Business success depends on a strong culture, which must be nurtured by great leadership. That's why most HR professionals will say that identifying and cultivating strong leaders is a top priority. In fact, a recent Deloitte study found that 89% of companies say the lack of effective leadership is a growing concern for them. As a result, companies spend billions on leadership programs each year. But many have little to show for this heavy investment, with 40% of companies suggesting their programs provide little value and 24% seeing no value at all.
But these training programs aren’t to blame alone. Companies must go beyond training and take a more holistic approach to developing their leaders. As Dell’s chief human resources officer, I’ve seen time and again that great leadership creates teams that are more inspired, productive and loyal.
Here are the three keys to successful leadership development that have worked for us:
1. Understand your company’s culture.
A recent study revealed that while 41% of organizations recognize the importance of defining leadership requirements, only 8% actually define specific expectations for their leaders. How can leaders contribute to a positive culture if they don’t even know the behaviors that their company values?
To identify the right cultural DNA for your business, ask for feedback from team members of all levels. Employee feedback sites like Glassdoor are also good resources to identify areas for improvement.
Once you figure out your ideal culture, you can provide your leaders with a list of principles that reflect and support it. For instance, Dell’s leaders are expected to thrive at these seven leadership attributes: optimism, humility, drive, vision, selflessness and good judgment, while building trusting relationships.
2. Embed expectations for leaders into your business’ ecosystem.
It won’t be of much value for leaders to know what is required of them if these expectations aren’t built into the company’s entire ecosystem. One way to do this is by ensuring your leadership training courses emphasize these values. We know this works at our company because over 90% of our leaders say they are able to apply what they’ve learned.
Accountability is also a must. One way we hold our leaders accountable is through our team member surveys. Leaders who score at least 75% favorability from their teams receive recognition and are more likely to be promoted. Those who score 60% or lower are provided resources, tools and training to improve.
Accountability can also necessitate hard decisions. Leaders who are identified as “uninspiring” are twice as likely to leave the company or transition to an individual contributor role within a year. Equally important, we’ve seen that those who commit to being inspirational leaders and continue to hold their leadership positions demonstrate significant improvement in their scores the following year.
3. Use data to uncover the leadership principles that matter most.
Every aspect of your company’s leadership strategy should be led by rigorous analysis. Only through extensive research was Dell’s HR team able to uncover that team members’ engagement, company pride and optimism all dropped by more than 30% when they shifted from an “inspiring” leader to an “uninspiring” one.
We measure this sentiment through surveys resulting in an Employee Net Promoter Score (eNPS). At its core, a Net Promoter Score reflects how favorably consumers view a brand. An eNPS rating turns that reflection internally, serving as a widely used indicator of employee loyalty and enthusiasm, ultimately answering the question, “How strongly do employees recommend the company as a great place to work?” Our most recent score of +28 is significantly higher than the industry benchmark for top performers established by Bain & Company.
Through research, we demystify leadership for our people managers by defining the specific leadership principles for success in our company. For instance, we can show our leaders that “vision” and “selflessness” are the two leadership principles that matter the most to our team members today.
Team members’ eNPS in the company is +45 when they consider their leader to be exceptional at building a compelling vision. However, that score drops nearly 30 points for those who feel their leader is lacking in this area. Having this insight is critical to not only helping leaders retain and attract top talent but to calculate the increased value that engaged, productive employees can drive within the company. To ensure your leadership development is making an impact, it’s also important to demonstrate that the program propels the bottom line as well. At Dell, we are able to show that sales teams working for inspiring leaders have 6% higher sales than those working for uninspiring leaders – a difference of millions in revenue.
To crack the code on leadership at your company, start by clarifying your company’s culture and values. Next, develop a set of leadership principles that will support those values and cultivate a strong culture. Finally, embed accountability for your leaders across the business’ ecosystem and help them to be successful leaders by providing them with guidance and insight. And, finally, base your strategy and ongoing evaluation of your leadership’s impact by building measurement into the process. For example, we survey all employees at least once per year to understand how they are feeling about the brand and their leadership, as well as important specific areas like pride, optimism, inspiration, innovation, integrity, vision and collaboration.
Of course, what Dell values shouldn't be a blueprint for your business, which is why it’s important for every business to assess their own unique culture and better understand what drives their company’s performance. By articulating your company’s defining leadership attributes and basing your programs on data and accountability, your leaders will be more inspiring and both your bottom-line and customers will benefit.
