Insight • April 2, 2024

Best Practices in Executive Leadership Development, Part 1: Why It’s Important & Key Development Needs

By Karen Foster and George Schmidt

When you hear, “leadership development,” what comes to mind? Most think of programs for aspiring or new managers. Programs that empower individual contributors to transform into efficient and effective first line leaders. But what about existing leaders? And specifically senior executive leaders? 

In our experience, executive leaders—and, by extension, their companies— benefit greatly from a strategic executive leadership development journey as it unlocks immediate value in leaders’ enhanced capabilities and goes far deeper by impacting teams, functions, and the entire organizational culture. So, why doesn’t senior executive leadership development typically come to mind? And what does good senior executive development look like?

Over the coming weeks, we will publish a series of articles on leadership development for senior executives. Here, in Part 1, we address two key topics:

  • Why Executive Leadership Development
  • Common Needs of Executive Leaders

Part 2 explores the unique challenges related to executive leadership development, as well as some high-level solutions. Part 3 outlines the value of –  and helpful guidelines for – communications efforts that drive participation to ensure executive leadership development initiatives are a success.  Let’s dive in!

Why Executive Leadership Development

Developing executive leaders unleashes a wealth of untapped tacit knowledge and achieves a multiplier impact on an organization’s culture.

Executive leaders are typically the most tenured people within an organization. They house years and years of expertise in their heads, much in the form of tacit knowledge – knowledge that is difficult to explain and relevant to a specific domain. Executive leadership development builds, elaborates on, and propagates tacit knowledge across an organization, acting as a competitive differentiator. 

Executive leaders are the social influencers of an organization. They have an overweight impact on a company’s culture via the philosophies they silently or expressly espouse and their observable actions, truly leading by example. The example they set may be intentional or unintentional, but make no mistake, their example gets noticed and is often adopted and repeated, whether they want it to or not.

Knowledge and influence become critical success factors for organizations operating in a rapidly evolving and highly competitive environment. Executive leadership development harnesses leaders’ expertise for new, innovative ideas and empowers them with a megaphone of influence to impact everything from day-to-day operating norms to huge transformations. Data supports this. A study by McKinsey and Co. showed that companies who invest in developing leaders during significant transformations (which are quite common in biopharma) are 2.4 times more likely to hit their performance targets. 

Executive leadership development taps into senior leaders’ power and knowledge, enabling organizations to better achieve business results.  

Common Development Needs

Executive leaders often show gaps in their cross-organizational strategic thinking, decision leadership, digital fluency, and ability to advocate for and empower change.

Leadership development programs geared towards new or aspiring leaders typically focus on foundational capabilities such as communication, collaboration, and coaching to name a few. This makes sense, as this audience is transforming from individual contributors to first-line people managers. When it comes to executive leadership development, most senior leaders are experts at these core capabilities and their needs are typically more sophisticated. Like most adult learner populations, these needs are often quite diverse, yet there are a few common gaps.

Strategic Thinking Coupled with a Cross-Functional Mindset

Generally speaking, most senior leaders have a solid foundation in strategic thinking. They define objectives, identify barriers, articulate and evaluate options, and formulate an integrated approach to overcome the barriers to achieve the objective. They do this adeptly within their functional domains. 

However, in today’s biopharma industry, strategy development has become an increasingly holistic and cross-organizational endeavor. As senior leaders grow into their functional areas, they often have a blind spot when it comes to other functions. In some cases, internal political and/or competitive factors can also limit cross-functional awareness and collaboration. Today, with the increasingly integrated nature of the biopharma industry and the more holistic nature of strategy development, SVPs and VPs must more carefully consider how strategic decisions within their own functional areas can affect—as well as be impacted by—other functional areas’ strategies.

It’s important to note that some leaders have been operating with a broader cross-functional mindset for some time. The past 5-10 years saw the explosion of cross-functional commercial planning. For example, a commercial VP planning for a new product launch understands the interplay between Marketing, Market Access, Training, Medical Affairs and Regulatory and Compliance, and can integrate those areas’ strategies accordingly. With the speed to market accelerating and the global marketplace shrinking, executive leaders must also understand and consider other cross-organizational areas’ strategies, dynamics and needs. Creating an optimal launch strategy more often requires that same VP of commercialization to understand and adjust to broader organization strategies.  Think government affairs strategy. Or a health equity strategy.  A good executive leadership journey expands senior leaders’ pan-organizational understanding and enables connections between these leaders to ensure they can craft optimal strategies that move at the speed of business.

Decision Leadership and Innovation

The biopharma industry must innovate to survive and thrive. It must develop new and better therapies on an ongoing basis. This need to innovate extends beyond scientific innovation. Every functional area including research, development, manufacturing, distribution, marketing, medical affairs, market access, business development, and more, must innovate to stay ahead of competitive and market changes, regulatory issues, payer dynamics, and so on. What most senior leaders neglect to accept is that innovation is predicated on what many in these roles consider anathema – failure.

Innovation expert Matt Ridley writes, “Tolerance of error is therefore critical [for innovation]”.  Think of how many times Thomas Edison “failed” before developing a working light bulb (over 1,000 times). Top leaders usually ascend to their roles by being successful. While, don’t get us wrong, success is a great thing, individuals who are accustomed to success have a tendency to develop an intolerance of failure and exacerbate their underlying loss aversion. Loss aversion is a known cognitive phenomenon where, in spite of being quantitatively equal, humans assign disproportionately more pain to losing (for example) $100 than joy in winning $100.

Mitigating for loss aversion bias and developing a mindset of failure tolerance requires decision leadership. Executive leaders with strong decision leadership establish decision architecture across their teams (they enable team members to make decisions within clear parameters and they manage that process, versus simply making decisions).  They view and bundle decisions in a portfolio approach versus individual decisions. These capabilities power a faster, more urgent way of working and also develop failure tolerance. Consequently, they can encourage a culture where new ideas and approaches are welcomed, even if they don’t work perfectly.

Change Management

Much ink, both real and virtual, has been spilled on the topic of change management over the years.  So, we won’t dive into its various sub-topics here.  However, it is a common area of need in leadership development, as articulated by senior leaders themselves.

In a rapidly (and constantly) evolving industry like biopharma, the ability to successfully facilitate and/or manage change is critical.  Highly tenured professionals learn a lot of habits during their career and can become “set in their ways.”  However, as leaders, the company looks to them to forge a way forward in a change-filled environment.

A strong senior leadership development program is often effective at helping these professionals

  • Optimize their individual attitudes to change as well as those at the organizational level
  • More effectively lead their teams, functions, and companies through change

Digital Technology and Fluency

We all know the cliché about how parents must rely on their children to show them how to operate a smartphone.  Well, senior leaders usually don’t need that kind of development support.  However, with the rapid advent of new technologies, such as artificial intelligence (AI), it can be challenging for anyone to understand what a given new technology is, what it can be used for, and how the company might be able to leverage it.

We often see executive leaders who want a deeper understanding of new technologies and how they might impact their business.  Such an understanding can also help facilitate more innovative thinking and better results for the company overall.

In Part 2, we will explore the unique challenges associated with leadership development for senior executives.  But don’t worry: along with those challenges, we’ll also look at some potential ways to overcome them.