Leadership succession

Steve Newhall, managing director of global HR consultancy DDI UK, argues
that in a service economy, lack of basic leadership skills at senior level will
stifle the best-intentioned initiatives

There was a time when companies were run by their founder, or his family.
The vision, innovation or creativity of the owner was what drove the culture of
the business. And if that was accompanied by autocracy and unilateral
decision-making, well that was ‘just the way things are done around here’. With
the succession of the son and heir, it was as important to preserve the
cultural legacy as to continue to grow the business and provide jobs for the
workers – who were generally glad to shelter under the patriarchal umbrella.

Things are very different now. The UK economy has moved away from
manufacturing to the service industry, and the make-up of the workforce has
changed along with it. Instead of demanding loyalty from uneducated employees, businesses
have to meet staff requirements, as research proves that employee engagement is
closely linked to productivity.

Focus on relationships

For example, if customer service staff who are uninspired by their work
allow their attitude to affect their behaviour towards customers, companies
lose money. Expectations are higher, and being treated as an equal by the boss
at the communal coffee machine is just a start.

Many British businesses depend upon their people to differentiate themselves
in the market. So for those accountable for business performance, what matters
now is how good you are at developing and displaying great skills in
relationship-building within an organisation and, equally importantly, outwards
to customers.

The trouble is that most organisations don’t check the right credentials
when they assume people’s aptitude for leadership. Promotion to management is
often a reward for performing well in specialist roles such as sales, IT and
engineering.

Recruiting externally brings no easy answers either. Most senior people’s
CVs list achievements unrelated to their ability to lead people.

The two key questions for organisations whose market share is won or lost
through their people’s behaviour should be: ‘How can leadership potential be
reliably spotted, early?’ and ‘How do we best accelerate the development of
those in whom we find it?’

Desired culture

In our experience, three out of four companies admit they lack clear
criteria for actually determining potential. They have failed to define a
consistent vision of their desired culture, so have no clear idea of what
skills future leaders need.

At DDI, we set out to find this Holy Grail. We took more than 30 years’
assessment data on thousands of individuals, and combined it with ground-breaking
research from the likes of Jim Collins, Morgan W McCall, Ann Howard and Doug
Bray. This gave us a process and a set of criteria for gauging leadership
potential.

So what should companies be looking for? An inherent desire to lead others
and the ability to bring out the best in people is critical. Aspiring leaders
must care about people and be willing to give their time and intelligence to
understanding different personal needs, motivations and histories. Are they
secure in their own ego, rather than needing to dominate? This has a high
correlation with integrity, too – we call this ‘leadership promise’.

Leadership imperatives

So what are the premium leadership skills on which development should focus?
At DDI, we believe there are seven ‘leadership imperatives’, the ‘must-have’
leadership skills that our research demonstrates drive success: coaching;
inspiring; partnering; influencing; driving performance; selecting; and
managing work and resources.

If you don’t start when you’re young – in this case, on the first rung of
the management ladder – you are unlikely ever to excel at any of these things,
and long-held bad habits are harder to change.

The only way to ensure the future CEOs of our service-led organisations are
truly leaders of people, and not just charismatic money or marketing men, is to
start building those ‘must-have’ skills today. Fledgling leaders in their first
management role – and many already in the job who have had no formal training –
must be equipped with the leadership imperatives to do the really important
stuff really well, and let an engaged and motivated staff do the rest.

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