The majority of organisations say it is crucial to have the right leadership in place for success, yet only 15% feel they’re developing their managers properly. Dr Tim Sparkes, from talent management organisation Hudson, examines how this can be addressed.
According to a recent global survey by consultancy Deloitte, leadership is the number one issue organisations face today.
Eighty-five per cent of organisations said that having the right leadership in place was “urgent” or “important”, even more so than talent acquisition, retention and engagement. However, fewer than 15% said they did an “excellent job” of developing those leaders.
Deloitte went on to surmise that “the capability gap for building great leaders has widened in every region of the world”.
Without their own pool of potential leaders to develop and nurture, organisations are forced to recruit externally. This comes at a higher price, and often with mixed results.
So why exactly are organisations struggling to produce new leaders?
One problem is simply that leaders are retiring without leaving behind an adequate pool of successors.
Employees are increasingly moving from role to role and job to job. Expecting an organisation to depend on a pool of leaders in waiting is no longer feasible.
Secondly, when they are developing future leaders, they usually go about it in the wrong way.
With a workforce comprised of five generations (Babyboomers, Generation X, Generation Y, millennials and the emerging Generation 2020), the idea of what makes a good leader is in a state of flux.
Traditional leadership – the kind Babyboomers will be most familiar with – was consensus-driven, and structured by routines and processes like appraisals. The boss sat in his office delivered orders and his workers carried them out.
But this kind of top-down, information-sharing, decision-making and development-modelling is becoming increasingly ineffective.
Essentially, the very idea of what it is to be a leader is set to change.
Informed and empowered
We now have to think about leadership at all levels. All employees in the organisation need to be informed, enabled and empowered to move company goals.
Agile and innovative, modern leaders must be informed by data, enabled by the right tools and empowered by authority.
These tools could include creating a shared ownership or autonomy (engaging employees in a shared ownership approach, where both parties are vested in the success of the organisation), training managers to coach (especially at mid-level) and building personalised development programs.
A poll conducted on behalf of Saba found that nearly 70% of employed US adults consider themselves leaders, regardless of their job title.
There’s a growing sense that people are itching to lead, irrespective of whether it comes with the traditional leader name tag.
Younger generations are more expectant. You give them the opportunity first, then they prove their worth. The workplace is shapeshifting too rapidly for people to sit patiently and earn their stripes.
So where do we find these new leaders?
Perhaps predictably, you will often find these new leadership models in practice in newer industries, such as digital.
Digital industries are invariably places brimming with young, dynamic talent with new ideas and new ways of thinking.
These are places where traditional top-down hierarchies have never really existed, and where old fashioned leaders never had the chance to implement old fashioned ways of thinking.
So how exactly do you accommodate leadership at all levels and ensure it is implemented?
For one, organisations need to draw focus to discovering talent in the early stages of their career.
Deloitte suggests that senior executives “create a culture that broadens the opportunity for leaders to develop in new ways” and they should continuously put potential leaders in “positions that stretch them beyond their current skillsets”.
Ram Charan’s leadership pipeline is also a useful tool for identifying leaders at all levels. It’s a six-passage process where individuals may, over the course of their career, move from managing themselves to managing an entire organisation.
Leaders progress through six key transitions, or “passages”, to succeed. Stages include managing yourself, managing others, managing managers, functional manager, group manager and business manager.
Each leadership needs different skill sets and values, and at each transition, leaders have to develop them.
Laying the foundations
Before implementing more complex models though, you need to lay the foundations. The whole process starts with knowing what mindset you want your future leaders to have, and how you want to help them develop.
Mindset is an approach someone adopts in response to, or in the face of tasks, challenges and opportunities.
We are talking about someone’s application of their experience and their learning agility. It is not about which university someone went to.
Mindset can influence nearly every aspect of a person’s working life, and it’s becoming just as important as a skill set. If organisations really want to embrace the new world of work, mindset is their key to successfully navigating it.
As more organisations dismantle their traditional hierarchies, and as more traditional leaders retire, the need to establish leaders at all levels grows significantly.
To attract and retain the top talent of the future, leadership at all levels must become a strategic imperative. How organisations do it is something they need to take their own lead on.