auContact: Dr Scott M. Bourke - Senior ConsultantEmail: [email protected]

CONTENTSFOREWARD 04

OVERVIEW 06Background 06Major Findings 08

INTRODUCTION 10Purpose of the Study 10Method and Sample 10Definitions 11Report Structure and Presentation 11

PART I: THE FUTURE OF EXECUTIVE DEVELOPMENT 13Section 1 Major Influences on the Future of Executive Development 13Section 2 Key Objectives 14Section 4 Future Learning Methods 17Section 5 Development Activities 18

PART II: EXECUTIVE DEVELOPMENT OPERATIONS 20Section 6 Development Strategy and Policy 20Section 7 Program Design and Development 20Section 8 Measurement and Evaluation 20

PART III: BEST AND NEXT PRACTICES 24Section 9 Best Practices 24Section 10 Innovations in Executive Development 25

CONCLUSION 26References 28

APPENDIX 1 Advisory Group Biographies 32APPENDIX 2 Survey response summary data 34

FOREWARD

5

FOREWARD

Australian business today is confronted by complex challenges that arise out of an increasingly competitive, dynamic and interconnected global market place. A new world order is emerging. It is a by product of relentless innovation, mainly in information and communication technologies, but also commonly in disruptive business models.

There is good reason, and emerging evidence, to suggest that the challenges confronting Australian business are only likely to intensify as we forge deeper into the 21st Century. How these challenges are understood, or made effective sense of, then addressed – typically by an organisation’s top executives – will undoubtedly differentiate organisational survival and prosperity from failure. If one accepts this assessment, it becomes almost axiomatic that each organisation’s future prospects will depend to a large extent on the leadership and managerial capability and competence of its senior executives.

Our recent understanding of the importance of executive development as a critical factor likely to have a profound influence on Australia’s and Australian organisation’s business competitiveness in the 21st Century dates from the Karpin Report (1995). Karpin established the imperative of building leadership and managerial capability at all levels of Australian organisations. More than ten (10) years on from Karpin, executive development remains well established as a modern strategic business imperative.

Good business research – Karpin was widely regarded as such – can inform and guide effective organisational decision making. But what constitutes good business research? To be valuable, business research has to be reliable, relevant and practical. Most business research suffers because it is a) unreliable, b) irrelevant (to pressing business problems), c) impractical (to translate or incorporate into practical business solutions) or a combination thereof.

The 2006 Australian Executive Development Trends Research Report (“the Report”), with which I am pleased to be associated as an Advisory Group member, reflects a substantial attempt to deliver reliable, relevant, practical and informative organisational development focused business research. In so far as we are aware, the Report represents the first serious effort in the new millennium to benchmark the executive development strategies and practices of large Australian corporations against their international peers using a comprehensive assessment framework.

The Report’s findings are thought-provoking and the potential implications for the future of Australian executive development strategy and practice are, in the view of the Advisory Group, profoundly important. The findings highlight the critical requirement for modern Australian organisations concerned with achieving competitive sustainability to focus on evolving their executive development strategies and practices in a number of directions.

Executive Development Trends November 2007

4

At the same time, the Report’s analysis provides preliminary guidance on where, how and why this evolution of strategy and practice might be beneficial.

Notwithstanding the valuable contribution made by the Report to our understanding of Australian executive development trends, there is an ongoing need for further research to better define and explain the trends reflected in the Report’s findings. The objective of this future research must be to inform organisational decision making that directly or indirectly impacts executive development investment and associated activities.

I would like to commend the Report all executives interested in advancing their, and in turn their organisation’s, understanding of the important trends in Australian and international executive development.

Christopher Bell

Chief Executive OfficerThe Leadership Consortium October 2007

7

FOREWARD

OVERVIEW

Background

“In 2004, it has become obvious

that an organization’s executive and

leadership talentis its greatest and

most sustainable source of competitive advantage.

Furthermore, many companies are

approaching a crossroads: they face increasingly complex strategic and managerial challenges

even as their current executive teams

are nearing retirement.Cultivating the

next generation of business leaders is imperative.”1

Jim Bolt - Chairman

Executive DevelopmentAssociates

The Australian Executive Development Trends Research Report 2007 (“the Report”) is the product of a collaborative partnership between Executive Development Associates Inc (EDA), The Leadership Consortium and Dr Scott M. Bourke of SRD Consulting (“The Research Partners”).

The Leadership Consortium is Australia’s foremost member based leadership development organisation. The members of The Leadership Consortium are sixteen(16) of Australia’s premier organisations from across the private and public sector. The purpose of the Consortium is to work collaboratively with its members todesign and deliver an outstanding suite of leadership programs and initiatives that contribute to the personal and professional development of senior executives and the business performance of its members.

EDA has conducted executive development trends surveys in the United States, and more recently on a global basis, for the past twenty (20) years. The firm’s research is designed to heighten awareness of the critical trends in executive development within the global context for the benefitof its clients. EDA’s US and international executive development trends research arguably represents some of the deepest and most comprehensive investigations and analyses of executive and leadership development practices and related trends that has been conducted to date.

In translating EDA’s research approach and methodology to the local Australian context, the involvement and support of The Leadership Consortium – Australia’spremier member funded leadership institute– has been invaluable and demonstrates the growing importance of practical business focused research in understanding and then shaping executive development strategy and practice for large Australian organisations. The Leadership Consortium has previously sponsored research in the area of leadership aspiration and organisational commitment and has the promotion of collaborative knowledge development as a central pillar in its strategic development platform.

The questionnaire employed in the Australian research represents a customised version of, and is substantially similar to, the survey instrument developed and deployed by EDA as part of its most recent executive development trends research, conducted in 2004. One of the main benefits of using a substantially similar survey instrument was the opportunity this approach afforded for direct comparative analysis of EDA’s 2004 survey findings with those of the present study.

Responses to the survey questionnaire were received from twenty six (26) organisations, the vast majority of whom (88%) are large national and multi-national corporations with substantial business operations in Australia.


1 The Future of Executive Development, p4.6

Respondents included publicly listed companies (listed on the Australian Stock Exchange and other internationalsecurities exchanges) government-owned corporations, not-for profit unlisted public corporations and governmental agencies.

The analysis and interpretation of questionnaire responses was guided by a small Advisory Group comprising

28%

15%

20%

5%22%

10%

leading industry practitioners, consultants and researchers. The review processitself involved;

ICT Financial Services ManufacturingUtilities Retail Other

Figure 1.1 – Respondent organisations: Industry profile

• reviewing the raw data – to identify the top five (5) and other significant responses (by percentage) foreach question;

• analysing and comparing the responses provided to inter-related questions (either within or across sections);

22%

39%

6%11%

22%

• analysing and comparing the similarities and differences across surveys between Australian and US/International responses and trends on the same or substantially similar questions; and

Fewer than 200 people 200 to 500 people500 to 1000 people 1000 to 5000 people More than 5000 people

Figure 1.2 - Respondent organisations: People profile

4%

• evaluating the findings in the context of existing Australian and international executive development research.

23% 19%

12%

42%

Less than 20 million 200 million to 500 million500 million to 1 billion More than 1 billion20 to 50 billion

Figure 1.3 - Respondent organisations: Revenue profile.

OVERVIEW

9

Major Findings

In the Australian context, the terms ‘investment’ and ‘strategic’ are commonly used by senior executives in connection with building executive and organisational capability. However the hard evidence that the sentiments implicit in the use of these terms is actually being reflected in practice has to date been limited. For the first time respondents to this survey have provided the strongest possible indication – with reference to the broadest range of issues and factors defining executive developmentpolicy and practice – that rhetoric and reality may be converging.

If there is one theme defining and linking the study’s major findings it is that large Australian firms are increasingly focused on making their executive developmentinvestments strategic. This is consistent with the longer term global trend, identifiedby EDA in its 2004 study, “toward a more strategic use of executive development”2.

The major findings by report section are as follows:

The Future of Executive Development in Australia

• Influences: The overwhelming majority of respondents identified changing business strategies (87.5%) as the major influence on their organisations’ executive development efforts. This perceivedneed for greater strategic agility was balanced by the importance of increasing

collaboration (75%) and reinforcing corporate culture (57%).

• Objectives: To respond effectively to these key influences, executive development programs and activities are being designed to accelerate thedevelopment of ‘high potential’ managers (82.6%), improve the capability of individual leaders (74%) and increase bench strength3(65%).

• Hot topics: The hot topics in executive development – managing human performance (83%), building leadership capability (78%), leading / managing change (70%) and strategy execution (70%) – reflect a balance between addressing the practical ‘people challenges’ of modern organisational life and making investments in professional development payoff through delivery of improved‘bottom-line’ business performance.

• Learning methods: Action learning (74%) – learning through working in teams on current business problems or opportunities – and externally sourced executive coaching support (74%) emerge as the most popular learning methods. This is consistent with the need for learning and development delivery mechanisms to evolve in responseto the more, complex, dynamic and unpredictable internal and external organisational environments confronting modern business.


2 Executive Development Trends 2004: Filling the Talent Gap, Research conducted and published by8 Executive Development Associates Inc.

OVERVIEW

Executive Development Operations

• Policy & strategy drivers: Far and away the most important policy and strategy drivers expected to guide the future executive development initiatives of respondent organisations are the creation of systems that integrate executive and leadership developmentactivities – commonly referred to as talent management systems – (77%) and the creation of systems that integrate human resource management (73%) functions. This finding is consistent with broader organisational trends that highlightthe self imposed pressure to achieve synergies and efficiencies across all organisational activities to produce cost and productivity benefits.

• Design and development: Respondent organisations rely on a range of design, development and delivery sources for building their executive capability ranging from internal resources (59%), the use of external consultants (55%) and training to upgrade design / development skillsof internal staff (50%).

• Measurement and evaluation: The frequency of use of Kirkpatrick’s four levels of evaluation for measuring executive development activities varied widely. The vast majority of organisations measured participant reactions (80%), interest in capturing learning effectiveness (55%) and the behavioural application of executive development learning (70%)

received strong support, as in a relative sense did measurement of the resulting impact of executive development activities on business performance (50%).

• Capability: Respondent confidence levels around the adequacy of the resources made available for executive development activities being sufficient to enable their organisations to meet future business challenges ranged from Confident (42%) through to Lacking Confidence (16%). The average tenure of internal executive development team resources is1-3 years with the typical respondent organisation outsourcing 30-80% of the required development capability to external providers.

Best & Next Practices

• Best practices: Building effective talent management systems with a focus on high potential manager development (74%), effective succession management systems (68%) and linking organisational development and business strategy (68%) represent the core of best practice for respondent organisations.

• Innovation: The fragmented nature of feedback on new innovations in executive development and standoutfirms innovating within the field suggests the concept of innovation in executive development may not be well understood or supported by many Australian firms.

3 We use the term ‘bench strength’ to describe the practice of linking succession planning and buildingquality broad-based leadership and managerial capability across an organisation. 9


1

INTRODUCTION

Purpose of the Study

“In companies where leadership

development really works, it is not a stand alone activity.

It is a core process of the business, dyed into its very

fabric. Companies whose boards and senior

executives fail to prioritise succession planning and

leadership development end up either experiencing

a steady attrition in talent or retaining people with outdated skills. Such

firms become extremely vulnerable when they have

to cope with inevitable organisational upheavals....

[when they] need to have the right people in the right

roles to survive4.

Our primary goal with the research is to help senior executive development, organisational learning, and human resource management professionals — the people who guideand influence their companies’ executive development strategies and practices — to take the pulse of the field, compare and benchmark experiences and anticipate the changes most important to the development of their organisation’s executive capability going forward.

In 2007, perhaps more so than ever, it has become clear that an organisation’s executive and leadership talent is its greatest sustainable source of competitiveadvantage. Furthermore, many companies are approaching a crossroads: theyface increasingly complex strategic and managerial challenges even as their current executive teams are approaching the traditional retirement age. Cultivating the next generation of business leaders has become for many organisations the dominant business imperative.

The Australian Executive Development Trends research is but a first step in the process of informing the thinking and practice that underpins the building of more informed executive development strategies and practices in Australian firms.The research as presented is broad based rather than definitive and in summary form only5. As such, it is acknowledged as necessarily incomplete.

However, adopting an evidence-based approach to building or enhancingan executive development strategy is fundamentally important if that strategy is to be useful in practice. It is the hope and expectation of the Research Partners that this research will encourage an ongoing investigative process that involves a deeper exploration of the important issues and trends impacting executive development practice in Australia.

Method and Sample

The 2006 Australian Executive Development Trends research has been informed bythe research methodology and approach employed by EDA in undertaking the 2004 Trends Report. Using substantially similar questions from the 2004 Trends Reportin the present study has allowed direct comparative analysis of the Australian and International data and findings. Whereit has been instructive, we have highlighted similarities and divergences in responses between the two studies throughoutthis Report.

Throughout the Report we have offered plausible – though yet to be tested– explanations of the possible causes and motivations for these similarities and differences in Australian and US/International data and perspectives on the respective executive development issues canvassed by the survey.

INTRODUCTION4 Cohn, Jeffrey; Khurana, Rakesh and Reeves, Laura. Growing Talent as if Your Business Depended on It, Harvard Business Review, October 2005, p1


1

An Advisory Group of leading industry practitioners, management consultants and researchers provided assistance by reviewing EDA’s 2004 survey questionnaire and suggesting enhancements, reviewingand analysing the survey results and helping to determine the most important findings and implications of the research6. In terms of the profiles of the representativesof respondent organisations, the survey instrument targeted completion bysenior executives from within the fields of human resource management, learning and development, executive development, change management andorganisational development.

Definitions

For the purpose of the survey, executives are defined as anyone who falls into one or more of the following groups:

• Members of the Board of Directors;

• The Chairman of the Board, the Chief Executive Officer, the Chief Operating - Officer, and the President;

• All Elected officers;

• Executive General Managers, General Managers and Corporate Vice Presidents;

• Heads of/Presidents of groups, divisions, business units, or profit centres and their direct reports;

• All people included in an executive compensation program;

• High-potential managers (a manager who has been identified as having the potential to fill an executive level position in the future)

Development is defined to include any activity that is aimed at broadening executives' knowledge and experience and enhancing their leadership, managerial or technical capabilities.

Report Structure & Presentation

The research analysis and findings are presented in three (3) main sections. Part I, The Future of Executive Development, examines the emerging conditions influencing executive development efforts, the key objectives and pressing topics likely to be emphasized in coming years, the learning methods employed, and participation in executive development activities or initiatives.

Part II, Executive Development Operations, shows how companies organize, plan, design and evaluate their executive development programs.

Part III, Best and Next Practices, captures the activities and approaches that have been identified as best practices, including respondents’ ideas about innovative practices in the field of executive development that they have engaged in, observed or are aware of having been implemented in other organisations.

5 All response data for the survey is presented in this Report in percentage format. Not all of the survey questions were compulsory and the percentage data is based on actual responses to each

INTRODUCTION

question which varied by question from the total response rate for the overall survey. The responses to a number of survey questions have not been presented in this report as the author did not consider it either meaningful or useful in the context of the overall report findings.6 See Appendix 1 for Advisory Board Biographies. 11


1

INTRODUCTION(continued)

In each section we present and analyse the Australian survey data in isolation and in, in certain sections we provide a comparative analysis between the US/Internationaldata and findings presented in EDA’s 2004 Trends Report. Drawing extensively on the experiences and views of the Advisory Group members, the objectives of the commentary in each section is to contextualise the research findings and where possible provide insights drawing on theory and practice within the field of executive development capability in Australia.

The conclusion endeavours to provide a final summation and perspective on the research findings and their potential implications for Australian executive development practice. Survey response summary data sets (in graphical format) for key questions are included in Appendix 2.

48


1

PART I

THE FUTURE OF EXECUTIVE DEVELOPMENT IN AUSTRALIASection 1 – Major Influences on the Future

In the opening question of the survey we asked respondents to nominate those conditions or factors that could influence executive development efforts in their respective organisations over the next 2 to 3 years. The graph of respondents most common responses is in included in Figure1.4 with complete responses included inFigure 2.1 (Appendix 2).

According to Australian Advisory Group member Professor John Bailey, the findings suggest firms are increasingly lookingto have their executive development practices and processes more effectively integrated into their strategy development activities as a methodology for building collaborative cultures and reinforcing broader organisational ownership of the strategies developed.

“Professional growth and development does not occur in a vacuum. It shapes — and is shaped by — the business and social conditions that affect organizations andindividuals. To be effective, companiesmust frame their executive development

Business Strategy

Collaboration

Reinforce Corporate Culture

Lack of Benchstrength

Change Corporate Culture

Customer Requirements

Business Strategy 86

55Collaboration

7553

86 Reinforce Corporate Culture57

7545

54Change Corporate Culture57

5454 Customer Requirements 2754 Lack of Benchstrength

547054 Globalization

51

initiatives in terms of the strategic needs and the business context in which they operate”7.

0 15 30 45 60 75 90 360 18 36 54 72 90

Figure 1.4: Influential factors shaping executive development activities in the next 2-3 years (Extract)

The overwhelming majority of respondents identified changing business strategies (86%) as the most important influence on their organisation’s executive development efforts going forward. This perceived need for greater strategic agility was balanced by the importance of increasing collaboration (75%) and reinforcing corporate culture (57%), with equally weighted attention given to the lack of bench strength (54%), changing corporate culture (54%) and meeting customer requirements (54%).

Somewhat surprisingly – given thelong-standing and intense media attention given them – is the relative lack of importance attached to factors such as downsizing (11%).

Australian data - 2007 US/Intern. data - 2004

Figure 1.5: US/International versus Australian data– Influential factors shaping executive development activities in next 2-3 years (Extract)

Figure 1.5 shows the Australian summary data plotted against the related US/ international data on the topic. The graph illustrates a number of interesting differences between Australian and international responses to the key factors shaping executive development. The first observation we can make is that althoughthe need to increase bench strength stood out as far and away the most significant influential condition for US/international respondents (70%), it received a relatively lower – though still significant – score with Australian respondents. In interpreting this finding on the importance of bench strength


1

7 Executive Development Trends Report 2004 p.7

8 Key Trends in Human Capital 2006 p5.14

key positions. Bench strength is also the capacity to lead organizational change and to develop new business models and strategy. It is a more sophisticated way to

Develop HPMs 83

Leadership capability 74

Vision & strategy 74Benchstrength 65Action learning 61

Vision & strategy 52

look at executives’ competencies”. Support change 48


in the 2004 Trends Report, Chuck Presbury, a member of EDA’s 2004 Advisory Board, explained that8:

“The need for bench strength goes beyond having ready replacements for

managers (82.6%), improve the capability of individual leaders to develop vision and execute strategy (both factors achieving74%) and to increase bench strength (65%).

Also noteworthy in distinguishing the two sets of results is the much stronger relative emphasis Australian respondents placed on collaboration and meeting customer requirements – 75% and 54% respectively– as key influences on their executive development activities in comparison with their US/International counter-partsconsideration of the same factors (53% and 27% respectively).

Section 2 – Key Objectives

Survey respondents were asked to identify the objectives that would be mostimportant to their executive and leadership development efforts in the next 2-3 years. Respondents ‘Top 5’ responses are included in Figure 1.6 with complete response data included in Figure 2.2 (Appendix 2).

To effectively address the key influences on executive development (identified in Section 1), respondents emphasised the importance of building executive development programs and activities that are designed to accelerate the development of ‘high potential’

0 18 36 54 72 90

Figure 1.6: Australian data – Key objectives of executive development in the next 2-3 years (Extract)

The identification of high potential manager development as the most importantpriority for Australian firms is unsurprising and consistent with the challenge of attracting and retaining executive talent in the tight Australian labour market which exists at present. High potential manager development is undoubtedly correlated with improving bench strength so it is equally unsurprising to see both factors appearing prominently together.

Greater context is provided when the responses of Australian and US/International data (see Figure 1.5 below) on this question are compared, highlighting some interesting divergences in thinking between the two response groups. Bench strength proved to be a much more significant objective for US/ International respondents (80% and the top ranking versus 65% and a forth ranking for Australian respondents). Also the emphasis of Australian respondents around crafting

PART IThe Future of Executive Development

9

vision and executing strategy was on building the individual leadership capability to undertake these initiatives, whereasthe US/International respondent focus was on the communication of these organisational foundations.

Clearly at the heart of the US/International response on this question was the requirement for executive development activities to support and reinforce organisational alignment. This in turn emphasises the strategic nature of executive development activities for US/International firms, a point noted in the 2004Trends Report9:

“…communicating vision and strategy and creating alignment is a major objective of executive development in all regions. It is consistently among the top objectives in our past surveys and unchanged in its ranking since 2000. This is encouraging as it reinforces the unmistakable march over the last ten or more years toward a more strategic use of executive development”

Develop HPMs83

62Leadership capability

7453

Execute vision & strategy74

44Benchstrength

6580

Action learning61

48Comm. vision & strategy

5262

Support change48

560 18 36 54 72 90


Figure 1.7: US/International versus Australian data– Key objectives of executive development in the next 2-3 years.

Section 3 – Hot Topics

When asked to identify the hot topics that would be most important to their executive and leadership development efforts in the next 2-3 years, respondents highlighted (see Figure 1.8 below) managing human performance (83%), building leadershipcapability (78%), leading / managing change (70%) and strategy execution (70%) as the most important. Complete responses are included in Figure 2.3 (Appendix 2).

The Top 5 ‘hot topics’ selected would seem to reflect a balance between addressing the practical ‘people challenges’ of modern organisational life and making investmentsin professional development payoff through delivery of improved ‘bottom-line’ business performance. In contrast, those topics which have in the past attracted significant attention in the media as key drivers ofbusiness performance such as Re-engineering/ Process Management (13%),



9 Key Trends in Human Capital 2006 p5.



Total Quality Management (4%) and Six Sigma (13%) were not considered by respondents to be of great relevance in the executive development space.

The Top 5 rankings from the Australian survey are quite similar to those of the US/ International survey (see Figure 1.9) on this topic, but for the stronger Australian emphasis on human performance management, strategy execution and general management skills. Another similarity between the survey results isthe fact that in both surveys “Creativity / Innovation” (Aus. - 35%: US/Int. - 36%), “Becoming customer/market focused” (35%: 25%), and “Entrepreneurship /Intrapreneurship” (17%: 9%), did not rate highly with senior HR/OD practitioners.

The low level of interest of Australian respondents to innovation generally is also consistent with their attitude to knowledge sharing and innovation within the fieldof executive development: “Advances in executive / leadership development in other companies” (11%) received little interest as an influence on developments in practice (for further clarification on this pointsee Section 1).

Managing Human Performance 83Leadership 78

Leading & Managing Change 70Strategy Execution 70

General Management Skills 570 15 30 45 60 75 90

The survey results surrounding creativity and innovation are surprising and somewhat anomalous given the centrality of these particular capabilities to building sustainable competitive advantage in most modern organisations. This is particularly truefor service based organisations, whose competitive advantage in today’s complex and globalising business environment derives ostensibly from the capability and innovation of their people.

As PwC note in their recent report on global human capital trends10:

“One of the key drivers of innovation is the development of employee’s skills and talents. The survey shows thatrelative levels of spending on training are higher in the US than in Europe – where they have in fact declined year-on-year. Though there is no established causal link between training spend and innovation there is a clear and consistent relationship between those companies that investin learning and development and competitive business results”.

83Managing Human Performance 58 78

Leadership 8070Leading & Managing Change 6770

Strategy Execution 5857General Management Skills 4639

Business acumen 570 18 36 54 72 90


Figure 1.8: Australian data – Hot topics emphasised in executive development programs in the next2-3 years (Extract)

Figure 1.9: US/International versus Australian data – Hot topics emphasised in executive development programs in the next 2-3 years


1

Section 4 – Future Learning Methods

Having established the important influences, key objectives and topics of particular interest in the Australian executive development field in the short to medium term, we next sought respondent’s viewson the most effective learning methods that would underpin their development aspirations. They indicated that Action Learning (74%) – by which we mean learning through working in teams on current business problems or opportunities– and External Executive Coaches (74%) are likely to be the most popular methods through which their organisation’s learning would be supported (see Figure 1.10).

Overall what this comparative analysis suggests is that for Australian and US/ International firms, the emerging importance of executive coaching as a future learning method may reflect a more general and consistent trend. Explaining this trend, at least in part, is a perceived increase inthe need for independent expert support at the top of many organisations and the increasing remoteness of top managers from the more traditional organisations support mechanisms that they could have drawn on in eras past.

It is plausible that this trend is also partly explained by the shorter duration for most executives in top and mid level roles (changing 2-3 years) and the more

Action Learning

External Executive Coaches

Outside Speakers

Internal Experts

Outside Experts

74 intensive, complex and challenging business74 environment they are operating in today

57requiring more direct and timely access to

57

48 external counsel about their organisational0 16 32 48 64 80

Figure 1.10: Australian data – Learning methods emphasised in executive development programs in the next 2-3 years

Although externally sourced coaching and action learning figured prominently in the US/International survey response on this question, there are a number of distinctions with the Australian survey response that are worthy of highlighting. The massive difference – almost 45% – in respondent attitudes around the involvement ofSenior Executives as Faculty in executive development activities is unquestionably the most significant divergence between the two survey groups (see Figure 1.11 below).

and personal career challenges, which inmany situations may overlap.

43Internal Leadership Staff 5330Senior Execs as Faculty 7574

Action Learning 7374External Executive Coaches 5657

Outside Speakers 6757Internal Experts 5048Outside Experts 63

0 16 32 48 64 80


Figure 1.11: US/International versus Australian data – Learning methods emphasised in executive development programs in the next 2-3 years

18


Section 5 – Development Activities

To gain greater insight into who participates in executive development activities within respondent organisations, at what levelthis participation occurs, the extent of that participation and its focus, weasked respondents a series of questions around these issues. The objective with this line of questioning was to forage a little deeper into respondent organisationperspectives and practices to obtain a more nuanced understanding of the types of activities occurring across and down the organisational hierarchy.

Developmental Job Assignments (48%) also identified as being of significance (see Figure 1.12). The trend for the US/International counterparts of this group was somewhat similar with an equivalent, though less substantial, reliance on Executive Coaching but with a greater emphasis on what might be regarded as a number of the more traditional forms of structured learning(see Figure 1.12).

81Executive Coaching 7056

Mentoring 26 48Developmental Job Assignts 33 48Customized Programs - Ext. 43

Specifically we asked respondents toestimate the percentage of each of three groups (CEO/Senior Executive Team members, EGMs and the like and High-

Programs - International

Unis Customized

Programs - Int.

37333739

0 18 36 54 72 90

Potential Managers) in their organisation that are likely to participate in formal executive development activities; the number of days these individuals in each group were likely to spend on average in development activities per year; and the three or four types of development activities in which the members of each group are most likely to participate in during the course of the next 2-3 years. Complete responses to these questions are presented in Figures 2.4.1-2.4.9 (Appendix 2).

In summary, far and away the most important and popular form of development activity for Australian CEOs & Senior Executive Team members was Executive Coaching (81%) with Mentoring (56%) and


Figure 1.12: US/International versus Australian data – CEO/Senior Executive Team executive development activities

In Figure 1.13 we can see that for Australian firms, the popularity of Executive Coaching (68%) as a development method is not limited to the top stratosphere, with its identification as the most popular approach for building capability in Executive General Managers, Corporate Vice Presidentsand Business Unit Heads of respondent organisations. For this cohort coaching is closely followed by Developmental JobAssignments (64%) and Mentoring (56%) as a key development activity.

1


Executive Coaching 68%

Developmental job assignments 64%

CEOs/ EGMs, CVPs & High Participation Senior Business Unit Potential rate (%) Execs Heads Mgrs Less than 20% 15% 15% 4%

Mentoring 58% 20-40% 19% 23% 23%

Action lea r ning 48% 40-60% 11% 12% 19%

Customised programs - External 44% 60-80% 15% 19% 23%

Geater than 80% 41% 31% 31%Figure 1.13: Australian data – EGM, CVP and BusinessUnit Head executive development activities

There is however something more in terms of a pronounced shift in developmental emphasis when the next organisational level cohort results are considered. Here, as Figure 1.14 reveals, DevelopmentalJob Assignments (77%) and Mentoring (65%) emerge as the preferred approaches to building capability in High Potential Managers.

Figure 1.15: Australian data – Executive development activity participation rates by group Participation rate (%)

CEOs/ EGMs, CVPs & High Activity per Senior Business Unit Potentialannum Execs Heads Mgrs

Less than 3 days 15% 15% 4%

3-6 days 37% 58% 31%

6-9 days 26% 19% 27%

9-12 days 15% 12% 23%

More than 12 days 7% 4% 15%

Figure 1.16: Australian data – Executive development activity levels by group

Developmental job assignments 77%

Mentoring 65%

Customised programs developed by external consultants 58%

Customised programs - Internal 58%

Executive coaching 54%

Figure 1.14 US/International versus Australiandata – High Potential Manager executivedevelopment activities

The participation rate (see Figure 1.15 below) and activity level (see Figure 1.16) distributions for all groups are broadly similar and indicate that the majority of organisations have more than 60% of their senior and high potential managers undertaking at least 3-6 days of executive development activity annually.

Executive Developmentne Trends November 2007

PART II

EXECUTIVE DEVELOPMENT OPERATIONS

“Many executives believe that

leadership development is a job for the HR

Department. This may be the single biggest

misconception they can have. [At] companies

thatare good at growing

leaders, operating managers, not HR

executives, are at the front line of planning

anddevelopment.11

In this section of the survey we asked respondents to consider their organisation’s executive development operations and provide feedback on a number of activities, including program strategy, needs analysis, program development, funding, staffing, and program evaluation and measurement. The following sections report the findings on three of these key areas: strategy and policy, program design and development and, finally, measurement and evaluation.

Section 6 – Development Strategy & Policy

If there is one theme that characterises respondents views on what is important in developing executive development strategies and policies it is integration. Of the range of possible considerations that we suggested respondent organisations could take into account in formulating their approach to executive development, two stood out head and shoulders above the others with both emphasising the importance of integration.

Ranking first was the need to create a strategy and system that integrates all executive / leadership development activities (77%). This was closely followed by the need to create a strategy and systemthat integrates all critical human resource management activities. Complete responses for this question can be found in Figures2.8.1 & 2.8.2 (Appendix 2).

Section 7 – Program Design and Development

Respondent views on the most effective design and development approach to be applied to deliver effective executivedevelopment initiatives was broad, with no one particular approach dominating.

The greatest support was for the internal design of course materials (59%), closely followed by the use of formal and informal training to upgrade internal design and development capabilities (55%) and the use of external program designers (50%).Complete responses for this question can be found in Figure 2.9 (see Appendix 2).

Section 8 – Measurement & Evaluation

Although there remains some debate as to the appropriateness and merit ofmeasurement and benchmarking in the field of executive development,

it is unquestionably one of the hotter topics of interest for an increasing number of organisations12. There are undoubtedly a range of factors that are underpinning this trend, however as we lead into a discussion of the research findings on this topic,two factors in particular that are arguably instrumental in this trend are worthy of acknowledgment.

First there is the development of appropriate measurement methodologies and metrics, which are becoming better defined and

11Cohn, Jeffrey; Khurana, Rakesh and Reeves, Laura. Growing Talent as if Your Business Depended

PART IIExecutive Development Operations

1

on It, Harvard Business Review, October 2005, p4.

12 This is on the basis that any expenditure on executive development activities is or can be considered an investment (as opposed to an expense). At this point in time there is very little reliable research data that establishes a clear linkage between expenditure on executive or leadership development activities and

20 improved business performance.


offering the potential for comparative analysis which is in turn important in assessing the relative value of different types of activity and investment.

The capability for firms to more easily and accurately capture the return on investment (ROI) contribution of their executive development is clearly encouraging more organisations to take this step. MetrixGlobal LLC’s Dr Merrill Anderson’s summary13 ofthe potential scope for using executive development performance data and metrics parallel’s the use of financial data in most modern corporations:

“[executive development ROI] data can be very useful for building a business case. Equally valuable, however, is how estimating ROI helps leaders think differently about their program: what are the cost drivers and how can these drivers be managed; what sources ofvalue can we expect from this program; and how can we maximize the value through the design and deployment of the program? Answering these questions improves how we envision change and make change happen.”

Second, the focus on corporate transparency is spreading to non-financial information, including the details on organisation’s human capital performance and investment returns. This trend is so unequivocal that PwC have been moved to comment recently that14:

“...the drive to divulge more and clearer human capital information to shareholders and other stakeholders is gaining momentum - and will continue to do so.”

In this context, we sought to better understand respondent organisations perspectives on the measurement and evaluation of their executive development investments, by canvassing the extent to which their executive development activities are likely to be evaluated and the specific methods employed to measure the impact of these activities on business performance.

15

Results 3550

10

Behavior 2070

25Learning 15

555

80Reaction 20

0 10 20 30 40 50 60 70 80

Extensively used Moderately used Seldom used Never used

Figure 1.17: Australian data – Kirkpatrick’s four levels of evaluation of development activity and impact

13 Interview with Dr Merrill C. Anderson, CEO MetrixGlobal, published in Link&Learn (September, 2004), a free e-newsletter published by Linkage, Inc (www.linkageinc.com).


14 Key Trends in Human Capital 2006 p21. 21


As the data in Figure 1.17 shows, the most common method of evaluation (80%)is to capture participant’s reaction to a particular program. The lack of emphasis on the measurement of learning, behaviour and results is by contrast surprising given the significant size of most respondent organisations executive development budgets (Figure 2.13.1, Appendix 2).

Planned methods of assessing individual performance varied considerably with respondent comments, illustrative examples of which are listed below, demonstrating little commonality around particular assessment approaches:

• “Track through development plans, followed by review of plan outcomes (linked with performance) 360 feedback Peer review Outcomes - leader performance and team satisfaction. Effectiveness in work deliverables.”

• “360 Employee Pulse”

• “Performance ratings of individuals and teams, re-assessing individuals on baseline diagnostics.”

• “Surveys and qualitative feedback and review from the managers of participants. There is linkage of number of succession participants who gain lateral or vertical moves in the organisation.”

• “One on one interviews providing development feedback against actual performance.”

• “Pre and post use of 360 degree feedback tools. Focus on leadership behaviours 'ready now' replacements for critical positions in quarterly talent reviews; % female leaders in critical positions.”

• “Multi-rater tools, individual self assessment of performance against KPIs.”

In addition to planned approaches, respondents were asked to describe their current and likely proposed methods of executive development assessment.

The range and diversity of comments suggest a breadth of approaches are being and will in the future be employed to measure the impact of executive development on individual and/or businessperformance. Illustrative responses included:

• “KPI and scorecard tracking key business outcome indicators, key culture and leader satisfaction indicators.”

• “Corporate Learning Evaluation Framework to be developed in late 2006.”

• “KPI's are to be set and measured.Rewards link into performance for most senior managers.”

• “Brinkhoff's Success Case Method.”

• “We do not formally measure.”

• “This has not been a focus of the organisation - (although it is)in development.”


22


2

• “Closer examination of the relationship between individual accountability, development and support and the maximising of shareholder value. Valuing people - retaining knowledge and capability within the organisation,monitoring safety and working within an environment of continuous improvement.”

• “Customer feedback, Profit, brand health measures EBIT and ROIC.”

• “Sustainability of results (achievement of stretch objectives over multiple years);reduced turnover of high potential staff.”

• “KPIs, engagement, culture and brand reputation surveys.”


PART III

BEST PRACTICES & INNOVATION

Section 9 – Best Practices

In this section of the survey respondents were asked to select those practices from a list of best practices, developed by EDA throughits work with leading organisations in the field, in which their organisation excelled. Inrelation to those practices at which respondent organisations excelled, the most significant practices are listed in Figure 1.18 below.

successful, high-impact executive/leadership development programs. Feedback on this subject emphasised the importance of top management commitment to, sponsorship of and participation in executive development initiatives:

• Time, focus, ownership. Ability to integrate competing demands into the learning experience (rather than being a distraction) A culture where learning is talked about

High Potential Identification

Linked to Strategy

Succession Planning

Integrated Talent Management System

Action Learning

Leadership Profile Feedback

Custom Designed

74 and expected.”68

68 • “100% exec commitment.”58

58 • “Whenever executive and leadership58 development is attempted, to be58

“The companies that shared their stories and

knowledge with us highlighted several critical

aspects of leadership development - in particular

CEO’s awareness and acknowledgment of the

importance of succession planning; board’s increased activity in system oversight;

managers refocused attention on people issues and processes; and HR’s

role in facilitating the entire organisation’s ownership of leadership development.”15

0 16 32 48 64 80

Figure 1.18: Common best practices

The identification and development of high potential managers was rated as the most significant best practice (74%). The importance of connecting executive development investment into tangiblebusiness benefit is reflected in respondent’s rating of the Linkage to Strategy (68%) as a best practice. Respondent’s emphasis on Succession Planning (68%) and developing an Integrated Talent Management System (58%) indicate a deeper commitment to organisational strategy of which both are key components. Those practices thatranked lowest included Measurement (26%), Strategy & Systems (26%) and Thorough Front-end Analysis (21%).

As a follow-up we then asked respondents to nominate other critical keys to success or

best practices in developing and conducting


2

successful, our top management mustactively particpate and attend programs and not just delegate.”

• “Commitment of program over time - 5

years+. Too often a process is championed by someone & people change & thetotal momentum is lost. In many cases it is program implementation over a longperiod of time that works even though the program itself may not be best in class.”

• “Top management driven seems to me the critical element in

building and maintaining momentum. As soon as it becomes a 'nice to do' in the minds of senior management, it is the first thing to be dropped when business pressures increase.”

One powerful technique or method through which the commitment and involvement of top management in executive development initiatives can be increased is through their participation as faculty. The marked difference

15 Cohn, Jeffrey; Khurana, Rakesh and Reeves, Laura. Growing Talent as if Your Business Depended on It,24 Harvard Business Review, October 2005, p1.

2

PART IIIBest practices & innovation

in US/International and Australian attitudes to the use of senior executives as faculty was illustrated in Section 4 - Future Learning Methods (Figure 1.11).

In concluding our investigation of organisational best practices we sought respondents views on the most effective companies / organizations in terms of executive development practices. Only three (3)companies were mentioned more than once and only one of these was an Australian based multi-national.

• General Electric (4 mentions)

• Australia & New Zealand Banking Group (ANZ) (3 mentions)

• Cisco Systems (2 mentions)

Section 10 – Innovation in Executive Development

Given the dynamic nature of the executive development field, both in Australia and abroad, one of the most surprising findings of the Australian survey has been the relative lack of awareness and interest respondents demonstrated in innovation generally and specifically within the area of development practice.

Illustrative examples of innovative practices identified by respondents included:

• “Action Learning experiences combined with specific Coaching/Mentoring that is closely tied to the project concerned.”

• “Mentoring. Mobility of executives and larger business means senior managers are able to visit multiple sites internationally to learn and implement best

practice at their

Executive Development Trends November 2007own sites. Various forums where successful speakers pass on their experiences, interactive sessions where senior managers can problem solve and network.”

• “International assignments, supported by long term individual incentives, and clear career maps for individuals involved.”

• “Action Learning workshops sponsored by Principal Executive (who commits full participation to the program to facilitate sessions and debrief breakouts).”

Our findings on the topic of innovation in executive development, whilst somewhat surprising for the Advisory Group, are not markedly out of kilter with anecdotal evidence of Australian organisationalattention to innovation more generally. Nor are they inconsistent with the relatively low level of interest shown by respondents in the related areas of entrepreneurship andbusiness innovation. This apparent disconnect- between the need for innovation as the catalyst for organisational change - and the lack of interest in the topic of innovation on the part of executive development professionals - is evidenced in practice as Advisory Group member ProfessorJohn Bailey observes:

“When I talk to business executives about what’s really

happening on the ground, thinking and practice don’t

seem to be changing. Everyone has innovation in their

‘values’: few organisations seem to be making it

happen in practice. Even fewer organisations have in

my experience been able to successfully build

innovation into their cultures in a way that has proven

to be sustainable.”

CONCLUSION

2

CONCLUSION

The principal objective of the Australian Executive Development Trends 2007 research project, has been to identify, explain and contextualise the important trends in Australian executive development, such that the insights produced could inform and guide improvements in organisational practice and in turn in organisational performance. The general conclusions of this study - highlighting the factors and trends shaping Australian executive development- can stand alone as guidance for top managers within large Australian companies.

The principal research findings are that Australian organisations believe that over the next 2 to 3 years:

• Business strategy, collaboration and reinforcing or changing corporate culture will be the most influential factors shaping executive development;

• The key objectives of executive development strategy will be developing high potential managers, leadership capability, executing vision and strategy and managing human performance; and

“Warren Bennis and James O’Toole ...argue that

business schools are in a self-defeating feedback loop that has resulted in a model

of education in which research and practice have

become increasingly disconnected and that most

of the researchconducted in business

schools is irrelevant to managers. Relevance .....applies both to the

practical implementation of ideas and to insight into

the underlying forces that shape business, markets

andbehaviours.” 16

This report provides significant insight into the pressures that impact on senior executives who are working withinAustralian organisations that operate in an increasingly globalised and rapidly changing world. The findings provide Australian organisations with high level insightinto the challenges and trends shaping Australian executive development within an international context, thereby establishing the opportunity to understand better these challenges and to compare them to the challenges faced by both US based andnon-US based organisations. It is hoped that these insights will assist organisations in developing more contemporary and effective executive development strategies and practices that can meaningfully contributeto sustainable improvements in organisational performance.

• The most commonly utilised learning methodologies used in executive development would be Action Learning and external executive coaching.

If we were to summarise the overall theme of the Australian Executive Development Trends 2007 research findings it would unquestionably centre on the emergence of executive development as a muchmore strategic organisational concern that it perhaps has been in the recent past. It would appear from respondent feedback that questions around executive development are more often today being framed strategically by organisationalleaders charged with generating adequate investment returns on their firm’s capital. That is, there is an emerging imperative for executive development activities to more closely and directly support the execution of an organisation’s business strategy.

16 Khurana, R. and Marquis, C. 2006. Diagnosing and Dissolving our “Translation Gap”, Journal of26 Management Inquiry, Vol. 15 No. 4 p406.

CONCLUSION


This shift in the strategic relevance of executive development has shown through in respondent feedback in most survey topics from Major Influences on the Future (Business Strategy - 1st ranking: 86%) through to Hot Topics (Strategy Execution- 2nd ranking: 70%) and Best Practices (Linkage to Strategy - 2nd ranking: 68%) .

The key influence of changing business strategies, the need for greater collaboration across organisations and the reinforcement of corporate cultures together suggest a pressing need for executive development processes to be more effectively aligned with strategy and the strategy development process. The emphasis on learning methods more closely connected with pressing business development support requirements such as coaching, mentoring and action learning also support this conclusion.

With this increasing strategic focus, linking investment in organisational development initiatives and business impact ROI is becoming more important to respondent organisations. It must also be true that sustainable support for OD investment requires a more fundamental acceptance and buy-in from both top management and the operational functions within organisations. Respondent feedback suggests this connection is recognised by senior HR/OD practitioners in that their responses highlight an increasing focus on demonstrating the executive development investment ‘business case’ -

the tangible financial return or benefit accruing to the business.

At the same time organisations appear to be interested in developing a more sophisticated approach to measuring theimpact of their OD investment by looking at the effectiveness of learning outcomes and in turn endeavouring to assess – through macro and micro metrics – in a more nuanced way the impact that learning has on business performance. Companies are no longer satisfied with measuring the reaction of participants to programs and the effectiveness of associated learning outcomes; greater emphasis is now being placed on measuring behavioural impacts and the linkage if any between executive development investments and resulting linkages to improved business performance.

As PwC identifies17:

“….it is clear that human capital issues have a powerful impact upon all businesses’ competitive abilities. However, there is little evidence to suggest thatthe HR role is similarly developing to a higher level of strategic influence within business organizations. The challenge for HR executives is to demonstrate to their colleagues that they have a real business performance contribution to offer. To this end, it is critical that they cease an introspective focus and produce practical human capital polices which have ameasurable impact on bottom line results.


2

CONCLUSION(continued)

Using incisive data and analysis, the HR function can begin to develop the tools and policies that should help place them at the centre of corporate strategy”.

The research findings should speak profoundly and persuasively to the respondent organisations and more broadly to executives operating in corporate HR/ OD functions and to providers of executive development programs and support.

For the respondents, it should be clear from the findings that many of the more traditional approaches to executive development are outmoded and are rapidly being replaced by newer less welldefined methodologies, practices and value equations. The challenge for respondent organisations - and perhaps more broadly for all Australian firms - is in crafting and integrating an executive development strategy that addresses issues such as:

• Creating and promoting ‘strategic alignment’;

• Increasing ‘speed to market’ for new products and product innovations;

• Increasing line management ownership of and active support (for executive development strategy and activities);

• Building the business case and measuring the performance contribution/impact of new executive development strategies and initiatives;

• Building ‘benchstrength’, filling the internal leadership pipeline and achieving the true potential of succession management; and

• Developing and implementing an integrated Talent Management System.

In relation to the OD/HR function the research findings imply that there is an opportunity, if not a pressing need, for HR/ OD executives to evolve and expand their role – playing more of a facilitative strategic advisory role in what might be regarded as an evolution in executive development for Australian organisations. However to take advantage of the opportunity afforded by any revolution, along with the requirement for the development of new competencies for example in the areas innovation and performance evaluation,

Future research could build valuably on the present research through a deeper exploration of the more significant trends highlighted in the findings including:

• Influences and objectives:How are the leading Australian firm’s executive development programs building individual and team competency in business strategy development and implementation? What approaches are being most successfully pioneered inthe area of intra- and inter-organistional collaborative knowledge development

communities of practice)?How can executive development

CONCLUSION


programs most effectively reinforce and shape corporate cultures?

2

CONCLUSION

• Learning methods:How are Australian firm’s incorporating action learning into their executive development programs and what forms of action learning are most popular/ successful? Are more traditional forms(e.g. MBA) and channels (Universities) of executive development losing their currency and effectiveness? How are learning and development service providers responding to the changing market for executive development programs and support?

• Measurement and evaluation: What metrics are being employed by Australian firms in assessing theeffectiveness and the impact of executive development initiatives? What arethe range of performance impacts of measured executive development initiatives in Australian firms?

• Best practices and innovation:What strategies and programs are most effective in high potential manager development, succession management and linking organisational development and business strategy? How can innovation - in executive development and more broadly - be more effectively encouraged in Australian firms?


3

REFERENCES

The following publications were reviewed and/or referenced where cited in the development and publication of this research:

Enterprising Nation – Renewing Australia's managers to meet the challenges of the Asia-Pacific century, (1995). Report of the Industry Task Force on Leadership and Management Skills. Commonwealth Government of Australia.

Management Development Practice in Australia: Key Findings, (2003). Australian Institute of Management.

Executive Development Trends 2004: Filling the Talent Gap, (2004). Executive Development Associates Inc.

The Future of Executive Development, (2005). James F. Bolt (Ed.). Executive Development Associates Inc.

Leading the Past: Preparing the Future – A DDI Australia Research Report, (2007). DDI Australia.

The Manager of the 21st Century: Vision 2020, (2005).A Report by Boston Consulting Group for Innovation & Business Skills Australia.

Aspire Australia 2025, (2005). Business Council of Australia.

Key trends in human capital: A global perspective, (2006). PriceWaterhouseCoopers.

Growing Talent as if Your Business Depended on It, (2005). Cohn, Jeffrey; Khurana, Rakesh and Reeves, Laura, Harvard Business Review.

November 2007

APPENDICES


3

ADVISORY GROUP BIOGRAPHIES

APPENDIX 1Christopher Bell (Chair)

Christopher currently serves as the Chief Executive Officer (CEO) of The Leadership Consortium. In his role as CEO Christopher has led the Consortium’s research initiative “Understanding the Leadership Aspirations and Commitment of Young People” and has presented at numerous conferences including the American Academy of Management, The Australian Institute of Company Directors National Conference, the Business and Higher Education Roundtable’s Australian Business Deans Conference and the National Personal and Organisational Development Summit. Prior to joining The Leadership Consortium in 2000 Christopher was Manager Leadership Development for the Telstra Centre for Leadership which he co-founded. Christopher holds undergraduate qualifications in arts (with honours), post-graduate qualifications in organisational development and is completing his doctorate on the effective leadership of virtual teams.

Professor John Bailey

John Bailey is the Chairman of The Carlton Consulting Group Pty Ltd, an Associate Professor and faculty member of the Melbourne Business School at the University of Melbourne and an adjunct professor in management at RMIT, the Australian Graduate of School Entrepreneurship and at the Graduate School of Management (ANU). John has an international reputation for his work in economic and entrepreneurship development programs in Australia, USA, Asia and Europe. He has co-authored 15 books on a variety of topics including Strategic Alliances (Business & Publishing 2000) and amongst a plethora of achievements was the founding President of the Australasian Institute for Enterprise Facilitators from 1996 to 2002. John holds undergraduate qualifications in engineering, commerce and education, post-graduate qualifications in business administration and a doctorate in management.

Lawrence (Larry) Marlow

Larry Marlow is a highly regarded management professional with significant senior line management and consultancy experience with both public sector (World Bank and WHO) and private sector clients in the fields of information technology, market research, human resource management and management consulting. Larry has also enjoyed extensive academic exposure having lectured on organisational change and strategic human resource management at UNSW, University of Sydney, University of Melbourne, University of New England and currently at the Macquarie UniversityGraduate School of Management. He is a frequently invited speaker at Australian industry conferences and is a member of the Editorial Board of the Asia-Pacific Journal of Human Resources and a Council Member of the Research Institute of Asia and the Pacific.

APPENDICES

3

Dianne Morgan

Diane is currently a Principle Consultant with Earth Wind Fire International. Previously Diane was a senior executive with leading global Pharmaceutical company GlaxoSmithKline (GSK). At GSK Diane held senior HR leadership roles in Australasia, United States, the Asia Pacific and in China. She has held both line and strategic roles and has contributed significantlyto the development of global leadership programs; recruitment of senior leaders; merger and acquisition integration; inspiring a business focussed HR function and mentoring senior business leaders at GSK, Telstra and through her work with The Leadership Consortium.

Dr Scott M. Bourke - Principal author

Scott is currently a senior consultant with SRD Consulting. He has undertaken and published applied research on aspects of organisational change, communication, corporate governance and knowledge management. Scott holds undergraduate degrees in law and business,post-graduate degrees in applied finance and a doctorate in business administration from the Australian Graduate School of Entrepreneurship.

Executive Development Trends November 2007November 2007

3

SURVEY RESPONSE SUMMARY DATA

APPENDIX 2

Figure 2.1: Factors / conditions influencing executive development activities

Other 18

Strategic alliances 32

Corporate governance 25

Customer requirements 54

Globalization 36

Collaboration 75

Corporate social responsibility 25

Diversity 36

Speed and simplicity 46

Political unrest

Shareholder value 50

Lack of benchstrength 54

Attraction / retention challenges 50

Downsizing 11

Advances in practice 11

Growth 50

Social / demographic change 29

Executive needs 50

New IT 29

Change corporate culture 54

Reinforce corporate culture 57

Business strategy 86

Productivity 54

Economic conditions 50

0 10 20 30 40 50 60 70 80 90

APPENDICES

3

Figure 2.2: Key objectives of executive development

Build organizational values 35

Enhance successful executive transitions 43Develop individual leadership capability 74

Achieve vision and execute strategy 74Develop high potential managers 83

Enhance management communication 22

Make talent management a competitve advantage 48

Support mergers / acquisitions 9

Solve business problems 43

Competitors strategic knowledge 13

Build IT awareness

Increase productivity 30

Individual development plans 43Increase benchstrength 65

Build teamwork and networks 35

Develop general manager perspectives 52Action learning 61

Develop critical knowledge / skills 35

Shape / manage culture 48Support / leverage diversity 22

Support change / transformation 48

Communicate vision and strategy 52Shape / develop vision and strategy 48

Establish identity 390 10 20 30 40 50 60 70 80 90


3

Figure 2.3: Australian data – Hot topics in executive development in the next 2-3 years

Other 13

Corporate Social Responsibility 17

New product/service development 4

Reengineering/process management 13

Systems thinking 4

Environmental and safety issues 9

Workforce diversity 30

Regulatory issues 13

Manufacturing/Operations 4

Marketing 17

Public relations

Entrepreneurship/Intrapreneurship 17

General management skills 57

Developing others 48

Business ethics 22

Corporate values 26

Creativity/innovation 35

Becoming customer/market-focused 35

Total Quality Management 4

Leading/managing change 70

Global trends 22

Teambuilding 48

Six Sigma 13

Globalization 4

Strategy execution 70

Productivity improvement 39

Information Technology 9

Managing human performance 83

Leadership 78

Basic management skills 43

Communication skills 43

Stand-up presentation skills 17

Quantitative decision-making 9

Business acumen 39

Financial management 26

Sustainability 17

0 10 20 30 40 50 60 70 80 90

APPENDICES

3

Figure 2.4.1: Australian data – Development activities for CEOs / Senior Executive Teams

Action learning 33Teaching 19Boards 26

Community service 11Mentoring 56

Executive coaching 81Web-based/on-line programs - External

Web-based/on-line programs - Internal 26Other external programs 33

Programs at International Universities 37Programs at Australian Universities 22

Customized programs - Universities 11Customized programs - External 48Customized programs - Internal 37Developmental job assignments 48Off-the-shelf programs - Tailored 15

Off-the-shelf programs - Standard 4Other 4

0 10 20 30 40 50 60 70 80 90

Figure 2.4.2: Australian data – Development activities for EGMs, CVPs & Business Unit Heads

Action learning 48Teaching 12Boards 12

Community service 8Mentoring 56

Executive coaching 68Web-based/on-line programs - external 12Web-based/on-line programs - internal 28

Other external programs 40Programs at International Universities 20

Programs at Australian Universities 36Customized programs - Universities 28

Customized programs - External 44Customized programs - Internal 36Developmental job assignments 64Off-the-shelf programs - Tailored 20

Off-the-shelf programs - Standard 4Other 4

0 10 20 30 40 50 60 70


3

Figure 2.4.3: Australian data – Development activities for High Potential Managers

Web-based learning programs - Internal 19Teaching 8

Australian University programs 35Customized programs - Universities 15

Mentoring 65Developmental job assignments 77

Other external programs 38Customized programs - External consultants 58

Web-based learning programs - Vendors 12International University programs 23

Executive coaching 54Off-the-shelf programs - As is 15

Participation on external boards 4Community service 4

Off-the-shelf programs - Tailored 27Customized programs - Internal 58

Action learning 42Other 4

0 10 20 30 40 50 60 70 80

Figure 2.5: Australian data – Annual participation rates in executive development activities for CEOs / Senior Executive Teams; EGMs, CVPs & Business Unit Heads; High Potential Managers

31

Greater than 80% 31

41

23

60-80% 19

15

19

40-60% 12

11

23

20-40% 23

19

4

Less than 20% 15

15

0 10 20 30 40 50

High Potential Mgrs EGMs CVPs & Business Unit Heads CEOs / Senior Execs

APPENDICES

3

Figure 2.6: Australian data – Annual development days per person for CEOs / Senior Executive Teams; EGMs, CVPs& Business Unit Heads; High Potential Managers

15More than 12 days 4

723

9-12 days 1215

276-9 days 19

2631

3-6 days 5837

4Less than 3 days 15

150 10 20 30 40 50 60

High Potential Mgrs EGMs CVPs & Business Unit Heads CEOs / Senior

Execs Figure 2.7: Australian data – Future learning methods in executive

development

Case studies 48Comedy 4

Improvisational theatre 9Military strategy

Storytelling 22External executive coaches 74Internal executive coaches 43

Root Learning Maps

Natural work team sessions 22Self-directed learning groups 22

Action learning 74Benchmarking 35

Visits to other sites 35Customer involvement 17

Outdoor experiences

In-basket simulations 17Computerized simulations 13

Web based/online learning 43Distance Learning 9

Self-study programs 26Outside speakers 57Outside experts 48

Internal leadership staff as faculty 43Internal experts as faculty 57

Senior executives as faculty 30Other 13


4

0 16 32 48 64 80

APPENDICES

4

Figure 2.8.1 (Graph): Australian data – Executive development policy and strategy considerations

Integrated HR system 73

Integrated executive development strategy 77

Creation of executive development transition system 14

Benchmarking "Best Practice" organizations 36

Direct rewards / incentives for making development happen 23

Use of systematic measurement / evaluation 36

Decentralization of executive / leadership development 5

Centralization of executive/leadership development 23

Creation of a core corporate curriculum 32

Use of an Advisory Board to oversee executive development 14

Creation and distribution of executive development policy 9

0 10 20 30 40 50 60 70 80

Figure 2.8.2 (Table): Australian data – Executive development policy and strategy considerations

Creation and distribution of a written policy to guide executive/leadership development activities 9%

Use of an Advisory Board to oversee executive / leadership development 14%

Creation of a core corporate curriculum (required courses) 32%

Centralization of executive/leadership development to control quality and costs 23%

Decentralization of executive / leadership development to better meet diverse/local needs 5%

Use of systematic measurement / evaluation to measure the impact of your efforts 36%

Direct rewards / incentives to executives for making development activities happen, e.g. implementation of development plans, mentoring, insuring job rotation & cross-functional/divisional transfers take place, etc.)

23%

Benchmarking "Best Practice" organisations 36%

Creation of a milestone / transition system for ensuring that managers / executives receive training on the knowledge and skills required for success at key points throughout their careers.

14%

Creation of a strategy and system that integrates all executive / leadership development activities (both leadership / executive education; internal and external programs; high-potential identification and development, succession planning, on-the-job development, etc.).

77%

Creation of a strategy and system that integrates all critical human resource activities(executive/leadership development

73%


4

Figure 2.9: Australian data – Program design and development considerations

Research benchmarking course designs & learning methods 18

Systematic measurement & evaluation - business ROI impact 27

Systematic measurement & evaluation - individual impact 45

Systematic measurement & evaluation - course effectiveness 18

Internal designed courses 59

Formal or informal training - internal staff 50

External consultant designed courses 55

University expert designed courses 41

0 15 30 45 60

Figure 2.10.1 (Graph): Australian data – Measurement and evaluation approaches

1535

Results: We will measure performance impact50

1070

Behavior: We will measure application and behaviour20

2555

Learning: We will measure knowledge & skill improvements15

580

20Reaction: We will measure reactions

0 10 20 30 40 50 60 70 80

Extensively used Moderately used Seldom used Never used

APPENDICES

4

Figure 2.10.2 (Table): Australian data – Measurement and evaluation approaches

Measurement approach Never used

Seldom used

Moderately used

Extensively used

Response Average

Reaction: We will measure the reaction of participants to the development activity

0% 0% 20% 80% 3.8

Learning: We will measure the knowledge acquired skills improved or attitudes changed as a result of the development activity.

5% 15% 55% 25% 3

Behavior: We will measure the transfer of development or if participants are applying new knowledge skills or attitudes on the job.

0% 20% 70% 10% 2.9

Results: We will measure the result of development activities as it relates to factors such as sales productivity profit costs employee turnover and product/service quality.

0% 50% 35% 15% 2.65

Figure 2.11.1 (Graph): Australian data – Common ‘Best Practices'

High Potential Identification and Development 74

Linked to Strategy 68

Succession Planning/Management 68

Integrated Talent Management System 58

Action Oriented Learning 58

Leadership Profile Feedback and Individual Development Plans 58

Custom Designed 58

Top-down Implementation 47

Top Management Driven 42

Measurement 26

Strategy & System 26

Thorough Front-end Analysis 21

Other 5

0 16 32 48 64 80


4

Figure 2.11.2 (Table): Australian data – Common ‘Best Practices

High Potential Identification and Development: Our organisation has an effective process for identifying high potential talent and accelerating their development.

74%

Thorough Front-end Analysis: No significant executive development effort is begun without a thorough front-end or needs analysis. 21%

Strategy & System: We have a strategy and long-term plan for executive development. Our programs and practices are part of a continuous system and process rather than stand-alone ad hoc events.

26%

Measurement: We set clear measurable objectives when we create new executive development strategies, systems, processes and programs. Then we measure the business impact using metrics and senior management and communicate the results.

26%

Top Management Driven: Our top executives champion our executive development efforts. We have a senior line executive advisory board. Our top executives attend the programs as participants and also teach when appropriate.

42%

Top-down Implementation: Whenever our executive and leadership development efforts are aimed at organisation change our top management attends the programs first as participants. Then the programs are cascaded down throughout the organisation.

47%

Custom Designed: We custom-design our programs so that they address our unique company-specific challenges and opportunities and help create and/or drive our vision values and strategies.

58%

Leadership Profile Feedback and Individual Development Plans: We use a custom-designed [linked to our vision values and strategies] multi-rater leadership instrument/inventory to provide confidential development feedback to our executives.

58%

Action Oriented Learning: Our executive learning experiences are action oriented. Whenever feasible we use some form of action learning where participants apply what they are learning to real current business problems and opportunities.

58%

Integrated Talent Management System: We have a well integrated talent management system (succession management external and internal executive education on-the-job development coaching/mentoring etc.) rather than independent processes.

58%

Succession Planning / Management: We have an effective succession management system that ensures we have the right executive in the right job at the right time.

68%

Linked to Strategy: Our executive development efforts are directly linked to our organisation's strategy. It is clear how these efforts help address our marketplace challenges and/or achieve our strategic objectives.

68%

Other 5%

Figure 2.12.1: Australian data – In-sourced versus outsourced executive development capability

Less than 10%: We do almost all of our OD/ED capability development and delivery with internal resources 21%

10% - 30%: We do most of our OD/ED capability development and delivery with internal resources but do outsource to external providers for targeted activities

26%

30% - 60%: Our OD/ED capability development and delivery is a mix of internal resources and outsourcing to external providers 26%

60% - 80%: Our OD/ED capability development and delivery is mainly outsourced to external providers with internal resources focusing on targeted activities

26%

November 2007 APPENDICES

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Figure 2.12.3: Australian data – Confidence levels around OD/HR resource sufficiency

Pessimistic

Lacking confidence 16

Optimistic 37

Confident 42

Extremely confident 5

0 5.556 11.111 16.667 22.222 27.778 33.333 38.889 44.444 50.000

Figure 2.12.2: Australian data – Period (years) OD/HR Leadership Team members in present role

More than 8 years 5

5 to 8 years 5

3 to 5 years 37

1 to 3 years 42

Less than 1 year 11

0 5.556 11.111 16.667 22.222 27.778 33.333 38.889 44.444 50.000

Figure 2.13.1: Australian data – Annual expenditures for internal and external "classroom" programs

Greater than $5,000,000 6

$1,000,000-$5,000,000 13

$250,000-$1,000,000 44

$50,000-$250,000 38

Less than $50,000

0 5.556 11.111 16.667 22.222 27.778 33.333 38.889 44.444 50.000

Figure 2.13.2: Australian data – Annual expenditures for "non-classroom" programs and activities

Greater than $5,000,000 13

$1,000,000-$5,000,000 20

$250,000-$1,000,000 13

$50,000-$250,000 27

Less than $50,000 20

0 5 10 15 20 25 30


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Copyright

All rights reserved. No part of this publication may be reproduced, stored in a

retrieval system or transmitted in any other form by any means electronic,

mechanical, photocopying, recording or otherwise without the prior permission of

the author and publisher, Dr Scott M. Bourke.

Limitation of Liability

This publication has been compiled using data which, to the best knowledge of the

author and publisher was current and correct at the time of printing. No party

mentioned in or involved with preparation of this report gives any warranty as to the

accuracy of

the information contained herein or its applicability to any specific circumstances. This

publication has been prepared for general guidance on matters of interest only, and

does not constitute professional advice. You should not act upon the information

contained in this publication without obtaining specific professional advice.

No representation or warranty (express or implied) is given as to the accuracy or

completeness of the information contained in this publication, and, to the extent

permitted by law, all warranties, express or implied, statutory or otherwise are excluded

to the extent permissible by the Trade Practices Act 1974 (Cth) and any similar legislation.

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