Organisations need to move from survive to thrive. To do so they will need leaders and leadership. New hybrid working, change, productivity, global market shifts, net zero, D&I and continued technology demands strong leaders. The problem is that it seems organisations are late to the party and possibly inviting the wrong people. Despite increases in spending on corporate leadership programs in recent years, the quality, rigor, and investment for leadership efforts remain uneven across companies. High-performing companies outspend their competitors on leadership by almost four times (O’Leonard and Krider, Leadership Development Factbook 2014).
As organisations shift from a structured hierarchy to a network of teams, companies require different types of leaders with inclusion and collaboration capabilities. There is a stronger demand for people who can lead at all levels of the company. Companies in this environment are finding that they must identify potential leaders much earlier in their careers and accelerate their movement through the leadership ranks.
Flatter and more dispersed teams means companies need better strategies for developing leaders to perform both as individuals and in teams. Important to this effort is to think systematically about leadership. A portfolio approach that simply assembles a selection of offerings from different vendors is unlikely to promote consistency in leadership development or to ensure that future leaders receive the training they need to direct today’s team-focused organisations. Identifying and developing exceptional leaders require a far more disciplined process, including:
1. The use of evidence and analytics to identify game-changers rather than relying on manager nominations.
2. Expanding the use of 360 and psychometric tools to enable organisations to identify high-potential employees earlier in their careers and potential leaders around the world.
3. Better use of leaders and emerging leaders to team with, mentor, reverse mentor and sponsor.
4. End to end blended development learning solutions (on-line, face to face, assessment, on the job) that follows the career journey from recruitment, HiPo identification, succession planning, performance management.
5. Comprehensive development of future leaders in advance of promotions rather than after them.
6. Identification of key capabilities that are fit for the context .e.g. in 2021 – inclusive leadership, hybrid working, driving net zero, collaboration, leading change, developing confidence in others, innovation, driving digitisation, influencing skills, developing an agile learning culture.
Many organisations provide individual contributors with technical or hard skills training but put off doing leadership or soft skills training until individuals are promoted into management.
Research from Zenger Folkman shows that training opportunities did not occur for many promoted into management until more than a decade after that promotion.
The Ashridge Management Index (AMI) 2012/13–1, carried out by Ashridge Business School, found that many businesses are failing to future-proof their leadership teams: 48% of managers say their organisation is not doing enough to develop the next generation of leaders.
“Talent management programmes and succession planning are essential. Without investment in developing the skills and experiences of younger managers it is hard to see how such organisations will continue to be successful. Businesses are at risk of holding back economic recovery by failing to do enough to develop the next generation of leaders.” says Viki Holton, Research Fellow at Ashridge Business School and the report’s co-author.
The assumptions behind the decision to hold off on leadership or soft skills training until people are in management positions are either that managers are in a better position to utilise and take advantage of that training or that it is not needed until then.
The difficulty is that when we promote individuals into managerial and leadership roles they can be overwhelmed by the new responsibilities and as such they lean on their individual contributor skills to get by. They can then fall into the trap of developing bad leadership habits which will only cost more time and budget to unlearn later.
The consensus amongst researchers, leaders and learners contend that the future leaders will need to balance the trends of humanity, technology and performance. The Davos Manifesto of 2020 now recognises the purpose of a company to serve not only its shareholders, but all its stakeholders – employees, customers, suppliers, local communities and society at large. To deliver this leadership must focus on soft skills, hard skills and technology. Those that manage this will deliver significantly more productivity and contribution than those with just soft skills or just hard skills.
Researchers and Leadership authors Zenger Folkman identified the impact of individual contributors who had both ‘hard skills’ as well as ‘soft skills’ The results below show the overall effectiveness ratings for leaders as the graph demonstrates, hard skills are more highly valued for individual contributors than soft skills. The more meaningful and much more substantial difference is between those who were in the top 25% on both skills.
Hard skills defined as:
Soft skills were defined as:
In addition to this analysis, Zenger Folkman looked at the individual manager’s performance ranking on productivity and effort. When individual contributors were highly skilled at both, 91.6% of those individuals were given the top performance rating.
Organisations would be well served to invest in systematic leadership identification and development for high potential colleagues before they get promoted. Not only will this deliver productivity returns in their current role but reduce leadership development costs in the future and further aid in identification of the best leaders.
Using a robust 360 assessment and psychometrics will reduce bias and investing in the wrong talent or letting the best talent slip through the net.
HR and its role in the war on talent, the war on skills, wellbeing, inclusion and diversity, hybrid working, culture, organisational brand will be further enhanced by it’s reputation for developing leaders of the future.
Vincent Romano
Matthew Crome