Sunday, 29 July 2007

Building a leadership brand

Dave Ulrich writes an interesting article (as always) on leadership branding in July and August’s Harvard Business Review.

Unfortunately, Ulrich does not succeed in being completely clear about what he means by this term and we will need to wait until his book Leadership Brand: Developing Customer-Focused Leaders to Drive Performance and Build Lasting Value (blimey, I thought the title of my book was long) is published in September to find out more.

Although Ulrich ties the leadership brand to the behaviours and training of leaders, in many ways, a leadership brand seems to be a rehashing of organisational capability, which Ulrich started writing about in 1990. So Ulrich explains that a leadership brand provides a company with competitive advantage by differentiating it from other organisations and provides the example of Disney which competes not purely on a successful business strategy, but by its capabilities: the ability to ensure that “ride operators and restaurant personnel will be upbeat, friendly and gracious”. To me, this is an organisational capability for customer service, not something specifically focused on its leadership.

Other than this slight lack of clarity, the article is a good read, and supports my views about organisational capability. In particular, Ulrich notes that (leadership) capability needs to be built upon something unique to a particular organisation, and that this requires HR practices that are different too:


“These companies go beyond standard-issue leader training. Instead of merely strengthening the abilities of individual leaders, these companies focus on building a more general (leadership) capability… Apple, for example, wants to be known for its outstanding ability to innovate and design user-friendly technology; to that end, it hires the best technologists and designers and encourages them to break new ground. Wal-Mart wants to be known for its everyday low prices, so it hires managers who are frugal and unassuming themselves, and who can drive a hard bargain.”


As Ulrich points out, the problem with vanilla competency models and vanilla training, is that they generate vanilla leadership, and this doesn’t succeed in contributing significantly to organisational performance.

Where I disagree with the article is Ulrich’s insistence that (leadership) capability comes from an outside-in approach. Of course, leadership development (and other HR activities) do need to align with business priorities. And I agree with Ulrich’s comment that:

“Thousands of companies have spent millions on their own corporate universities; yet most have failed to develop true leadership bench strength. That’s because, in too many cases, the approach to leadership training is detached from what the firm stands for in the eyes of customers and investors. Rather the training is the same from company to company, regardless of whether the company is a fast-food chain or an aerospace contractor.”


But in my view, the most valuable (leadership) capability is the type that transforms what a company is capable of doing, rather than just supports it to do the same thing more efficiently or effectively. And in my experience, this usually comes from looking within the organisation, at its existing strengths which can be leveraged more effectively, than simply at the current, external business environment: ie inside-out as well as outside-in.