We’ve long known that the key to driving sustainable long-term performance is to place an equal emphasis on how the organization makes money (performance) and how leaders run the place (health). Companies that do so outperform their peers threefold. More recently, we’ve found that leaders can capture even more value when they go one step further and focus on performance and health at both the organization and individual levels.
Driving performance and health across levels is a tall order, even for the most experienced leader. Doing this well requires embedding this new way of operating across all layers of the organization. This can be done by revamping capability-building programs to focus on helping employees develop knowledge, skills, and behaviors in four key areas (see exhibit).
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Teach them the business (e.g., how we make money). Ensure efforts are in place for employees to learn the strategic priorities and corresponding initiatives and targets the company is driving. This should include the day-to-day business, efficiency or transformation efforts, and new growth.
Take, for example, an agricultural company that asked their top 100 leaders to fill out a one-pager that highlighted which initiatives they were driving within their units, what success looked like, and how it aligned to the organization’s broader value agenda. Leaders then used them to communicate with their teams how the initiatives they were driving fit into the company’s broader strategy during team meetings.
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Teach them management (e.g., how we run the place). Continually build an understanding of how leaders need to operate to meet their strategic imperatives, including how to “walk the talk” of company culture, how to manage teams, how to shift mindsets, and how to drive accountability and continuous improvement.
An energy company that was restructuring as part of its transition to clean energy brought their top 300 leaders through a workshop that focused on how to lead during the transformation. They then used a train-the-trainer approach to upskill others in the company on the workshop content and cascaded the program to all people leaders.
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Ensure technical and functional skills to accomplish jobs to be done (e.g., how I create value). Ensure that technical and functional trainings are designed to build skills needed to accomplish the jobs to be done today, as well as the critical skills needed to drive efficiency or growth efforts that will deliver value in the future.
To do this, one biopharmaceuticals company assessed their capabilities in comparison to their industry (e.g., lagging, on par, or leading) and defined both their current skill gaps and those that needed closing in order to achieve their three-year aspiration. This allowed them to design targeted and high-impact skill-building programs.
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Develop them personally as colleagues and leaders (e.g., how I behave). Empower individuals to achieve their performance goals by showing them how their goals translate into day-to-day relational and adaptive behaviors, what those behaviors look like when done well, and when they should engage in them. From there, the key is to help each individual build new habits through continuous coaching.
One steel manufacturer undergoing an agile transformation mapped out the competencies required to lead through agility. They then deployed a personalized coaching app to provide their top 300 leaders with daily “nudges” to adopt these new behaviors.
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In today’s competitive environment, it’s no longer sufficient to focus capability building solely on developing job-level skills. By building individual capabilities across four quadrants and at scale, leaders have the potential to capture value and drive impact at levels previously thought unimaginable.
The authors would like to thank Han Hu for her contribution to this blog post.