Are You Building A Leadership Engine?

Zig Ziglar gave one of my favorite answers when a business leader–leery of the risk of training his own staff–asked, “But what if I train my people and they leave?” Zig’s response: “What if you don’t train them and they stay?”

Well put.

A great article appeared in USA Today about 19 companies that seem to train, develop, and grow the most leaders–as evidenced by how many of them left to become CEOs elsewhere. It’s an enviable stat despite the left-handed twist.

The primo companies for “most former employees who are now CEOs at publicly- traded companies with market values of $2 billion or more” are: General Electric with 26, IBM with 18, McKinsey with 16, then PepsiCo and AT&T tied with 13 each, then 14 more companies with bragging rights for between 7 and 12 CEO alumni.

Jack Welch, former GE CEO, was legendary for building a leadership engine in which he identified a high number of CEO-caliber executives, established upward growth paths for each, then was regularly briefed on their development status and readiness for a top leadership position. In an organization like GE–with a strategy of growth by acquisition–being able to pluck a qualified candidate from a ready gene pool on short notice is a necessity. Welch knew every time he bought a new company and selected the CEO from his crop of internal talent, he would anger those who were passed over and probably lose them to other companies. He saw this not as a loss, but as what he had to sacrifice to win. Yes, he was training CEOs for other companies–and he knew it–but not doing so meant curtailing his corporate growth strategy. Procter & Gamble has 12 alumni now CEOs of other $2+ billion firms. The USA Today article quoted A.G. Lafley, P&G’s CEO, as saying he takes some pride in their alumni who have left because it proves “We are a leadership engine and a talent machine.”

Joe Moglia, CEO of TD Ameritrade, likens companies to football programs. He said the curse of successful head coaches is that the phones of assistant coaches start ringing with job offers, because “success breeds success.”

Also quoted was Yum Brands CEO David Novak, a PepsiCo alumni, who said, “If people aren’t going after your people, you really aren’t building a great company.”

Is this ego talking? Or smart business?

Lessons & Actions For You:

No doubt all these powerful leaders have egos. But that aside, it’s clearly smart business. Sure, you could argue the other side and say, “Hey, it’s tough enough finding capable talent at mid-manager levels. Now I’m supposed to build an executive wing and stock it with presidential candidates–which will cost me a fortune by the way–and then lose most of them when they don’t get the promotion they were expecting? I don’t have that much financial clout.” No one said this would be easy. And realistically, few companies have the spending power of the 19 in this USA Today article. Certainly none in the small to mid-size business category. But you don’t have to carry it to the extreme they do. Nor spend the wads of cash they are. The essence of the point here is: Do you have any kind of ongoing leadership development training program that will help you attract top talent, retain it, energize your people, and put you in position to capitalize on growth opportunities with leadership ready to go?

If 1 in 50 companies can answer yes to that, I’d be shocked.

Can you?

If you can’t, don’t beat yourself up. Just get started. Today. And if you’re puzzled about where to begin, here’s good news. This wheel has already been invented. Study the mechanics and methodologies of Jack Welch’s factory for churning out high-caliber leaders. There are a myriad of available books by or about Welch (on CD too). Few would argue he was the master. Or get a copy of the USA Today article, make a list of all 19 companies, then investigate their methodologies for growing leaders. Not one of the 19 made this list by accident. They each have a focused, intentional, and dynamic leadership engine with a crystal-clear development curriculum–and each one is working brilliantly. Would you spend $10,000 to learn their secrets? Then why not find 10 ambitious college grad students, and pay each $1000 to research and report on the leadership program of one of those companies. They’ll end up with more beer money than they can blow in a semester, and you’ll have the skinny on how 10 successful, high-powered companies did what you want to do. Can you think of a better place to start?

The bottom line: The very best leaders recognize the importance of growing the next generation of leaders, and put non-stop, perpetual programs in place to do just that.

When will you start yours?