How MDA Leadership helped Sleep Number identify and develop the leaders responsible for its record-breaking results

Minnesotans may remember 2010 as the year of local major stadium news—the opening of Target Field in April; the blizzard-induced deflation of the Metrodome roof in December. Long-term employees of Minnesota-based Sleep Number recall 2010 as the year the company turned a corner, starting an unbroken string of annual revenue growth, from $606 million in 2010 to an industry-leading $2+ billion today.

While several factors have contributed to Sleep Number’s success, the company’s leadership credits in particular an ongoing, decade-long effort, in partnership with MDA Leadership, to unite employees behind a vision to improve peoples’ lives through personalized—and better—sleep experiences. To get there, Sleep Number, with MDA’s help, needed to identify and develop leaders capable of achieving transformative cultural and business results.

After initially engaging MDA to provide talent selection assessments, Sleep Number broadened its engagement over the past 10+ years to leverage many MDA solutions, including:
• A leadership framework for individual and talent pipeline development
• Comprehensive development assessments for top and emerging talent, including executive coaching for C-suite executives, vice presidents and directors
• Functional leader development to help leaders in this linchpin role consistently succeed
• Board advisory services, including CEO succession/scenario planning

“We view the MDA team as an extension of our team,” says Shelly Ibach, president and CEO of Sleep Number. “They have become trusted partners who support our ongoing leadership growth. Together, we have strengthened our culture and built an incredibly diverse team who is innovative, agile, resilient and mission-driven.”

MDA’s work with Sleep Number proved particularly important in 2020, as the company grappled with the closure of most of its 600+ retail stores, due to the pandemic. This didn’t stop Sleep Number, however, as it rapidly pivoted to a Web- and phone-based selling model. The result? Record-breaking sales, despite global supply chain challenges, as Americans enhanced their homes in record numbers—and sought improved sleep experiences.

“Leading in an environment of ambiguity can be really challenging. Because of our years of leading through a transformation quite successfully, we became comfortable with it. Our team is resilient and agile, and they came together and worked in an extraordinary way during the pandemic.”

Scott Nelson, CEO of MDA, is justifiably proud of his firm’s role in Sleep Number’s transformation, particularly over the past few years during the pandemic. “During a time of tremendous stress and change and a lack of human connectedness, leaders need to be there to reinforce why their company exists,” he says. “They need to ask: How do we help people stay connected and find purpose in what they are doing? Sleep Number has excelled at this, as their results show.”

So how do companies nurture the leaders who will guide them through rapidly changing contexts, as Sleep Number has done? MDA founder and chair Sandra Davis offers these suggestions:

1) Know your differentiating talent strategy—A hallmark of Sleep Number is its agile, cross-functional leadership. Successful organizations regularly assess their current talent and determine future needs. Who do you need in your organization to achieve your purpose? What skill gaps does your organization have? It’s hard to fix what you don’t know.

2) Build leadership at all levels—Don’t mistakenly think leadership development should be solely reserved for senior leaders. Develop diverse leaders at all levels. Directors, managers and supervisors oversee most of the workforce and directly impact productivity, engagement and retention. They’re also the most likely source for future senior leadership roles.

3) Use comprehensive assessments to identify, develop and promote talent—Early on, Sleep Number relied on MDA for selection assessments, but quickly began using MDA’s assessment expertise for development and promotion decisions as well, paving the way to record-breaking annual sales.

4) Continuously develop leaders—Don’t wait until you need specific skills to think about development. Instead, create opportunities for employees to strengthen their leadership through learning journeys, team
development sessions and executive coaching. And focus on developing the whole person, which Ibach embraces: “We believe in total leadership—providing our leaders and team members with the programs, tools and support they need to be successful throughout all aspects of their lives.”