Interview: Noel M. Tichy explains why the "virtuous teaching cycle" is integral to effective leadership

Noel Tichy, who ran GE's Leadership Development Center, is currently director of the Global Leadership Program at the University of Michigan's Business School. His teaching model posits that CEO's must be intimately involved in teaching their teams' leaders. The basic premise is that companies are successful to the extent that they have leaders at all levels of the organization. Any institution that invests in the development of leaders at all levels is going to get ahead of its competition. It is a principal job of the leader to help develop the next generation of leaders. Unfortunately, many leading companies do not build good leadership pipelines because their leaders do not do the teaching of their own managers. An essential element for a leader to develop the next generation is to present a teachable point of view about how he/she believes they should run the organization. Also needed is a clear idea of what your want to teach them: ideas, product services, distribution channels, customer segments, and values. Leadership is about focusing on human capital as the organization's most important asset. Unfortunately, many companies make only 10 percent of the investment they should make on development of their people and most of it is spent in the wrong ways. A better approach is to make 80 percent of the development investment be on-the-job life experiences. The other 20 percent can be potentially leveraged with very high impact development experiences. If you sit around and read business school cases for three weeks, you're getting about 20 percent of what you could if you engaged people in action learning real projects. Developing leaders requires a rethinking of the leadership pipeline. You look for those career points where you can leverage the 80% with high impact development, and then you have to build teaching into every single management process.