The job no leader should delegate: you can't spend too much time on obtaining and developing the best people. It's a job you have to love doing.

• Author: Bossidy, Larry
• Position: Executive Development

WE TALK TO MANY LEADERS who fall victim to the gap between promises they've made and results their organizations delivered. They frequently tell us they have a problem with accountability -- people aren't doing the things they're supposed to do to implement a plan. They desperately want to make changes of some kind, but what do they need to change? They don't know.

Given the many things that businesses can't control, from the uncertain state of the economy to the unpredictable actions of competitors, you'd think companies would pay careful attention to the one thing they can control -- the quality of their people, especially those in the leadership pool. An organization's human beings are its most reliable resource for generating excellent results year after year. Their judgments, experiences, and capabilities make the difference between success and failure.

Yet the same leaders who exclaim that "people are our most important asset" usually do not think very hard about choosing the right people for the right jobs. They and their organizations don't have precise ideas about what the jobs require -- not only today, but tomorrow -- and what kind of people they need to fill those jobs. As a result, their companies don't hire, promote, and develop the best candidates for their leadership needs.

Quite often, we notice, these leaders don't pay enough attention to people because they're too busy thinking about how to make their companies bigger or more global than those of their competitors. What they're overlooking is that the quality of their people is the best competitive differentiator. The results probably won't show up as quickly as, say, a big acquisition. But over time, choosing the right people is what creates that elusive sustainable competitive advantage.

We weren't up to par

The most troubling problem I found when I joined AlliedSignal Inc. was the weakness of our operating management team -- it wasn't up to par with our competitors. And we were unlikely to produce future leaders, because we didn't have any bench strength. When I retired from Allied Signal in 1999, I considered the greatest sign of our strength to be the extraordinary quality of our leadership pipeline. One measure of their quality was that several of our outstanding people had been recruited to lead other organizations, among them Paul Norris (who became CEO of W. R. Grace); Dan Burnham, hired as Raytheon's CEO; Gregory Summe (CEO of PerkinElmer); and Frederic Poses (CEO of American Standard).

That level of excellence didn't happen by accident. I had devoted what some people considered an inordinate amount of time and emotional energy to hiring, providing the right experiences for, and developing leaders -- between 30% and 40% of my day for the first two years and a good 20% later. That's a huge amount of time for a CEO to devote to any single task, but I'm convinced it accounts in large part for AlliedSignal's success.

One of the first things I did was to visit the company's plants, meet the managers, and get a feel for their individual capabilities. I didn't just talk to them; I talked to their people as well, to see how they perceived their work environment and how they behaved -- both of which reflect the kind of job a leader does. It was during those visits that I came to see that the company's inattention to leadership development was a major problem.

While I was impressed with my half-dozen direct reports, I was less impressed with the heads of our operating units and the teams they had built. Some of the managers simply needed seasoning in a few more assignments in different businesses. Too often, though, they lacked a well-rounded business foundation, so they set priorities from a functional standpoint. They didn't demonstrate basic skills like understanding the competition or developing their people. I'm not saying they weren't smart or didn't work hard. They had good ideas and knew how to present them, but they had not been prepared to execute. So we tried to give them generous severance packages and help them land on their feet.

A core competency

The next step was to vigorously recruit more able people -- not only to run our businesses but also to ensure that we could develop talented leaders in the future. Executive development needs to be a core competency. At GE 85% of the executives are promoted from within -- that's how good the company is at developing leaders. And it got so good because Jack Welch -- and now his successor, Jeff Immelt -- made leadership development a top priority and demanded that all of his executives do the same. At AlliedSignal, by contrast, we had to go outside for nearly all our early hires, mostly to...