Acorn Coaching and Development

Improving business performance

Insights

The Leadership Deficit: How Healthy is Your Leadership Pipeline?

  • Leadership defecit

Key industry sectors are facing a worrying shortfall in leadership capability as they move into a period of activity following recent economic challenges.

Understandably, many businesses ‘stripped out’ or froze their investment in personnel as they sought to reduce overheads in the face of a declining, or at least static, balance sheet. In addition, following the frequently used mantra ‘more from less’ - much loved by budget-holders but in real terms ultimately limited by definition - leaders are being asked to manage more projects, and more staff, than previously, often against a backdrop of tighter budget and time constraints. The reduction of training and development budgets - a common money saving strategy in times of downturn - compounds the problem.

Plenty of theories exist that illustrate the changes in capability required as people move upwards. Of course additional skills are required: what is often unrecognised is that many previously essential skills must be left behind. Commonly those who have shown technical expertise are promoted to management positions, requiring them to acquire additional people skills in personnel and stakeholder management whilst leaving behind much of the technical capability that has resulted in the promotion. Those moving from middle to senior management must acquire a deeper understanding of external sector trends and how to apply them to internal strategy.

The appointee must be prepared to ‘transition’ - to change their outlook as well as their job description - and move on from earlier, often hard-won achievements. At all levels of promotion they will almost certainly need to be taught new skills, encouraged to leave surplus ones behind, and guided in this transition, if they are to progress as effective leaders.

The Ashridge Management Index (AMI) 2012/131, carried out by Ashridge Business School, found that many businesses are failing to future-proof their leadership teams: 48% of managers say their organisation is not doing enough to develop the next generation of leaders.

Viki Holton, Research Fellow at Ashridge Business School and the report’s co-author, says: “Talent management programmes and succession planning are essential. Without investment in developing the skills and experiences of younger managers it is hard to see how such organisations will continue to be successful. Businesses are at risk of holding back economic recovery by failing to do enough to develop the next generation of leaders.”

We agree. Some of our most senior clients in construction, rail, infrastructure and professional services are now expressing real concern about an emerging shortfall in the depth and breadth of leadership capability in their middle and senior management tiers, and are asking what they can do about it.

What’s the solution?

“I start with the premise that the function of leadership is to produce more leaders, not more followers.” - Ralph Nader

Developing the leadership pipeline is a ‘long game’ that can – and must – start before the need arises. The requirement for new leaders is always on the horizon, and in the event businesses understandably want people who are ready to pick up the batons that are often suddenly dropped. The obvious place to look first is within, for people who know the business and demonstrate both the capability and the drive to succeed. Companies who invest in those who show leadership potential, consciously and strategically developing their skills, are in the strongest position to grow, contract and re-organise as the business situation changes.

“Leaders aren’t born, they are made. And they are made just like anything else, through hard work. And that’s the price we’ll have to pay to achieve that goal, or any goal.” - Vince Lombardi

Leadership development programmes, often introduced by the HR function, can be excellent for identifying leadership potential. They can and do play a useful role in creating awareness of leadership styles and skills and create a common language within the business to develop understanding. The most effective ones are delivered within the organisational context, taking into account the business strategy, and designed with the purpose (to identify and nurture leadership potential) clearly in mind. They have the scope to work individually with delegates and their real time situations, with a strong element of personal analysis. It is essential to have the active support of senior and middle management if these programmes are to truly nurture the leaders of the future in a sustainable way.

“Great leaders are not defined by the absence of weakness, but rather by the presence of clear strengths.” - John Zenger

High potential personnel (in fact all personnel) benefit from 1:1 coaching that again works with real time situations and places high importance on personal analysis, supported by feedback from line managers and key stakeholders - given positively and with the future in mind. The coaching process, when done well in a supportive environment, creates a strong awareness of capability, clarity of aspirations and, crucially, enormous confidence to excel. Many senior managers have carried the habit of personal coaching with them as they have progressed to some of the most senior roles in their industries.

Debunking the myth

"The most dangerous leadership myth is that leaders are born – that there is a genetic factor to leadership. That’s nonsense; in fact, the opposite is true. Leaders are made rather than born.” – Warren Bennis

What about those who believe that great leaders are born great? There are a few born leaders perhaps, but probably not as many as often believed. Most have slogged, studied, learned, invested their time, and consciously developed their practice. To battle the leadership deficit, to ensure that all leadership potential is nurtured, internal business culture actively promoted by management at the highest levels must play a key role in driving this process, and prioritise the ongoing enhancement of capability. Or as the authors put it in their book “The Leadership Pipeline”2

“Organizations need leaders, but natural leaders are at least as rare as natural athletes. And, even natural athletes need careful training and development — given that almost everyone is capable of developing some degree of athletic potential. Similarly, the right training and development program can help almost anyone cultivate some degree of leadership potential. In fact, it can help a few people develop extraordinary leadership abilities. Ignoring leadership development is foolish, but at many companies, short-term priorities eclipse the long-term thinking needed to develop a good leadership pipeline.”

What next?

  • Most companies don’t recognise the leadership shortfall until it causes them a problem. Consider well in advance at a strategic level whether you have the depth and breadth of skill within the company to meet future leadership needs.
  • Review whether you have a working system in place to recognise leadership potential, that is supported in practice at all levels.
  • Consider what additional resource you need, internally or externally, to deliver targeted development to high potential leaders of the future.

In summary

Developing a leadership pipeline requires advanced, strategic thinking at the highest levels of the organization, and must be actively supported and promoted ‘down the line’. A 2013 survey by UK-based recruitment agency Benchmark Recruit shows that 66% of people leave their jobs due to poor management3, at enormous financial and knowledge cost to the companies involved. In times when entire industry sectors are facing a shortfall in leadership capability, can you afford to ignore your potential?

Article References

1: Dent, F., Holton, V. et al. (2013) The Ashridge Management Index (AMI) 2012/13, The Ashridge Business School, available from www.ashridge.org.uk

2: Charan, R., Drotter, S. et al (2000) The Leadership Pipeline: How to Build the Leadership-Powered Company. San Francisco, Jossey-Bass

3: www.benchmarkrecruit.co.uk