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How SAP, Coca-Cola, and Target Develop Their Top Leaders

Discover how fortune 500 companies are increasing employee engagement, company trust scores and ultimately net operating profits.

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BY Melissa Thompson - 03 Nov 2017

PHOTO CREDIT: Getty Images

Companies like Coca-Cola and Target go beyond the call of duty when it comes to leadership development, which has recently become quite the trend. But yet only a handful of companies were known for breeding world-class executives before it became "cool." Not having a leadership development program is also a contributing reason why many startups fail.

Will leadership development save a failing company? No.

However, small businesses can use these principles to run a more profitable long term operation during growth and hiring phases.

Everyone talks about leadership development as a priority but rarely is that reflected in the investment made as it relates to executive time and capital resources. However, when companies do walk the walk by incorporating leadership development, there's a ripple effect across the organization.

For example, SAP reported after deploying a multi-year leadership development program they saw increases in employee engagement, company trust scores, and ultimately the company's net operating profit. I talked to Jessica Parisi, CEO of the consulting firm behind SAP, Coca-Cola and Target's leadership development programs, and she told me her company used both instructor-led and virtual approaches to develop over 80 percent of the 40,000 plus leaders in every sector of these companies.

Whether your company is going to take a virtual or in-house approach, here are several key areas of competency according to Parisi.

1. Use competency models.

When we think of leadership growth, the competency model is one of the first things that come to mind. Competency models are defined as the framework developed within an organization to define the skill and knowledge required to do a particular job. They are then used within business units to identify and assess competencies in both hard (abilities and experience) as well as soft skills (ability to interact efficiently and harmoniously).

Parisi recommends developing competency models that are unique to each leader's core line of business. By having leaders define what high performance within their organization looks like, they will be able to develop competency models that are true and relevant to their department.

"What is working today is if companies take the time to define high performance or 'great' for the role given their organization's unique strategy, evolving business model and culture. People will become high performing a lot faster if you start by showing them what high performance looks like. As they get better and better they will bring their native genius to the work and make it their own," explains Parisi.

Companies tend to experience very high and fast growth rates, making it easy to overlook the importance of establishing core fundamentals. However, it's imperative that companies not forget to get very clear on its values, how they expect leaders to lead, and the culture it's trying to build.

Competency models today must be designed with this in mind. Historically companies have relied too heavily on the human resources function to set the leadership standards, provide the training and drive accountability. This model doesn't work anymore and often fails to drive business results.

2. Personalize leadership development.

Typically, competency models given to leaders tend to be generic, universal, and not focused on the leader's' particular business unit. They have also failed to take into account the company's unique business strategy or model from which they operate. These are the primary reasons most competency models continue to fail at driving business results.

Leadership development in the past has been very theoretical, leaving the leader to decide what is relevant to his or her role and team. Today, leaders want training and coaching that is deeply personal, relevant to their role, reflective of the culture and the evolving business model of the organization.

Additionally, leaders must have a comprehensive command of their organization's core business model, be able to articulate what great looks like as it relates to the company's unique culture and most importantly knows themselves. If we want leaders to turn strategy into action, training that provides the alignment, mindset, and capabilities needed for success is a must.

The mission in our most beloved brands is the same as all other businesses: create a team/company that stays ahead of trends and is market-defining and leading, while at the same time create an environment for people to do their best. Companies that can foster this model will inevitably drive towards more agile teams and work environments, in turn, be able to pivot quickly as the market shifts.