How Johnson & Johnson and American Express Are Developing Young Leaders

June 8, 2018 Rebecca L. Ray

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Over the next decade, approximately 10,000 Baby Boomers will retire every day. Young leaders will have substantial opportunity to climb the corporate ladder — by 2030, millennials alone will comprise three out of every four individuals in the U.S. workforce — and companies will increasingly grapple with how to accelerate the development of those individuals for leadership positions.

We heard this leadership dilemma from multiple companies that participated in our research on the leadership perspectives of C-suite executives and millennial leaders, which was co-produced by our three organizations, The Conference Board, RW2 Enterprises, and DDI. The study examined the management and development preferences of America’s young and rising corporate leaders.

When the research showed the growing premium that companies place on high-speed development, we decided to follow up with some of the study’s participants to hear more. The accelerated development programs at American Express and Johnson & Johnson (J&J), specifically, caught our attention. (Disclosure: One of us, Ron, serves on the board of directors of American Express and Johnson & Johnson, and these companies are members of The Conference Board.) We share these examples here to illustrate how these forward-thinking companies are working now to address their future talent needs.

American Express

In 2016, former American Express CEO Ken Chenault tasked chief human resource officer Kevin Cox with finding new opportunities that would drive innovation and revenue growth. When we spoke with Cox and his team, they told us they turned to a specific company cohort: young vice presidents who had already graduated from the company’s six-month Accelerated Learning Development (ALD) program.

They convened the program’s top 75 performers — many still fresh out of business school — for a three-day stint of idea generation and problem solving. Fall of 2016 marked the first convening of the ALD Revenue Growth Challenge event. On arrival, participants knew only that the CEO had invited them to tackle pressing business challenges. They separated into teams of four to five, received briefings on available data and existing strategy, and engaged with customers, employees, and other stakeholders.

Insight Center

On day three, 13 teams pitched the chairman and those senior leaders whose businesses were affected by the challenges being addressed. Presentations needed to convince leaders that the new idea merited financial investment and the effort required to plug it into the company’s businesses. Participants learned to think about how their ideas could drive growth and be scaled to the enterprise, as well as how they could be economically sustainable. In Amex’s first revenue challenge, business leaders purchased five ideas on the spot and designated four as pending.

Johnson & Johnson

Johnson & Johnson’s data show that cross-functional, cross-sector, and global assignments each increase the likelihood of employees advancing in the organization. But rising leaders often lack the time in the workforce to have reaped the benefits of such experiences. To address this challenge, J&J designed their Talent Acceleration Process (TAP) in 2012, which fast-tracks early- to mid-career individuals to senior leadership positions. The company retention rate for participants hovers around 80%, and participants receive promotions at a rate 30% higher than the peer population.

Mary Lauria, J&J’s Vice President of Global Talent Management, explains TAP as a four- to five-month program designed to provide emerging leaders with a wide range of experiences where they learn from individuals — or organizations — both within and outside of the enterprise. They experience new techniques that drive their ability to learn and think differently. J&J wants leaders to understand: What creates disruption? What does being an entrepreneur mean and what does that look like? What might business models of the future look like? Their reasoning: Five years from now, successful companies will increasingly employ innovative business models that no one currently thinks are feasible.

Participants go through three intensive sessions and work on an “action learning project” as part of a small team. Team members come from multiple geographic locations, career paths, business lines, and time zones, and the teams have to work together in a self-directed way. While a high degree of coaching and mentoring is a part of the program, the teams own their own process. They quickly learn that group success and cooperation will enable individual success. They also dive deep in “in-resident sessions” where participants are brought into an immersive experience (three one-week sessions), in varied geographical locations and innovation hotspots. They meet with consumers, J&J employees, and leaders of varied external organizations, where they learn how companies solved a daunting challenge or used an innovative approach to drive success.

Participants also described a scenario where they were seated at a conference table and presented with a complex issue. They were told that they were the board of directors at a company, and had to stay at that table until they decided on a course of action while being held to an aggressive time limit. Sitting in the room were coaches and mentors taking notes that they would individually share with participants. While initially intimidating, this kind of feedback opened participants’ eyes to how they can think, act, and manage differently or better.

Why these programs work

Analogous learning — or learning from seemingly unrelated experiences — stood out in the J&J program. In interviews, we heard from a participant in TAP who cited this approach as critical to her career goals and recent promotion. As part of her participation, she was tasked with developing a cancer-screening program. One of her analogous learning assignments entailed meeting with the CEO of a highly successful home goods start-up in the UK. She learned the value of deeply understanding the actual needs of people for whom you’re solving a problem. This customer-centric experience led her and her team to create an unusual and innovative but commercially viable screening program for their particular project. The perspective she gained, combined with the one-on-one coaching and feedback from the TAP program, ultimately gave her the confidence to apply for a much larger leadership role, which she received.

An important takeaway from the American Express program was that these types of learning programs don’t have to be time-consuming. The American Express participants had only three days before pitching the senior team, and leadership purchased five of the pitches on the spot, designated four as requiring more information, and passed on four. It just goes to show that high-pressure settings can often elicit new and innovative ideas. As for the program participants, their success went a long way toward American Express advancing their careers. Overall, Amex has seen that ALD participants are two to three times more likely to be promoted within five years relative to their high-potential peers.

Both of these companies devised win-win programs that expedited development scenarios and provided participants with real-life experiences to enhance personal abilities, preparing them to be leaders. At the same time, these companies went beyond simply helping their employees to improve their skills. By using real-life challenges in the development programs, they demonstrate how equipping younger talent with new experiences to solve company problems can have an impact on the bottom line.

Our research also found that young leaders are willing to leave if they are not advancing, but prefer to stay as long as they’re engaged. (Almost 44% of study participants were willing to stay 15 years or longer.) When asked what would prompt them to leave, many cited a lack of developmental opportunities.

Both the J&J and American Express programs have elements aligned with what we heard in interviews and focus groups. Specifically, young leaders said they value development assignments, mentorship, and manager feedback, ranking them as their top three experiences for developing their leadership skills. Moreover, we found that complete self-directed learning, while ranked second by CHROs in our survey, did not rank highly among younger leaders because they prefer one-on-one learning and direct feedback. Both the American Express and J&J programs have been designed as immersive in that they deeply engage the participants and provide real-time challenges, coaching, and learning tools.

In the coming years, as retiring Baby Boomers continue to outpace new entrants into the workforce, America’s labor market will only tighten. Workers will have more leverage regarding where they work, as well as their level of compensation and flexibility for that work. Employers will have to place far more emphasis on cultivating budding leaders with ongoing developmental opportunities that lift both the individual and the organization.

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