Business Brain: Let's recognise potential leaders of the future and help them to rise to the top
According to PwC's 2013 CEO Pulse survey, one of the top three challenges leaders reported was the talent gap, with 33pc of leaders reporting that their company's performance had been significantly affected by talent constraints in the last year.
One in five respondents said it resulted in cancelling or delaying a strategic initiative, and one in seven said it reduced innovation and halted the pursuit of new opportunities.
One of the topics the survey investigated was the types of leadership development initiatives and their perceived effectiveness in developing future leaders. The top three initiatives by their perceived effectiveness were:
1. Bringing managers below board level into the strategic decision-making process
2. Active succession planning (which usually involves identifying talented managers to potentially succeed their superiors and actively involving them in a development and transition plan over e.g. one to two years)
3. Dedicated executive development programmes
Respondents seem to agree on their relative effectiveness in developing future leaders, but how can organisations get the most out of these initiatives?
Developing future leaders is a crucial and strategic piece of the organisational development agenda. However, it is approached differently by different organisations and with varying degrees of success.
The most successful programmes are in organisations where the senior leadership are clear on the leadership challenge and what kinds of leadership behaviours they want to foster in their talent pool.
It is clear that the leadership behaviours needed have moved on in the last few years. There is increasing focus on the collective aspects of leadership, building strategic working relationships, networking and generally acting in a collaborative way, up, down and across the organisation.
Leading transformational change is a core competency. This includes not only leading once-off change initiatives, but fostering constant change readiness and creating a flexible performance culture. Continuous innovation and learning is also crucial: constantly staying up-to-date with the industry and competitors and developing personal and organisational agility. Leaders also need the ability to make decisions quickly, and in ambiguous circumstances.
The most effective talent development programmes are seen in organisations that view it as a strategic imperative and where such interventions are owned and driven by all business leaders and not just by human resources or learning & development professionals. Far too often leaders put personal development in second place over other work commitments.
The most effective approaches we have seen use a multi-pronged, 'little and often' approach to development. They combine multiple complementary initiatives. The idea behind it is the '70/20/10' model of learning, which states that 70pc of learning happens from practical experiences on the job, 20pc of learning comes from others e.g. through coaching and/or stretch assignments and only 10pc comes from formal classroom interventions such as training courses.
For instance, the effectiveness and practical application of an executive development programme is increased where it includes mentoring or shadowing with a senior executive and an opportunity to get involved in strategic decision-making (for instance "acting up" on behalf of senior leadership).
Other companies engage in active succession planning, whereby the identified talent pool is rotated around functions and in some cases globally, and completing a set number of these "tours of duty" is a pre-requisite for taking on a senior leadership role in the organisation.
The leadership challenge is very real and something that should be high on every organisation's strategic agenda. There is a myriad of innovative and effective ways to develop future leaders, and they do not have to involve a big financial investment. Organisations should find an approach that is fit-for-purpose and suits their budget, timeframes, culture and ways of working.
Milla Clynes is a manager at PwC People and Change www.pwc.ie