Strategy

Leaders in leadership

Canadian Business, in partnership with Knightsbridge Human Capital Solutions, asked Canadian executives to name the organizations that are best at developing the next generation of leaders. Here's what they told us.

See also ” The evolution of leadership.”

Canadian Business, in partnership with Knightsbridge Human Capital Solutions, asked Canadian executives to name the organizations that are best at developing the next generation of leaders. Here’s what they told us.

No. 1: TD Bank Financial

There’s no exaggeration in TD Bank’s talk about the importance of leadership. Each month, the 30-member senior executive team gathers to attend the company’s Build for the Future program, where time is equally divided between strategy and about leadership within the bank. Not only does president and CEO Ed Clark make it a priority to attend, he has never missed a session. ‘We don’t hold the program if Ed can’t attend,’ says Teri Currie, the group head of marketing communications and people strategy. ‘And at the end of three days, he fields the questions people have come up with.’

But the training doesn’t end there. The team then reconvenes for a second session to focus on coaching. This helps executives to not only get the most out of their teams now, but to nurture the skills that TD most values so that future leaders are ready when an opportunity for promotion arises.

TD defines itself by its leadership practices, and that’s getting the company noticed. In a Canadian Business survey of 240 Canadian executives — vicepresident level and above — 91% said strong leadership contributes to an organization’s competitive advantage. But only 60% responded that developing leadership capacity was currently a priority for their organization. When asked which Canadian company (other than their own) they considered exceptional at building their leadership, respondents picked TD more often than any other company. They liked the focus on leadership at the top of the company, but also noticed that leadership development is a priority at all levels of the corporate ladder. As one respondent noted: ‘Talent is a top priority for the CEO, which means it’s a top priority for everyone else.’

In fact, Build for the Future also has a feeder program called Build for the Future Pipeline, which TD off ers to managers just below the executive level. This program is led by executives to develop the talent TD has selected. The bank believes that these programs are successful because they allow employees to learn from their supervisors, who in turn learn from their superiors. It’s not just waiting around for born leaders to find it. Tim Hockey is a good example. Now group head, Canadian banking, and president and CEO of TD Canada Trust, he has been with TD for 27 years and is only 47. He started as a part-time teller while he attended university, and then quickly advanced to more senior roles within the company.

But while TD places heavy emphasis on promoting from within the organization (two-thirds of job openings are filled with internal candidates), the bank isn’t opposed to collecting outside talent. The company’s current growth trajectory has made it necessary to look beyond its own walls to bolster the talent across North America. That means that while grooming internally is important, there’s no guarantee of promotion and no tolerance for complacency. In order to get the most from its leaders, the company also encourages upper management to change positions and migrate across various businesses. Poll respondents picked up on this and said they thought it helped the top talent ‘develop a true organizational appreciation of the company, and re-energize themselves.’ Says Currie, who started at TD as a part-time teller: ‘You can have lots of different careers and one pension.’

Another strength at TD identifi ed by poll respondents was a disciplined talent-management process within the company that encourages diversity. This commitment to inclusive leadership is one of TD’s secrets to success. The TD Diversity Leadership Council has many initiatives, each led by both a Canadian and an American executive who reports to Bill Hatanaka, group head for wealth management as well as chairman and CEO of TD Waterhouse Canada. There are six diversity strands that promote women, workers of various sexual orientations, visible minorities, diverse communities, the disabled and aboriginal people. Currie says that the diversity program ensures people are able to ‘bring their whole self to work,’ no matter what their background is.

No. 2: RBC Financial

At RBC, leaders aren’t only judged on their ability to meet financial targets, but also on their ability to cultivate leadership skills in their team. In fact, part of their paycheque depends on it. RBC leaders have talent management and development goals they must meet, and those are tied to their performance goals within the company. So, grooming future successors accounts for part of current leaders’ variable compensation, and that means the bank actually counts leadership development in dollars.

This way of measuring performance says a lot about RBC’s unique methods of grooming leadership qualities. The company puts a strong emphasis on promoting from within its own talent pool of more than 80,000 full- and part-time employees and believes that, with the right training, it will be able to promote existing RBC employees through to upper-management positions. That knowledge may be what keeps employees focused on the company’s objectives. ‘Their front-line staff still understand what the corporate strategy is, even though it is a huge company,’ one poll respondent observed.

Many poll respondents admired the bank’s focus on internal promotion, as well as its extensive leadership training programs. Zabeen Hirji, chief human-resources officer at RBC, says that the bank has a three-tiered learning system that it uses to develop leadership skills. ‘On-the-job experience is really the best way for people to learn,’ says Hirji. ‘Then we have a coaching and mentoring component, and a formal learning component that’s more classroom and web-based learning.’ From these three angles, Hirji says that managers learn the black-and-white leadership skills they need while also developing their abilities to engage employees and lead them through change.

But while RBC puts plenty of time into fostering leadership skills in employees, it also aims to nab strong leaders right out of MBA schools. One poll respondent remarked that the bank offers ‘extensive training programs and career opportunities, which aids in leadership development.’ Indeed, the RBC Graduate Leadership Program (GLP) hires several MBA graduates each year who have proven both academically inclined and socially involved, and who have demonstrated leadership. The GLP associates then embark on a two-year program that puts them through a series of assignments in areas such as insurance, wealth management and global technology, and at the end, they have the opportunity to build their careers. As they progress, they receive one-on-one mentoring by executives. All this contributes to a public image that inspires confidence. ‘Their strong pipeline of future leaders is evident to the public,’ one business leader says. ‘They have excellent training programs and follow-up.’

Even RBC’s philanthropic contributions find a way to focus on leadership. RBC runs the Blue Water Project Leadership Grant, which is a 10-year program that will award $50 million to organizations that protect watersheds and ensure access to clean drinking water in Canada. This year, the bank handed out $3.2 million.

No. 3: Research In Motion

Will Apple still be Apple without Steve Jobs? Will RIM still be RIM without the Lazaridis-Balsillie tag team? No one can say for sure, but one way the Waterloo, Ont.-based tech company is hedging its bets is with a high-calibre leadership program that helped the smartphone maker land the No. 3 spot in our survey.

Leading by example for the past 18 years, co-CEOs Mike Lazaridis and Jim Balsillie have seen the company through times of economic uncertainty and constant competitive pressure. More than one senior manager commented on the duo’s ability to lead as a team, with one stating, ‘Finding a way to make the co-CEO model work can’t be easy. They must be doing something right,’ and another claiming, ‘Balsillie/Lazaridis have consistently shown that two heads are sometimes better than one … especially now that the competition includes Steve Jobs.’

RIM’s LeadOn program is another part of that magic. Taken over the course of several months, the five-day program gathers the company’s ‘people leaders’ together to talk strategy, build skills and work through various other RIM-specific modules. The program teaches participants the best practices for leading teams of people as well as how to deal with team members on a one-on-one basis.

RIM offers other in-house training to encourage career development as well as providing ‘training dollars’ for employees to be used for industry conferences or outside educational programs. This comes on top of the company’s formal mentoring program.

Several respondents to our survey cited RIM’s ability to combine innovation with an uplifting esprit de corps as a reason behind the company’s exceptional leadership and reputation. As one commented, ‘They have a very successful product to attract strong leaders. Once [the recruits get] there, I know that investment is made in further development and retention.’ Established in 1984 in Kitchener-Waterloo, Canada’s answer to Silicon Valley, the company now boasts 12,000 employees worldwide, and fills more than 8,500 of those full-time positions in its home country.

No. 4: GE Canada

GE is more than 130 years old, reported Q2 earnings of US$3.3 billion — which is up 14% over last year — and has US$781 billion in global assets. For a company of this size, leadership is key to innovation, reliability and longevity. While other companies may think of leadership as a quality and not a critical path, for GE, leadership is actively cultivated and an integral part of the firm’s business practices, as anyone familiar with the name Jack Welch knows. As one respondent notes, ‘I am familiar with their leadership development practices, and they use a sound program of education, succession planning and mentoring to grow and develop their high potentials.’ In the company’s 2007 annual report, chairman and CEO Jeff Immelt stated, ‘We have always believed that building strong leaders is a strategic imperative.’

At GE, good leadership begets good leadership, and as one survey respondent put it, ‘Their leaders are generally well trained in terms of understanding the value of people and ensuring they are progressing.’ Elyse Allan, president and CEO of GE Canada is a prime example of the GE leadership program in effect, where potential leaders are given various development roles to round out their experience. She began her career at GE 1984 in corporate marketing in the U.S., then became the manager of GE Canada’s customer service program before being offered her current position in 2004.

No. 5: Telus

Rounding out the Top 5 companies most admired for their leadership development is Telus, Canada’s second-largest telecommunications company with almost 35,000 fulltime employees.

Similar to GE, leadership is not taken as a given at Telus. One of the Vancouver-headquartered company’s six strategic imperatives, which provide the framework for building and improving the company, is ‘investing in internal capabilities to build a high-performance culture and efficient operation.’ As one survey respondent commented, Telus has ‘excellent embedding of values with development and career progression plans.’

Being able to identify employees at the early stages in their careers and grooming them for succession is key to any good leadership program. Of all the reasons listed for ranking Telus near the top, respondents identified this quality most frequently, praising the firm’s ‘proven transitional capability.’ The company’s leadership development program starts even before an employee is hired, with the recruitment process. Available to recent graduates and select young employees who rotate through various positions, the program provides a look into all facets of the company and includes mentoring, networking and project management guidance. Candidates who shine in the program have a clear path to promotions.