Wharton@Work

October 2011 | Customized Learning

Leadership Development – Customized

This month Wharton Executive Education will receive Excellence in Practice awards for two of its custom programs. The leadership development curricula, led by faculty who also teach in Wharton’s Open Enrollment programs, achieved outstanding results for Philips and Royal Bank of Scotland, and for over 1000 executives who attended them.

In 2005, Netherlands-based Philips was looking to maintain a competitive advantage through greater innovation and leadership excellence. They knew they had to go beyond the in-house training program they had relied on in the past. CEO Gerard Kleisterlee tasked the company's Learning & Organizational Effectiveness team to search for the needed expertise.

As a result, Philips initiated a six-year collaboration with Wharton and the Center for Creative Leadership (CCL) designed to spark innovation and create substantial financial value. The Octagon program focused on strong strategic business skills (what leaders should do) as well as effective behavioral leadership skills (how they should do it). Led by David Wessels, who teaches in Wharton's Growing the Top Line: Full-Spectrum Innovation, Integrating Finance and Strategy for Value Creation, and Advanced Management Program, teams of executives from across the global company collaborated to come up with new ideas for growth.

Octagon made a significant difference in managers' knowledge, skills and attitudes around leadership — and it affected Philips' bottom line. Half of the new products and services conceptualized by Octagon teams from 2009-2010 have been added to Philips' innovation pipeline. Other projects have led to entry into new markets and the launch of new product lines. And most of the internal promotions into senior executive positions have gone to Octagon alumni, reducing the cost (both financial and time-wise) associated with outside hiring.

Mid-way into the Octagon program, in the wake of the 2008 financial crisis, the Royal Bank of Scotland (RBS) was also in the market for a leadership program. After a near collapse and partial nationalization, its new chief executive, Stephen Hester, announced a five-year strategic turnaround plan to refocus on customers and restore the company to financial health. Part of this plan included the RBS Leadership Development Program, which was established in partnership with Wharton Executive Education and INSEAD.

Wharton, INSEAD, and RBS designed a curriculum for the bank’s senior global leaders that focused on ways to create value and manage risk. Over 1,100 participants completed the Leadership Development Program with faculty leader Kathy Pearson, who also teaches in Wharton Executive Education programs on Critical Thinking and Strategic Thinking and Management. The participants achieved a critical mass that contributed to significant cultural change inside the organization and put RBS significantly ahead of schedule on its 5-year strategic recovery plan.

Why a Custom Program?

Deb Giffen, Wharton's Director of Innovative Learning Solutions, spoke recently about the value of Custom and Open Enrollment programs. "Organizations send executives to Open Enrollment programs to give them a broader strategic perspective and prepare them for future roles. Attending an Open Enrollment program with cohorts from other industries, nations, and cultures allows them to learn best practices in a very wide context. Open enrollment also gives companies a chance to develop, reward, and retain top performers. They can then take back what they learn to improve corporate performance with effective new strategies, tools, and processes.

"But when you want to accelerate the achievement of a specific strategy, Custom programs can be the answer. Having a large cohort of executives go through a program at once creates a cohesive leadership team that shares a common language and experience — one that becomes highly focused on a clear strategy. The program itself becomes a strategic lever, that helps accelerate execution."

Giffen and Wharton colleagues will head to Maastricht in October to receive two Excellence in Practice Awards on behalf of Wharton's Philips and RBS programs from the Brussels-based European Foundation for Management Development (EFMD). "Getting the recognition is nice," she notes, "but seeing Philips and RBS succeed in their goals is better. Business impact is a core focus of Wharton Executive Education in both Custom and Open Enrollment programs, and it is always a pleasure to see how Wharton insights make a difference in a company's achievements and their bottom line."