Executive development is an important part of talent management in modern organizations. Organizations that perform well in the market place train their executives. Also, such organizations respond better to changes in the business environment.
Executive development is not limited to commercial enterprises. The benefits of executive development programs make the programs attractive to all types of organizations. The purpose of this paper is to explore the purpose of executive development, the approaches, and the challenges of running executive development programs in organizations.
Defining Executive Development
The term “executive development” contains two words. The term “executive” refers to top-level officers in any organization (UNC, 2013). The executives of an organization may comprise between five and fifteen percent of its employees, depending on its leadership structure (Smith, Caver, Saslow, & Thomas, 2010).
Organizations that use hierarchical structures have fewer executives compared to those that have other types of structures. In the HR context, “development” refers to the improvement of the skills of a person (UNC, 2013). Therefore, executive development refers to all the efforts an organization makes to improve the skills of its top-level employees.
Purpose of Executive Development
The debate on the need for executive development programs arises from questions about their purpose in an organization. Each organization uses executive development programs to achieve different objectives. The common objectives of executive development programs are as follows.
The first purpose of executive development programs is to ease executive selection. Executive selection refers to the process of choosing the heads of various departments in an organization. It also refers to the choice of the Chief Executive Officer of an organization. Organizations that prefer to select their executives internally can benefit from executive development programs.
The programs provide selection panels with the opportunity of assessing how each candidate adapts to new situations based on the training offered under the executive development program.
On the other hand, organizations that hire employees externally can also benefit from executive development by increasing the competence of newly hired executives using tailored programs. Many companies hire their executives depending on the availability of talent.
Secondly, executive development programs play an important role in succession planning. Succession planning is vital for top positions in any organization.
Rough transitions can lead to loss of business. Executive development programs help organizations to develop skills in employees earmarked for appointment to replace outgoing executives. An executive development program is vital for the smooth transition of a Chief Executive Officer or any other senior executive in an organization.
The third purpose of an executive development program is to anchor the organization’s strategic plan in the minds of all the executives. The implementation of a strategic plan is very dependent on the clarity of the plan to all the executives in the organization. It is important for every organization to train its executives on various issues to give them the skills needed to implement the strategic plan.
Apart from anchoring the strategic plan of the organization in the minds of the executives, executive development also gives organizations the opportunity to use strategic management initiatives more effectively. Strategic management is vital for the achievement of the objectives of every business.
Executive development is vital in the implementation of strategy because strategic management requires collective action from top executives. Collective training ensures that all the executives work as part of a team. It gives each one of them an understanding of the roles played by other executives. This develops synergy in the operations of the organization.
Finally, executive development can help an organization to increase its overall effectiveness. Executives sometimes lack the tactical skills required in their areas of responsibility. For instance, a Chief Information Officer may not have effective financial management skills.
When an organization takes its executives through an executive development program, the executives acquire skills that make it easy for them to perform their duties. Such skills may include financial management skills, strategic management skills, among others when all the executives have the same set of basic skills, the overall performance of the organization increases.
Executive Development Approaches
Organizations use different executive development approaches based on their needs. The approaches used by organizations vary depending on the location of training, the type of facilitator used in training, and the length of the program. These approaches include action learning, mentorship, executive coaching, institutional training, workshops, seminars, and management trainee programs.
Action learning is a popular executive training model. Its popularity comes from its ability to impart various skills at once. In action learning, executives handle real business cases in a simulated environment. It works when executives need to find new ways of dealing with challenges in their organization.
It gives the executives a chance to see how their peers deal with various situations. This model is ideal for instilling corporate culture, developing strategy, and for creating rapport between executives.
The second method used in executive development is mentorship. Executive mentorship takes longer to implement. It is, however, very effective in giving new executives a sense of depth in regards to their duties. Mentorship relationships usually have two people, with the senior one serving as the mentor.
Mentorship is ideal for succession planning because an outgoing executive can transfer knowledge, skills, and perspectives to an incoming executive. Mentorship tends to be informal and depends on the relationship between the two parties.
Executive coaching is a formal approach to mentorship. While mentorship depends on established relationships, executive coaching can start without a prior relationship. Executive coaching depends on the learner.
The executive looks for a coach for support. Executive coaches do not need any experience with a particular organization. However, they must have an intimate understanding of what it takes to operate at the executive level. Executive coaching is more formal and delivers specific results. Usually, executive coaching is personal and is useful for introducing new executives to their roles.
The fourth approach to executive development is institution-based training. Many institutions of higher learning have executive development programs for current or aspiring executives. These programs tend to cover a wide array of issues common to all executive positions. Some organizations can afford to pay for customized courses for their executives to ensure that their training is relevant to their needs.
A management trainee program is an approach to executive development that targets fresh graduates. Companies with such programs identify talented graduates and train them as a strategic measure. In time, such trainees grow through the ranks to become senior executives in the organization.
Management trainee programs usually give organizations the highest rewards. These rewards come from the fact that the trainees have an intimate understanding of the organization as they grow through the ranks. It is, however, very risky because the trainees become very competitive in the market place. Recruiters can woo them to go and work for other organizations.
Executive development can also take place via workshops and seminars. Workshops and seminars are very useful for developing tactical skills such as financial management, stakeholder engagement, or understanding a specific market. This approach can help executives to expand their perspective on issues when they interact with executives from other organizations.
Challenges of Executive Development
The first main challenge facing executive development is the high transition rate of executives. Many companies lose their executives to business rivals. At the same time, boards usually come under pressure to rotate or retire executives in departments that perform poorly.
This means that the process of executive development takes place in short cycles, rather than long ones. This robs organizations of the strategic advantages gained from long-term executive development programs.
The second challenge many organizations face in their executive development programs is the cost of financing the programs. The constant changes in the business environment make it necessary to keep on retraining top executives. It is difficult to quantify the benefits of training in the short term.
The costs of executive training vary. They can include scholarships to universities, hiring of consultants, or payment of conference fees. Internal initiatives for executive training also require time, which in turn reduces the time available for productive work. These costs are set to rise even further because of the increasing rate of change in the global economy (Smith, Caver, Saslow, & Thomas, 2010).
The third challenge associated with executive training is the relevance of the programs. While a basic executive training program can help a new executive to settle, it is insufficient for handling the growing pressure associated with executive positions. The most effective executive training programs deal with specific issues in the organization.
For instance, an executive training program for managers going to a new country usually focuses on the cultural, political, and environmental issues in the new country (Smith, Caver, Saslow, & Thomas, 2010). While such a program is very vital for expatriates, local executives going through the same program may find it unnecessary. This illustrates the challenge of relevance in executive training programs.
The fourth challenge affecting all executive development programs is globalization. Globalization is affecting organizations in different ways. Even organizations with no foreign interests must deal with pressure from global competitors seeking to enter local markets. Globalization is very dynamic.
The issues that organizations need to deal with because of globalization range from language barriers, cultural differences, time zone differences, and competition. Any organization that ignores the impact of globalization on its business is at the risk of becoming obsolete.
The challenges that executive development programs must address in regards to globalization include handling new currencies, meeting regulatory demands in new markets, understanding local laws, political concerns, as well as understanding labor laws affecting recruitment (Smith, Caver, Saslow, & Thomas, 2010).
Conclusion
It is clear from the research that executive development is necessary for all organizations. Executive development plays several critical roles in the life of the organization. These roles affect the competitive position of every organization. Organizations have several executive development options.
The effectiveness of each option depends on the objectives of each organization and the resources available for executive development. The challenges associated with executive development are on the rise. While the challenges come from various sources, the main force that is complicating executive development efforts is globalization.
References
Smith, A., Caver, K., Saslow, S., & Thomas, N. (2010). Developing the Global Executive: Challenges and Opportunities in a Changing World. Web.
UNC. (2013). Executive Development. Web.