By Steven H. Hanks, Ph.D.
According to leadership expert Noel Tichy, “Winning companies win because they have good leaders who nurture the development of other leaders at all levels of the organization.” Nurturing leadership across the organization doesn’t happen by chance — it requires focused attention, starting at he top of the organization. To gain greater insight into key processes for growing leaders, we interviewed two graduates of the Jon M. Huntsman School of Business, Mark James, senior vice president of human resources and communications at Honeywell, and Steve Milovich, senior vice president of human resources, Disney/ABC Television.
Both men said they see leadership development as core to their strategy and operations.
“I think the best gift we can give every employee in our company is a great leader to work with,” Mr. Milovich said. “Leadership is one of the top determinants of why people join and stay with a company. That makes all the difference in the world.”
At Honeywell, developing leaders is strategic and systematic. “It’s not that we’re doing it because we want people to self-actualize and that sort of thing,” Mr. James said. “We have a business and shareholder purpose behind why leadership development is so core to what we do. We have a strong belief that we would rather grow our own leaders internally, no matter what country they’re in, rather than hiring someone from the outside.”
Consistent with this belief, in recent years Honeywell has filled 85 percent of its senior management openings internally. In Mr. James’s mind, leadership development is central to achieving Honeywell’s commitment to customer and shareholder
performance. Growing leaders requires multiple elements, including identifying potential leaders and developing their skills
through stretch assignments, developmental experiences, and mentorship, according to both Mr. James and Mr. Milovich. “We have to hone the capability of our leaders to excel in every facet of their role: the technical and creative as well as the people-focused element,” Mr. Milovich said.
Central to Honeywell’s strategy for leadership development is identification and rigorous assessment of leadership talent. “There are the usual ways to identify people, either by observing strong performance or business results, or someone who demonstrates they are capable of driving a lot of change, or someone who comes up with a remarkable marketing or business development strategy, or excels in operations or invents something in our engineering group,” Mr. James said. “These are the normal ways, but I think what distinguishes Honeywell is the emphasis that we put on what we call the MRR, the Management Resource Review. It’s a mix of assessment and succession planning and development.”
Mr. James talked about the process.
“Not only do you as a manager assess your own talent, but you explain it your boss who explains it to their boss and it goes all the way up to the top where Dave Cote (Honeywell’s chairman and CEO) and I sit down with every business president, every functional leader, and the people below them a level and we talk about all the people who work for them,” James said.
“A commitment to leadership development really starts at the top of the organization,” said Mr. Milovich. Mr. James agrees. And while HR, Learning and Organizational Development can play a facilitative role, leadership development is driven by line executives in both organizations, starting with the CEO.
The person who owns the MRR is line management, and that’s driven by Dave Cote. He schedules all the meetings, he
asks the business leaders to talk before the HR person talks. And when your CEO expects the business president to know all the people working for him a couple layers down and details about what makes those people tick and what their weaknesses are, that’s what makes all the difference in the world.
A key focus at Disney in recent years has been the development of bench strength, said Mr. Milovich. Each manager holds responsibility for developing leadership talent below them, with increasing accountability for having a “viable slate of succession candidates” for key positions.
Mr. James reports that Honeywell executives are responsible for assessing not only the performance of subordinates, but their promotability as well. In the review process, subordinates are sorted into the following categories:
Both organizations have a mix of formal and informal programs for developing leadership talent. These include leadership, and executive development programs. At Honeywell, Mr. James reports that senior executives have formal mentorship assignments.
Dave Cote and everybody on his staff each mentor three or four high potential leaders. “They might be a couple of moves away from our job, or they might be just one move away from our job and we mentor them in whatever their key development areas are, in order to make them ready to become one of us at some point,” he said. “Then, that same thing happens in each of the businesses and
While the process is “more organic” and “less process driven” at Disney, Mr. Milovich reports that the responsibility for identifying, developing, and mentoring talent is core to the leader’s role.
Central in all of this is the integration of leadership and talent planning with the strategic planning processes of the firm. At Honeywell, the MRR process is tied integrally to the organization’s five-year strategic forecast as well as the annual operating plan. Mr. James explains that when Mr. Cote conducts reviews with individual businesses, they spend the morning reviewing the MRR and then the afternoon and evening reviewing the strategic, or annual operating plan of the business. “It’s not just about managing headcount and cost. It’s really key for us to build organizational capability, and so there’s much more rigor put on that in our planning process,” Mr.
Milovich said. “The strategic framework around organization and people is embedded in the long range and annual operating plans, and leaders are held accountable.”
At both organizations, the acid test for their leadership development initiatives comes when someone leaves and you have to fill their position. Is someone waiting in the wings, fully prepared to step into the job?
“Our MRR process ensures we have strong people ready,” Mr. James said. "We don’t use interim roles while we’re searching for a successor. You just don’t see that happening here.”