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

Happy to be here, John. Thanks for having me. It is a pleasure to be with you.

That's very nice, thank you very much for the intro. Just really briefly, I've been in the human capital industry for my whole career, which is 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. So happy to be on the show.

Absolutely. At LHH, we really do quite a bit of research to help guide the work that we do. The work we do is really in three areas — if you really simplify it, we help our companies, our clients, recruit talent, develop talent, and transition talent when they have to exit an organization. This study really focuses on the middle pillar, which is developing talent — how we build leaders and how we help companies guide leadership development investment and programs. We felt that in the world we're living in right now, which is the convergence of leadership skills changing amid AI, return-to-work programs formulating, Gen Z entering the workforce — it was just a really good time to take a step back and look at our customers and say, hey, what is working in leadership development? That's really what the impetus was for the survey. We did a survey of about 1,500 C-suite executives — these are C-suite leaders who are actually responsible for the purse strings of leadership development investment in their companies. They were all large companies, and it was across not only the US but also the UK, Canada, and Australia — so all our biggest English-speaking markets — just to get a sense for what was really working in the area of leadership development and what were some of the challenges. A couple of insights we got out of this that we can dive into more: we really saw major challenges associated with change management and being agile — that probably rose to the top. But also how L&D programs really impact recruitment and retention, some geographic differences in terms of what people are doing across the different markets, and how you build an L&D culture and what really works. Those are the areas we really probed into.

There were — obviously customs and work styles across those countries are a little bit different, but there were really two major significant differences that jumped out of the data when we looked at it. The first one was in North America — in the US and Canada, the composition of leadership programs had a big focus on not just leadership but DEI. When you compare that to the UK and Australia and some of the other markets, we had almost 100% of leadership development programs at least having a component that was really strongly focused on DEI, and we didn't see as many programs that had that focus in the non-North American markets. So that was one thing that really jumped out. And I think the second one was that there's this success factor that leadership development programs are really only successful when they're linked with business objectives. We all kind of know it's a little bit of motherhood and apple pie — leadership has to drive the business strategy. We found in North America, a majority, 80%, felt that the linkage was pretty clear — their programs were clearly linked to the business strategy. Outside of North America, we actually found the result to be much less — it was less than 50% affirmed that opinion that their programs were connected to their leadership strategies. So those were the two major geo differences that were actually called out statistically in the study.

It wasn't a huge surprise to see the DEI component come up, because I think 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, by the way, which put some of these programs into question, what we're seeing in the research and anecdotally with our clients is that almost all of our clients are really focused on building out this agenda, at least as a component of what effective leadership looks like. And that's really nice to see.

Great question. Maybe I'll start with some of the challenges that emerged in the report. The interesting thing was that we saw several challenges emerging in getting that buy-in or even participation in the program that they were actually building and trying to fund. The five challenges that rose to the top: one was really a lack of interest in the program overall; second was lack of awareness; third was a perception that the resources in the program were not adequate; the fourth was lack of clarity around connection to the actual business; last was perceived lack of measurability. So those are all the things a CEO is going to ask when they're considering funding this. What's really great is the solutions we found in the report. Starting with measurability — this has been the holy grail for any program for a long time. How do you demonstrate to the CEO or the CFO that you're getting value from leadership development in a quantifiable manner? We've made tremendous gains in the way we design programs now because of AI, big data, and digital tools that we can actually quantify things we couldn't quantify in the past. I'll give you the example of coaching — most leadership programs have a coaching component, which has always been hard to quantify, 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 actually using digital platforms to measure that. You can in real-time see 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're able to do that at scale in a company, you get reams of data — you're not just talking about 20 people going through a program, you're talking about coaching being democratized to thousands of people. So you can really come with data that's measurable and say here's the impact we've made, which gets C-suite executives to invest more in leadership development. The other challenge is you need real executive sponsorship to create a culture for leadership development. I'm not talking about doing a video and saying 'have at it, guys' — I'm talking about the CEO or executive sponsor personally talking about how leadership development impacted them and got them to the role they're in, telling their story and being vulnerable. Companies that do it this way really drive a culture of commitment to development. Ultimately, if you ask me what's the impact on attraction and retention, the research is clear — 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. So if you get executive sponsorship at the top that's real and authentic, you can start building a culture where feedback is accepted, vulnerability is accepted, and where it's actually an honor to go to a development program and not a chore.

Exactly, yeah.

Well, I think 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. It's not just making sure that a leadership program is for C-minus-one and C-minus-two only. If you're really trying to build a leadership development culture, you have to offer real development to every stage of the company. Our best clients that do this really well are really segmenting their employee population. They're visibly putting investment into saying the competencies you need for leadership at an early stage, a mid-stage, and a more seasoned executive stage are different. We're going to develop different learning journeys and different experiences based on those competencies so that from the moment you start, you're clear on what your actual leadership development path looks like. I think that's the other big reason why people leave a company — career path becomes unclear. When career path is not clear or development isn't valued, that doesn't keep people. A lot of companies, even if you throw money at them, often can't retain people. So leadership support at the top — it's not just about turning up on a video or making a speech once. Money talks, and putting the investment into the program at all levels. I love what a lot of our clients have done. I use the example of coaching a lot because it's one of the most visible investments you can give to everybody. Highlight the people that have been promoted that have gotten out of these programs. Make it an honor at all levels, not just the top.

Exactly right. And it's funny about that — I've seen that a lot as well. We are starting to see it a little bit less because there is definitely more of a shift to what we call internal career mobility. It's really about employment because there are so many open jobs that companies actually can't fill. It's a really interesting labor market we're dealing with right now where you have on one hand a lot of large publicized tech downsizings and on the other hand 3.5% unemployment in the US. There's people looking for jobs and there's jobs looking for people, as I always say. Companies are starting to realize that comment about 'we don't really have anything for you anymore' — it's a really costly problem. It's much cheaper to invest some money in people, help them grow in their career, and actually help them understand: here are your top five skills today and here are your skill adjacencies that you can actually develop because these are the new jobs we are trying to fill and we'd rather fill them with you than have to go outside. More companies are actually doing that. So my hope is that that problem you just described starts to get solved, at least a little bit, because there's nothing worse than having a career conversation where you're like, your track here is over. You want people to be leaving as friends, you don't want people to leave that way.

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 much of an issue outside of the US. In Continental Europe, everybody's in the office pretty much every day. In the US, we were headed even before the pandemic to a bit more of a hybrid model anyway, and that was exacerbated. Our research is really interesting — what we found is that right now people just don't like extremes. On one hand, the mandate, especially in financial services, to be in the office five days a week — that's not going over very well. My prediction is pretty clear: if it continues to go down that route, there will be some retention issues, there's no doubt about it, because the labor market is still really strong. On the other hand, the idea that you can work every day in a virtual environment and be connected to the culture of a company is also not realistic. Work happens between meetings, not in the meeting. Work happens after the meeting — that's when people actually get things done. The idea that you're going to have a virtual environment where you encourage people to come in just for a team meeting once or twice a month — that's not really building culture, building communication, collaboration. That's just getting people to see each other and then go back to their homes. I don't think that works either. I read the other day about a customer we work with, J.M. Smucker — they make jam and peanut butter — and they have a really novel concept that I could actually see taking off. They have this core week concept at their headquarters where you have about 22 weeks out of the year in the office, in their core weeks, which are basically every other week except for the summer. They're finding 80% of people are going into the office because they've got the flexibility. So it's not like two days a week or three days a week — it's this sort of core week and you manage your work in that cycle. It seems to be really taking off pretty well. The research is pretty clear — hybrid is what people want. They don't want extremes, they want hybrid. Coming up with the structure for hybrid is really where the challenge is. And I think leadership culture is actually a really key part of it because the way to get people back into the office is to say, listen, if you want to grow and develop as a leader in this company, you need to build the relationships, you need to collaborate with people. As great as the tech tools are, we're humans and that kind of has to happen in an office setting at least some level. Designing our programs where at least a component is in person, facilitated by great technology tools — whether it's self-directed learning, virtual coaching, virtual peer circles — but when you're learning as a cohort, spend some time together in the office. Leadership development should mirror work at the end of the day, and now work actually happens that way.

Absolutely right, absolutely right.

Absolutely. I'll give the final word on the topic and then I'll leave you with how to connect with me. The one thing that really rose to the top of the study is this notion of change and agility and how people need to develop leadership skills to manage change and agility. We found that rising to the top — over 90% cited agility and responding to organizational shifts as a leadership development challenge. So I really encourage all the listeners — if you're building leadership development programs and you're trying to figure out what the competencies are, make sure you're addressing that whatever way makes sense in your organization, 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 that we do. Our website is lhh.com. And just thrilled, John, that you had me. I'm happy to come back and talk about any of the work we do at LHH in the future. So thanks again.