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Despite Cutbacks, Firms Invest in Developing Leaders (Wall Street Journal)

imageDana Mattioli wrote an interesting piece for today’s (Feb. 9, 2009) Theory & Practice column in the Management section of The Wall Street Journal titled Despite Cutbacks, Firms Invest in Developing Leaders. (free content) While firms are laying off employees and reorganizing operations, contrary to earlier recessions leadership development programs are still a priority. Companies recognize that retaining and developing their top performers and high potentials is important if they want to remain competitive through and after the downturn.

Yaarit Silverstone, global managing director for the organizational-effectiveness practice at consulting firm Accenture Ltd., says the emphasis on leadership development is a departure from the past. Ms. Silverstone says companies historically cut leadership-development programs during downturns, but the moves backfired, prompting midlevel managers and top performers to leave when the economy recovered. Now, she says, executives believe that without capable managers, "their ability to come through [the recession] in a healthy fashion is diminished."

While leadership development may still a priority for some, most companies are reducing expenses be shortening the length of programs, bringing events closer to home to reduce travel costs and using more in house staff to conduct the training. They are also being more selective in identifying which employees can participate.

In the February 8th edition of the Wall Street Journal, Mattioli interviewed Rochelle Weichman, Executive Director of MIT Sloan Executive Education about the challenges and opportunities they face in an article titled Making the Case for Executive Education. (free content) When asked there is a renewed focus on leadership? Weichman states:

I think a lot of companies that contact us are very strong in their core technology, so many leaders and key people in those companies are engineers and scientists that were perhaps promoted to where they are because of technical expertise. We can help those technical leaders understand more about management and leadership in organizations…We’re helping them with transformational change, and especially in these challenging times it’s important to keep employees thinking about what they can do differently, be it saving costs or being more efficient. It may be a little painful in the present, but investing will help build toward the future that companies want to have.

Times of crisis and change demand strong leadership. It’s good to see than many companies still recognize this and we hope that this trend continues through the life of the current recession.

About the author

Peter A. Mello, Founder/Editor Founder of Weekly Leader and Sea-Fever Consulting, LLC, a leadership development and strategic communications consultancy. Previously, CEO of an international nonprofit organization and COO of a national insurance/risk management services firm. Peter has been leading people and managing organizations for over 30 years, writes a leadership column for MarineNews magazine and blogs about maritime culture at Sea-Fever. Follow him on Twitter.

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