Copyright Society for Human Resource Management Jun 2005The best companies for leaders are the ones with a strong focus on leadership development and CEOs who are actively involved in the process.
3M Co., 
General Electric Co. and Johnson & Johnson head a 2005 list of the 20 U.S. companies that are best at developing leaders. The list is selected by an independent panel of judges and is sponsored by Hewitt Associates and The Human Resource Planning Society (HRPS). (see "Top 20 U.S. Companies for Leaders" on page 24.)
Global HR services firm Hewitt Associates conducted a study comparing the companies on the list with 350 other U.S. companies and found that, "as baby boomers get ready to retire, the top 20 companies are ahead of the curve," says Marc Effron, global practice leader, leadership consulting, at Hewitt. "They realize their future success relies heavily on how well they are currently developing the next generation of leaders," he says.
"More to the point, they understand that programs such as executive education, assignment-based development and mentoring are all good, but the only way they truly work is if senior leadership is involved in and accountable for the success of these initiatives," adds Effron.
Among the practices that differentiate the top companies from the rest:
* 85 percent of these companies hold their leaders accountable for developing their direct reports, compared with 46 percent of other companies.
* 53 percent of the top companies earmark between 6 percent and 15 percent of incentive pay for leadership development, vs. 34 percent of other companies that do so.
* 95 percent of these companies say their leadership initiatives attract quality leaders to their organizations, compared with 59 percent of other organizations.
* 95 percent of the top companies have a CEO succession plan; less than 60 percent of other companies have one.
* 85 percent of the top companies promoted their current CEO from within, vs. 68 percent of the other companies.
"The lesson learned," says Walt Cleaver, president and CEO of the HRPS, a global network of senior HR professionals, "is that no matter what your company size or business, an organization that offers quality leadership development programs will attract stronger leaders and will increase their chances for success in the long run."
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