How to bridge the leadership gap
When I think about the recent spate of leadership changes in some high profile cases, it makes me wonder: how effectively are organisations mapping their leadership strategies to the contextual environment that we are experiencing in Australia and New Zealand right now?
By that I mean share prices going up and down, trading environments changing rapidly and economic factors weighing heavily, not to mention the changing demographics and digital transformation of the work environment.
Are companies sometimes failing to match the leaders they appoint to the businesses they are running? Or are the businesses they are running changing so fast they are no longer fit to run them?
Take any high performing team and chances are it’s managed by a strong leader. Great leaders get great results. Everyone knows this, but it seems some organisations are struggling to turn intention into action.
In a recent Hudson survey, leadership development has been revealed as the number one people priority of over 100 HR leaders for this year and next – yet only one in two organisations actually has a leadership strategy in place. It appears concern around leadership is abundant, but action is not.
Few dispute the business case for good leadership. But without a clear leadership plan, having strong leaders comes down to luck, not design.
A leadership strategy essentially provides the link between what a business is trying to achieve and what its people need to do to get there. It evolves with the business, defines what good leadership looks like in that organisational context and informs what kinds of leaders are promoted, hired or developed. It provides a framework for the traits that leaders need to have to be effective within the organisation.
Without a plan, companies are effectively flying without a radar. Who would want to leave the success of their business to mere chance?
Effective leadership is ultimately about execution of a business strategy. So if the market is changing quickly then organisations need to be able to adapt at the same pace. That means an organisation’s leadership strategy needs to be agile. Most companies define and develop their overall business strategy and regularly reassess it based on a whole host of factors – changing market conditions, expected growth, turnover, costs, competition, projections for the coming year, etc. Why would a leadership strategy be any different?
A leadership strategy isn’t something you print out, laminate and put on the shelf. It’s a moving feast that must be fluid, adaptable and open to change, like the nature of leadership itself.
Organisations also need to be clear about what good looks like. Our survey found that around a third of organisations with a strategy haven’t considered what makes a good leader: 37% don’t have processes in place to assess current leadership capability and 32% lack a capability framework to describe what good leadership looks like.
There’s no doubt that measuring leadership capability is hard. Building leadership capability requires a high level of commitment and investment, with the rewards sometimes reaped a long way down the track. But in today’s increasingly sophisticated environment it is essential – because businesses can’t afford to rely on gut feel when it comes to understanding who is leading them.
It’s hard to judge if something’s working if you don’t have a benchmark against which to measure it. But it seems that that is exactly what is happening in many organisations when it comes to leadership.
Risk proofing the future of the business by building a strong leadership pipeline with a robust process in place to proactively identify potential leaders should be a pillar of any business. It was really interesting – and very much reinforced my view – to pick up the November issue of the Harvard Business Review and read that of the 100 Best Performing CEOs in the world, 86 per cent were promoted to that role from within their companies. Obviously, having a strong talent pipeline is crucial when it comes to finding high performing, effective leaders – and if talent pipelines are weak, who is waiting in the wings to succeed a leader who derails?
Lack of talent pipelining represents a failure of foresight that hurts the bottom line in more ways than one, affecting business performance, turnover and retention rates, recruitment costs and morale. We know it’s far more effective and costs less to build rather than buy talent, so organisations without a plan for developing high-potential staff are really missing a trick.
Moreover, it creates a flight risk, as the best talent won’t stick around forever, waiting for their turn. Strong leadership talent deserves to be part of a nurtured development program.