08 Sep Leadership Development Around The World Remains Stalled
It’s tough to find an effective leader in the workplace. Only 40% of leaders rated their organization’s leadership as high, according to a global survey of 13,124 leaders and 1,528 human resource professionals by talent management consultancy DDI and the Conference Board.
The Global Leadership Forecast 2015, Ready-Now Leaders: Meeting Tomorrow’s Business Challenges report revealed that only one in four HR professionals rated the quality of their leaders as high. Only 15% of organizations thought that their supply of leaders ready to step in to fill vital leadership roles (leadership bench strength) was strong. Just 37% of leaders rated the quality of their organization’s development programs as high. The latter figure was the same for DDI’s last two leadership forecasts which means there has been no improvement over the past seven years.
Leadership development remains at a sticking point, commented Simon Mitchell, UK general manager for DDI. “Many leaders feel unprepared for the world around them, and this is a troubling situation. This is partly because of the characteristics of the world that leaders operate in: volatile, uncertain, complex and ambiguous. These traits are unlikely to change in the foreseeable future, and yet less than two-thirds of leaders are confident they can meet the challenge. Organizations by necessity should prepare leaders for the realities of the world they work in; and there are clear benefits in investing in leadership. Organizations with a high number of leaders able to handle these challenges were more likely to perform well financially.”
DDI compared the quality of leadership with an organization’s leadership bench strength. The results were disturbing: only India, Indonesia and South Africa rated their future leadership bench strength as high. The US rated its current leadership quality as high but its future bench strength was ranked as moderate.
Poor leadership bench strength means an organization’s ability to have in place the leadership team that it needs to deliver on its business strategy will be significantly disadvantaged in the future, warned Mitchell. “Our research shows that many organizations are simply not confident that they have leadership with the skills and experience to address current and future business needs. This is worrying, as it puts organizations at a serious competitive disadvantage. The HR function and senior leadership have a responsibility to do much more to ensure there is a strong pipeline of future leadership talent, with the skills needed to deliver. Any shortage of leadership ability will impair the organization’s ability to deliver its goals, in what remains a challenging business environment.”
Why does the quality of leadership matter? The findings highlighted that organizations with high leadership qualities were six times more likely to be among the top 20 financial performers of all organizations. Organizations with both high levels of leadership quality and leader engagement and retention were nine times more likely to outperform their peers financially.
The research also revealed that chief executives’ number one concern in 2014 is human capital yet only 27% of leaders reported they were ‘very prepared’ to be the kind of leader that creates an optimal workplace where employees deliver their very best. Only a third of leaders reported being effective in leading across countries and cultures. The lack of leaders with the ability to lead and operate effectively across borders is a significant and growing problem for multinational businesses, commented Mitchell. “In an increasingly globalized world, it is still an issue for almost any size of organization. Businesses must recognize that managers and leaders that operate outside of the home market or as part of a team that stretches across borders need specific skills and qualities such as coping with ambiguity, having clear and effective interactions and making decisions in unfamiliar environments become increasingly challenging when operating across border.”
How the HR function perceives itself was also explored in the report. Just under two-thirds of HR functions around the world see themselves as a ‘partner’–openly exchanging information with the business about current issues and collaboratively working towards open goals. In comparison, 22% saw themselves as ‘reactors’ – ensuring compliance with policies and practices. However, only 18% saw themselves as ‘anticipators’, a group that uses data too predict talent gaps in advance and provide insight about how talent relates to business goals. The latter group were far more likely to be part of their organization’s strategic planning process: 43% compared to 26% for partners. The research revealed that the degree of involvement by ‘anticipators’ pays dividends for their business which is over six times more likely to have exhibited strong financial performance compared to organizations in which HR’s involvement in the planning process is non-existent.
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