Just looking at the numbers, corporate investments in leadership development are soaring. The latest data shows U.S. spending at over $15 billion annually. (Yes, that’s billion!) Not only is it a huge number, it’s growing at over 10% a year, and now accounts for 35% of all training spends.
It’s clear the C-Suites around the globe are concerned about the selection, preparation and succession of their next-generation leaders. A lot of money is being spent, but is it being invested in the best way possible? I would argue there is room for improvement.
Leadership Development is not new. We have been at it for decades. It wasn’t until Motorola created Motorola University did others say we can do more. Motorola University evolved out of the company’s technical training, and later six sigma training, as CEO, Bob Galvin, realized that to improve the quality of its products they had to first improve the knowledge of its people. Galvin recruited Bill Wiggenhorn from Xerox as President of Motorola University to lead their corporate university and to expand it past merely technical training. As Motorola became recognized as the first national quality award winner, it was also being recognized for all areas of education, especially leadership education. Motorola was custom-developing leadership development courses for every level in the organization. The leadership development benchmark had been set.
Many companies worked to emulate the early achievements of Motorola, including Milliken & Company where I spent my career. Milliken & Company is over 150 years old and still privately held by the Milliken family. With a strong manufacturing heritage in textiles and chemicals, it also sought to improve its competitive position through quality. Third generation CEO, Roger Milliken, became very close to Galvin at Motorola.They shared many ideas on business, government and education. Milliken was successful in winning the national quality award after Motorola.
Milliken had successfully achieved its quality goal, at least for the time being, but had not committed to sustaining the improvements through education. Roger Milliken was concerned about creating a Milliken University because he felt it was not like a traditional university and it would not award degrees, but Galvin convinced him otherwise, and things started to change. Classes were developed, staffed and filled. Bricks and mortar followed for Harvard style classrooms, followed by 40 required hours of training for every manager each year and distance learning. Leadership education was developed for new managers, managers managing people for the first time and so on up the line. Future leaders were given additional education at the best colleges. The cost was never challenged, it was an investment.
Roger Milliken made the decision that education should not be under Human Resources, but rather Quality. So, my quality responsibilities were expanded to VP of Quality and Milliken University. For two weeks at the end of every year we conducted “Year End Reviews” where every manager was reviewed for performance, compensation, career path and education. Milliken told me he thought it was the most important meeting of the year as it was the only meeting we held only discussing the future. We could not give enough education to young, high potentials, and by the way, there was no budget.
This was about the time I calculated our education investment at 6.5% of salary. This was extremely high by all benchmarks I had at the time. Nevertheless, at that point our top leadership was deeply committed to education and the education roadmap we had developed.
A New Roadmap
As the shine lost its glimmer on the quality awards, the intensity of the competitive landscape was not slowing down. Milliken needed to do more, especially in its 50 plus operations. This led us to benchmarking best-in-class Japanese companies. Four study missions were taken over a two year period, which led to Milliken committing to the implementation of Toyota-type production system we would eventually call the Milliken Performance System. The results seen in Japan were so impressive that we hired the Japanese consultants of JIPM (Japan Institute of Plant Maintenance) to install the system.
While Milliken was anxious for the cost and quality improvements, JIPM continued to advise us that putting in such a system was a “leadership development” process as well. We did not listen and we continued to invest in classroom-based learning. Every operation was assigned a “Specialist” to assist in implementing the system. They all came from Milliken’s ranks with varying pedigrees. JIPM pushed back again saying the “Specialists” should be our future leaders. We had heard that before and we knew you can’t put your “best and brightest” on every project.
As the results of the new system started to come in we realized this was more than a project and it was going to be the way Milliken’s operations would run in the future. When we looked at our “Specialists”, about half were high-potential future leaders, but the other half were A & A – “Average and Available”.
The Moment of Truth
Milliken made the decision to remove the A & A Specialists and replace them with potential future leaders. It hurt and it created tension throughout the company. Milliken had JIPM consultants in house for 9 years. We went through every operation in Milliken, bringing them up to world-class standards. The experience gained by directly interacting with the leading thinkers in operating systems was invaluable.
As our plants won more awards for their accomplishments, the consultants went home. It was now ours to maintain and sustain. As opportunities came open for Operations Managers and Directors, Milliken was able to replace internally with high potential Specialists. (At last count, was able to do this over 20 times.)
“The Milliken Performance System was and continues to be a very successful operational system because of great processes and people.”
We know now if we had not invested in Leadership Development, the consultants would have left and we would not have been able to sustain it.
Honestly, this was an “a-ha moment” for Milliken. This was not the look and feel of leadership development that Milliken was used to. You cannot put your best leaders on everything, but you certainly can do so for the key things that will be the future drivers of the organization.
One Last Thought . . .
Today, Milliken helps other organizations implement their own performance system as JIPM did with Milliken. In addition to cost and quality improvements, we tell everyone how this is also a “Leadership Development” program, as well.
Everyone nods and agrees. Few act.
I hope your organization is different.
Craig Long spent the last 40 years with Milliken & Company in many different roles. For over 20 years he was VP of Quality. More recently, Craig started the consultancy Performance Solutions by Milliken, now operating in 400 operations in 23 countries.