This document outlines the business case for building effective business leaders. It summarizes research showing organizations with high-quality leaders are 13 times more likely to outperform competitors financially. Additionally, companies with great leadership outperform the S&P 500 by almost 2x over 10 years. Conversely, poor leadership can result in losses like decreased engagement, productivity and profits. The document recommends organizations implement comprehensive leadership strategies that include defining competencies, hiring and developing leaders based on talent identification, succession planning and continuous evaluation.

1. Making the Business Case for Building
Effective Business Leaders
Jennifer McClure
President, Unbridled Talent LLC
@JenniferMcClure
#SHRM14

2. A QUESTION FOR YOU.

3. $$$

4. LIKE 13xLESS MONEY.
Organizations with the highest quality leaders were 13x more likely to outperform
their competition in key bottom-line metrics such as financial performance.
DDI Global Leadership Forecast, 2011

5. GOT YOUR ATTENTION?

6. IT’S A GLOBAL ISSUE.

7. Deloitte, Global Human Capital Trends, 2014
Top Global Human Capital Trends
By Perceived
Urgency
48%
52%
53%
51%
38%
25%
26%
24%
UrgentImportant
Leadership
Reskilling the HR Function
Talent Acquisition & Access
Retention & Engagement
86%

8.
Global
Trend
Consumer
Business
Energy
&
Resources
Financial
Services
Life
Sciences
&
Healthcare
Manufacturing
Professional
Services
Public
Sector
Technology
Media
&
Telecom
1) 86% Leadership
1 1 1 1 1 1 1 1
2) 79% RetenBon
&
Engagement
2 2 2 4 2 2 5 2
3) 77% Reskilling
the
HR
FuncBon
3 2 3 2 3 4 4 3
4) 75% Talent
AcquisiBon
&
Access
7 3 4 4 6 3 8 2
By Industry
Top Global Human Capital Trends
Deloitte, Global Human Capital Trends, 2014

9. WHY DOES
LEADERSHIP
MATTER?

10. 10-year
performance
comparisons
91%
58%
Top 15%
Bottom 15%
Market Capitalization Growth
Chief Executive, 40 Best Companies for Leaders 2013
Impact of Great Leadership

11. 10-year
performance
comparisons
91%
58%
Top 15%
Bottom 15%
Market Capitalization Growth
Chief Executive, 40 Best Companies for Leaders 2013
Best Companies
outperform the
S&P 500 almost 2x
over 10 years!
Hay Group
Impact of Great Leadership

12. DDI, The State of Frontline Leadership
69%
65%
59%
57%
40%
32%
26%
Loss of team member Engagement
Loss of productivity
Leader left organization
Team members left organization
Forced to demote
Loss of leader engagement
Loss of profit
Impact of Poor Leadership

13. DDI, The State of Frontline Leadership
69%
65%
59%
57%
40%
32%
26%
Loss of team member Engagement
Loss of productivity
Leader left organization
Team members left Organization
Forced to demote
Loss of leader engagement
Loss of profit
Impact of Poor Leadership

14. • Improved Customer Metrics
• Higher Profitability
• Increased Productivity
• Higher Quality
• Lower Turnover
• Less Absenteeism
• Less Shrinkage (Theft)
• Fewer Safety Incidents
Harvard Business Review, 2014
Gallup has discovered links between employee
engagement and vital performance indicators:

15. MAKE THE
BUSINESS CASE.

17. IMPLEMENTATION PLAN
DEFINE SUCCESS METRICS
MAKE RECOMMENDATION
PROPOSE SOLUTIONS
PROVIDE ANALYSIS
DEFINE THE PROBLEM
EXECUTIVE SUMMARY

18. EXECUTIVE SUMMARY

19. DEFINE THE PROBLEM

20. PROVIDE ANALYSIS

21. PROPOSE SOLUTIONS

22. MAKE RECOMMENDATION

23. DEFINE SUCCESS METRICS

24. IMPLEMENTATION PLAN

25. CRITICAL
COMPONENTS.

26. CREATE A STRATEGY

27. “Our research shows that enduring business
performance is really driven at much deeper
levels: a focus on leadership strategy.
Long term business performance comes from
leadership culture and careful and continuous
development of leadership at all levels.
Josh Bersin, Forbes

28. Best Companies for Leadership, 2013
Hay Group, 2013
Top
20
Best
Companies
for
Leadership:

29. Best Companies for Leadership, 2013
Hay Group, 2013
100% of top 20 companies had CEOs who were
actively involved in developing leadership talent.
Top
20
Best
Companies
for
Leadership:

30. Change in
probability of
being a top-tier
leadership
organization
Senior Executives are good
role models for
developing employees
Executives believe
development is important
Line Managers make
development a priority
84.1
70.3
54.2
Corporate Executive Board
The Power of Leading by Example

31. DEFINE COMPETENCIES

32. 9%
11%
13%
7%
9%
12%
7%
9%
9%
11%
Decision-­‐Making
Problem-­‐Solving
PrioriBzaBon
Technical
ExperBse
Influence
Teamwork
Learning
Agility
ProacBvity
Self-­‐Awareness
OrganizaBonal
Awareness
Adapt to
Change
Work
Collaboratively
Apply
Judgment
The Corporate Executive Board
10 Competencies That Drive Performance

33. HIRE FOR TALENT

34. LEADER
Gallup Inc,
1 in 10 people possess the inherent talent to manage.
Choose Leaders Based Upon Talent

35. LEADER
TRUE LEADER
82% of the time, companies choose wrong.
Choose Leaders Based Upon Talent
Gallup Inc,

36. IBM CEO Study
Success Factors: Future Potential

37. IBM CEO Study
Success Factors: Future Potential

38. IDENTIFY POTENTIAL

39. Corporate Executive Board
6% to 9%

40. Harvard Business Review, June 2014
“…new era of talent spotting - one in which our
evaluations of one another are based not on
brawn, brains, experience, or competencies,
but on potential.”

41. Although experience and development are
important, we believe they account for about
30% of leadership success.
The rest we attribute to talent — and the
assessment of predictive talent is where so
many companies fall short.
Gallup Inc, 2012

42. DEVELOP LEADERS

43. Leaders: Born or Made?

44. “People often describe certain individuals as
‘natural-born leaders’, but the truth is that
business leaders are made, not born - shaped
through the assignments they receive and
the experiences they have.”
Diana O’Brien & Alice Kwan, Fast Company

45. LEADERSHIP DEVELOPMENT PROGRAM
Job
Assignments
Special
Projects
Team
Work
Mentors
Coaches
Customized
Learning
COMPREHENSIVE LEARNING APPROACHExperiential Learning Approach

46. Experiential Learning Approach
LEADERSHIP DEVELOPMENT PROGRAM
Job
Assignments
Special
Projects
Team
Work
Mentors
Coaches
Customized
Learning
70
10
20

47. SUCCESSION PLANNING

48. 65%
DDI Research

49. of organizations don't have a formal process
to identify & grow the talent that they need.
65%
DDI Research

50. R A W

51. Ready Able Willing

52. • Prioritize hard-to-fill positions or scarce skill-sets
• Identify current risk of turnover
• Account for changing business needs
• Incorporate organizational goals (ex. Diversity)
Key Succession Planning Considerations

53. LEADERSHIP
DOES MAKE A
DIFFERENCE.

54. “The truth is that no one factor makes a
company admirable; but if you were
forced to pick the one that makes the
most difference - you’d pick leadership.”
Thomas A. Stewart, Author & former managing editor Harvard Business Review

55. ACTION STEPS

56. Action
Plan
Define
the
Problem
Create a Strategy
Define Competencies
Hire & Promote based upon TALENT
Identify High Potential Employees
Develop Leaders
Plan for Succession
TO DO

57. CONTINUOUSLY
EVALUATE!

58. Jennifer McClure
unbridledtalent.com
@JenniferMcClure
THANK YOU!