Workforce.com

Indiana University, Target Take Aim at Leadership Crisis

November 27, 2007
Undergraduates at Indiana University’s Kelley School of Business may not realize it, but they are part of an experiment in leadership development. And it isn’t merely an academic exercise.

    Heeding companies’ concerns about whether employees are prepared to step into leadership roles, the business school this year began requiring that students complete a series of leadership training exercises, including an electronic behavioral assessment as well as working with a coach to monitor progress toward goals.

    Students also are thrust into role-playing situations they likely would encounter in the workplace, such as running project teams, resolving conflicts or persuading a boss to buy into a new idea.

    The initiative is being underwritten with a $400,000 grant from retail giant Target Corp., which for four years running has been the top recruiter of Indiana University students. Target reportedly hires about 50 graduates of the school each year to fill positions in marketing, finance, supply chain and other areas. The Rochester, Minnesota-based retailer declined several requests for interviews.

    "Target has a leadership culture that enables us to attract the best team members and help them achieve their full potential, whether at work or in their communities. Indiana University and the Kelley School of Business share our passion for leadership, and we are pleased to partner with them to help develop the next generation of leaders," Target president Gregg Steinhafel said in a statement after the grant was announced in September.

    About 1,200 students enroll in the Kelley School each year. Until this year, however, they pursued functional coursework related to their business majors.

    The Target Excellence in Business Leadership program is designed to help aspiring business majors learn the skills that most business schools have long neglected. IU officials stress that the new leadership curricula, while bearing Target’s corporate name, is intended to help companies across all sectors.

    Companies feel that their leadership bench strength isn’t all it should be, says Tim Baldwin, an Indiana University professor of business administration who is helping design the new curriculum.

    It seems that nothing worries company executives more than a lack of people who are able to lead. Only 3 percent of the world’s largest organizations are confident of their ability to nurture future leaders, according to an October report by the Corporate University Xchange, a training organization in Harrisburg, Pennsylvania.

    Titled "Leadership 2012," the report also found that nearly three-quarters of organizations believe their existing leadership isn’t sufficient to support growth strategies. Only about one-third say their organization demonstrates strong commitment to leadership development, especially funding.

    Although often referred to as "soft skills," persuasion, initiative and similar behaviors are increasingly important as companies struggle to replenish their leadership ranks, Baldwin says.

    To gauge their leadership potential, each student undergoes a behavioral assessment that includes a series of in-basket exercises, which are based on situations that have actually occurred in the workplace. Using commercially available assessment tools, students confront various likely scenarios and are expected to take action to address each one.

    "If they are supposed to mediate a conflict, for example, their solution may be to write a memo. We then would tell them, ‘Great, sit down and write it,’ " Baldwin says.

    Another part of the assessment involves students trying to sell an idea to a skeptical boss. Students are given some background material and are instructed to make a persuasive argument to convince the boss. Students may supplement the material with their own research to strengthen their argument. Playing the interested-but-skeptical bosses are training professionals hired by IU.

    A third component of the assessment involves leaderless discussion groups. An example is a simulated compensation committee in which participants must hash out how to distribute raises from a limited pool of money. Each participant is provided with different information, with the idea they will advocate their position.

    By having a "leadership portfolio" and marking progress toward specific goals, undergraduates will be better prepared to showcase their learning when competing in the job market, Baldwin says.

    To enhance the leadership training, Kelley School honors students are being asked to help out. A group of 20 handpicked students have agreed to serve as mentors, helping new entrants map out leadership portfolios and providing one-on-one coaching, says Theresa Williams, director of the Center for Education and Research in Retailing in the Kelley School.

    Organizations share Target’s need for leadership, and Baldwin says the retailer’s grant may serve as the tipping point for similar arrangements, although he declined to say if any such deals were imminent. But he added, "I would be surprised if in five years this is solely a Target initiative."

    The grant extends for three years, after which time internal funding sources probably will be sufficient to enable the school to continue the program, university officials say.

    University-based job training is nothing new, but programs like the Indiana University-Target endeavor indicate how roles and responsibilities are changing. Employers no longer feel it’s solely their role to develop people’s competencies, says Peter Cappelli, a management professor at the University of Pennsylvania’s Wharton School.

    "For all kinds of interesting reasons, they are pushing the problem onto the market—getting individuals to pay for it themselves before coming into the business," Cappelli says. "They don’t want to take the risk of making these investments themselves. Fear that the employees will [gain new skills] and leave is the big concern."