19 - L&D Buy-In for Talent Attraction and Retention, with John Morgan

That's very nice, thank you very much for the intro. Just really brief, I've been in the human capital industry for my whole career, for just 25 years. I always like to think of myself as a blend — I run a large human capital business, but I'm also a psychologist in training. I have a master's in organizational psychology and also an MBA. I've just always been fascinated by human behavior at work, which is really why I do what I do. Happy to be on the show.

Absolutely. At LHH, we do quite a bit of research to help guide the work that we do, which really falls in three areas. We help our clients recruit talent, develop talent, and transition talent when they have to exit an organization. This study focuses on the middle pillar — developing talent, how we build leaders, and how we help companies guide leadership development investment and programs. In the world we're living in now — the convergence of leadership skills changing amid AI, return-to-work programs formulating, Gen Z entering the workforce — it's a really good time to take a step back and look at what's working in leadership development. That was really the impetus. We surveyed about 1,500 C-suite executives responsible for the purse strings of leadership development investments at large companies across the US, UK, Canada, and Australia — our biggest English-speaking markets — to get a sense for what was really working and what the challenges were. We saw major challenges associated with change management and being agile, how L&D programs impact recruitment and retention, geographic differences across markets, and how to build an L&D culture. Those are the areas we probed into.

Yeah. There were obviously some customs and work styles across those countries that are a little bit different. There were really two major significant differences that jumped out of the data. The first one was in North America — the US and Canada — the composition of leadership programs had a big focus on not just leadership but DE&I. Almost 100% of leadership development programs at least had a component strongly focused on DE&I. We didn't see as many programs with that focus in the non-North American markets. The second one was that there's this success factor that leadership development programs are really only successful when linked with business objectives — kind of motherhood and apple pie, right? In North America, 80% felt the linkage was pretty clear. Outside of North America, less than 50% affirmed that their programs were connected to their leadership strategies. Those were the two major geographic differences that were statistically significant in the study.

It wasn't a huge surprise to see the DE&I component come up because companies based in North America are a little bit behind in that area. The focus on that is actually encouraging to see — lots of companies, despite some of the recent government rulings that have put some programs in question, what we're seeing in the research and anecdotally with customers is that almost all of our clients are really focused on building out this agenda as at least a component of what effective leadership looks like. That's really nice to see.

Great question. Maybe I'll start with some of the challenges that emerged. The five challenges that rose to the top were: lack of interest in the program overall, lack of awareness, a perception that the resources were not adequate, lack of clarity around connection to the actual business, and perceived lack of measurability. These are the questions a CEO is going to ask. What's really great is what we found as solutions. Starting with measurability — that's been the holy grail for any program for a long time. How do you demonstrate to a CEO or CFO that you're getting value from leadership development in a quantifiable manner? We've made tremendous gains because of AI, big data, and digital tools that we can now quantify things we couldn't in the past. Most leadership programs have a coaching component — always hard to quantify the impact of coaching, but any practitioner knows it's the single best development tool on the planet. Now in 2023, every leadership development program has a one-on-one coaching component, and we're using digital platforms to measure that. You can see in real time what the person is working on, the connection to the behavioral competency they're trying to improve, and to the actual business. We're able to do surveys to quantify the impact on dollars. When you do that at scale, you get reams of data — not just 20 people going through a program, but coaching democratized to thousands. You can come with measurable data showing the impact, which gets C-suite to invest more in leadership development. The other challenge is that you need real executive sponsorship to create a culture for leadership development. I'm not talking about doing a video saying 'have at it, guys.' I'm talking about the CEO or executive sponsor personally talking about how leadership development impacted them, got them to the role they're in, telling their story, and being vulnerable. Companies that do this really drive a culture of commitment to development. People want to go to companies where development is a priority. It's the number one reason why people join and the number one reason why people leave. If you get real, authentic executive sponsorship at the top, you can start building a culture where feedback is accepted, vulnerability is accepted, and it's an honor to go to a development program and not a chore.

It goes by not only being a visible advocate, not just once but continuously, but also the investment talks at the end of the day. Making sure a leadership program is not just for C-minus one and C-minus two. If you're really trying to build a leadership development culture, you have to offer real development at every stage of the company. Our best clients segment their employee population, visibly investing in saying the competencies needed for leadership at an early stage, a mid-stage, and a seasoned executive stage are different. We're going to develop different learning journeys and experiences based on those competencies so that from the moment you start or enter, you're clear on what your leadership development path looks like. Another big reason people leave is when career path becomes unclear or development isn't valued — that doesn't keep people, even if you throw money at them. Leadership support at the top, putting investment into the program at all levels, and democratizing coaching — making it available to everybody in the organization. That's how you build a culture of development. The best way an executive can prove they believe in something is to make it available, encourage people to use it, make it a normal part of your cadence — highlight people who've been promoted out of programs, make it an honor at all levels, not just the top.

Exactly right. We're starting to see it a little bit less because there's more of a shift to internal career mobility and retention. There are so many open jobs companies can't fill. It's a really interesting labor market — on one hand, you have large publicized tech downsizings, and on the other, 3.5% unemployment in the US. There's people looking for jobs and jobs looking for people. Companies are starting to realize that comment of 'we don't have anything for you anymore' is really costly — it's expensive to keep hiring and releasing. It's much cheaper to invest money in people, help them grow in their career, understand their top skills today and skill adjacencies they can develop because those are the new jobs you're trying to fill. You'd rather fill them internally than go outside. More and more companies are doing that. My hope is that problem starts to get solved because there's nothing worse than having a career conversation and saying 'your track here is over.' You want people leaving as friends.

The culture of leadership development is a key method to help solve the issue we have with return to work right now, particularly in the US, because it's not as much of an issue outside the US. In Continental Europe, everybody's in the office pretty much every day. In the US, we were headed to more of a hybrid model even before the pandemic, and that was exacerbated. Our research found that people just don't like extremes. The mandate, especially in financial services, to be in the office five days a week is not going over well. My prediction is if it continues on that route, there will be retention issues — the labor market is still really strong. On the other end, the idea that you can work every day in a virtual environment and be connected to the culture is also not realistic. Work happens between meetings, not in meetings. The idea of encouraging people to come in just for a team meeting once or twice a month isn't building culture, communication, or collaboration. I read about a customer, J.M. Smucker, that has a novel concept — a core week concept with 22 weeks out of the year in the office, basically every other week except for summer, and they're finding 80% of people are coming in because they have the flexibility. The research is pretty clear: hybrid is what people want, not extremes. Coming up with the structure for hybrid is the challenge. Leadership culture is a key part because the way to get people back into the office is to say if you want to grow and develop as a leader, you need to build relationships and collaborate. As great as the tech tools are, we're humans and that has to happen in an office setting at least some level. Designing programs where at least a component is in person, facilitated by great technology tools — self-directed learning, virtual coaching, virtual peer circles — when you're learning as a cohort, spend some time together in the office. Leadership development should mirror how work actually happens.

Absolutely right. John, this has been a real pleasure. I note the time and need to let you go. Before we wrap up, I wanted to give you a chance to share with the audience how they can connect with you and find out more about your work, and then give us the final word on the topic.

The one thing that rose to the top of the study is really this notion of change and agility — how people need to develop leadership skills to manage change and agility. We found that rising to the top, with over 90% supporting agility and responding to organizational shifts as a leadership development challenge. If you're building leadership development programs and trying to figure out what the competencies are, make sure you're addressing that because it's a really key leadership development component right now. You can reach me at [email protected]. Happy to reach out to any of your listeners and viewers to talk about leadership development or to talk more about LHH and the work and research we do. Our website is lhh.com. Thanks for having me, and I'm happy to come back and talk about any of the work we do at LHH in the future.