The Importance of Leadership Development

A crucial element in turning talent to business advantage during this recession is leadership development. It is no exaggeration to say that today's economic crisis is a leadership training and testing ground, under the most stressful conditions. So every organisation must step up and use the current economic situation to test and develop its next generation of leadership. At the same time, it must also make sure it is looking after its current leaders, communicating with them and supporting them

Here, insights from Robert Thomas's book, Crucibles of Leadership: How to Learn from Experience to Become a Great Leader are especially appropriate. In the book, he argues that what matters most in leadership development is not just innate capabilities but what one makes of experience—particularly the traumatic and often unplanned crucible events that challenge one's identity as a leader.

As Thomas writes, "The ability to find meaning and strength in adversity distinguishes leaders from nonleaders."

The point is to turn the current economic situation into a learning experience that can benefit current leaders, as well as those who will form the next generation of leadership. Burt Tansky, CEO of Nieman Marcus, noted recently: "I've been telling many of our young people who have never been through this [kind of downturn] to study what's going on today, study the kind of things that are being put in place to minimise the stress, because as their careers develop, they're going to have to face some of this again."

The next step, then, would be for organisations to institutionalise those insights into what's happening today and use them to advance leadership capabilities throughout the organisation.

Honda Motor Co., for example, has historically used work projects as the foundation for developing leaders. Honda project managers are expected not only to produce results but also to create a learning contract with the company around the leadership skills developed during the course of the project.

Applied to a recessionary environment, that kind of project-based, experiential approach to leadership development can make young leaders attuned to what they are learning, and help them share experiences with their peers.

It is easy enough to say that companies that can rally their people will have a better chance to thrive during and after the economic downturn. But effective talent management is not simply a matter of exhortation or charisma. Close, comprehensive and scientific analysis of the capabilities needed to achieve high performance is vital.

It's workforce talent that is feeling the effects of today's economic crisis most profoundly. At the same time, this crisis could well be the period when strategic talent management finally comes of age.

The Importance of Leadership Development