Whats behind the leadership shortages?
One argument is that the traditional ‘pyramid model’ of leadership development model is no longer fit for purpose. There’s also evidence that less of the millennial generation aspire to take up leadership roles.
How big a problem is this?
According to Deloitte, it’s big. They found that 89% of executives rated the need to “strengthen, reengineer, and improve organisational leadership” as an important priority – and the following findings give further cause for concern:
- 56% of executives say their companies are not ready to meet expected leadership needs
- More than one in five companies have no leadership programmes in place
- Just 7% of companies say they have accelerated leadership programmes for Millennials
The good news is that 44% of businesses report making progress in leadership development (up from 33% in 2015) and investment has grown too, by 10%, since last year.
What needs to change?
Companies must shake up their strategy and processes. They need to embed a more structured, scientific and open-minded approach to identifying, assessing, and developing leaders. And, crucially, they should start initiatives earlier to develop leaders from more junior levels.
Identify what successful leaders look like
You should have a clear picture of what makes a successful leader in your organisation, too many organisations say they don’t know who their future leadership talent is. Consider what capabilities they need, what behaviours they should display and what values they must embody.
It can be useful to look at current successful leaders in your business to identify what makes them effective. It’s important though not to base leadership profiles solely on this as you could be creating a culture of ‘groupthink’. Innovation thrives on diversity so make sure you’re not creating a conveyor belt of leadership clones!
Instead, take a step back and consider the types of talent and leaders that your business needs. For example, specialists will have different motivations and skills to traditional leaders and your organisation is unlikely to be successful without them.
Actively look for future leaders
Hold regular leadership talent forums with other stakeholders to identify potential future leaders, flag retention risks and agree development opportunities for individuals. This also offers a good opportunity to discuss succession plans for critical leadership roles.
Getting milliennials on-board
Millennials, as a group, are worthy of special consideration within your thinking. By 2030, they will make up around 75% of the workforce. Millennials will be leading millennials and selling to, servicing or manufacturing for millennials. Involving them in shaping the type and profile of leaders being developed is therefore a no-brainer.
For example, we know that millennials’ value system and motivations are different from previous generations. This influences everything they do. So, establish what they want, expect and value in leaders.
Create ‘best fit’ programmes and use the right tools
By establishing who your leadership talent is and where there are talent gaps, you’ll be better informed to create development programmes that best fit the business needs.
The right leadership tools will depend on what it is you need to develop in future leaders. Using psychometric assessments or 360 degree feedback can help to raise self-awareness, highlight gaps in key behaviours and capabilities for these individuals. This information can then be used by leaders to inform personal development plans. You can even use such findings, at an aggregated level too, to shape the content of development programmes for future leaders.
Coaching can be invaluable in helping people to become more aware of their leadership style, personal effectiveness and what they need to work on in order to progress. And encouraging mentoring is a great way of ensuring that successful leaders can provide guidance and share the benefit of their experience with future leadership talent.
Failure to offer appropriate leadership development opportunities at different levels or grades is a common problem. Often companies identify future leaders well at a junior level but then lose sight of them as they progress into middle management. It simply isn't an option to overlook the development of these groups and, from what we know about millennials, they won't let you anyway!
You need to offer a breadth of opportunities including the chance to make horizontal career moves, as well as vertical ones in order to challenge and prepare future leaders. Furthermore, development programmes for those in middle management should not only help them to be more effective in their current position but should also prepare them for their next role.
Whats the benefit of getting this right?
The shortage of leaders isn’t an issue that’s going away and, as mentioned, could even soon become worse. Organisations will be best served by being proactive and putting in place the plans and processes to develop leaders in line with their own business needs. Doing this, and getting it right, will mean:
Significant cost and efficiency savings as it reduces the need to hire externally for leaders. There’s a further time-saving in their on-boarding, which will naturally be simpler for those already working in the business.
Less risk and a higher chance of success when promoting leaders from within as they already know the business, its values and customs and are likely a good ‘cultural fit’. This means the chances of them being successful in their role will be far higher.
Greater leadership continuity as you’ll be constantly progressing future leaders at all levels of the business, ready to step up into senior roles so shouldn’t encounter significant gaps or shortages.