Shift from short to long-term innovations
This year’s Best Companies for Leadership survey conducted by Hay Group shows that the leadership culture of today is very different from before the economic crisis.
When we look at what companies value most in their leaders, there is a greater emphasis on strategic leadership: this comes top of the list of valued attributes. This has become more important since the financial crisis and is also placed higher by companies in the top ten.
Companies are thinking more strategically and conceptually, shifting their position from the short to the longer term and are reviewing their options, rethinking their strategies and considering new opportunities and innovations.
In second place comes execution, with the best companies valuing the combination of strategic thinking and then proper execution.
Ethics has risen to become the number three priority for leading companies and is a key differentiator between the best companies and the others, as is inspiring leadership.
The more successful companies make leaders effective in a global environment and foster collaboration more than the others. They hold their leaders accountable for developing business, they incentivise them to collaborate with other business units and they collect leadership development best practices from subsidiaries and share them.
They have programmes designed to creatively bring people together across the organisation, expecting employees at all levels to contribute ideas and act like leaders.
Mega-trends - values
Another effect in the best companies is that they think more actively about the key mega-trends affecting business today, such as demographic change, globalisation, individualisation, value pluralism, social responsibility, environmental awareness and work-life balance.
There will be huge demographic change as the available pool of highly skilled and educated workers starts to decline in the West. Competition for good talent is already fierce and will become fiercer.
The nature of global trade is also changing fast. There is significant industry in the BRIC and N11 (Next 11) emerging countries (identified by Goldman Sachs) and escalating inter-country trade and commerce, increasing the competition for business and manpower.
It will become more important to have international and inter-cultural teams, with a good balance of male and female leaders. The best companies recognise the importance of international exchange and they support ex-pats with inter-cultural adaptation programmes.
They recognise that travelling needs to be part of career management and development. Businesses that do not encourage employees to take jobs abroad will find themselves lacking the right experience to do business with the emerging markets.
The best companies adapt to employee needs, such as having programmes in place to help new parents return to work; they make it easier for them to work from home and they have more family-friendly cultures and policies.
They focus more clearly on attracting and developing talented people, embracing a culturally diverse workforce, offering more international opportunities and having targeted leadership development programmes.
The companies that appear in the survey’s top 10 take decisions in terms of long-term capacity planning: they set up targeted, demand-driven staff development programmes.
Employees are given stretch assignments to develop their skills and capabilities, but are not left alone to find their way: the companies implement active programmes of mentoring and coaching. They see the value of the human factor and they focus on it.
There are also some things the leading companies do less than the others: they are not as likely to have fast-track promotion schemes, and they do not use pay and bonus opportunities as the key means to attract and retain staff.
The most prestigious organisations have good reputations and offer valuable career development, so money is not the major trigger to join or stay with the firm.
Many of the best companies are aiming to have a flatter structure, eliminating unnecessary layers and red tape, so the business can react faster and be more competitive and efficient. This creates an environment that is more motivational and empowering, allowing employees to feel more included and engaged and take more responsibility for the success of the organisation.
Time to act
Companies need to act fast so as not to get left behind. Fire-fighting, cutting and thinking in the short-term became the norm in the crisis, but now companies need a strategic approach to recruitment and development and a long-term perspective on leadership issues. They need to actively manage their manpower, rather than reactively filling gaps and holes.
To become an employer of choice, they need to be strategic; communicate appropriately with employees; consider ethics, inspiration and CSR; take employees’ needs into account and develop them with active mentoring programmes.
Three quick wins
1. Foster collaboration, across borders and across functions; encourage participation and inclusion to empower everyone, including those in the lower ranks, to take ownership of the organisation, speak up when they have ideas and have input into decision-making.
2. Focus on the needs of employees and develop leadership across the organisation in a targeted and strategic way.
3. Set up a strategic, proactive demand-driven human capital strategy – this will ensure that succession planning is organic and that organisations have the talent available to fill mission-critical roles.