But focusing on results alone is not enough. Demographic, cultural, and technological changes have led to a workforce that demands a set of operating principles characterized by core values such as transparency, trust, inclusion, and real-time collaboration to help guide behaviors and decision-making in companies. Finally, studies have shown that millennials are deeply motivated by corporate social responsibility and a compelling sense of purpose. Together, these forces make the case that companies that fail to aspire to align purpose, performance, and principles will also fail to attract the best talent. Furthermore, to achieve the kind of transformations that today's fast-moving economy often requires of businesses, executives need engaged, committed employees who have opportunities to contribute their knowledge. Purpose and principles can help engage employees in support of high performance. The authors acknowledge that while it is easy for executives to say they aspire to build companies that are simultaneously purpose-driven, performance-focused, and principles-led, it is a difficult accomplishment to achieve. There are often inherent tensions and conflicting goals associated with trying to achieve all three aims. How can executives align purpose, performance, and principles so that they can lead their organizations through major changes? The authors'research and experience suggest the task requires not only a set of leadership skills that they describe but also five mindsets that encompass the embedded tensions that face leaders of large, complex organizations. Executives must learn to reconcile these tensions by mastering a series of five conflicting yet complementary dualities: urgency and patience; collective and individual accountability; coaching and driving performance; student and teacher; and humility and boldness.

This is an MIT Sloan Management Review article. A survey of top business executives from major international organizations found that 79% said it was extremely important to have leaders who act on behalf of the entire organization, not just their units. The rest said it was very important. Nearly 65% said they expected at least half of their senior and midlevel managers to behave as enterprise leaders -that is, executives who are as successful at serving the needs of the enterprise as they are at growing the units they head. The expectation that managers will know what's happening elsewhere in the enterprise is rising, authors Douglas A. Ready and M. Ellen Peebles write, but few organizations have been set up to support the development of such enterprise leaders. So how are managers learning to become effective enterprise leaders, and how can organizations encourage their development? The authors surveyed and interviewed scores of executives from the Americas, Europe, and Asia, and focused on three companies: Pfizer, Li & Fung, and Unilever. They found that regardless of the business or the location, enterprise leaders developed their capabilities in similar ways -through a combination of deliberate personal development, high-level mentoring, and opportunities afforded by their work that enabled strong unit performers to become even more effective as enterprise leaders. According to the authors, the essence of enterprise leadership lies in combining two often incompatible roles -those of builder and broker. That means executives need to build their unit's vision and integrate it into the wider corporate vision, clarifying where the enterprise is going and how their teams can best contribute, both within and beyond unit boundaries. They must build unit capabilities and share resources and business know-how across units to contribute to enterprisewide organizational capability.

When most of the world's financial services giants were stumbling and retrenching in the aftermath of the 2008 recession, the asset management firm BlackRock was busy charting a course for growth. Its revenues, profits, and stock price all performed consistently through this tumultuous period. The authors looked at BlackRock and other game-changing companies-the Mumbai-based global conglomerate Tata Group, and Envision, an entrepreneurial alternative energy company based in China-and found significant commonalities. These three companies demonstrate the essential attributes of a game-changing organization: They are driven by purpose, oriented toward performance, and guided by principles. In the process of conducting interviews with these companies, the authors discovered a fourth thread that weaves them even more tightly together: Each is supported by a game-changing talent strategy. But, they write, the path to such a strategy seems rife with complexity and ambiguity. How can both strategy and execution be consistently superior? How can they support a collective culture yet enable high potentials to thrive as individuals? How can the strategy be global and local at the same time? And how can its policies endure yet be agile and constantly open to revitalization? BlackRock's approach provides the answers.

It's a fact of organizational life: some employees are more talented than others. Douglas Ready explains how to retain your 'high-potentials' (HiPos), who represent the top three-to- five per cent of your organization's workforce on two key dimensions: performance and living the company's values. He also discusses some of the downsides of being labeled a HiPo.

In the past few years, some companies have not just weathered the economic storm: They've emerged stronger than ever. How did such players as Four Seasons, Sephora, and Standard Chartered Bank defy conventional logic? Instead of pursuing a single ambition, such as profits, employees defined a collective ambition. As a result, those organizations deepened their engagement with employees and other stakeholders and became sustainably profitable. Purpose, a company's reason for existence, is the central element of collective ambition. The other elements--vision, targets and milestones, strategic and operational priorities, brand promise, core values, and leader behaviors--must be aligned to serve the company's purpose. Articulating the elements of collective ambition can give everyone in the organization a better sense of the company's purpose and how they can contribute to it. Purpose does not have to be about saving the world; providing excellent entertainment or banking services is just as meaningful a purpose as improving health care in emerging economies--as long as it is an authentic representation of why the company exists. To shape and then achieve a collective ambition, companies must strengthen their organizational glue (the collaborative engagement that creates a unified culture) and grease (the disciplined execution that enterprisewide change initiatives require).

Some employees are more talented than others, and nearly every company has its method for identifying their high-potential managers. So how can you get on your company's high-potential list? Douglas A. Ready, of the talent-management research center ICEDR; Jay A. Conger, of Claremont McKenna College; and Harvard Business School's Linda A. Hill have studied programs for high-potential leaders for 15 years. They have found that the rising stars who make the grade are remarkably similar in their core characteristics, the most intangible of which they call "X factors": a drive to excel, a catalytic learning capability, an enterprising spirit, and dynamic sensors that detect opportunities and obstacles. The authors' in-depth interviews with high potentials, their managers, and their HR departments reveal how you can develop your four X factors and, if you manage to get on your company's high-potential list, how to avoid falling off. The article also discusses the pros and cons companies face as they decide whether to make their high-potential lists transparent.

"This war for talent is like nothing we've ever seen before," write the authors, who have spent decades studying talent management and leadership development. Recently they interviewed executives at more than 20 global companies to identify strategies for attracting talent in developing economies - where, they learned, brand, opportunity, purpose, and culture play out in particular ways. A desirable brand affiliation in conjunction with inspirational leadership appeals to eager young high potentials suddenly awash in possibilities. Opportunity should imply an accelerated career track - or at least a fast-paced acquisition of skills and experience. Purpose ought to benefit a job candidate's home country and express the value of global citizenship. A company's culture should be meritocratic, value both individual and team accomplishments, and follow through on promises implied in recruitment. The authors claim that emerging markets pose special challenges for foreign multinationals. For instance, talent strategies that work at home will probably need extensive tailoring to succeed in the developing world, and an overreliance on fluency in English may impede spotting talent. It's critical to develop a core of local talent and to embrace and leverage diversity. In the talent race, a local company that creates genuine opportunities and exhibits the desired cultural conditions will often win out over a Western multinational offering higher pay.

This is an MIT Sloan Management Review article. Just a few decades ago, organizations could stay the course with one strategy for a period of years. The idea that a new vision would be needed, perhaps with some frequency, would have been treated with mild amusement, if not outright derision. But competitive realities have forced executives to rethink what their companies are doing, and how they are doing it, over time. Automakers see profitability and market share evaporating. Media companies face the hostile world of disruptive technology. Financial institutions discover that a one-country focus is a path to extinction. In such conditions, bold visions are called for -- and will be called for again, probably sooner than any executive would like. The problem is the gap between inspiration and implementation. CEOs often get off to a rousing start, energizing top managers by presenting a bold new vision at a lavish off-site meeting. The excitement, however, often dies down within a few months, and the vision blurs into an indistinct image. Eventually, it fades from sight completely, and the organization returns to its previous ways. To find out why this gap between inspiration and implementation is so common, the authors conducted research on about 40 global companies. In this article, they explain several common reasons for the derailment of bold visions such as failure to focus, failure to engage the workforce and neglecting the skills and talents of the organization. They go on to offer a five-stage framework that executives can use to ensure that their visions become more than just pipe dreams. Examples of companies that have successfully followed this path -- including Deutsche Bank, the BBC, Nissan, Mattel and Starbucks -- are drawn on both to illustrate the challenges and to provide guidance to those who want to turn bold visions into reality.

Despite the great sums of money companies dedicate to talent management systems, many still struggle to fill key positions--limiting their potential for growth in the process. Virtually all the human resource executives in the authors' 2005 survey of 40 companies around the world said that their pipeline of high-potential employees was insufficient to fill strategic management roles. The survey revealed two primary reasons for this. First, the formal procedures for identifying and developing next-generation leaders have fallen out of sync with what companies need to grow or expand into new markets. To save money, for example, some firms have eliminated positions that would expose high-potential employees to a broad range of problems, thus sacrificing future development opportunities that would far outweigh any initial savings from the job cuts. Second, HR executives often have trouble keeping top leaders' attention on talent issues, despite those leaders' vigorous assertions that obtaining and keeping the best people is a major priority. If passion for that objective doesn't start at the top and infuse the culture, say the authors, talent management can easily deteriorate into the management of bureaucratic routines. Yet there are companies that can face the future with confidence. These firms don't just manage talent, they build talent factories. The authors describe the experiences of two such corporations--consumer products icon Procter & Gamble and financial services giant HSBC Group--that figured out how to develop and retain key employees and fill positions quickly to meet evolving business needs. Though each company approached talent management from a different direction, they both maintained a twin focus on functionality (rigorous talent processes that support strategic and cultural objectives) and vitality (management's emotional commitment, which is reflected in daily actions).

Edward Bennett has done wonders at Astar Enterprises. In the 15 years he's been CEO, the company has more than tripled in size through product line extension and disciplined acquisitions and is now distributing its cleaning, personal hygiene, and skin care products nationwide. But Astar's chief executive is 64 years old, and while all his attention is taken up with a new strategy to expand into international markets, board members are becoming increasingly worried about the issue of succession. Bennett wants none of it, arguing that if he were to die suddenly, his second in command, Tom Terrell, could take over. Besides, after much prodding, Bennett, former vice-chairman Vincent Dalton, and longtime HR head Gail Thompson have already come up with a list of four possibilities. "When will these guys back off?" Bennett complains to Thompson. "I've told them who the candidates are. Why do we need to talk about it?" Thompson knows, however, that the board chairman, Tom Calloway, considers Terrell a nonstarter without the requisite skills to take over in anything more than an interim capacity. As for the other three candidates, only one is even known to the board, and none has any significant international experience. Calloway is well aware of how critical Bennett is to Astar. But he's equally certain that the board risks failing in its fiduciary responsibilities if it doesn't create a viable succession plan. What should Calloway and the board do if Bennett refuses to cooperate? Commenting on this fictional case study in R0609A and R0609Z are John W. Rowe, the executive chairman of Aetna; Edward Reilly, the president and CEO of the American Management Association; Jay A. Conger, a professor at Claremont McKenna College and London Business School; Douglas A. Ready, a visiting professor at London Business School; and Michael Jordan, the CEO of EDS.

Edward Bennett has done wonders at Astar Enterprises. In the 15 years he's been CEO, the company has more than tripled in size through product line extension and disciplined acquisitions and is now distributing its cleaning, personal hygiene, and skin care products nationwide. But Astar's chief executive is 64 years old, and while all his attention is taken up with a new strategy to expand into international markets, board members are becoming increasingly worried about the issue of succession. Bennett wants none of it, arguing that if he were to die suddenly, his second in command, Tom Terrell, could take over. Besides, after much prodding, Bennett, former vice-chairman Vincent Dalton, and longtime HR head Gail Thompson have already come up with a list of four possibilities. "When will these guys back off?" Bennett complains to Thompson. "I've told them who the candidates are. Why do we need to talk about it?" Thompson knows, however, that the board chairman, Tom Calloway, considers Terrell a nonstarter without the requisite skills to take over in anything more than an interim capacity. As for the other three candidates, only one is even known to the board, and none has any significant international experience. Calloway is well aware of how critical Bennett is to Astar. But he's equally certain that the board risks failing in its fiduciary responsibilities if it doesn't create a viable succession plan. What should Calloway and the board do if Bennett refuses to cooperate? Commenting on this fictional case study in R0609A and R0609Z are John W. Rowe, the executive chairman of Aetna; Edward Reilly, the president and CEO of the American Management Association; Jay A. Conger, a professor at Claremont McKenna College and London Business School; Douglas A. Ready, a visiting professor at London Business School; and Michael Jordan, the CEO of EDS.

Few leaders excel at both the unit and enterprise levels. More than ever, though, it's up to organizations to develop leaders who can manage the inherent tensions between unit and enterprise priorities. Take the example of RBC Financial Group, one of the largest, most profitable companies in Canada. In the mid-1990s, RBC revamped its competitive strategy in a couple of ways. After the government announced that the Big Six banks in Canada could neither merge with nor acquire one another, RBC decided to grow through cross-border acquisitions. Additionally, because customers were starting to seek bundled products and services, RBC reached across its traditional stand-alone businesses to offer integrated solutions. These changes in strategy didn't elicit immediate companywide support. Instinctively, employees reacted against what would amount to a delicate balancing act: They would have to lift their focus out of their silos while continuing to meet unit goals. However, by communicating extensively with staff members, cross-fertilizing talent across unit boundaries, and targeting rewards to shape performance, RBC was able to cultivate rising leaders with the unit expertise and the enterprise vision to help the company fulfill its new aims. Growing such well-rounded leaders takes sustained effort because unit-enterprise tensions are quite real. Three common conditions reinforce these tensions. First, most organizational structures foster silo thinking and unimaginative career paths. Second, most companies lack venues for airing and resolving conflicts that arise when there are competing priorities. Third, many have misguided reward systems that pit unit performance against enterprise considerations. Such long-established patterns of organizational behavior are tough to break. Fortunately, as RBC discovered, people can be trained to think and work differently.

This is an MIT Sloan Management Review article. For the past couple of decades, companies have focused on creating strong leaders of business units and influential heads of functions--men and women responsible for achieving results in one corner of an organization. But they have not paid as much attention to a more important challenge: developing leaders who see the enterprise as a whole and act for its greater good. And that perspective has become increasingly necessary as companies seek to provide not just products but broad-based customer solutions. The author explores the three key questions that companies must answer to link strategy to leadership development: What are the key elements of the enterprise leader's job? Why is learning to lead at the enterprise level such a difficult challenge? And what can companies do to identify and develop enterprise leaders? He illustrates his points with examples from PricewaterhouseCoopers, Canada's RBC Financial Group, IBM, and others.

This is an MIT Sloan Management Review article. In recent years, the need to develop next-generation leaders--people who can translate strategy into results and core values into day-to-day behaviors--has become the paramount challenge for many CEOs and their top teams. Yet, most executives admit that they are failing at the effort. For more than a decade, Douglas A. Ready, founder of the Massachusetts-based International Consortium for Executive Development Research, has led a series of large-scale studies to identify the most pressing leadership development challenges in more than 40 global companies. He has found that storytelling by a company's senior executives is a powerful way of developing new leaders. In a corporate setting, storytelling is hard work that requires careful planning and preparation; it does not involve "winging it" or telling war stories about past successes. Identifies and explains the five ingredients of effective stories and presents a case study. Outlines how top teams can implement a storytelling leadership program.

Frank Waterhouse, CEO of Argos Diesel, Europe, is exasperated. Bert Donaldson, who arrived in Zurich a year ago to create a European team--to facilitate communication among the parts suppliers that Argos has acquired over the past two years--just isn't working out. Although he has excellent credentials, both as a successful team builder at Argos International in Detroit and as a teacher in Cairo, his style seems abrasive here and he is behind schedule in implementing the team-building program. Moreover, Waterhouse is worried that Donaldson's failure will reflect badly on himself. But Waterhouse can't simply fire Donaldson. Donaldson is a smart man with a record of genuine successes in the States. If he gets fired, his career may be destroyed. Further, the CEO of Argos International thinks the world of him and is counting on Waterhouse to make this assignment work. Can Waterhouse teach Donaldson cultural awareness? Can he help him become effective in his job? Waterhouse has scheduled a conversation with Donaldson to discuss the situation. What should he say? For teaching purposes, this is the case-only version of the HBR case study. The commentary-only version is reprint 95401Z. The complete case study and commentary is reprint 95401.

Frank Waterhouse, CEO of Argos Diesel, Europe, is exasperated. Bert Donaldson, who arrived in Zurich a year ago to create a European team--to facilitate communication among the parts suppliers that Argos has acquired over the past two years--just isn't working out. Although he has excellent credentials, both as a successful team builder at Argos International in Detroit and as a teacher in Cairo, his style seems abrasive here and he is behind schedule in implementing the team-building program. Moreover, Waterhouse is worried that Donaldson's failure will reflect badly on himself. But Waterhouse can't simply fire Donaldson. Donaldson is a smart man with a record of genuine successes in the States. If he gets fired, his career may be destroyed. Further, the CEO of Argos International thinks the world of him and is counting on Waterhouse to make this assignment work. Can Waterhouse teach Donaldson cultural awareness? Can he help him become effective in his job? Waterhouse has scheduled a conversation with Donaldson to discuss the situation. What should he say? In 95401 and 95401Z, Douglas A. Ready, Susan Schneider, Bjorn Johansson, Fons Trompenaars, and Roman Borboa offer advice on this fictional case study.