Smeal Op-Ed: Leadership Development A Sound Investment

By Albert A. Vicere

UNIVERSITY PARK, PA (June 21, 2004) It is impossible for a single leader, no matter how capable, to drive organizational performance alone. Savvy top execs know that sustained performance requires a cohesive, motivated leadership team at all levels of the organization. But how do you build that kind of leadership depth?

A good example can be found at ARAMARK. Under the watchful eyes of executive chairman Joe Neubauer and CEO Bill Leonard, the Philadelphia company has consistently ranked among the best performing companies in its industry and was named one of "America's Most Admired Companies" by Fortune magazine in 2004.

That success didn't happen by itself. When Neubauer and Leonard saw signs of a performance plateau in 1993, they launched the Executive Leadership Institute (ELI), an ongoing effort to drive growth and performance through leadership development. The institute was originally designed for ARAMARK's top 150 people. Since then, the initiative has evolved into almost a rite of passage into senior leadership at the company. Neubauer notes, "Rituals and symbols are very important to a company. For us, attending ELI is a symbol, a badge that says you've made it as a leader."

Leonard portrays the institute and other leadership development initiatives at ARAMARK as major culture-building efforts. "The biggest benefit is meeting and learning from people across all of our businesses. The experience opens people's minds to what we can do for our clients as well as what they can do as leaders to move the company forward."

The institute has been used to help define ARAMARK's approach to doing business, give leaders tools and techniques for analyzing how to grow their business, and provide leaders opportunities to practice using those tools in what the company calls "action projects"— guided team projects that enable leaders to put newfound skills to work to address some of the company's real-time problems.

Some of the action projects have been formidable—merging business units, assessing market potential in new segments, designing processes to involve lower-level managers in leadership development. Many have actually caused the company to shift perspectives or identify new opportunities for growth.

Neubauer sees work on these projects as a key benefit of the experience, "We couldn't be where we are today without ELI. It is the way we teach our leaders to work together, trust each other, function as teams, think critically and challenge everything we do."

He also relishes the opportunity the company has to see its next generation leaders in action. "It's a great opportunity for top management to see future leaders in challenging situations, to see how well they work in teams, how they build trust, how they work together to deal with critical company challenges."

ARAMARK uses discussions during sessions at the institute to help define how leaders need to think and behave to drive future business success. Both Neubauer and Leonard believe those discussions have helped create a common language and common values around the company's strategic agenda.

Neubauer was the CEO when the institute's sessions began. He hoped to get the company's leaders to recognize that if they were going to maintain their stellar performance record, they had to open their minds to new opportunities in the marketplace and new ways to grow. Leonard has picked up on the thrust.

When I asked them how they determined the financial return on ELI, Leonard chuckled. "I don't know how you'd calculate it, but I'd hate to think where we'd be without it." Neubauer added, "What's the value of a common language, a common set of values, deep insight into your leadership team, their abilities, their thinking? You can't put a number on that."

What can we learn from ARAMARK? Maybe that initiatives like the Executive Leadership Institute are absolutely core to a company's future success. They enable your leadership team to assess how the competitive environment is changing, to know when to should shed skins, when to make a change in a marketplace of evolving opportunities.

Leonard may have said it best, "We invest in leadership development to help our people grow and get better. But there are competitive reasons for doing that. Our investment makes our people better. And better people are at the heart of our competitive advantage."

(Albert A. Vicere, one of the country's top leadership coaches, is a professor of strategic leadership at Penn State's Smeal College of Business and president of Vicere Associates, Inc. Visit www.vicere.com.)