National Academies Press: OpenBook

Developing Transportation Agency Leaders (2005)

Chapter: Chapter Two - Literature Review

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Suggested Citation:"Chapter Two - Literature Review." National Academies of Sciences, Engineering, and Medicine. 2005. Developing Transportation Agency Leaders. Washington, DC: The National Academies Press. doi: 10.17226/23300.
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Suggested Citation:"Chapter Two - Literature Review." National Academies of Sciences, Engineering, and Medicine. 2005. Developing Transportation Agency Leaders. Washington, DC: The National Academies Press. doi: 10.17226/23300.
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Suggested Citation:"Chapter Two - Literature Review." National Academies of Sciences, Engineering, and Medicine. 2005. Developing Transportation Agency Leaders. Washington, DC: The National Academies Press. doi: 10.17226/23300.
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Suggested Citation:"Chapter Two - Literature Review." National Academies of Sciences, Engineering, and Medicine. 2005. Developing Transportation Agency Leaders. Washington, DC: The National Academies Press. doi: 10.17226/23300.
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The topic of leadership has been considered often and in great detail. On this subject, nearly as many theories and approaches exist as there are authors and speakers. For the results of this synthesis to be relevant, reviewing a sampling of the available literature is both appropriate and necessary. In addition, leadership analysis includes related issues that must be reviewed to provide a full picture. Therefore, some of these subjects will also be covered. DEMOGRAPHICS Demographics will play a large part in the future of agency leaders. Some authors who have focused on transit agencies have identified changes in demographics and technology as the hardest problems they face. As workforce demographics change, so will the workers who are slated to become future agency leaders. The Hudson Institute projects that partici- pation of older workers in the workforce will continue to increase, especially in areas where workers are more edu- cated (Judy and D’Amico 1997). This increasing number of older workers and leaders will offer transportation agencies and private companies a cadre of experienced individuals to draw on for key leadership positions. By the year 2020, Amer- icans over the age of 65 are expected to constitute 16.5% of the population, and this segment of our society will continue to increase as the baby boomers age. Participation by women in the workforce is also expected to increase along with increases in immigrant labor—both will continue to make up large portions of future workforce increases. Training magazine conducted a survey on the state of training in the United States. Its findings included informa- tion on the demographics of training programs and on the actual leadership training programs offered by organizations (Delahoussaye 2001). The studies showed that, in the trans- portation industries’ leadership development programs, par- ticipants are 63% male and 37% female, with 74% of Euro- pean decent and 24% of non-European decent. For comparison purposes, current census data show that 22% of the U.S. pop- ulation is of non-European descent. Of those entering their company’s leadership development program, 20% are younger than 30 years of age, 37% between 30 and 39, 31% between 40 and 49, and 14% over age 50. Sixty-two percent of man- agers are participating in some kind of leadership develop- ment program. Of entrants into leadership programs, 83% have previous full-time, salaried work experience and 77% have in-company experience. Interestingly, 73% lack a Mas- 6 ters in Business Administration or a similar degree. The authors reported that nearly half of the participants in leader- ship training make less than $50,000 and speculated that orga- nizations are offering training to a wider base than ever before. RECRUITMENT AND RETENTION Recruitment and retention are important for the overall work- force within an agency, but become major factors in deter- mining the depth and breadth of an agency’s leadership corps. In a 2000 survey, only 20% of the survey respondents stated that they have the talented leaders they need to meet their requirements, with 99% reporting that their management pool needed to be stronger in 3 years. The workforce will grow by 12% between 1998 and 2008; however, the 25 to 44-year-old age group, the future leaders, will decrease by 6%. The next generation of leaders will be different in many ways from their present counterparts. They will have high career expectations in the transportation industry and require opportunities in the work place, including the ability to grow, learn, and overcome challenges. Survey respondents were found to value the ability to make independent decisions, to be involved, and to make a meaningful contribution (Mure 2001). The workforce of today is more willing to relocate than it was in the past. The War for Talent survey (Michaels et al. 2001) found that 20% of managers reported that there was a strong chance, and 28% that there was a moderate chance, that they would leave their current employer in the next 2 years. Furthermore, it was found that younger managers are 60% more likely to leave than their older counterparts. Individu- als reporting a 30% chance of leaving their company within 2 years were asked to list the reasons. The top five were as follows: insufficient career advancement opportunities, bet- ter wealth-creation opportunity elsewhere, do not feel valued by my company, insufficient reward or recognition, and higher salary and benefits elsewhere. To retain key employees, companies must make them feel that they are part of the greater vision of the company and allow them to participate in company leadership. Com- panies that do not offer these opportunities will lose employ- ees to more progressive workplaces (Mure 2001). Research has found that managers want a job that is exciting, offers chal- lenging work within a well-managed firm, provides a wealth- creation opportunity, helps to develop their skills, and meets personal and family needs (Michaels et al. 2001). CHAPTER TWO LITERATURE REVIEW

7One of the reasons employees cite for leaving an organi- zation is their relationship with the manager. With this in mind, Ahlrichs (2003) describes about how to become an employer of choice. She suggests organizations add recruit- ment and retention to their strategic plan, set measurable objectives, build a top-employer reputation, hire well or not at all, treat employees like customers, and develop current employees for tomorrow’s needs. To become a manager of choice, leaders must master five competencies: talent scout- ing, relationship building, trust building, skill building, and organization brand development. To retain individuals, agencies must focus on long-term retention goals, including career paths, training, and life- style benefits. Employees give reasons such as lack of career development opportunities, burn-out jobs, difficulty balancing work and family, and lack of appreciation as rea- sons to leave a company. To avoid losing employees, com- panies must keep them from becoming bored and allow them to see a long-term future within the company. Areas that companies must focus on include basic leadership skills training for both new employees and existing management. Companies also need a performance management program with rewards for both above-average performance and for managers who retain good employees. Although compensa- tion is not the most frequently cited reason for leaving a com- pany, employers must stay current and offer competitive compensation to their employees (Mure 2001). Employees must be given feedback concerning their role in the overall success of the company. They want informa- tion about the goals of the company and how they can con- tribute to those goals. Companies can also offer flexible work schedules, casual dress codes, and reasonable time off for family activities to help employees balance their work life with their life outside of the work environment (Mure 2001). Ashby and Pell (2001) discussed Fortune’s 100 best com- panies to work for in their book Embracing Excellence. These companies have a turnover rate of 12.6% per year, which is lower when compared with other companies, with annual turnover at 26%. These companies also receive more job applications and have better stock performance than those with higher turnover rates. According to the authors, human resource consultant William Byham, speaking of a survey of 150 Fortune 500 companies, stated that “The average com- pany expects 33% turnover at the executive ranks in the next five years, and fully one-third said they’re not confident that they will be able to find suitable replacements. . . . The aver- age one-year estimated replacement cost is $750,000,” including costs for finding and training the new hire. LEADERSHIP TRAINING In Training magazine’s survey of training practices, the authors found that of the leadership training programs queried, 33% are formal, 25% are informal, 20% are ad hoc, and 20% are mixed. Seventy-eight percent of participants attend only one session or attend only occasionally, whereas 42% of the organizations reported an ongoing program with multiple sessions. Participation has both mandatory and voluntary com- ponents in 55% of the organizations. Most companies are using classrooms (97%), conferences and meetings (83%), and videotapes (72%) for their leadership training. The survey also found that the most important factors for choosing participants are job performance within the organization and current func- tion or department specialization. The average cost per partic- ipant varies by company size. It ranges from just over $6,000 for organizations with fewer than 500 employees to more than $7,500 for organizations with more than 10,000 employees (Delahoussaye 2001). The same survey of training in the United States showed that, for formal training efforts, the transportation industry used instructor-led training 71% of the time, which is near the national average of 73%. Almost 40% of training is devoted to teaching computer skills. The study also showed that 48% of the training “purchasing power” was done by the training or human resources departments, whereas 38% was from information technology departments. In the transportation industry, 78% of the training was designed, and 53% was delivered, by outside sources. The average of all industries is 58% for design and 45% for delivery from outside resources (Delahoussaye 2001). According to several transit industry authors, leadership is a direct result of corporate culture. The culture of an agency will determine the values espoused by both the leaders and the employees. Culture will also determine how leaders are chosen, whether through succession planning or a more fixed, bureaucratic process. These authors also found from survey answers that many agency leaders believe that they are able to make most training decisions on their own, but that they must get permission to do anything viewed as out- side traditional approaches. Authors advocate making leader- ship training available to more employees and making it available earlier in their careers. They advocate using meth- ods such as job rotation to allow employees to gain the needed skills to lead an agency. These authors also found that upper management needed to be involved with employees in the lower levels of the organization to seek potential future leaders. They found that employees involved in organiza- tional decision making early in their careers were more suc- cessful leaders. They also found that employees expect to be involved in these decisions (Davis 2003). In The War for Talent, survey managers ranked job experi- ences as the most effective training tool, followed by coach- ing, feedback, and mentoring. Classroom training ranked con- siderably lower. The jobs that managers listed as best for development were position with a larger scope; involvement in turning around a business; starting a new business; working on a large, high-profile special project; and working outside

8the home country. The authors suggest that because such opportunities may be limited, it is important to assign them to those with the most potential talent. They also recommend two types of leadership training as being effective. The first is foundational managerial educa- tion offering basic skills for new or junior managers. Second is leadership development training, given to members of middle- and upper-level management; they advocate that it should be offered by top-level management, plus give high- quality feedback to participants (Michaels 2001). SUCCESSION MANAGEMENT In The Leadership Pipeline, Charan et al. (2001) define suc- cession management as “perpetuating the enterprise by fill- ing the pipeline with high-performing people to assure that every leadership level has an abundance of these performers to draw from, both now and in the future.” Succession management must be tied to leadership devel- opment. This means that succession management should be more than a list, but must also allow employees to develop the skills they need to meet company requirements. Classroom learning experiences do not necessarily make this happen. Employees need opportunities such as job rotation, special assignments, or action groups that make recommendations on a timely and significant topic. Organizations should also con- solidate succession management and leadership develop- ment to extend their view of potential executive talent. The authors note that a focus on linchpin positions is important; those that are extremely important to the success of the com- pany or those that first show the potential of a future leader. They also advocate some level of transparency in succession management, which may range from informing employees that they are marked as having potential to disclosing actual rankings of employees (Charan et al. 2001). Another sug- gestion is to place employees in charge of keeping their own files up to date, with a check from supervisors to avoid over- exaggeration (Conger and Fulmer 2003). According to Sorcher and Brant, “CEOs and other top executives know that one of their most important jobs is management succession, and they are well aware that the process of identifying potential leaders is neither simple nor straightforward.” They suggest that leadership is hardwired into people in their early to mid-twenties. This means that CEOs need to spend time on identifying, and not developing, leaders. Corporate leadership development is only useful for creating better managers (Sorcher and Brant 2002). In The War for Talent, Michaels et al. (2001) suggest that CEOs and senior human resource officers should run suc- cession management or talent review meetings. These meet- ings should include the top 400 to 800 managers in a large company or 40 to 100 managers in a small company. Of high performing companies, 49% make talent one of their top three priorities for selecting and advancing leaders in their organizations. GENERAL LEADERSHIP PUBLICATIONS Outside the realm of basic study on leadership, such as this project, there exist many publications that cover the topic in great detail. They cover the spectrum of philosophies with their respective advocates and critics. Some are considered biographical in nature, such as Jack Welch & the G.E. Way: Management Insights and Leadership Secrets of the Leg- endary CEO by Robert Slater (1998), which describes how Welch’s almost legendary style transformed the culture and leadership of one of the world’s largest companies. An older book, Iacocca: An Autobiography, recounts the leadership and management attributes of the man who brought Chrysler back from near failure and how innovative thinking in the early 1960s created the popular Mustang automobile (Iacocca and Novak 1986). Other contemporary books on leadership include such works as Leadership Is an Art by Max DePree, the former CEO of Herman Miller, Inc. DePree offers a view of leader- ship that contrasts with the larger-than-life images included in the books on Welch and Iacocca. He suggests that lead- ers should have a strong human side; they should share the pain of employees and not be autocratic or despotic in their approach but rather compassionate, kind, and humble. DePree is perhaps one of the best authors at delineating the differ- ences between management and leadership (DePree 1989). Covey’s Principle-Centered Leadership (1991) offers the reader a vision of leadership that focuses on the core values and attributes of an individual and suggests that these attri- butes are what drive leaders and organizations to excel. He also asserts that if one is true to this principle-centered core, then decisions and actions will always be in accordance with fundamental values and culture. The list of authors writing about leadership methods is long. The extensive nature of leadership literature may be a reflection of the topic’s complexity; it is hard to define, looks different under varying circumstances, has diverse applications depending on the individuals involved, and seems to change over time. Ultimately, leadership style must match organizational culture, or one of them must change. The variety of works on leadership offering various opinions, approaches and strategies to fit each person, organization, and culture can be a valuable tool. The Bibliography contains additional works considered to be most useful, but that are not cited in the text, and may be used as a beginning refer- ence list for the student of leadership training techniques.

9In completing this literature review, it is worth mentioning that there is a conspicuous absence of works specifically writ- ten for public-sector agencies. Although there may be some publications that mention leadership in the public sector, there are few works that are focused strictly on government agen- cies and their leadership teams. Therefore, more often than not, public agency leaders turn to private-sector literature and examples for two reasons: First, the number of popular books and writings from the private sector on the subject of leader- ship and second, because most government organizations are encouraged to emulate private-sector models of management and leadership and not other public agencies. This sampling of literature on the subject of leadership, developing new leaders, and succession management is com- pelling in its observations and insights. Transportation lead- ers could benefit from combining the knowledge available in these publications with that contained in the remainder of this synthesis to properly advance leadership and succession man- agement programs in their respective organizations.

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TRB’s National Cooperative Highway Research Program (NCHRP) Synthesis 349: Developing Transportation Agency Leaders examines practices and innovative approaches that address the development of transportation leadership in today’s work environment. The report covers demographics, recruitment and retention, leadership training, and succession management.

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