At Cox Enterprises, one of the nation’s leading media companies and operators of automobile auctions, general managers are the top officers at their sites. They are accountable for the bottom-line performance of their units, but they don’t get any coaching regarding their leadership style.
French chose to use Discovery Learning’s four-day Personal Leadership and Organizational Effectiveness (PLOE) program. Internally, it was called the General Manager Leader Lab. “The research literature says that managers learn a lot just in taking on the responsibilities of a new position, but that all that learning is usually squeezed out in the first two to three years,” said French. “We were looking for a program for experienced managers who had done all the on-the-job development and were in need of going to the next level of their leadership potential.”
The pilot program involved only 14 GMs but the company won big. “For the five GMs who could tie planned behavior changes to bottom-line effects, the difference was $3.57 million dollars plus a couple hundred thousand British pounds,” said French. “That’s in four months.” These increased revenues or savings are the sum of impact these GMs were willing to identify as being directly tied to the behavior changes they made as a result of the PLOE.
Many leadership-development programs assume that if you improve the individual, the organization will follow. The PLOE does not make this assumption. Participants leave the program with an organizational-improvement action plan developed through intensive feedback.
The culture survey that begins the PLOE connects organizational traits to bottom-line financial indicators. For example, survey research shows that organizations scoring in the upper 50 percent in the area of decision-making inclusiveness gained a 2-to-1 ROI advantage over organizations scoring in the lower 50 percent. This trend emerged from tracking 30 publicly held companies over five years.
“By using the PLOE’s organizational culture survey and leadership development survey together, we created a unique advantage in providing feedback to our GMs,” said French. “We were able to give a snapshot of their organization’s culture and then overlay on that the 360-degree feedback they received about their individual management style.”
The PLOE then ties individual development to organizational goals. Participants’ individual 360-degree feedback is compared with the culture survey data collected at the beginning of the program, so there’s a context for how the individual needs to grow to support the organization.
Under French’s direction, there were two follow-up processes for measuring the results of the Leader Lab. Direct reports re-evaluated their GM’s performance after the Leader Lab with regard to specific goals and behavior changes that each GM had identified. Every GM was also evaluated on overall performance effectiveness. For the nine GMs who completed the evaluation process, the average rating went from 3.5 on a five-point scale before Leader Lab to 4.5 after only four months.
“Clearly, these GMs had demonstrated a change in behavior that others had seen and liked,” said French. “I think this change in perception reflects a positive ‘halo effect’ as well. Those who provided the feedback before and after were not just responding to the specific changes they noted, but judging the overall perceived change in improved effectiveness.”
The ultimate measurement is bottom-line performance. French cited a compelling example: “One GM received feedback from his direct reports that he was thought to be too risk-averse. During the Leader Lab, he committed to acknowledging with these direct reports that he had heard the message and would agree to be more open to their suggestions and innovations. Soon enough, he found himself considering a proposal to conduct business in an experimental fashion in a way that clearly violated company policy. It was designed to drive up volume but was not guaranteed to work. Against his own instincts, he agreed and undertook the experiment. He now cheerfully admits that the bottom-line impact of that one change in his behavior to be less risk-averse netted the business $300,000 in six months.”
While the PLOE is intended for senior management, components of the program can be rolled out to every level of the organization, and executives can get data on the business at every level, valuable in identifying the disconnect between upper and middle management in areas such as mission and vision.
“My take-away from this experience confirms what I have long believed,” said French. “There is nothing in business as fungible—that is, that translates impacts to the bottom line as effectively—as leadership. Capital improvements don’t do it; cutting prices doesn’t do it. Nothing improves your bottom-line performance faster than effective leadership.”
Randell Jones, MBA, is a communications and leadership development consultant and an award-winning author. He assisted in the research and writing of “Dangerous Opportunity: Making Change Work,” forthcoming in 2004, by Christopher Musselwhite, Ed.D., Discovery Learning president & CEO.Filed under: Leadership Development, Measurement