The key is having the leadership talent to carry out the organization’s strategy. Most commonly, senior executives are asked to identify the qualities needed by individuals given the future direction of the company. The executive “common language” is translated into competencies that bear little resemblance to the actual language of executives.

Imagine that part of your business is in trouble. Who would you choose to fix it? A person who had demonstrated competence by successfully turning around troubled operations in the past, or one rated highly on a competency inventory? If you are like the vast majority of executives we have talked to, demonstrated competence trumps competency ratings every time. High scores on competencies don’t necessarily translate into the ability to accomplish specific tasks. So it’s no surprise that executives base placement decisions primarily on their assessment of whether a person can do the job, as demonstrated by past performance in challenges similar to the ones that lie ahead.

Where do executives learn how to deal with these kinds of challenges? Through experience. What experiences? Step 1 in leader development should be identifying the leadership challenges that the strategy will create. It is then possible to talk about the kinds of experiences that a talented person might need to prepare him or her for those challenges. From a business perspective, there is a clear preference for those who have done it before over those who might benefit from learning how to do it. How people use their abilities to handle situations is more important than the list of abilities they are seen to have. If people can learn how to handle various situations, then development can be driven by giving them the experiences that allow them to put existing abilities to use and to develop the new ones needed. In other words, the opportunity for talented people to grow lies in the challenges they face (or the “stretch” required), so the focus of development must be on giving people the challenges (embedded in their assignments) that over time will enhance their ability to accomplish the goals of the organization. This means that the challenges talented people are given need to be those most directly relevant to the business strategy and objectives of the organization.

There is no better example of this philosophy in operation than Carlos Ghosn, chief executive officer of Nissan and Renault. In his recent book he commented:

Using the business strategy to identify the important developmental opportunities is the crucial link. Trying to identify a list of competencies that top executives should have is a distraction from the true task, which is developing competence through experience. While many organizations engage in the theoretical exercise of identifying “nice to have” attributes given the strategic aims, relatively few HR organizations tackle the bottom-line question of what experiences are important to developing competent executives. It is ironic that the intuitively powerful and well-accepted practice of putting talented people into challenging assignments would be so difficult to apply systematically, yet that appears to be the case. Instead of a well-defined process, such placements are usually made on an ad hoc basis by line managers responding to serendipitous opportunities. It is rare to see the business strategy translated into leadership challenges, much less to see systematic identification of the important developmental experiences (assignments, projects, roles models, and so on) related to them. Even more unusual is to see deliberate developmental moves coupled with specific strategies to help the person learn what the experience was chosen to teach. In contrast, consider how well developed the HR processes are for such traditions as performance management or management training.

One organization that has linked leadership development to strategy is Canada’s largest financial institution, RBC. With a history of commercial banking, RBC carefully articulated strategic priorities that their five business platforms must be able to deliver against. These strategic priorities served as the foundation for leadership development processes that included identification of ten key experiences that define an RBC leader, as well as the cross-unit talent management processes required to provide high potentials with the experiences. At the most general level, RBC’s strategy dictated that cross-business leadership would be necessary in the new enterprise, that it would need both generalist and specialist leaders. Assessment of their current executive population showed a wide gap between current capability and future needs; so began a systematic process of determining both potential and ambition for cross-business roles, and talent management to assure that cross-business development opportunities were targeted at those executives most likely to profit from them.

A substantial amount of research has identified what lessons different kinds of experiences offer that executives need to learn. Certain kinds of assignments (start-ups, turnarounds, increases in scope and scale, various projects, and the like), exposure to exceptional people (usually superiors, both good and bad), overcoming hardships and difficult times, and even some training and educational programs, are what drive development. On-the-job experience, supplemented by strategic interventions, is where the greatest leverage is.

The good news is that experience is available every day to everyone. The bad news is that using experience effectively to develop executive talent is not as straightforward as offering training programs. It is not the first priority of a business to develop people, so critical business needs may dictate giving jobs to proven players rather than to the people who might develop the most from having them. Furthermore, there is no science to dictate how to use specific experiences to develop specific skills in specific people at the right time. For all these reasons, using experience rather than programs to drive the development process is itself a challenging proposition.

One organization that has made a concerted effort to shift the focus of development from programs to on-line experience is Procter & Gamble (P&G). This 100-plus-year-old company with sales in 145 countries and 28,000 managers (10 percent of them expatriates) places a premium on building talent via experience. They began by studying the kinds of experiences their most successful company presidents had been through and by identifying the kinds of experiences critical to strategic success (for example, brand management, working in a global business unit, and being a general manager of a country operation). It was made clear what experiences are required to move toward a destination job, and a process was introduced in which employees keep track of the types of experience they have had. Building blocks to an executive career have been identified and a host of ancillary processes (including open job posting, a talent development process, and a general management college) put in place to make it work. P&G is able to ensure that executives are placed in positions that can provide new learning and development, rather than “wasting an assignment” (from the corporate viewpoint) and “wasting time” (from the executive’s view).

Boeing has offered one of the most impressive examples we have seen of a company that puts experience at the core of development.^[4] Their goal was to develop leaders while they were running the business by being intentional about the experiences that talented people were given. Called the “Waypoint Project” (from the electronic signals pilots use to navigate), Boeing researchers are 4 years into a 10-year longitudinal study aimed at using experience effectively for development. Since the year 2000, 120 executives and managers have been taking part in the 10-year study of their careers and the key experiences in their development. This research has already produced types of experiences and the strategically relevant lessons that can be learned from each of the experiences. A variety of tools (many of them Web-based) have been developed (using the language and metaphors of the executives) to facilitate access to experience and the learning that takes place in it.

We are suggesting that an effective development approach begins by identifying the kinds of experiences talented people need, given the business strategy. This does not avoid the question of personal attributes, but it does change the focus of it. Instead of looking for some specific and uniform set of attributes, we assume instead that many of the required abilities are learned, that successful job performance can be achieved in different ways, and that successful people do not necessarily have—or need to have—all of the same attributes. People with very different personalities and different skill sets can bring their existing abilities, along with what they learn along the way, to bear on accomplishing the task at hand. How else can we explain the success of so many different kinds of leaders?

If the goal is to use experience to develop competent executives rather than to develop executive competencies, then the challenge is to identify those people who will learn the most from the experiences they are offered. Adult learning is seldom very predictable, and it takes time. If it takes 10 years to become a master chess player, then leadership mastery would require at least as much investment in learning. It is interesting to note that years ago John Kotter suggested that it takes at least 10 years or more to become a general manager. Perhaps if we could better understand the patterns, connections, and content that constitute the “language” relevant to executive behavior, we could come closer than simple competency models to realistically assessing developmental progress.

That complexity aside, several attempts have been made to identify and measure the capacity to learn from experience. The most common high-potential assessment practice (often unsystematic and fraught with error) is supervisor’s judgment. Organizations take a number of approaches to improve on the quality of information used to judge the “high potential.” General Electric (GE) has historically used an Accomplishment Analysis Process that uses trained interviewers to capture a candidate’s experience, achievements, successes, and failures and then to verify those with prior bosses and peers before summarizing them in an assessment report.^[5] Sorcher describes the Group Evaluation Technique that uses the behavioral observations of next-level executives who know the potential executive, capturing the wealth of information that is already available in the organization.^[6] Ram Charan, Stephen Drotter, and James Noel in the Leadership Pipeline emphasize well-defined common standards of potential and frequent reviews of executives.^[7] All of these efforts focus on capturing in a more systematic and defined way the information that is needed, and then making timely (and frequent) decisions based on it.

Other efforts to identify people most likely to learn from experience have resulted in tools that attempt to assess the characteristics associated with learning. One study of more than 800 international managers and executives provided a profile of people who learn from experience based on four general factors: willingness to “pay the price of admission” by their commitment to results and willingness to take risks, showing a “sense of adventure” by taking or making opportunities to learn, doing things that help themselves learn, and learning from their mistakes and changing as a result of their experiences.^[8]

After the learners and the experiences have been identified, getting these right people into the right experiences is critical. Many forces operate to prevent developmental interventions. Executives often are reluctant to give up their talented people; they may be reluctant to fill a key position, which also may be a developmental one, with an “unknown quantity.” And both of these dynamics are exacerbated if the culture of the organization is one that breeds distrust, defensiveness, and protection of turf.

If we assume a base of sufficient mutual respect, trust, and commitment to development, then how does one go about matching developmental need to developmental opportunity? Much development can take place absent a promotion or lateral move, such as setting specific goals, designing the work to optimize development, providing coaching and feedback, exposure to significant people and projects, use of temporary assignments, access to information and resources, attending training and educational programs.

But many powerful developmental opportunities require that a boundary be crossed in order to get the person needing the experience into it—several managers must cooperate. It is no small challenge to pull this off, and the most common process used to determine who gets what job is succession planning.

A typical succession planning process involves identifying key positions, developing lists of candidates, and evaluating those candidates in terms of readiness to fill positions. For those who are seen as having potential but are not yet ready to be promoted, there may be some discussion about what further development or seasoning is needed. The resulting succession or replacement tables are really assessments of current bench strength relative to existing positions. Identification of development needs is incidental to the process, and specific development plans for individuals are usually the product of a separate process if they are created at all.

Using succession planning to drive development requires a different approach. At one company we worked with, succession planning was broken into two phases. The first step was having senior executives assess the talent pool and replacements for key positions likely to come open within a year. The second step, however, aimed directly at making developmental moves. With the help of their HR business partners, executives identify specific positions in their organizations that would come open in the near future and that were potentially quite developmental. “Developmental” was determined by analyzing the jobs against criteria based on research into what makes experiences potentially developmental. They also identified from among their most talented subordinate managers those who needed and were ready for a developmental opportunity. In a half-day meeting, the developmental jobs were presented by the executive (or business partner) responsible for them. The ensuing conversations then identified those high-potential candidates who might profit from the experiences, and a list was created for each open position. In follow-up meetings decisions were made on who got which jobs. As a result of this process, eleven executives were given developmental assignments. A few weeks later these eleven were brought together to assess their experiences so far and to gather suggestions for improvement. One of the most important (and in retrospect obvious) suggestions was to pass on to the developing executive the essence of the conversation in the executive review that led to the placement. In other words, why was this experience chosen and what was he or she expected to learn from it?

Experience may be the best teacher, but our understanding of how it teaches leaves much to be desired. The fickle nature of experience has spawned aphorisms, such as “Some people have 20 years of experience while others have one year of experience 20 times.” Unlike formal courses with specific teaching objectives and examinations to test acquisition of knowledge, experience has no textbook or instructor’s guide. Each experience is at some level unique, and the interaction of a specific person with a specific experience in a specific context makes predicting a learning outcome problematic. True, research has established probabilities—certain lessons are clearly associated with certain kinds of experiences. But what a person will learn, if anything, from a particular experience is difficult to predict.

There are, of course, a wide variety of interventions sometimes used to aid learning from experience. Some training programs are timed to coincide with important transitions, such as entry into management, and provide a framework for learning from a particular event. Three-hundred-sixty-degree feedback can provide multiple perspectives on an individual’s behavior on the job. Some organizations make extensive use of coaches and mentors to work with individuals as they go about their daily tasks. Boeing, as mentioned earlier, provides a number of easy-touse Web-based tools to help its managers learn from experience. But overall, our experience is that most organizations do very little to help people mine the lessons of their experience.

We have been studying the forces that help and hinder learning from experience by asking executives to retrospectively describe learning from challenging assignments and by following leaders on a weekly or bi-weekly basis as they move into new assignments. The results have opened our eyes to the complexity of on-the-job learning. First of all, people have very different styles of learning, or at least of figuring out if they have learned. For some it is the traditional action-reflection-learning-action cycle. But some don’t realize they’ve learned anything until they face a similar situation again and respond to it differently. Others find themselves making the same mistakes again, perhaps learning something the second or third time around. In short, there often is a gap between realization and implementation, and different individuals at different times may learn in different ways—even from similar experiences. The implication is that development is highly individual and must be treated that way. We’ve long known that “one size” rarely fits all except in socks, but the desire for a universal model and efficient systems presents a formidable challenge.

What is learned seems to vary significantly as well. Many learn almost exclusively those things necessary for the immediate accomplishment of the task—what works, what this boss values, why quality is down. Whether or not any of these very specific insights, as necessary as they may be for performance, will generalize to the next assignment is problematic. For others, the learning is more generic, such as how the organization works or what its values are. Still others learn powerfully about themselves—what they love, where their hot buttons are.

What makes the difference between an epiphany and a relatively mundane technical lesson? Timing clearly matters. Job transitions are powerful learning opportunities, but at the same time can be loaded, even overloaded, with the need to master immediate, performance-relevant details. This might be the worst possible time for an intervention, as even welcomed help may get lost in the immediacy. As John Gabarro observed in his classic study of new general managers taking charge, the “taking hold” stage can be all consuming.^[9] Indeed, much of action in the early stage is based on what a person already knows and on immediate needs, so it is only later that the opening for new learning—at least learning above the task requirements of the moment—appears. One executive, for example, recently had joined the company in a job that was the equivalent of a skip-level promotion. Although he was from the same industry, he was not familiar with the culture, people, or processes of the new company, much less with the leadership demands of the new level. To make matters even more interesting, this piece of the business was in deep trouble, almost in crisis mode.

To “help” with the transition, the company assigned a quality black belt to the new executive. Instead of making things easier, the new resource quickly became an additional burden as the executive, with little time to devote to developing new quality initiatives or to engage in extensive statistical analysis, found himself spending time trying to come up with things to keep the black belt busy. This same executive, asked if having a coach would help, responded that the amount of time required to bring a coach up to speed with the problems and context would make it impossible. One solution is to incorporate “after action reviews” (AARs) designed to capture available learnings from the transitions. A good example of these AARs is provided in an article appearing in the Wall Street Journal on May 23, 1997, “Lessons Learned: Army Devises System to Decide What Does, Does Not, Work.”

Leader development took a wrong turn, we argue, when it began focusing on a laundry list of competencies and on programs to measure and train them rather than on the competence to handle leadership challenges and on the experiences that build it. Difficult though it may be to break the enchantment, it’s time to kiss the frog. Avoiding the pitfalls of the past requires a redirection.

Neither as concrete nor apparently certain as the focus on competencies, a competence focus also is not as elegant or integrated. As messy as life is, however, there is little doubt that effective leaders are not all alike, that there is no one personality or style that marks them, and that none of them have all the perfect qualities, no matter how much we would like them to. Instead of a holy grail of competencies, we should be using the language of paradox, equifinality, tapestry—whatever is necessary to realistically acknowledge that leadership is about bringing one’s talents, whatever they may be, to bear on the challenges that face an organization.

Organizations should focus on competence, not competencies, and should aim their efforts at producing leaders who will be able to meet the strategic challenges ahead. The strategic challenges of the organization in turn dictate the development challenges for future leaders. A powerful example exists at Bristol Myers Squibb—under tremendous pressures in 2001 to survive as an organization, the strategic imperative was that it must bring new products to market while at the same time carefully controlling costs. The leadership development function, faced with a staff cut from thirty to four, realized that it must focus its efforts on making a difference in the critical new product function. Rather than focus on a competency model, the leadership development function targeted its efforts to helping select and develop specifically those executives on the new product teams.

With different assumptions about people, leader development can move ahead, or at least in a different direction. It is almost trite to suggest, as all previous generations have, that leadership development must be driven by the business strategy. Even the competencies in competency models are at least superficially connected to strategic direction. However, when developing competence through experience is the focus, development must not only flow from the strategy it must be a fundamental part of it.

James Burke, CEO of Johnson & Johnson (J&J) during the Tylenol crisis, spoke to a class in the Harvard Business School in 1984 about the credo. J&J is highly respected for its credo and the intensity with which it has inculcated it into the fabric of the company. During the question and answer period, Burke was asked which was more important to J&J’s success, the much-heralded credo or the equally well-known strategy of decentralization. After a brief pause, Burke answered that he really couldn’t say which was more important because they are so completely intertwined.

That is the kind of answer we would hope to see for leadership development and strategy. The only reason to invest in developing leaders is to have the wherewithal to achieve the business objectives. Therefore, the leadership challenges presented by the business strategy determine what experiences talented people need if they are to develop competence. Further, the only viable way to assure that talented people get the experiences they need is to build access to those experiences into the strategy itself.

The key experiences that develop leaders are controlled by line executives, not by human resources staff, and line executives are responsible for results first. It follows then the mechanisms developed to get talented people into the experiences they need must be consistent with line objectives, which means they must take into account the potential costs of developmental moves. The only way to do that is to make development an integral strategic aim that balances short- and long-term costs, and adjust the performance criteria accordingly.

The leader development process does not end with getting people into the experiences they need. Because it is a business decision to risk developmental moves, it is simply good business to do whatever can be done to make the moves successful. And success is defined not simply by performance, but also by achieving the learning goals that prompted the move in the first place. Just sitting back and seeing how it comes out is not acceptable.

The definition of “high potential” must include a person’s ability to and desire to learn from the experiences they have, not just their “ability to move ahead two levels.” Selection for jobs that contain the prime developmental challenges must include an element of how much the person will learn, rather than just how much they will produce in the short run.

Developmental leaders are themselves the most frequent ingredient, and sometimes the most important, in the learning process that results in a high potential’s learning the lessons of challenging jobs. The developmental leader has a role to play directly with potential leaders, but also indirectly in providing developmental organizations that build development into the course of business.

Shifting the focus of development from competencies to experience will not be easy. Accumulating experience takes time, so it must start early. Moving people into assignments for which they are not fully qualified has costs to the business in lost efficiency and risks of failure for the person and the business. Line executives must have both the commitment and the skills to take responsibility for making it happen. But it is clear that the popular emphasis on competency models is not sufficient. While we need a common language to describe desired leader behavior, putting such theoretical constructs at the heart of development has caused us to misdirect our efforts. The most likely source for developing executive talent is experience, and that, not competencies, should be the driving force.