Whether in retail or aviation or tech or ship-building, when it comes to navigating the future, the human dimension is critical. The rise of generative artificial intelligence (gen AI) doesn’t change that; if anything, it reinforces it.
Leadership starts at the top, but it doesn’t end there. To perform well, I have argued that organizations need to operate something like a factory to produce the leaders it needs at every level, consistently and at scale. Building a leadership factory will help organizations withstand the next disruption—and such disruption is inevitable.
The old playbook, such as it was, needs to be updated in order to reach today’s workers and thus build the next generation of leaders. The attributes that are required, such as positive energy, a sense of service, grit, humor, authenticity, and humility, are different from those that characterized previous generations.
A relevant analogy is to sports. While all good athletes have superior physical attributes, the truly great ones also cultivate habits of mind, body, and spirit. They are all about winning, but know that victory is the result of a deliberate process, including managing their time, investing in recovery, and seeking out new ways to learn.
In business, the typical scorecard is in the form of managing for shareholders. This will always be important. The art of 21st century leadership, however, requires also managing for other stakeholders. Rather than command and control, leading through collaboration and coaching are higher priorities. A collaborative environment is a more resilient one, while coaching spreads knowledge. In devising a well-run leadership factory, the training mostly takes place on the job, not in the classroom. It is intensely human, with wisdom passed on through apprenticeships and colleague-to-colleague interactions. And it is based on a blueprint that can be adapted, but that nonetheless sets out a clear picture of what the eventual outcome should look like. That blueprint will vary from company to company, but it will include the following principles:
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Define and cultivate. The goal is to develop models that make it clear what skills people need to become good leaders, including specific technical and temperamental competencies. These models should be made available to individuals so that they know what is expected of them. In McKinsey’s leadership model, for example, one critical competency is to “apprentice others”—an expectation that is part of every evaluation. At each career stage, we redefine expectations related to apprenticeship, so people understand what is expected of them as they progress.
- Challenge and support. Assign high-potential managers to the toughest situations to test their capabilities and give them room to grow. But they cannot be hung out to dry; they should also get mentorship and continuous coaching. Senior leaders should be available to compare notes, discuss challenges, and figure out how to address them. Organizations should supplement on the job training with specific modules on topics such as leading self, leading teams, leading organizations, and using technology to do all three.
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Give and receive feedback. Learning science demonstrates that this can be systematically developed. At McKinsey, we identified a pilot group and gave them a weekly assignment addressing a feedback skill. Recipients learned how to manage their reactions, initiate difficult conversations, and decide what input to act on and how. The feedback, so to speak, was overwhelmingly positive and the program is being expanded.
- Measure and manage. While leadership is a human quality, that doesn’t mean it is impervious to analytics. It is possible to create a comprehensive collection of metrics that can go a long way to measuring the abstract concept of leadership. That means developing innovative data sources. For example, McKinsey’s Mentorship Sponsorship Survey is a way to find out and recognize those who contribute to other people’s development. We also measure how teams think of their leaders and break this down by region and practice. This allows leaders to see how they compare to their peers—and to take action to improve in areas they are falling short. Over time, and as data comes in, it’s easier to understand what’s good, and what it takes to move to great. When one European office found that a small group was doing most of the sponsorship, for example, it took action to ensure that more people got involved. However it is developed, the leadership measurement system should be used in internal reviews and evaluations.
No question: it will always be up to leaders to make the hard decisions on hiring, firing, budget, and promotions. But as four of my colleagues argue in their recent book, The Journey of Leadership, softer qualities such as self-reflection and vulnerability are important, too, because they enable leaders to connect with their teams better.
In short, the more open and truthful leaders are, the more respect and input they will get from others. That matters because the top reason teams fail is lack of trust. And these days, no organization can succeed without a high level of teamwork.
Creating a leadership factory, then, is a subtle task. The impetus will mostly come from the top, with CEOs showing the way. But in important ways, the nuts and bolts also come from within.
