TIGERS Success Series

By Dianne Crampton,

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Good leadership makes or breaks a company. Stellar leadership, on the other hand, filters down through all levels of operation and sparks innovation. These were some of the findings from the recent study conducted by the Hay Group.

A global management consulting firm, the Hay Group released its seventh annual Best Companies for Leadership Study and Top 20 list. The study ranks the best companies for leadership around the globe and examines how those companies nurture talent and foster innovation in their ranks. This year, General Electric topped the list, followed by Procter & Gamble,IBM, Microsoft and Coca-Cola.

According to Hay Group’s study, the Best Companies for Leadership create workplace environments and processes that enable innovation to thrive. In fact, all of the Top 20 companies reported that their leaders regularly celebrate innovation, compared to just 49 percent of other companies. In addition, 90 percent of the Top 20 companies reported that if individuals have an excellent idea, they can bypass the chain of command without the threat of negative consequences, compared to only 63 percent of other companies.

“The Best Companies for Leadership recognize innovation is key to their future growth and ability to survive in a fiercely competitive global market,” said Rick Lash, director in Hay Group’s Leadership and Talent practice and co-leader of the Best Companies for Leadership Study. “Many companies prize innovation, but the Best Companies for Leadership approach it in a disciplined way by building agile organizations, promoting collaboration, celebrating successes, learning from setbacks and fostering a culture that encourages a passion for innovation throughout the organization.”

Hay Group’s study also found that the Best Companies for Leadership cast a wide net for ideas and develop their people to think more broadly. All of the Top 20 companies said they provide structured opportunities for younger employees to promote innovative ideas, compared to 68 percent of other companies. Similarly, 95 percent of the Top 20 companies reported that senior leaders personally spend time actively developing others, and 90 percent said their leaders effectively help frontline employees understand their company’s long-term strategy. That is compared to only 48 percent and 53 percent, respectively, of all other companies who reported the same.

“The Best Companies for Leadership distinguish themselves by their ability to develop well-rounded, multifaceted talent within their organizations,” said Susan Snyder, senior principal in Hay Group’s Leadership and Talent practice and co-leader of the Best Companies for Leadership Study. “As innovation increasingly becomes a key differentiator for companies worldwide, best-in-class organizations are doing more to train and develop their people, celebrate diversity, reward collaboration and establish an environment that fosters innovation, creating a competitive advantage in the marketplace.”

In fact, the Best Companies for Leadership consistently out perform their peers. Over a 10 year period, the Top 20 companies produced a 5.39 percent shareholder return, compared to a 2.92 percent shareholder return generated by the S&P 500.

Other major findings from Hay Group’s Best Companies for Leadership Study include:

Companies are better positioned for talent now and in the future

Top 20



Leadership create a work climate that motivates employees to do their best. 100% 61%
My organization actively manages a pool of successors for mission-critical roles. 100% 60 percent
There are a sufficient number of qualified internal candidates who are ready to assume open leadership positions. 100 percent 44 percent
Organizations are structured for speed and agility Top 20



My company has an organizational structure that favors quick communication paths. 85% 55%
Roles have been designed to allow for flexibility to respond to immediate projects. 90% 65%
Leaders at the frontline have all the decision-making authority needed to respond to changing market conditions. 75% 49%
Leaders set the context for smart innovation Top 20



My company runs unprofitable projects to try new things. 94 % 49%
Employees spend much time discussing customers’ future needs. 90% 47%
Employees are encouraged to learn in areas outside of their expertise. 90% 48%
Leaders encourage collaboration and reward it accordingly Top 20



My organization takes clear action when a leader is not collaborating. 100% 59%
My company evaluates and rewards leaders based on their ability to build excellent relationships with their peers. 95% 46%
Our incentive plans put significant weight on team-based measures. 84% 56%