Leadership Brand: Developing Customer-Focused Leaders to Drive Performance and Building Lasting Value.(Dave Ulrich and Norm Smal

Leadership Brand: Developing Customer-Focused Leaders to Drive Performance and Building Lasting Value

Authors: Dave Ulrich and Norm Smallwood

Publisher: Harvard Business School Press, Boston, Massachusetts ISBN: 1-4221-1030-0 (paperback, advance reader's copy)

Leadership Brand focuses the reader on the issue of leadership development that can elevate an organization's market value and create competitive advantage. Dave Ulrich and Norm Smallwood argue that leadership brand represents an intangible value and shared identity among organizational leaders, which differentiates what an organization can do compared to the competition. The authors' approach to leadership brand demonstrates how to create value for investors, customers, and employees and create a competitive edge for the organization. The authors suggest that to achieve this competitive edge requires a shift from a focus on leaders to leadership: a shift from focusing on "celebrity leaders" to leadership, which represents the array of organizational leaders' credibility, capabilities, and the capacity to foster and sustain future leaders. In addition, a key component in leadership brand is to connect leaders inside the organization to investors and customers outside the firm. Leadership brand occurs when the knowledge, skills, and values of organizational leaders focus employee behavior on factors the customer cares about. Overall, leadership brand shifts the attention to what occurs inside the firm to how it links to what happens outside the firm.

The premise regarding leadership brand is that an exceptional leader may deliver exceptional results for some period of time, but quality leadership is what maintains results, allows organizations to align with changing strategies, and builds confidence in employees, customers, and investors. As such, leadership needs to expand beyond individual development to an institutional process that creates the capacity to produce future leaders to deliver future results. The authors define leadership brand as follows: "leadership brand is the identity of the leaders throughout an organization that bridges customer expectations and employee and organizational behavior" (p. 5).

The first strategy in leadership brand is for an organization to define what goes into a leadership brand. A leadership brand is composed of the fundamentals (defined as leadership code by the authors) and the differentials. The leadership code represents 60 to 70 percent of the core attributes that all leaders must possess to be effective leaders. The differential is the 30 to 40 percent of the attributes that a leader must be able to adapt to the strategies and goals of their organization.

Most of the book is devoted to Ulrich and Smallwood's presentation of a six-step process for building leadership brand:

1. The case for building a leadership brand;

2. Creating a leadership brand statement;

3. Assessing leaders against the brand;

4. Investing in leadership brand;

5. Measuring return on leadership brand; and

6. Building awareness for leadership brand.

The following discussion summarizes points from the steps.

Step 1, "the case for building a leadership brand," is an important first step in building a leadership brand. The first step represents the foundation for building a leadership brand and involves getting top leaders on board for the need for leadership brand. This is achieved by establishing the business case for leadership brand. Executives need to understand how investing in leadership will help them and the organization reach company goals and achieve strategies and that the lack of leadership reduces confidence, growth, and diminishes value for customers, investors, and employees. The authors identify six key challenges to address in building the case for leadership:

1. Workforce planning (thorough understanding of the quantitative leadership challenge);

2. Right results in the right way (the quality of leaders it will need to deliver the right results as defined by the customer);

3. Strategy shift (leaders who can deliver on future/changing strategies);

4. Geography (leaders who can adapt to diverse locations);

5. Mix of M&A and organic growth (leaders who can deliver on mergers and acquisitions and organic growth); and

6. Critical jobs (leaders that can respond to demanding assignments).

The authors also provide a second methodology for preparing a case for leadership brand that involves conducting stakeholder analysis. This includes identifying major stakeholders such as investors, customers, and employees and assessing the value of leadership quality on the different groups. For example, with respect to investors, leadership brand would result in leaders who increase investor confidence, in future earnings, investor intangibles, and market value.

Ulrich and Smallwood suggest Step 2, "creating a leadership brand statement," is necessary to include both the leadership code and differentiated leadership shaped to the specific business. They identify a six-step process to create a leadership brand statement and provide a detailed discussion of the process. Their approach begins with customer expectations and how customer expectations shape firm strategy, shifts to defining the firm brand, customizes a leadership code to the organization, and identifies anticipated results. This process combines the attributes and results into a brand statement and identifies standards to evaluate leadership. The leadership brand statement provides a unifying framework that promotes common leadership development and aligns customer expectations and employee behaviors across the organization.

In the section "Assessing Leaders Against the Brand," the authors' six-step process provides assessment tools to evaluate whether leaders at various levels are measuring up to the desired leadership brand. In this chapter, the authors share their perspectives on effective assessment, share common best practices, and apply general principles of assessment to leadership brand. The authors state that to assess leadership brand three elements need to be assessed, the degree to which leaders have the right stuff, at the right stage, and delivering the right results in the right way.

To assess the right stuff, a leader's predisposition toward the leadership brand can be evaluated or behavioral feedback from the leader's superior, peers, direct reports, clients, and customers can be assessed. To evaluate at the right stage, the authors adapt the Dalton and Thompson (1986) stages model to leadership brand. Four discrete developmental stages are identified, as adjusted to the leadership brand, and include the apprentice/learning the brand, contributor/demonstrating brand efficacy, local leader/building the brand in others, and global leader/perpetuating the brand in the organization. The method allows the assessment at each stage regarding desired performance. The premise of these four stages is that leaders must change the things they do as they move from one stage to the next.

Lastly, leaders need to be assessed regarding whether they are delivering the right results in the right way. The right results are based on the clarification of desired results with investors, customers, and employees. The right way is assess by evaluating whether the methods or actions used to achieve the results are consistent with the leadership brand.

In step 4, "Investing in Leadership Brand," Ulrich and Smallwood suggest that spending on leadership development all too often generates disappointing results. They argue that organizations that start with leadership brand, with a clear business case and a leadership statement that links internal organizational behaviors to customers and business strategy, increase their return on leadership development significantly. To achieve this dramatic improvement in return on leadership development, the authors outline key assumptions about leadership development, provide a formula for developing leadership brand, and present how to create a unifying process for managing leadership brand. For example, one of the key assumptions is that not all leaders are equal and as such development opportunities should be designed to fit specific leader needs. Also, leadership brand invests to build on existing strengths and moderate critical weaknesses, and leaders must master those things that align with the firm brand.

Ulrich and Smallwood suggest that the common formula for leadership development is 70-20-10. Seventy percent of learning occurs in the course of on-the-job experiences, tasks, and problem solving. Twenty percent of learning happens from others through sharing feedback, observing, and working with role models. Ten percent of learning occurs comes from formal training. They contend with the development of leadership brand the new formula should be 50-20-30. That is, 30 percent of learning will derive from training experiences, 50 percent of the learning will continue to happen on the job, and 20 percent of learning will come from life experiences. The increased emphasis on training in this revised formula requires that the content and process of the training must advance the leadership brand to add value for the organization.

In the chapter on "Measuring Return on Leadership Brand," Ulrich and Smallwood stress the importance of effective measurement in leadership brand. They present two approaches to measurement: the competency approach and concrete return on the investment in training. The authors suggest the competency model (defined as a set of attributes, based on the assumption that good leaders share a particular array of characteristics) is flawed. In contrast, the authors recommend the concrete return, which they call return on leadership brand (p.136). The authors offer a four-quadrant model and suggest that one or two measures from each quadrant will demonstrate the value of leadership development investment. The four quadrants are as follows:

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