Leaders: get a growth culture

Organisations need to continuously adapt. That means all of your people need to be growing and developing all of the time. Developing a growth culture which supports that ambition is therefore, we would argue, a strategic imperative. 

So what does this mean for organisational development? According to Dr Robert Kegan, Harvard’s Meehan Professor of Adult Learning and Professional Development, the traditional approach to leadership development – high-potential programs, corporate universities and retreats – is no longer enough.

" All of your people need to be growing and developing all of the time."

“By definition, these approaches are ‘something extra’ – beyond the normal flow of work,” Dr Kegan says. “So how do you ensure employees transfer their new knowledge to the stubbornly durable context of business as usual?”

“How do you sustain the double costs of external inputs and employees’ time away from the job?”

Andy Fleming, chief executive and one of Dr Kegan’s co-authors of An Everyone Culture, points out another major flaw in 20th century corporate development.

“Companies only run these programs for five to 10 per cent of their people, their so-called ‘high-potentials’,” he says. “That means they’re effectively writing off 90 per cent of their workforce.”

“There may be no greater waste of a company’s resources.”

Getting better

Fleming says succeeding in an increasingly complex operating environment requires companies to get better at getting better.

“We need to create an environment where everyone, every day is being intentionally supported and challenged to develop themselves, each other and the organisation to achieve regular breakthrough performance,” he says.

This plays to the heart of what’s needed to create organisational agility. Adaptive challenges – those ever more pervasive moments when organisations must change in response to customer demands and competitive forces – can only be met by people and organisations exceeding themselves.

Making it happen

At EY, together with Dr Kegan and Fleming, we propose a new model for 21st century development which injects growth practices into business as usual. The model deliberately puts individual and business stretch challenges into daily tasks by fostering three enablers of human development.

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As Dr Kegan explains, each of these enablers is underpinned by the latest findings in the science of human development.

“It’s not until relatively recently scientists discovered transformative learning is possible at any age,” he says. “The thinking used to be, once we hit 20, our mental equipment was basically set.

“But discoveries like neuroplasticity have shattered that idea. We now know people’s capabilities can qualitatively grow and develop at any age. And this opens up whole new possibilities for learning in the work setting.”

Dr Kegan says the conditions which support human development involve “optimal forms of conflict”.

“This is where people are challenged to stretch themselves outside their comfort zone (edge), while receiving significant encouragement and support from the people around them (home),” he says.

“These conditions lead to the kinds of transformative experience that outstrip the limits of the way a person works.”

Fleming says in most companies, ‘edge’ and ‘home’ sometimes come together for some people – but usually by accident.

“These people have ‘moments’ in their careers where they had a high-growth experience,” he says.

“They got thrown in the deep end with a supportive sponsor and the result was career- or even life-changing. But you don’t want that happening just by happy accident. You want a culture where development happens for everyone, every day – not just for the fortunate few once in a blue moon.”

Every day

This everyday development is what the authors mean by ‘groove’– the intentional practices, habits and routines which foster consistently higher levels of ‘edge’ and ‘home’.

Fleming cites the practices of Bridgewater Associates, which manages the world’s largest and highest performing hedge fund.

“Bridgewater requires their people to enter their errors, omissions, and missteps in a ‘mistake log’ and regularly drill down to discover the flaws in people’s thinking that actually caused the problems,” he says. “The only unpardonable sin? Not acknowledging your mistakes.”

He says when he, Dr Kegan and EY run the growth culture diagnostic over companies, ‘groove’ is always the lowest-rated dimension.

“Very few organisations have baked development into the day- to-day fabric of work,” Fleming says.

Conflict is your friend

Importantly, the model creates a culture where individuals and teams have a high capacity to surface and challenge existing assumptions about themselves, other people and all aspects of their business.

This is critical in a culture that supports agility. However, Dr Kegan is quick to emphasise that companies must put in place strategies to stop “question everything” from becoming demoralising or punitive.

“Companies using the model need protocols for dealing with conflict. Instead of allowing conflict to be inhibitive or destructive, employees use these moments as opportunities to check their own thinking and learn something from someone else’s perspective,” he says.

Development is a team sport

Fleming notes primary developmental relationships go beyond a manager or trainer and expand to include peers and even direct reports.

“This is exactly the philosophy used by elite sporting and military teams,” he says. “A US military leader told me the difference between a good and a great marine unit is that, in the great unit, the men and women constantly challenge each other to grow and get better.”

“When someone fails, it’s not a blame game. But it’s also not a lowering of standards. The team explores what external condition or internal thinking is holding someone back. And then they work together to remove that barrier.”

Profound improvements

Compelling evidence suggest companies embracing a growth culture have a lot to gain. Proven benefits include increases in profitability, innovation and growth.

More specifically, organisations infuse development into their everyday business have improved employee retention, greater speed to promotion, more-competitive cost structure, less interdepartmental strife, better error detection, more-effective delegation and enhanced accountability.

This radical approach could be the catalyst for a new type of agile organisation, with a workforce pumped and primed to take on disruption – and win.

Adam Canwell is Global Leader, Leadership Consulting at EY

The views expressed in this article are the views of the author, not Ernst & Young. This article provides general information, does not constitute advice and should not be relied on as such. Professional advice should be sought prior to any action being taken in reliance on any of the information. Liability limited by a scheme approved under Professional Standards Legislation.

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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