Leadership Training Hangs Tough

Despite the bad economy, executives think it's essential to hold the line on programs aimed at developing the skills of leaders, survey finds. Also...
Lisa YoonOctober 1, 2002

Conventional wisdom holds that during tough economic times, companies should scale back spending to just the basics. As budgets are trimmed or frozen, professional education stands to take a hit. Mass employee-training classes and “soft” training programs for anything besides essential skills are considered luxuries.

But one type of training defies that wisdom. Leadership development, once considered a soft topic that companies lavished money on only in flush times, is now considered a necessity by a majority of senior executives, according to a survey released last week by The Conference Board.

Budgets reflect priorities. In these times of volatile stock markets, eroding trust in corporate governance, and cost-control worries, investment in leadership development programs are considered more important than ever.

In the survey, which polled 31 leadership-development executives, 60 percent said they feel more strongly than they did a year ago that their companies’ senior managers see leadership development as a priority. Twenty-seven percent saw no change in attitudes, while only 13 percent felt less strongly about senior leadership’s support of leadership development.

What’s striking is that 90 percent of the respondents whose confidence in senior management’s commitment to leadership development was unchanged or had increased said business at their companies declined at their companies over the past year.

Simply put, says The Conference Board, companies will spring for leadership development whether business is humming or not.

In fact, the survey found that senior executives are putting money where their mouths are by actually increasing budgets for leadership development, not just by not cutting back. The overwhelming majority of respondents (29 out of 31) said their budgets fared the same or better than other departments’ budgets. Twenty-six out of the 31, saw either no change or a boost in budgets for leadership development.

Of course, all department heads feel their budgets are important. So what’s really shielding leadership development from the axe? Members of The Conference Board’s “Developing Business Leaders” working group, summed up the answer this way: “The CEO gets it.”

That is, it’s often the CEO that puts the word out on leadership development. In some cases, chief executives even making exceptions to freezes in travel and other budgets for the purposes of leadership development programs. The message: During tough times, leadership — both current and bench strength — is critical.

Not surprisingly, a new focus in leadership development is ethics. Participants in the working group said ethics must now be on the radar screen of every leadership-development executive.

CFOs on the Move

Financial-services firm State Street Corp. names Edward J. Resch CFO and executive vice president…He succeeds Ronald O’Kelley, who left State Street in March for personal reasons…Resch most recently served as CFO, managing director, of Pershing, a Jersey City, N.J,-based Credit Suisse First Boston subsidiary that serves brokerages and financial institutions…

Before Joining Pershing, Resch was chief accounting officer and managing director of Donaldson, Lufkin & Jenrette…Previously, had been CFO of DLJ’s capital markets group…Stefan Gavell, executive vice president and chair of Pershing’s investment committee, has held CFO slot on interim basis …

>> American Greetings Corp. taps Robert Ryder as CFO, senior vice president…Ryder succeeds William Meyer, who announced retirement in March… Ryder spent 13 years at PepsiCo, most recently as VP and controller for its $9 billion Frito-Lay North America division…Before that, was CFO, VP of Frito-Lay International’s $1 billion developing markets region, based in London…Also served earlier stint as director of strategic planning for Frito-Lay International …