One of the questions I hear frequently from emerging and current leaders is this one: “How has leadership changed from 10 years ago and what do I need to understand about running a successful enterprise that I don’t know today?”
Well the reason is simple: only 14 Percent of CEOs Have the Leadership Talent to Execute Their Strategy.
The data in Global Leadership Forecast 2018 shows that organisations with effective leadership talent outperform their peers. Yet very few organizations manage this high-value asset in an integrated, cohesive way.
Even after spending more than $50 billion annually* on developing their leaders, many companies still don’t have the bench strength to meet their future business goals. And despite the spending, investments are often fragmented and see a lack of returns.
Leadership models and development programs abound; few ties to business goals. Worse yet, there’s scant evidence that they actually work. What’s needed is a coherent, integrated leadership strategy.
A well-crafted blueprint ensures that companies have the right talent, at the right cost, and with the right capabilities to deliver today and into the future. Yet, this report found less than one-third of the HR professionals surveyed feel their organisations have an effective leadership strategy. Companies that do have such strategies in place report better returns on their investment in talent. They consistently feature deeper leader bench strength and stronger leaders at all levels.
Many leaders are living under an identity crisis. They are uncertain about how to lead in a more diverse, transient, multigenerational environment that requires them to embrace diversity of thought – and they fail to see the potential opportunities this represents to both workplace and marketplace success.
When leaders become too comfortable with a one-size-fits-all approach to leadership, they conversely become uncomfortable with the uncertainty and change that more successful leaders embrace as part of the job. Complacent leaders are at risk of becoming irrelevant because they are unable or unwilling to course correct their style, approach and attitude to the environment of change they must lead through.
Leaders fail in their primary role and responsibility of enabling the full potential in people and the business they serve because they don’t know the difference between substitution and evolution. Instead of leading the organization and its people to continually evolve, they get stuck in a cycle of complacency and the substitution of activities associated with it. As a result, the company cannot grow or its growth cannot be sustained.
The result is a major shortfall in competent, clued up global leaders.
According to a 2017 report by Price Waterhouse Coopers, 75 percent of hiring managers believe leadership skills are hard to find in new recruits. And a Deloitte study found a whopping 87 percent of companies aren’t effective at building global leaders.
What could be more vital to a company’s long-term health than the choice and cultivation of its future leaders? And yet, while companies maintain meticulous lists of candidates who could at a moment’s notice step into the shoes of a key executive, an alarming number of newly minted leaders fail spectacularly, ill prepared to do the jobs for which they supposedly have been groomed.
Look at Coca-Cola’s M. Douglas Ivester, longtime CFO and Robert Goizueta’s second in command, who became CEO after Goizueta’s death. Ivester was forced to resign in two and a half years, thanks to a serious slide in the company’s share price, some bad public-relations moves, and the poor handling of a product contamination scare in Europe.
Or consider Mattel’s Jill Barad, whose winning track record in marketing catapulted her into the top job—but didn’t give her insight into the financial and strategic aspects of running a large corporation.
Ivester and Barad failed, in part, because although each was accomplished in at least one area of management, neither had mastered more general competencies such as public relations, designing and managing acquisitions, building consensus, and supporting multiple constituencies. They’re not alone. The problem is not just that the shoes of the departed are too big; it’s that succession planning, as traditionally conceived and executed, is too narrow and hidebound to uncover and correct skill gaps that can derail even the most promising young executives.
However, Harvard Business School released some research into the factors that contribute to a leader’s success or failure, the findings found that certain companies do succeed in developing deep and enduring bench strength by approaching succession planning as more than the mechanical process of updating a list. Indeed, they’ve combined two practices: succession planning and leadership development, to create a long-term process for managing the talent roster across their organisations. In most companies, the two practices reside in separate functional silos, but they are natural allies because they share a vital and fundamental goal: getting the right skills in the right place.
A final thought: to succeed in the 21st century workplace and marketplace, leaders must come out from under their identity crisis and embrace diversity of thought so that those they lead can overcome their own identity crises and reach their full potential. They must embrace risk and change as opportunities that others may fail to see as such. And they especially must understand the difference between substitution and evolution: one leads to the trap of complacency, the other leads to a path of growth and continued success. In the end, the wise leader knows their subject matter expertise and specifically what their leadership (identity) solves for – in support of the organisation’s evolution.
Perhaps the underlying lesson is that good succession management is possible only in an organisational culture that encourages candor and risk taking at the executive level. It depends on a willingness to differentiate individual performance and a corporate culture in which the truth is valued more than politeness.
A.P. J. Abdul Kalam once said:
“When we tackle obstacles, we find hidden reserves of courage and resilience we did not know we had. And it is only when we are faced with failure do we realise that these resources were always there within us. We only need to find them and move on with our lives.”