Hay Group, the global management consulting firm, released its eighth annual Best Companies for Leadership Study and Top 20 list. The study ranks the best companies for leadership around the globe and examines how those companies nurture talent and foster innovation in their ranks. This year, Procter & Gamble topped the list, followed by Microsoft, General Electric and Coca-Cola.
According to Hay Group’s study, the Best Companies for Leadership are purposeful and strategic in developing, enabling and motivating leaders throughout the organization to do their best. In fact, 73 percent of the Top 20 companies reported giving everyone at every level of the organization the opportunity to develop and practice the capabilities needed to lead others, compared to only 47 percent of all other companies. These future-focused companies also look ahead to what roles are – and will be – mission-critical to their success, and then intentionally identify and develop leaders with the right skills to fill those roles. To facilitate this process, the Top 20 companies reported doing more to develop their population of new and mid-level managers, with higher usage rates of web-based leadership modules (72 percent vs. 39 percent at all other companies), classroom-based leadership training (80 percent vs. 55 percent) and mentoring by a senior manager or executive (68 percent vs. 39 percent).
“The Best Companies for Leadership recognize that many of the skills once required solely for senior leadership roles — high levels of emotional intelligence, commitment to continuous learning, analytical thinking — are now critical at every level of the organization,” said Ruth Malloy, global managing director of Hay Group’s Leadership and Talent practice and co-leader of the Best Companies for Leadership Study. “To excel in today’s highly complex and competitive business environment, the Best Companies are taking deliberate steps to develop and reward these competencies to enable their organizations to achieve operational excellence today, while driving innovation for tomorrow.”
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In fact, 82 percent of the Best Companies for Leadership use rewards or reprimands that are based on rigorous measurements of performance against goals, compared to only 58 percent of all other companies. Similarly, 89 percent of the Top 20 companies encourage employees to set challenging or aggressive goals, versus only 69 percent of all other companies.
At the same time, the Best Companies for Leadership foster cultures that encourage innovation. Seventy-six percent of the Top 20 companies reward and stimulate cross-business-unit collaboration to develop new business lines, compared to only 54 percent of all other companies. The Top 20 companies are also more likely to encourage employees to learn in areas outside of their areas of expertise (70 percent vs. 48 percent) and to recognize and reward employees for really new and different business ideas (77 percent vs. 58 percent).
“It’s becoming harder to create and run profitable businesses in traditional ways,” said Rick Lash, director in Hay Group’s Leadership and Talent practice and co-leader of the Best Companies for Leadership Study. “Organizations have to think differently about how they relate to their markets. The Best Companies are adept at anticipating and meeting client needs at multiple points along the consumer spectrum. They’re shifting from selling products and services to becoming integrated business partners that can help their customers solve for pressing needs.”
In fact, 78 percent of the Top 20 companies reported that their organization encourages employees to spend much time discussing customers’ future needs, compared to only 55 percent of all other companies.
Correspondingly, 90 percent of the Top 20 companies reported that senior leaders communicate that the firm’s survival depends on adapting to evolving market trends, compared to 70 percent at all other companies.
“In times of rapid change, many companies lose their focus, failing to adequately engage and enable their current workforces as the organizations shift to achieve short-term or immediate objectives,” added Lash. “Those companies that simultaneously execute on immediate priorities while aligning their employees with a shared sense of purpose, and develop leaders at all levels to contribute and act on innovative ideas, have a better chance at financial success.”
Other major findings from Hay Group’s Best Companies for Leadership Study include
| The Best Companies develop, motivate, engage and enable employees | Top 20 | All Other Companies |
| Actively manages a pool of successors for mission-critical roles | 85 percent | 55 percent |
| Leadership development programs better enable employees to deliver on my company’s goals/strategies | 84 percent | 62 percent |
| Leaders work hard to connect people with projects that are personally meaningful to them | 82 percent | 61 percent |
| Senior leaders personally spend time actively developing others | 74 percent | 48 percent |
| Provides employees access to resources for innovation, even though success is not guaranteed | 68 percent | 47 percent |
| Leaders have the ability to generate personal and organizational loyalty | 84 percent | 67 percent |
| The Best Companies emphasize innovation | Top 20 | All Other Companies |
| Provides structured opportunities for younger employees to promote innovative ideas to senior leaders | 71 percent | 54 percent |
| Treats failure (after a good effort) as a learning opportunity, not something to be ashamed of | 72 percent | 59 percent |
| Views employees in new start-up or innovation areas as having equal importance to those driving operational improvement | 80 percent | 56 percent |
| Provides employees with creative challenges rather than narrowly defined tasks | 78 percent | 62 percent |
| The Best Companies are globally aware and respect diversity | Top 20 | All Other Companies |
| Requires an appreciation of global issues as a key job requirement | 79 percent | 46 percent |
| We actively recruit cultural minorities | 71 percent | 34 percent |
| Leaders are culturally savvy and have the skills to work effectively with diverse teams | 84 percent | 64 percent |
| Has a high proportion of women in senior leadership positions | 59 percent | 40 percent |
| The Best Companies emphasize environmental and social responsibility | Top 20 | All Other Companies |
| Leaders are advocates for environmentally responsible business practices | 89 percent | 61 percent |
| Our leaders are change agents who initiate change toward higher environmental standards | 86 percent | 59 percent |
| Actively applies sustainable and energy-efficient policies | 83 percent | 56 percent |
| Uses corporate social responsibility to recruit employees | 68 percent | 48 percent |
