Global Study Finds Effective Leadership Development Critical to Corporate Performance and Competitive Advantage

Mercer Delta Executive Learning Center Launches First Annual Global Leadership Study 


DAVOS, Switzerland, Jan. 26  /PRNewswire/ -- A majority of global business executives believe that leadership shortages, specifically in their ability to adapt and respond to business risks, are threatening corporate performance, according to the results of first annual Global Leadership Imperative.  The Global Leadership Imperative was launched today by Mercer Delta Executive Learning Center, the leading global provider of senior executive programs, at a luncheon coinciding with the World Economic Forum in Davos, Switzerland.

Mercer Delta Executive Learning Center in cooperation with the Economist Intelligence Unit surveyed 223 senior executives in large corporations across 17 industrial sectors worldwide.  The survey data was supplemented with a number of in-depth senior executive interviews.  The study revealed that organizations that implement effective processes aligning leadership development with business challenges typically realize stronger corporate performance than those that do not have such processes in place.  In fact, companies with effective processes for assessing individual leadership development needs were significantly more likely to have recorded an increase in sales and net income between 2003 and 2004.  Additionally, interviews revealed that employing processes that continually refine and align leadership development activities to meet business challenges results in other tangible long-term benefits, including the ability to seamlessly fill key executive positions with fully-qualified leaders from the internal leadership pipeline. Despite these benefits, the research also indicates that a majority of companies still do not have quantitative processes in place to link leadership development initiatives to a company's business challenges.

"Implementing processes that foster the competencies of multi-dimensional leaders has clearly become a critical factor in a company's ability to manage risk and successfully execute global business strategies," said Dr. David Dotlich, president of the Mercer Delta Executive Learning Center.  "What was once largely considered a function of human resources, measurable leadership development and its impact on corporate performance is now viewed as a business imperative by enterprise leaders and the entire organization.  Now that the challenge is recognized, the next step is to address it."

Business Risks Reveal Leadership Weaknesses

The study uncovered the top four business risks facing business leaders and their ability to achieve business results over the next 24 months. According to 83% of senior executives, "increased competitive pressures" poses the greatest challenge to large businesses and requires the broadest leadership skill set, followed by,

  * "responding to rapidly changing market conditions" (67%),
  * "failure to innovate" (60%), and
  * "satisfying customer expectations" (52%).



More than three-quarters of respondents said these challenges had uncovered weaknesses within the organization's leadership pipeline, and competitive pressures alone revealed deficiencies in more than 90%.  Moreover, approximately 30% acknowledged that their companies did not have a good understanding of the leadership capabilities required to overcome these risks, specifically related to driving innovation.  Approximately 72% said their companies were planning to take action to close these leadership gaps, yet only half of companies surveyed have made sufficient investments to do so.

"While creating cost efficiencies and streamlining operations remains a top priority for senior executives, those measures will only help companies to cut costs, not drive growth," stated Dr. Stephen Rhinesmith, partner, Mercer Delta Executive Learning Center.  "In order to overcome current deficiencies in the skills needed to drive innovation and growth, organizations need to invest the necessary resources in cultivating a healthy leadership pipeline that can effectively adapt to change brought about by globalization and increased competitive pressures."

North America Behind in Measurement

Leadership development programs were found to be most effective when they identify appropriate leadership performance measures.  Executives from a wide range of companies have found success by aligning leadership competencies with the organization's business strategies and corporate culture.  Subsequent executive interviews indicate that no matter what leadership training tools are utilized, in order to effectively measure leadership competencies, they must be periodically evaluated to shift with dynamic business conditions.

The study found North American companies (63%) are more likely than their counterparts in Western Europe (47%) and Asia-Pacific (57%) to have identified the next generation of senior leaders and targeted specific individuals for development within their organizations; however they are substantially less likely to have established an effective process for assessing individual leader performance.

Developing "Whole" Leaders

Senior executives identified the profile of today's successful business leader as multi-dimensional, possessing a combination of three core competencies in order to rise above the top four business challenges.  Mercer Delta Executive Learning Center categorizes these competencies as:

  * Head:  Cognitive skills; providing strategy, direction and purpose
  * Heart:  Emotional intelligence; understanding, working with, and
    developing others
  * Guts:  Values; doing the right thing based on clear values



"Traditionally, cognitive skills were seen as the most important element of leadership," added Dr. Dotlich. "'Head' leaders -- often being "the smartest people in the room" -- operate under the assumption that if they analyze the situation, absorb the data, and decide among rational alternatives, they are strong leaders.  On the other hand, the Global Leadership Imperative supports that while the one-dimensional leadership approach may have worked in simpler times, partial leaders struggle during an era of paradox, ambiguity, and unpredictability.  Our experience is that companies have a great supply of leaders who are strategic, analytical and purposeful (head) and a shortage of leaders who can develop talent (heart) and have the courage to do the right thing (guts)."

Survey results further show that the competencies needed to lead successful organizations in the changing business landscape are not fixed; rather they differ and are associated with varying levels of leadership within an organization.  In order to manage all four categories of risk within the next two years, executives identified the capacity to "think like a customer" as the most important leadership capability for their organizations.  In addition, they expressed the importance of requiring leaders to possess highly-developed skills across all three characteristics.  Survey findings illustrated that executives did not find competencies such as "creating trust" and "ethical leadership/values-based decision-making" a priority for helping to overcome business risks.  In subsequent interviews, however, executives explained these are underlying measures of more action-oriented leadership competencies that directly link to business results.

About the GLI

Mercer Delta Executive Learning Center in cooperation with the Economist Intelligence Unit conducted a survey including 223 senior executives situated in 44 countries, with companies engaged in 17 different industrial sectors. Company annual revenues range from approximately $1 billion to more than $10 billion.  More than half the respondents held C-Level positions or their equivalents, including CEO, CFO, and CIO, while more than 42% were Vice Presidents or Directors, and 6.7% were heads of business units.  The remainder was Board Members.

About Mercer Delta Executive Learning Center

Mercer Delta Executive Learning Center is the leading global provider of executive development, assessment, education, and coaching for Global 1000 companies throughout the world.  Mercer Delta Executive Learning Center works with CEOs and Senior HR executives to foster a development strategy, build a leadership pipeline, and deliver high-impact solutions to take their current executives and high-potential future leaders to new levels of performance, innovation, and accountability.

Mercer Delta Executive Learning Center is the leadership division of Mercer Delta Consulting, LLC.  Mercer Delta Consulting is a global management consulting firm that advises CEOs, senior leaders and Boards of Directors on organizational change, leadership and board effectiveness.  Since the firm's founding in 1980, it has consulted to more than 200 CEOs of organizations around the world.

Headquartered in New York, the firm has practices across the United States and in Europe and Canada.  Mercer Delta is part of Mercer, a major global provider of human resource and specialty consulting services and an operating unit of Marsh & McLennan Companies, a global professional services firm.  More information about Mercer Delta Consulting can be found at http://www.mercerdelta.com/.

About MMC

MMC is a global professional services firm with annual revenues exceeding $12 billion.  It is the parent company of Marsh, the world's leading risk and insurance services firm; Guy Carpenter, the world's leading risk and reinsurance specialist; Kroll, the world's leading risk consulting company; Mercer, a major global provider of human resource and specialty consulting services; and Putnam Investments, one of the largest investment management companies in the United States.  Approximately 59,000 employees provide analysis, advice, and transactional capabilities to clients in over 100 countries.  Its stock (ticker symbol: MMC) is listed on the New York, Chicago, Pacific, and London stock exchanges. MMC's Web site address is http://www.mmc.com/.

About Economist Intelligence Unit

The Economist Intelligence Unit is the world leader in global business intelligence.  It is the business-to-business arm of The Economist Group, which publishes The Economist newspaper.  The Economist Intelligence Unit provides geopolitical, economic and business analysis on more than 200 countries, as well as strategic intelligence on key industries and management practices.  With over 300 full-time professionals in 40 offices around the world, supported by a global network of more than 700 contributing analysts, the Economist Intelligence Unit is widely known for its unparalleled coverage of major and emerging markets.  More information about the Economist Intelligence Unit can be found on the Web at http://www.eiu.com/.

  Contact:
   Dawn Lauer, Peppercom          Carl Foster, Peppercom
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DATASOURCE: Mercer Delta Executive Learning Center



CONTACT:  Dawn Lauer, [phone], , or Carl

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http://www.mmc.com/

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