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When does leadership development become organisational development?

21st Oct 2011
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Are leadership development and OD two sides of the same coin? Or chalk and cheese? Sean Mills of Kenexa says improving the quality of leadership will also improve the performance and capability of the organisation.

 

Much has been written about the importance of developing leaders to meet the challenges of the future. A wealth of material has also been produced on organisational development (OD) and how, by overcoming the barriers to effectiveness, it can improve an organisation’s overall performance. So where do the two meet?

Let’s start with some definitions. Leadership development is the easier of the two to define. "Expanding the collective capacity of organisational members to engage effectively in leadership roles and processes" (McCauley 1998) is as good a definition as any.

"This is not to say that leadership development is the be all and end all of OD. It is not. There are other items that need consideration."

For  organisational development, the Chartered Institute of Personnel and Development (CIPD) defines it as: "The planned and systematic approach to enabling sustained organisation performance through the involvement of its people." Even the CIPD concedes that "behind this definition lies a depth of research and practice, but also confusion".

When we talk about development, we have a very simple definition of a leader: "Anyone who has responsibility for the performance of others." So if you believe that OD is essentially about improving the capability of an organisation to succeed in its stated goals (vision/mission/values/strategy), and that the capability of an organisation resides mostly (but perhaps not wholly) in its people, then improving the quality of leadership in an organisation must, by the definition above also improve the performance and capability of the wider organisation. If you can develop leadership capability on a wide enough scale, you should achieve performance improvement across the organisation.

This is not to say that leadership development is the be all and end all of OD. It is not. There are other items that need consideration: developing and executing winning strategies, creating efficient operational systems and processes, having a structure that works in the environment in which the organisation operates, ensuring the organisation has the right staff etc.

However, when you consider who is responsible for strategic implementation; who chooses and defines the processes; who creates the structures and who hires and fires staff, then the importance of leadership (and by extension its development) in OD becomes obvious.

Business growth

To illustrate the above, we worked with a client in the logistics arena. They had a number of traditional businesses that effectively facilitated the movement of goods into and out of the country. They had been successful for some years, however they realised that, whilst their performance was sustainable in the longer term, it was not going to give them the growth they were looking for.

The CEO considered the best way of leveraging the physical assets at his disposal (plant, property and infrastructure) and decided that the organisation should diversify into related businesses through a combination of a new start-up, joint ventures and an acquisition. He identified that he needed to leverage his people too, and asked us to both assess his leadership and identify how best to build the capability of his leaders to execute this strategy.

We assessed the top leadership team, some 40 people, including the CEO. We found that whilst the existing team had all the right leadership capabilities for success in the traditional business (they were adept at searching for information, analysing it, creating action plans and executing), they had little of the required capabilities needed to succeed in the future (people development, teamwork, empathy and flexible thinking). What was interesting was that where these capabilities did exist, they resided mostly with the CEO and the MD of his biggest operation.

Corporate governance

This led to a number of difficult questions: What did this mean for the future strategy of the organisation? What actions needed to be taken? How great was the succession risk, and what did it mean for corporate governance? We provided a number of recommendations including:

  • Create individual development plans for key leadership team members.
  • Identify roles that require external hires and provide assistance to fill them.
  • Align recruitment, reward, performance and talent management processes to future requirements. 

As a result a number of people left the business; others were promoted or given stretch assignments. Also, a number of new hires were made and processes were aligned. By highlighting the gap between the current and future required leadership capability, we were able to identify the individual and organisational capabilities that the company needed to succeed. 

So are leadership development and OD the same thing? Patently not, but the ability to develop the people who cast such a large shadow over an organisation’s success is certainly key to developing the organisation.

Previous articles in this series:

 


Sean Mills is a consultant at Kenexa Leadership, the leadership development specialist. He can be contacted at [email protected].

 

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