Many would agree that the quality and capability of organizational leadership defines the overall performance of the company. Leadership development generates exponential returns, create stability, improve morale and promotes brand recognition.
Globalization had accelerated the significance of international leadership development. Trans-national companies are operating globally making sensitive leadership more critical than ever.
“Winning companies win because they have good leaders who nurture the development of other leaders at all levels of the organization.” — Noel Tichy
Leadership development!
Most organizations state that leadership development is their number one priority. However, when you look closely, the results derived from this focus reflect anemic progress. Primarily, because too little emphasis is being allocated to developing future leaders. According to a Borderless survey, 54% of leaders feel that their leadership development program is ineffective and 60% are dissatisfied with the investment in these programs.
Many top executives view these programs as a burden easily deferred to HR leadership and front-line managers. Developing future leaders is not an easy function. Molding well-rounded next leaders in a complex, volatile, and ambiguous world is a significant challenge.
Baby Boomers- hard workers! Millennial’s – lazy, but smart! Who knows?
The Washington post had substantiated that almost 4 million baby boomers retire on a yearly basis – that’s a staggering daily 10,000 retired baby boomers! Bay boomers were loyal employees, so where most companies in the 1960’s.
The formula was simple; you work all your life for probably one company, you retire with a good pension and a gold watch. Things have changed since then.
Well, according to Brandon Hall Group research by the year 2020, half of the US workers will be millennial’s (extracted from government survey data). 66% of millennial admit that they are unhappy with their current job and are actively looking for a new position. Besides, 91% of these millennials who stay in the post are planning to transit to another role/company in less than three years.
Forget loyalty!
Millennials grow up differently. Therefore they, think, interact, communicate, learn and operates differently. This generation has been labeled as entitled, lazy, loyalty-lite, dopamine-hungry with unrealistic expectations. Millennials are the future, but the future is already here!
Deloitte estimates that Millennials will make up 75% of the global force by 2025. Many baby boomers have already reached, or are fast approaching, retirement age. With their retirements decades of learned skills and valuable experiences will vanish, creating a significant skill gap.
Millennial’s insanity
Millennial’s demand a lifelong learning experience, customized to their specific needs through an on-demand, easily searchable internal database. You may think, they are difficult! They are not. They are merely programmed differently, due to their mental conditioning, surrounding environment and expectation from a workplace.
“Millennials are often portrayed as apathetic, disinterested, tuned out and selfish. None of those adjectives describe the Millennials I’ve been privileged to meet and work with.” — Chelsea Clinton
However, what millennials expect, and what they view as a natural condition of job growth and development is often an organizational nightmare, as most organizations lack these fundamental capabilities.
Human resources systems and operational methodology are vastly archaic. Companies who created private universities, fashioned according to old academic methods and processes are too traditional for millennial’s learning style.
Most millennials possess a digital DNA. It is natural for them to reject traditional classroom training programs that are often run by HR. Millennials grow up absorbing a vast amount of data through digital methods, and intuitively recognize that these conventional methods are incompatible with mental stimulation and growth.
Given a choice, they prefer an online customize education or peer-to-peer interactions with brainstorming opportunities, as well as professional coaching through participative dialogues. Millennials are the future of most organizations, and the survival of these institutions depend on the quality of training provided to these future leaders.
Statistical Reality
According to CEB, 66% of companies invest in programs that aim to promote high-potential employees. However, only 24% of senior leader surveyed believe the organization is achieving the intended objectives. Additionally, just 13% of top executives polled trust the capability of their internal candidates.
It is worth noting that 30% of all hired new CEO are outsiders. It’s troubling to think that despite the fact that considerable financial resources are allocated to these programs. They lack leadership engagement and faithful support.
The question is: is it a leadership development issue? An organizational failure? Alternatively, lack of competency?
According to Egon Zehnder research, an evaluation of managers at thousands of corporations. Found that 72% of internal managers have what it takes to grow into the c-suite roles. Conversely, 9% of these managers have what it takes to become great CEOs. Yet, 25% of top executives believe that less than 10% of their managers are ready to take over a critical position at a moment’s notice.
According to Borderless researchers, as many as 58% of organizations are struggling to close leadership skill gaps. Not surprisingly, 71% of employees have little or no faith in their current leader’s ability to lead the organization to a better future. That is why 30% of new CEOs are hired from the outside.
Leadership development is a tough business. With few notable exceptions, most organizations fail to produce good internal leaders. Primarily due to lack of robust process and systems that cultivate, educate, stimulate, and mold future leaders.
Millennials are the products of their time
Many say that aspiration to a higher office is a private personal affair, based on individual belief, ambition, hunger, mindset, and commitment. But, not necessary an organizational function. Becoming a senior leader requires unique skills and capabilities, coupled with excellent personal attributes. One must possess a good dose of curiosity, engagement, grit, intelligence, and tenacity as well as people skills to get things done right.
In reality, despite what’s being stated, most organizations have not developed robust systems that will allow full development of the future leader.
A recent study conducted by indeed.com, reflected that 71% of total employees in the United States are currently either actively looking for a job or open to a new opportunity, while 58% review available posting at least in a monthly basis. One should note, that three-quarter of employee turnover is voluntary. Recent studies have shown that in 2016 employee turnover was 20.3% in the United States and potentially higher within some specific industries.
Leadership development means corporate revenue growth.
High turnover, low engagement, discomfort and distrust of the company is costly for any organization. We become accustomed to people making a way to c-suite by sheer force of resilience, mental brilliance and playing politics to serve the power brokers that can facilitate the transition. However, that the wrong way to climb-up the upward mobility ladder.
Leadership development programs are strategically designed to develop business acumen and soft skills to accelerate individual development, by immersing one into real-life challenges to gain the necessary experience and decision making, while being supervised by an experienced executive.
Job rotation is often a way to discover candidate’s competencies and provide a holistic view of how the business operates. Direct involvement of top executives is vital to drive these programs forward. It is worth to recognize that these programs drive profitability, revenue growth and ensure seamless future leadership succession.
Leadership matters!
History repeats itself. When Steve Jobs’ death was announced on Oct. 5, 2011, Apple Inc. stock immediately dropped over 5%. Apple products were still in high demand, and cash on hand ratio was extremely healthy. The issue was shareholders confidence diminished, despite the fact that Tim Cook was a very competent successor. Tim managed to assure the market that any proposed changes will be complementary to the company culture and philosophy. His approach was brilliant given the market circumstances.
On the other hand, John, Sculley (Apple CEO from 1983-1993) fired Steve jobs in 1985, which caused the company’s stock to plummet to less than $2 per share from $5 per share in 1984. Howard Schultz stepped down as CEO of Starbucks in 2000, and returned in 2008, during the years leading up to his comeback, Starbucks stocks had dropped by 50%. Leadership quality matter, knowing the essence of the business can make the difference between corporate success or failure.
Good Leadership requires one to be result oriented, strategic, diplomatic, with strong leadership and organizational capability. Additionally, one must have a good dose of curiosity, intellect, and a good understanding of market dynamics and people.
Not all CEOs possess unique competencies that make them far superior to their reports. Multiple surveys have shown, that many talented individuals with skills and potential far superior to current CEO go unnoticed for decades, often because of middle-management that stifle their growth due to personal insecurities.
Talent is a commodity! Really?
Many talented employees despite their best efforts go ignored for years. Many watched hopelessly the position they wanted to acquire, gets allocated to an external candidate. Who, often has to rely on their expertise and knowledge to do his job. Most, internal employees are not against hiring outside talent, especially if the job requires competencies not available within.
Most loyal employees are merely asking for a fair chance to be considered based on ability, skills, and merit. They are looking for fairness in all areas that deal with personal growth and employee development.
To stay relevant, and minimize turnover. Companies need to adopt leadership development programs that evolve according to need and demand. Most businesses are a construct of separate units of production managed by expert employees. It should be easy to spot promising talented employee that qualify for these growth programs.
“Growing other leaders from the ranks isn’t just the duty of the leader, it’s an obligation.” – Warren Bennis
Developing competent future leaders that exude robust strategic capabilities while being result oriented, is not an easy task. However, done well, it pays high dividends.
A joint study by Egon Zehnder international and McKinsey surveyed more than 100,000 senior executives across multiple industries found that there is a direct correlation between leadership quality and revenue growth. Moreover, while most companies lack high-caliber executives, many do not master specific competencies required to have higher growth impact.
Only 1% of the executive surveyed average a competency score of 6-7 out of 7. while 10% had an average rating of 5. Executives at high growth companies score better than their peer in lower growth companies across all competencies.
Leadership competency
Great CEOs can transform business models into a reality, develop breakthrough corporate strategies that work and influence partnerships that encourage high-performance sales culture. Leaders know how to promote organizational capabilities that focus on talent management, team capabilities and encourage transformative changes that mobilizes everyone to drive forward.
Great leaders are visionary, they predict market changes and act accordingly to leverage market upside, by creating an inclusive corporate culture that promotes cohesiveness, diversity, acceptance, and tolerance.
We understand that one person cannot excel in all these competencies. However, lasting transformative changes must be led by the CEO cascading down the organization.
“My main job was developing talent. I was a gardener providing water and other nourishment to our top 750 people. Of course, I had to pull out some weeds, too.” — Jack Welch
Curiosity is one of the most significant prerequisites for individual development and promotion to the c-suite level, along with a good dose of Insight which is an attribute that allows a leader to develop a good sense of strategic orientation and market understanding.
People with potential can be groomed to cultivate required capabilities. Exposing employees with potential to training and rotational corporate development process allows these employees to build the necessary experience, knowledge, skill, and insight essential for the job. Continuous coaching will develop competencies required for the next level of responsibility.
Woman are underrepresented at the highest corporate level. Multiple studies have shown, that woman has the same capability, skill, and talent and score equally to men on various competencies tests. Nonetheless, they continue to be underrepresented, primarily because they are not given the opportunity to hone vital competencies within specific areas.
Women are not given a fair chance
Women continue to struggle in a man’s world. If you are women, you cannot develop team leadership if you never manage a team. You could not improve your strategic results if you were never given a chance to participate in molding strategic objective projects related to internal processes or organizational capacity.
You cannot make financial decisions, if you never participated in the projects related to planning lowering cost, increasing profitability or increase in revenue. It’s not a gender issue; it is an opportunity and confidence issue that has a direct correlation with the exposure and time spent practicing to acquire mastery.
No one can possess perfect competencies in multiple-disciplines without essential practice. Most CEOs are specialist in a specific field, but, fortunately, they are surrounded by other competent employees that help them see through the clutter to make a careful decision.
“I’ll bet most of the companies that are in life-or-death battles got into that kind of trouble because they didn’t pay enough attention to developing their leaders.” – Wayne Calloway
Talented individuals are everywhere, the issue resides, in the fact that companies often fail to identify and help these talented individuals to hone their skills to higher level.
Leadership development programs expose talented employees to multiple disciplinary functions and allow employees to uncover areas of strengths that resides dormant within. Without conscious effort and training on numerous functional disciplines top gifted employees cannot grow to handle important responsibilities and manage corporate conflicts.
Label-less leadership
It’s critical to retain and engage top talent including Millennials consistently. People do not work just for money, recognition, and rewards. Most Millennials are looking for potential job rank elevation, increased responsibilities and challenges, learning opportunities and career development path.
Senior managers, often, refuses to empower junior employees primarily because they are “Junior.” History is filled with examples, where janitors became CEOs and excelled at the job. It took a lifetime of hard work and discipline to get that. But it’s the results that matter.
Corporations with an executive business program have the potential to create, build, and mold a competent generation of potential corporate leaders. Most corporate leadership development systems are assessment focused, and provide little insight on how to develop a vision, mission and core values.
Most lacks solid education on challenge handling, customer need and value proposition, corporate direction, strategic performance measures and targets as well as leadership perspective.
Most organization rely on line managers and human resource leaders to spot potential talent and future stars. This method while somewhat effective is subject to inherent discrimination as well as personal biases. Hence, potential talent may never get discovered, nor be promoted to access the leadership development programs.
Few companies that value the importance of promoting from within have enlisted a more rigorous succession planning across all divisions and regions. Effective success needs to be engrained in the company culture to ensure adherence and results.
The CEO and the executive committee board should oversee and manage these development program progress by cascading down to the HR leaders and front-line managers, who should be trained and incentivize to spot future stars to join these development programs.
“To help others develop, start with yourself! When the boss acts like a little god and tells everyone else they need to improve, that behavior can be copied at every level of management. Every level then points out how the level below it needs to change. The end result: No one gets much better.” – Marshall Goldsmith
Progress reports are sent in a monthly basis to the committee board, reflecting areas of growth, performance analysis, capacity to absorb and implement change, the speed of improvement, personal initiative, stewardship, conflict management and unique capabilities that accelerate growth.
Companies that have promoted rigorous development programs were able to replace their top global role with internal promotions at the rate of 80%.
Organizations like Prudential Financial, Inc which promote leadership programs from the top-down, and establish an accountability system managed by executive management in congruence with HR and front-line managers tend to have more success than the organizations that merely allocate adequate financial resources and leave it to become a discretionary secondary responsibility of HR and front-line manager.
Conclusion
Leadership development programs should be part of the corporate training and growth rhythm. The potential employee should be consistently identified and put into a fast-track learning process designed to accelerate career responsibility path.
Millennials should be educated on the financial, social and human corporate responsibilities. Their rebellious, and inquisitive natures should be celebrated as part of the evolution of humanity and market demand. Diversity and inclusion should part of the foundation of the program to ensure global success.
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