When it comes to grooming and bringing on the leaders of the future, American multi-nationals, and industrial giant General Electric in particular, lead the field, a new global survey has suggested.
The industrial conglomerate has topped a 2006 poll of Best Companies for Leaders carried out by consultancy Hay Group and the magazine Chief Executive aimed at identifying those companies most committed to and most successful at fostering leadership talent.
The top five companies were all American – GE, Procter & Gamble, PepsiCo, Citigroup and Johnson & Johnson.
The top UK company, ranked at number six, was banking giant HSBC, while Holland's BASF was the highest ranked continental European business.
"An estimated 75 million workers will retire in the U.S in the next five to 10 years, including 50 per cent of CEOs from major corporations," said Mary Fontaine, vice president and general manager of Hay Group's McClelland Center for Research and Innovation.
"There's an urgent need for leadership with only 45 million younger workers available to fill those roles.
"Some sectors and markets are already battling for talent and leaders. Within a few years it will be a full-scale war. Those companies that are not already preparing are putting their futures at risk," she added.
This concern was not isolated to the U.S and Western Europe where aging Baby Boomers are readying to retire, she contended.
In emerging and developing countries – particularly in China, Eastern Europe, Brazil, and elsewhere – there was a clear need to bring on and develop enough leaders to maintain the necessary pace of growth.
As such, focusing on identifying and managing the talents of high potential candidates would rise to the top of the agenda, predicted Fontaine.
"Organisations that are able to identify, develop, and promote their leaders from within will find themselves better positioned than their peers to win the war for leaders – and to safeguard their organisational futures," she said.
"The top companies are already focused on this. Those companies which are not prepared will be forced to rely on external recruitment – which is usually much more expensive and less dependable than internal promotion," she added.
The study identified the practices followed by the various companies, including having leaders at all levels who focused on creating a work climate that motivated employees to perform at their best
Another key attribute was ensuring that the company and its senior management made leadership development a top priority.
The judges also looked for firms that provided training and coaching to help intact leadership teams, as well as the individual leaders, work together more effectively.
Common best practice included rotational job assignments for high potentials, external leadership development programmes for mid-level managers, web-based self-study leadership modules for mid-level managers and executive MBA programmes for mid-level managers.
"The Top 20 companies are far more likely to use the top practices than their peers," said Fontaine.
"And, while many of the companies we looked at employ all of the practices, the top ones use them by a much wider margin," she added.
But the study also identified common practices that wasted resources, including outdoor activity-based programmes, paper-based self-study leadership modules, job shadowing for senior managers and executive MBAs and web-based self-study modules that were implemented too late in the executive's career.
"These practices may achieve other objectives, such as personal rewards or short-term team building," continued Fontaine.
"But they don't help companies develop more, better leaders," she added.