Harvard Business School Press, 2001 - Ed Michaels, Helen Handfield-Jones, and Beth Axelrod

In 1997, a landmark McKinsey & Company study exposed the "war for talent" as a strategic business challenge and a critical driver of corporate performance. In the new book The War for Talent, the authors of the original study reveal that that in hot economic times and cool, talent management is critical to every company's success.

McKinsey & Company consultants Ed Michaels, Helen Handfield-Jones, and Beth Axelrod provide a strategic view of what it takes to build a strong pool of managerial talent. They looked for evidence that better HR processes distinguished the high-performing companies from the average-performers, but it just wasn't there. What made the most difference was a pervasive talent mindset – a deeply held belief shared by leaders throughout the company that competitive advantage comes from having superior talent and that it is their job to manage talent effectively. With a talent mindset, leaders take bolder actions to build their talent pools.

In addition to the talent mindset, The War for Talent describes the elements of a new more deliberate approach to talent management. It proposes a way to analyze and strengthen the value proposition that the company offers its managerial talent. It describes more proactive strategies for recruiting and developing leadership talent. And it recommends that leaders invest heavily in the "A" performers, affirm the "B" performers, and improve or remove the "C" performers.

From their research, including surveys of 13,000 executives at more than 120 companies and case studies of 27 leading companies, the authors discovered compelling evidence that better talent management leads to better performance. On average, companies that did a better job of attracting, developing, and retaining highly talented managers earned 22 percentage points higher return to shareholders. Through revealing case examples, the authors show leaders at all levels what they can do to improve the way they manage talent and strengthen the talent pool around them. Doing so will not only improve their company's performance; it will make them better leaders as well.

EXECUTION - The Discipline of Getting Things Done – Larry Bossidy and Ram Charan

Disciplines like strategy, leadership development, and innovation are the sexier aspects of being at the helm of a successful business; actually getting things done never seems quite as glamorous. But as Larry Bossidy and Ram Charan demonstrate in Execution, the ultimate difference between a company and its competitor is, in fact, the ability to execute.

Execution is "the missing link between aspirations and results," and as such, making it happen is the business leader's most important job. While failure in today's business environment is often attributed to other causes, Bossidy and Charan argue that the biggest obstacle to success is the absence of execution. They point out that without execution, breakthrough thinking on managing change breaks down, and they emphasize the fact that execution is a discipline to learn, not merely the tactical side of business. Supporting this with stories of the "execution difference" being won (EDS) and lost (Xerox and Lucent), the authors describe the building blocks--leaders with the right behaviors, a culture that rewards execution, and a reliable system for having the right people in the right jobs--that need to be in place to manage the three core business processes of people, strategy, and operations. Both Bossidy, CEO of Honeywell International, Inc., and Charan, advisor to corporate executives and author of such books as What the CEO Wants You to Know and Boards That Work, present experience-tested insight into how the smooth linking of these three processes can differentiate one company from the rest. Developing the discipline of execution isn't made out to be simple, nor is this book a quick, easy read. Bossidy and Charan do, however, offer good advice on a neglected topic, making Execution a smart business leader's guide to enacting success rather than permitting demise.

Good to Great by Jim Collins

Five years ago, Jim Collins asked the question, "Can a good company become a great company and if so, how?" In Good to Great Collins, the author of Built to Last, concludes that it is possible, but finds there are no silver bullets. Collins and his team of researchers began their quest by sorting through a list of 1,435 companies, looking for those that made substantial improvements in their performance over time. They finally settled on 11--including Fannie Mae, Gillette, Walgreens, and Wells Fargo--and discovered common traits that challenged many of the conventional notions of corporate success. Making the transition from good to great doesn't require a high-profile CEO, the latest technology, innovative change management, or even a fine-tuned business strategy. At the heart of those rare and truly great companies was a corporate culture that rigorously found and promoted disciplined people to think and act in a disciplined manner. Peppered with dozens of stories and examples from the great and not so great, the book offers a well-reasoned road map to excellence that any organization would do well to consider. Like Built to Last, Good to Great is one of those books that managers and CEOs will be reading and rereading for years to come.

http://www.jimcollins.com/lib/discussion.html

Level 5 Leadership
• Which is harder to cultivate within yourself: humility or will?
• If Level 5 is about ambition first and foremost about the cause, the company, the work—not yourself—combined with the will to make good on that ambition, then how can each of us as individuals learn to take actions consistent with being Level 5?
• Think of a Level 5 you have known. How did he or she become Level 5? What can we learn from that person?
• Why do so few Level 5s get chosen for top spots in our organizations? What can be done to change this?

First Who
• How might you tell if someone is the right person on the bus?• How might you tell if someone is simply in the wrong seat as distinct from being the wrong person on the bus entirely?
• Think of a case where you had doubts, but your organization hired anyway. What was the outcome? Why did the organization hire anyway, and what do you learn from the situation?
• If compensation is not the primary driver for the right people on the bus, then what are the primary elements in getting and keeping the right people on the bus? What role does compensation play?

Confront the Brutal Facts
• Which side of the Stockdale Paradox is harder for you: unwavering faith or confront the brutal facts? Why? • Think of two environments that you have been in. The first, an environment that did not confront the brutal facts and people (and the truth) were not heard. The second an environment that did confront the brutal facts and where people had a tremendous opportunity to be heard. What accounts for the difference between the two environments? What does the contrast teach about how to construct an environment where the truth is heard?
• Do you have any red flag mechanisms in your life or organization? What ideas do you have for new ones? • In leading a team, what is your “questions to statements ratio”?

Hedgehog Concept (the Three Circles)
• How long, on average, did it take the good-to-great companies to clarify their hedgehog concepts? What implications does this have about finding your own hedgehog concept?
• Are you engaged in work that fits your own three circles: what you are passionate about, what you are genetically encoded for, what you can get paid for? Do you need to change? Which circle is hardest to get right? Why?
• Which is more important for an organization: the goal to be the best at something, or realistic understanding of what you can (and cannot) be the best at?
• Can each sub-unit and each person have a hedgehog concept?
• How is the hedgehog concept different for a nonprofit organization?

Culture of Discipline
• If "rinsing your cottage cheese" is important, how do you tell *which* cottage cheese is worth rinsing? In other words, if diligent attention to detail is essential, how do we decide which details are important, and which are trivial?
• Think of two people: One being someone who only sees his or her job as a "job" and the other who understands that he or she has a responsibility. How does this difference play itself out in their work? What should we look for in locating such people?
• If class distinctions are deeply divisive, then why do organizations persist in creating an executive class that separates itself from those who do the real work? If you ran the whole show, what would you remove to reduce these class distinctions?
• Do you have a stop doing list? What do you put on your stop doing list?

Technology Accelerators
• If technology cannot make or break a company's level of greatness, but only serves as an accelerator of greatness or demise already in progress, then why did everyone fall in love with technology for technology's sake during the 1990s?
• Why is there so much hype and fear about new technologies, and what can you do to view new technologies with objective equanimity?

Flywheel
• Think of two organizations you've observed: one that followed the flywheel principle, and the other that fell into the Doom Loop. What caused the difference between the two? What does your contrast teach about why do so many organizations fall into the Doom Loop, rather than building momentum over the long term in the flywheel?• How do you know when it is time to change the direction of the flywheel?
• If big change programs with lots of hoopla, tag lines, launch events, motivational meetings—and so forth—do not lead to greatness, then why are such programs so common? What should be done instead of these programs?
• How can the flywheel concept apply to your own life and career?

Preserve the Core / Stimulate Progress
• What are your core values?
• What is your core purpose, beyond just making money?
• What is your BHAG—big hairy audacious goals
• What is your first five year base camp, on the way to achieving the BHAG?
• What practices and strategies does your organization have that are dysfunctional and should be open for change?

The Search for Talent - Oct 5th 2006 - The Economist

The world's most valuable commodity is getting harder to find THESE are heady days for most companies. Profits are up. Capital is footloose and fancy-free. Trade unions are getting weaker. India and China are adding billions of new cheap workers and consumers to the world economy. This week the Dow Jones Industrial Average hit a new high. But talk to bosses and you discover a gnawing worry—about the supply of talent. “Talent” is one of those irritating words that has been hijacked by management gurus. It used to mean innate ability, but in modern business it has become a synonym for brainpower (both natural and trained) and especially the ability to think creatively. That may sound waffly; but look around the business world and two things stand out: the modern economy places an enormous premium on brainpower; and there is not enough to go round. The best evidence of a “talent shortage” can be seen in high-tech firms. The likes of Yahoo! and Microsoft are battling for the world's best computer scientists. Google, founded by two brainboxes, uses billboards bearing a mathematical problem: solve it for the telephone number to call. And once you have been lured in, they fight like hell to keep you: hence the growing number of Silicon Valley lawsuits. As our survey this week shows, such worries are common in just about every business nowadays. Companies of all sorts are taking longer to fill jobs—and say they are having to make do with sub-standard employees. Ever more money is being thrown at the problem—last year 2,300 firms adopted some form of talent-management technology—and the status and size of human-resource departments have risen accordingly. These days Goldman Sachs has a “university”, McKinsey has a “people committee” and Singapore's Ministry of Manpower has an international talent division.

Trespassers will be recruited Some of this panic is overdone—and linked to the business cycle: there was much ado about “a war for talent” in America in the 1990s, until the dotcom bubble burst. People often talk about shortages when they should really be discussing price. Eventually, supply will rise to meet demand and the market will adjust. But, while you wait, your firm might go bust. For the evidence is that the talent shortage is likely to get worse. Nobody really disputes the idea that the demand for talent-intensive skills is rising. The value of “intangible” assets—everything from skilled workers to patents to know-how—has ballooned from 20% of the value of companies in the S&P 500 to 70% today. The proportion of American workers doing jobs that call for complex skills has grown three times as fast as employment in general. As other economies move in the same direction, the global demand is rising quickly. As for supply, the picture in much of the developed world is haunted by demography. By 2025 the number of people aged 15-64 is projected to fall by 7% in Germany, 9% in Italy and 14% in Japan. Even in still growing America, the imminent retirement of the baby-boomers means that companies will lose large numbers of experienced workers in a short space of time (by one count half the top people at America's 500 leading companies will go in the next five years). Meanwhile, two things are making it much harder for companies to adjust. The first is the collapse of loyalty. Companies happily chopped out layers of managers during the 1990s; now people are likely to repay them by moving to the highest bidder. The second is the mismatch between what schools are producing and what companies need. In most Western countries schools are churning out too few scientists and engineers—and far too many people who lack the skills to work in a modern economy (that's why there are talent shortages at the top alongside structural unemployment for the low-skilled). What about all those billions of people in the developing world? Alas, adding willing hands to the global economy is not the same as adding trained brains. Both India and China are suffering from acute skills shortages at the more sophisticated end of their economies. Wage inflation in Bangalore is close to 20%, and job turnover is double that (“Trespassers will be recruited” reads a sign in one office). The few elite institutions, such as India's Institutes of Technology, cannot meet demand. And there are also cultural legacies to deal with: India's Licence Raj destroyed management skills, while China's Confucian tradition still emphasises “face” over innovation.

A problem for all of us This poses different challenges for companies, governments and individuals. For companies the main task is simply to end up with more talented people than their competitors. Firms will surely have to cast their net wider, employing more part-time workers and more older workers, and spending yet more on training, even in places where workers seem cheap: the training budget at Infosys, an Indian tech giant, is now well above $100m. Human-resource managers, once second-tier figures, now often rank among the highest-paid people at American firms; they will have to justify that status. But governments too need to act. Removing barriers is a priority: even America still rations the number of highly skilled immigrants it lets in, and Japan and many European countries do far worse. But education inevitably matters most. How can India talk about its IT economy lifting the country out of poverty when 40% of its population cannot read? As for the richer world, it is hard to say which throw more talent away—America's dire public schools or Europe's dire universities. Both suffer from too little competition and what George Bush has called “the soft bigotry of low expectations”. And the talented would do well to intervene in this debate on the side of the disadvantaged. For one last thing is sure to flow from the hunt for talent: even greater inequality. Most societies will tolerate the idea of well-rewarded winners, as long as there is equality of opportunity and the losers also clearly gain something from the system. If those conditions are not met, populist politicians from Toledo to Tokyo will clamp down—and everyone will be poorer for it. A global meritocracy is in all our interests. Be prepared to fight for it.

The Battle for Brainpower - Oct 5th 2006 - The Economist

Talent has become the world's most sought-after commodity, says Adrian Wooldridge. The shortage is causing serious problems

In A speech at Harvard University in 1943 Winston Churchill observed that “the empires of the future will be empires of the mind.” He might have added that the battles of the future will be battles for talent. To be sure, the old battles for natural resources are still with us. But they are being supplemented by new ones for talent—not just among companies (which are competing for “human resources”) but also among countries (which fret about the “balance of brains” as well as the “balance of power”). The war for talent is at its fiercest in high-tech industries. The arrival of an aggressive new superpower—Google—has made it bloodier still. The company has assembled a formidable hiring machine to help it find the people it needs. It has also experimented with clever new recruiting tools, such as billboards featuring complicated mathematical problems. Other tech giants have responded by supercharging their own talent machines (Yahoo! has hired a constellation of academic stars) and suing people who suddenly leave. But a large and growing number of businesses outside the tech industry—from consulting to hedge funds—also run on brainpower. When the Corporate Executive Board (CEB), a provider of business research and executive education based in Washington, DC, recently conducted an international poll of senior human-resources managers, three-quarters of them said that “attracting and retaining” talent was their number one priority. Some 62% worried about company-wide talent shortages (see chart 1). The CEB also surveyed some 4,000 hiring managers in more than 30 companies, and was told that the average quality of candidates had declined by 10% since 2004 and the average time to fill a vacancy had increased from 37 days to 51 days. More than one-third of the managers said that they had hired below-average candidates “just to fill a position quickly”. The CEB found, too, that about one in three employees had recently been approached by another firm hoping to lure them away.

Can't get enough of it

All this brings back memories of the dotcom boom in the late 1990s, when management consultants were writing books such as “The War for Talent” (by Ed Michaels, Helen Handfield-Jones and Beth Axelrod of McKinsey), telling companies that they must move heaven and earth to recruit and promote the best talent. No sooner had the bubble burst than many former masters of the universe were begging for work. Indeed, companies do not even know how to define “talent”, let alone how to manage it. Some use it to mean people like Aldous Huxley's alphas in “Brave New World”—those at the top of the bell curve. Others employ it as a synonym for the entire workforce, a definition so broad as to be meaningless. Nor does stocking up on talent seem to protect companies from getting it spectacularly wrong. Enron did everything that Mr Michaels and his colleagues recommended (indeed, McKinsey was both a consultant and a cheerleader for the Houston conglomerate). It recruited the best and the brightest, hiring up to 250 MBAs a year at the height of its fame. It applied a “rank-and-yank” system of evaluation, showering the alphas with gold and sacking the gammas. And it promoted talent much faster than experience. Another corporate disaster, Long-Term Capital Management, was even more talent-heavy than Enron, boasting not only MBAs but Nobel prizewinners among its staff. But despite all this talent, the companies still succumbed to greed and mismanagement.

The coming shortage

Clearly there is more to good management than hiring the best and the brightest. Among other things, it requires rewarding experience as well as talent, and applying strong ethical codes and internal controls. Indeed, talent-intensive businesses have a particular interest in maintaining high ethical standards. Whereas in manufacturing industries a decline in such standards is often slow, in talent-intensive ones it can be terrifyingly sudden, as Arthur Andersen and Enron found to their cost. All the same, structural changes are making talent ever more important. The deepest such change is the rise of intangible but talent-intensive assets. Baruch Lev, a professor of accounting at New York University, argues that “intangible assets”—ranging from a skilled workforce to patents to know-how—account for more than half of the market capitalisation of America's public companies. Accenture, a management consultancy, calculates that intangible assets have shot up from 20% of the value of companies in the S&P 500 in 1980 to around 70% today. McKinsey makes a similar point in a different way. The consultancy has divided American jobs into three categories: “transformational” (extracting raw materials or converting them into finished goods), “transactional” (interactions that can easily be scripted or automated) and “tacit” (complex interactions requiring a high level of judgment). The company argues that over the past six years the number of American jobs that emphasise “tacit interactions” has grown two and a half times as fast as the number of transactional jobs and three times as fast as employment in general. These jobs now make up some 40% of the American labour market and account for 70% of the jobs created since 1998. And the same sort of thing is bound to happen in developing countries as they get richer. A second change is the ageing of the population. This will be most dramatic in Europe and Japan: by 2025 the number of people aged 15-64 is projected to fall by 7% in Germany, 9% in Italy and 14% in Japan. But it will also make a difference to China, thanks to its one-child policy. And even in America, where the effect will be less marked, the retirement of the baby-boomers (which has just started) means that companies will lose large numbers of experienced workers over a short period. RHR International, a consultancy, claims that America's 500 biggest companies will lose half their senior managers in the next five years or so, when the next generation of potential leaders has already been decimated by the re-engineering and downsizing of the past few decades. At the top of the civil service the attrition rate will be even higher. This means that everyone will have to fight harder for young talent, as well as learning to tap (and manage) new sources of talent. At the same time loyalty to employers is fading. Thanks to all that downsizing, the old social contract—job security in return for commitment—has been breaking down, first in America and then in other countries. A 2003 survey by the Society for Human-Resource Management suggested that 83% of workers were “extremely” or “somewhat” likely to search for a new job when the economy recovered.

As well as becoming more footloose, the workforce is becoming less standardised. Today employees come in all shapes and sizes. Some 16% of American workers telecommute some of the time. A quarter of the staff at B&Q, a British DIY chain, are over 50; the oldest is 91. And these diverse workers are often part of a global supply chain that keeps going 24 hours a day. Managers not only need to deal with lots of different sorts of people, but also to manage workers in different countries and often across different functions. That means even more competition for people with up-to-date management skills. Obsession with talent is no longer confined to blue-chip companies such as Goldman Sachs and General Electric. It can be found everywhere in the corporate world, from credit-card companies to hotel chains to the retail trade. Many firms reckon that they have pushed re-engineering and automation as hard as they can. Now they must raise productivity by managing talent better. With opportunities at home running dry, the hunt for talent has gone global. Over the past decade multinational companies have shipped back-office and IT operations to the developing world, particularly India and China. More recently they have started moving better jobs offshore as well, capitalising on high-grade workers with local knowledge; but now they are bumping up against talent shortages in the developing world too. Even governments have got the talent bug. Rich countries have progressed from simply relaxing their immigration laws to actively luring highly qualified people. Most of them are using their universities as magnets for talent. India and China are trying to entice back some of their brightest people from abroad. Singapore's Ministry of Manpower even has an international talent division.

The dark side

Competition for talent offers many benefits—from boosting productivity to increasing opportunities, from promoting job satisfaction to supercharging scientific advances. The more countries and companies compete for talent, the better the chances that geniuses will be raked up from obscurity. But the subject is strewn with landmines. Think of the furore that greeted Charles Murray's and Richard Herrnstein's book “The Bell Curve”, which argued that there are differences in the average intelligence of different racial groups; or the ejection of Lawrence Summers as president of Harvard University because he had speculated publicly about why there are so few women in the upper ranks of science. It would be wonderful if talent were distributed equally across races, classes and genders. But what if a free market shows it not to be, raising all sorts of political problems? And what happens to talented Western workers when they have to compete with millions of clever Indians who are willing to do the job for a small fraction of the price? This survey will argue that the talent war has to be taken seriously. It will try to avoid defining talent either too broadly or too narrowly but simply take it to mean brainpower—the ability to solve complex problems or invent new solutions. It will thus focus on what Peter Drucker, the late and great management guru, called “knowledge workers”. But there is no point in being dogmatic. The nature of critical talent varies from company to company: it may be the ability to crack a few jokes while turning an aeroplane around in 25 minutes, as demonstrated by Southwest Airlines. It is one of the marks of a sophisticated society that it rewards a wide variety of different talents. The survey will conclude by looking at the widening inequalities that will result from the competition for talent, and weighing up the risks of a backlash against the talent elite.

BUILT TO LAST- Jim Collins

This analysis of what makes great companies great has been hailed everywhere as an instant classic and one of the best business titles since In Search of Excellence. The authors, James C. Collins and Jerry I. Porras, spent six years in research, and they freely admit that their own preconceptions about business success were devastated by their actual findings--along with the preconceptions of virtually everyone else.

Built to Last identifies 18 "visionary" companies and sets out to determine what's special about them. To get on the list, a company had to be world famous, have a stellar brand image, and be at least 50 years old. We're talking about companies that even a layperson knows to be, well, different: the Disneys, the Wal-Marts, the Mercks.
Whatever the key to the success of these companies, the key to the success of this book is that the authors don't waste time comparing them to business failures. Instead, they use a control group of "successful-but-second-rank" companies to highlight what's special about their 18 "visionary" picks. Thus Disney is compared to Columbia Pictures, Ford to GM, Hewlett Packard to Texas Instruments, and so on.

The core myth, according to the authors, is that visionary companies must start with a great product and be pushed into the future by charismatic leaders. There are examples of that pattern, they admit: Johnson & Johnson, for one. But there are also just too many counterexamples--in fact, the majority of the "visionary" companies, including giants like 3M, Sony, and TI, don't fit the model. They were characterized by total lack of an initial business plan or key idea and by remarkably self-effacing leaders. Collins and Porras are much more impressed with something else they shared: an almost cult-like devotion to a "core ideology" or identity, and active indoctrination of employees into "ideologically commitment" to the company.

The comparison with the business "B"-team does tend to raise a significant methodological problem: which companies are to be counted as "visionary" in the first place? There's an air of circularity here, as if you achieve "visionary" status by ... achieving visionary status. So many roads lead to Rome that the book is less practical than it might appear. But that's exactly the point of an eloquent chapter on 3M. This wildly successful company had no master plan, little structure, and no prima donnas. Instead it had an atmosphere in which bright people were both keen to see the company succeed and unafraid to "try a lot of stuff and keep what works.

TOPGRADING - DR. BRAD SMART

The key to building a superior company, an increasing number of observers now agree, is the ongoing ability to recruit and retain superior personnel. In Topgrading, industrial psychologist and global consultant Bradford Smart expands upon this idea by examining in great detail exactly how today's premier organizations have assembled such top-level employees, and then showing precisely how others can do it, too. "Simply put, topgrading is the practice of packing the team with A players and clearing out the C players," Smart writes. 'A players' is defined as the top 10 percent of talent available at all salary levels--best of class. With this radical definition, you are not a topgrader until your team consists of all A players. Period." Essentially a best-practices manual for developing this outstanding personnel pool, the book is based on more than 4,000 interviews and case studies conducted by Smart at major corporations like General Electric as well as fast-growing high-tech companies and small family-owned firms. He further bolsters its effectiveness by including his extensive "Chronological In-Depth Structured Interview Guide," along with other assessment tools and hands-on strategies for assembling an ideal work team

BLINK MALCOM GLADWELL Why "Blink" Matters: The Power of First Impressions From Susan M. Heathfield

Professional speakers and trainers have long asserted that people make up their minds about people they meet for the first time within two minutes. Others assert that these first impressions about people take only thirty seconds to make. As it turns out, both may be underestimates. According to Malcolm Gladwell, in Blink: The Power of Thinking Without Thinking the decisions may occur much faster - think instantaneously or in two seconds. His findings have serious implications for organizations. According to Gladwell’s research, we think without thinking, we thin-slice whenever we “meet a new person or have to make sense of something quickly or encounter a novel situation.” He says, “Snap judgments are, first of all, enormously quick: they rely on the thinnest slices of experience … they are also unconscious.” We thin-slice because we have to, and we come to rely on that ability because there are lots of hidden fists out there, lots of situations where careful attention to the details of a very thin slice, even for no more than a second or two, can tell us an awful lot.” (p.44) Whenever we have to make sense of complicated situations or deal with lots of information quickly, we bring to bear all of our beliefs, attitudes, values, experiences, education and more on the situation. Then, we thin-slice the situation to comprehend it quickly. The implications of this concept have astonishing significance for our personal reactions to most situations. It seems to me that this ability to think without thinking, to make snap decisions about situations and people in a “blink”, has significant implications for how we interview and hire staff. It plays havoc with how we view ourselves and our ability to interact with people who are different than ourselves. It impacts how we develop friendships with people at work. It affects our networking and business relationship building. It affects who we believe in a work disagreement or confrontation.

What Got You Here Won’t Get You There – Marshall Goldsmith

Goldsmith, an executive coach to the corporate elite, pinpoints 20 bad habits that stifle already successful careers as well as personal goals like succeeding in marriage or as a parent. Most are common behavioral problems, such as speaking when angry, which even the author is prone to do when dealing with a teenage daughter's belly ring. Though Goldsmith deals with touchy-feely material more typical of a self-help book—such as learning to listen or letting go of the past—his approach to curing self-destructive behavior is much harder-edged.

For instance, he does not suggest sensitivity training for those prone to voicing morale-deflating sarcasm. His advice is to stop doing it. To stimulate behavior change, he suggests imposing fines (e.g., $10 for each infraction), asserting that monetary penalties can yield results by lunchtime. While Goldsmith's advice applies to everyone, the highly successful audience he targets may be the least likely to seek out his book without a direct order from someone higher up. As he points out, they are apt to attribute their success to their bad behavior. Still, that may allow the less successful to gain ground by improving their people skills first.

Growing Talent as if Your Business Depended On It

Traditionally, corporate boards have left leadership planning and development up to their CEOs and human resources departments - primarily because they don't perceive that a lack of leadership development in their companies poses the same kind of threat that accounting blunders or missed earnings do. That's a shortsighted view, the authors argue.

Companies whose boards and senior executives fail to prioritize succession planning and leadership development end up experiencing a steady attrition in talent and becoming extremely vulnerable when they have to cope with inevitable upheavals - integrating an acquired company with a different operating style and culture, for instance, or reexamining basic operating assumptions when a competitor with a leaner cost structure emerges. Firms that haven't focused on their systems for building their bench strength will probably make wrong decisions in these situations.

In this article, the authors explain what makes a successful leadership development program, based on their research over the past few years with companies in a range of industries. They describe how several forward-thinking companies (Tyson Foods, Starbucks, and Mellon Financial, in particular) are implementing smart, integrated, talent development initiatives. A leadership development program should not comprise stand-alone, ad hoc activities coordinated by the human resources department. A company's leadership development processes should align with strategic priorities. From the board of directors on down, senior executives should be deeply involved in finding and growing talent, and line managers should be evaluated and promoted expressly for their contributions to the organization wide effort. HR should be allowed to create development tools and facilitate their use, but the business units should take responsibility for development activities, and the board should ultimately oversee the whole system.

By former A.T. Kearney consultant Laura Reeves, Rakesh Khurana and Jeffrey M. Cohn

2006 All-Stars

For the 50 most admired companies overall, FORTUNE's survey asked business people to vote for the companies that they admired most, from any industry.