The majority of business leaders are all talk, not enough action, and guilty of putting their own egos first.
Not the most flattering portrait of company bosses, but these are the top-line findings of a leadership survey carried out among 937 HR professionals in public and private sector organisations by Personnel Today in association with business consultancy Square Peg International.
The HR department – and line managers’ opinions of it – was the subject of much analysis and debate in our 360-Degree Appraisal of HR survey (Personnel Today, 24 October). But in this issue, it’s your turn to let your leaders know what you really think of them.
The depth of the leadership survey results – which we examine in more detail here – could prompt you as HR professionals to reassess the way you develop strategic leadership and planning skills in your organisation.
Planning v execution
First, let’s take the ‘all talk, no action’ claim. When respondents were asked to rate the senior management team in terms of planning a direction and strategy for the organisation, nearly half (44%) said they were good or excellent, while one in five said they were sub-standard or poor. Contrast that with how the management team executes that strategy. Overall, 34% thought senior managers were good or excellent at implementing their strategy, compared with 41% who thought they were average.
But the most revealing results arise from the difference of opinion between HR professionals in low-performing organisations (those who said their organisation’s success over the past two years was ‘declining’ or ‘running for cover’), and those in high-performing ones (those who define their organisation’s success as ‘ballistic’ or ‘steady’).
While two-thirds of respondents from high-performing organisations said their senior management was good or excellent at execution, three-quarters of those from low performers rated their bosses as sub-standard or poor at carrying out their strategy.
Senior teams who are excellent planners are not necessarily good at execution – only 55% said they were excellent at both.
Overall, 42% of respondents said the leadership of their organisation was effective at setting direction, but unsuccessful at implementing strategies. And a worrying one in four (24%) said their senior teams were ineffective at either setting direction or making things happen.
Hamstrung by process
So what’s holding leaders back from translating their plans into actions? Organisational bureaucracy gets in the way of progress, according to our survey.
Processes are perceived to be more of a barrier than an enabler in the organisation, and procedures are blamed for driving inappropriate or ‘wrong’ behaviours.
While half of the survey respondents believe their policies reinforce the right behaviours, 41% believe they frustrate them. Proof, perhaps, that if you handcuff managers, they are not going to be able to do their jobs to the best of their ability, or deliver on company strategy.
More than half believe their businesses are hamstrung by organisational bureaucracy (rising to 89% among those from low-performing organisations). This is one of the strongest signals to arise from the survey: if the organisation creates too many procedural hoops for people to jump through, then it cannot perform successfully.
Doug Ross, managing director of Square Peg International, agrees that organisations are “becoming addicted” to processes. “Just look at the explosion of HR processes, all with their own bits of paper, rules and procedures, and most of them hooked to annual planning cycles,” he says. “We try to manage risk with process, and by doing that, we’re sub-optimising personal impact and effectiveness.”
Ross advocates building more flexibility into the planning process. Once the annual strategic plan is in place, leaders need to be able to react to change and adapt their plans and budgets accordingly, he argues.
“We need to break free from fixed planning and budgeting processes, so we allow true entrepreneurial ability to escape,” says Ross. “Executive focus needs to be on real emerging issues and the need to run the business in step with its changing environment. Real-time thinking is needed for competitive success.”
Figures from the survey prove his point. While a third review their plans every quarter (39%) or every six months (33%), our research reveals that successful organisations are more likely to review their plans in the face of changing environments or opportunities. While more than a quarter (28%) of low-performing organisations do not review their plan or reforecast budgets during the year, only 6% of high performers admit to sticking rigidly to the plan no matter what.
So, we have established that if an organisation is nimble and reactive in the face of change, it is more likely to be successful. But it is a different story when it comes to making major changes of leadership. In fact, the more change at the top, our survey reveals, the more fatigued and demoralised the employees are.
Half of the respondents who took part in our research have been through a major change in leadership during the past two years. And among low-performing organisations, 73% had been through a change of leadership in the past couple of years.
Given the correlation between the percentage of people who have undergone leadership change and how they rate the organisation, the conclusion to draw here is that the more leadership change an organisation goes through, the less successful it is, and the less value it is perceived to offer its customers.
The success or otherwise of leaders is not just down to the structure of the organisation or how much change it has been through. Much depends on the qualities and characteristics of the leaders themselves.
Nearly half (48%) rate their leaders as ‘having the right stuff but needing development’, and a third (30%) believe their leaders are ‘OK and occasionally have a glimpse of talent’. Only 8% believe their leaders are ‘fantastic and extremely talented’, and a worrying 14% believe their leaders are ‘devoid of any real leadership talent’. Perhaps unsurprisingly, this rises to 58% in companies that have had lacklustre performance in the past couple of years.
This is where HR has a huge part to play in focusing efforts on the areas that will make leaders much more effective. Leaders need to pay the most attention to their interpersonal and communication skills (say 60% of respondents), while more than half (51%) believe they need to work on developing a leadership approach that minimises their personal agendas and egos.
The number of leaders deemed to have huge egos is 72% in low-performing organisations (and 35% in high-performing ones). You could therefore draw the conclusion that bosses with a dose of humility are inclined to preside over more successful organisations.
Egos are notably more prominent among larger rather than smaller organisations – perhaps a surprising statistic, given the entrepreneurial, personality-driven style of smaller businesses. Fifty-nine per cent say personal agendas come first in large businesses (more than 10,000 employees) compared with 49% in smaller businesses (500 or fewer employees).
More than half (55%) want leaders to display the organisation’s behaviour and values – signifying that, on a personal level, most employees want to be inspired by their leaders, and to trust that their bosses truly believe in what they’re doing.
However, given these figures, in many organisations, it seems to be a case of ‘do as I say, not as I do’. While one-third of employees in a high-performing organisations may feel empowered to make decisions and are given clear decisions and rules, only 2% of those in low-performing ones can say the same.
These findings are likely to give food for thought to HR professionals in charge of formulating or reviewing their next leadership development programmes. With focus in the right place, HR can help transform leaders and give them the skills to run winning organisations – no matter how much change they are going through.
As Ross concludes: “Values and behaviours are very much HR’s problem. Rather than walk away from change, embrace it, and it could make your career.”
How do you believe leaders could best develop to become more effective?
Develop interpersonal and communication skills – 60%
Personally display the organisation’s behaviours and values – 55%
Lead in a way that minimises their personal agenda or ego – 51%
Develop their strategy and planning skills – 48%
Influence others to do the work rather than doing it themselves – 28%
Develop their industry knowledge and technical skills – 7%