By Marcus Leach
Leadership development, processes and practices need radical transformation, if organisations are to meet the increasingly rapid pace of business change, according to DDI’s 6th Global Leadership Forecast.
The forecast, from Global Talent Management Company DDI, paints a worrying picture for organisational leadership capacity. Responses from more than 12,000 organisational leaders and 1800 HR professionals, across 74 countries, indicate that leaders rate themselves poorly, do not possess the skills necessary for business in the future and do not have a sufficient pipeline of talent within their organisation.
Quality of leadership and leadership development
From the Forecast, only 38% of leaders themselves, and 36% in the UK, rate their organisation’s leadership quality as high. Their HR peers rate leadership even more poorly with only 25% of HR professionals stating that their organisational leadership quality is high.
The development that leaders receive is also regarded by leaders as ineffective. Only 1 in 4 (38%) leaders state that the development they receive is effective and perhaps most worryingly, globally only 18% (20% in UK) of HR professionals believe that the organisation has the leadership bench strength it needs to meet future business challenges.
Steve Newhall, Managing Director at DDI UK comments; “Research from our last two Global Leadership Forecasts shows that leadership quality hasn’t changed that much over the last six years despite the estimated £14 billion spent globally each year on leadership development. If organisations are going to have in place the leadership they need, how they find, develop and promote new leaders is going to have to change”.
Effective leadership directly contributes to organisational effectiveness and the bottom line
According to DDI, leadership capability should be a major concern for organisations if they want to become more effective in today’s global marketplace and there is evidence to support this.
66% of leaders within organisations who rate their overall leadership quality as high are confident of business success. At the other end of the scale, only 4% of leaders in organisations with low rated leadership quality are confident of success.
When compared with the competition, leaders in organisations that have highly rated leadership are more effective in many key areas, including financial performance at 2.8 times more effective; customer satisfaction at 4.6 times more effective; productivity at 4.7 times more effective and quality of services at 4.4 times more effective.
Skills required for today’s business environment
With the business world changing so fast the survey sought to understand whether the skillset leaders have are the same as those they expect to need in the next few years. Some of the key skills leaders expect remain important, such as driving and managing change; coaching and developing others and executing organisational strategy. However, these vital skills have been joined by two new skills that are increasingly seen as critical: identifying and developing future talent and fostering creativity and innovation. It seems that organisations may finally be turning towards growth and their leaders need commensurate skills.
Leaders are not well prepared for the future
However, alarm bells should be ringing in organisations, because leaders themselves say they are not prepared for what they will need to accomplish. In fact only between 50%-60% of leaders believe they are effective in the skills they identified.
Best in class use a mix of development techniques
It is interesting that the best results seem to be when a mix of development techniques is used. Organisations with the most effective development programmes use 32% more methods. When asked what were the most effective techniques, 73% (81% in UK) of leaders rated formal classroom training as effective, followed by special projects and assignments (66%) and various types of coaching.
Newhall comments: “On the face of it, the Forecast paints a worrying picture - leaders haven’t yet got the skills they need, only 1 in 4 organisations rate their leadership quality as high and 80% haven’t got the leaders they need coming through. Yet, the picture isn’t as bleak as it may first appear. Organisations have bought into the fact that they need to develop leaders and it’s indisputable that leadership does matter. Leaders are telling us the skills they need and they are clear on what development methods are effective. Put all of those elements together and, if we put our minds to it, we should be able to bring about a step change in leadership through effective, targeted development programmes.”
DDI’s 6th Global Leadership Forecast is the largest leadership survey of its kind in the world and spans more than 12 years. More than 1,800 HR professionals and 12,000 leaders from 2,600 organisations in 74 countries around the world took part in the survey. The survey is taken every two years.
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