The Importance of Leadership Development
By John Essick
Welcome to Spencer Trask Perspectives, a monthly interview series with our CEO Bill Clifford and writer John Essick. Mr. Clifford has generously agreed to share his unique insights and expert opinions on topics such as business development, deal flow, C-suite management, startup culture, entrepreneurialism, and more. We welcome your feedback, and encourage you to submit questions to askST@spencertraskco.com for Mr. Clifford to potentially answer in future articles.
Organizations require strong and confident leadership in order to implement a culture that inspires employees and engenders creativity and innovation throughout its workforce. Where to find these leaders and how to cultivate their skills for the demands of leadership are important factors organizations face as they navigate growth and compete in an ever-evolving marketplace.
In this installment of Spencer Trask Perspectives, William (Bill) Clifford and I discuss the challenges organizations face when it comes to identifying and preparing their leaders of tomorrow.
John Essick: In the past, being a leader meant setting the right example; now, it is increasingly up to those at the top to establish and communicate a culture that embraces the factors that engage employees. What are some of the best practices today’s leaders can adopt to help them adapt to the changing roles that are required of them?
Bill Clifford: First of all, it’s important to realize that the leader isn’t THE culture. Rather, the leader enables the culture, creating the environment where the desired culture is allowed to grow and flourish. The best leaders establish an environment in which each employee sees and feels the organizational culture. It’s more than just talk; it’s an atmosphere that motivates them to a higher level of loyalty and performance.
While the scope and detail vary widely by the size of the organization, there are a few basic principles that a leader should exhibit to set the tone for the organization, and allow the culture of the organization to grow and take shape around them.
One of the most important ways I’ve always chosen to set the tone and encourage a culture within my organization was to openly and completely share the strategy. I wanted every employee, and I mean every employee, to know and understand where we were going and why. I always believed that each employee was faced with some decision, no matter how small, during the course of their workday in which knowledge of the company strategy helped them decide the right answer to their question. It gave every employee a greater sense of belonging to something as a participant decision maker, not a cog in a wheel.
The second principle was complete honesty in every employee interaction. Employees will never forget the time that they were deceived by their leadership. In an organization filled with layers of executives and managers, employees have only one path to the truth in an organization — their management structure, which starts with senior leadership.
The third principle is that as leaders we have to be careful with our choice of words, such as our use of superlatives or the language we use to communicate with employees. Something as off-hand and innocuous as a brief hallway conversation with an employee can often resound through the halls of buildings far and wide, with reciprocating impacts good and bad.
JE: In terms of finding qualified individuals for leadership positions, are organizations better served by looking to recruit people from outside the organization rather than internally?
BC: When making a determination on whether to fill leadership positions from inside versus outside the organization, there is no correct answer. Each situation is different and must be evaluated based on the needs of the organization at that particular time.
Organizations that need bold and fresh ideas, a management shake-up, a strategy reset, or even a leader who brings a viewpoint from a totally different industry, would typically look to an outside hire. The issue is definitely one of time, place, and organizational need.
Organizations that need stability and a continuance of a successful strategy, culture, and management execution may opt to seek an internal candidate who is familiar with all aspects of the current operation. These employees are much more likely to have developed strong working relationships with the current management team, and can make a rather seamless entry into the leadership role.
JE: What are the one or two greatest challenges that organizations face when seeking to develop leaders from within the organization?
BC: In terms of developing internal employees for future management leadership positions, I’ve found two circumstances that present the biggest challenges:
First is the challenge of employee retention. The individual that you select for additional management development is likely your highest achiever — a top performer in their current and prior assignments — and well regarded in the organization as an up-and-coming star. As such, they likely have developed a strong reputation both inside and outside your organization. Therefore, they have likely become known not only to your direct competition, but also to the placement and search organizations that recruit talent in your industry. So, as you are investing time and developmental training in your future leadership candidate, others might be looking to take advantage of that investment and make an enticing offer to get your star to change jobs.
Second, it’s often difficult to predict exactly what leadership skills will be valuable as new positions become available. I’ve had many EIT’s (Executives-in-Training) who were ready for their next move, but unfortunately, when a position became available, it was clear that the EIT wasn’t a good fit because, for example, the position required 10 years in IT or a CPA plus prior Big 4 (or 6 or 8!) experience. While the EIT’s were ideal fits for maybe half the open leadership positions, the other half we filled by outside hires. There’s one thing you can’t create no matter how excellent the development training you provide, and that’s experience.
JE: Studies have established that almost half of managers don’t receive any training when they take on new leadership roles. How can an organization be more proactive in giving their employees the tools and knowledge to handle a new role with new responsibilities?
BC: Unfortunately, we too often tend to promote our best team performers to become managers, often hurting the organization doubly by taking away the best individual performer, and then asking them to perform skills for which they are the least well-equipped.
Most newly appointed managers, especially in the technology industry, have no prior training or experience in management before their first management assignment. This is a sad state of affairs for individuals tasked with performing duties that they are unprepared for. However, it can be an even worse state of affairs for their subordinate employees who often have to deal with unprepared managers’ amateurish attempts at Management 101.
Whenever possible, I suggest breaking projects down into small project teams that offer multiple individuals some small form of management responsibility over people and deliverables. Using the small team approach, it’s easy to determine who amongst the team has management aptitude and can be “cultivated” as future management talent. Then, as bigger and broader project assignments are successfully delegated and accomplished, there’s confidence you have a future manager/leader in that individual.
For more tips and advice, follow our Spencer Trask Perspectives series on Medium, or follow us on Twitter @SpencerTrask. You can learn more about Spencer Trask by visiting spencertraskco.com.
About Bill Clifford
Bill Clifford is Chief Executive Officer of Spencer Trask & Co., a privately owned advanced technology incubation firm. Prior to joining Spencer Trask & Co., Mr. Clifford served as Chairman of the Board and Chief Executive Officer at Aperture Technologies Inc., General Partner of The Fields Group, and General Partner of New Vista Capital. He is also the former President and Chief Executive Officer of Gartner Group, the world’s leading authority on the information technology industry, user and vendor technology strategies and market research. During his tenure at Gartner, annual revenues increased from $175 million in fiscal 1993 to $780 million in fiscal 1999.
Mr. Clifford currently serves on the board of directors of Cybersettle Inc. and SWK Holdings (SWKH.OB). He has been featured in CEO Magazine, Leaders Magazine and Forbes, and is a keynote speaker and panelist at numerous Technology Industry conferences.
