Leadership Development, Key for Growth, Seen As Stagnating

April 8, 2016 – Leadership development is now seen as a main driver for ensuring delivery of business results (43 percent) and business growth (20 percent), according to the ‘2016 Leadership Development Survey’ just released by Borderless Executive Search.

The report captured insights from close to 1,000 senior executives across a range of industries. The high rate of response and depth of feedback demonstrate that leadership development remains top-of-mind and is considered a key enabler of business strategy and growth.

Nevertheless, the results show that this remains a wide open area for executive search firms to make their mark, and expand their service offerings.

Nearly half of respondents (44 percent) characterize leadership development in their organization as poor, and more than half (54 percent) describe it as ineffective.

A large majority (nearly 60 percent) are dissatisfied with their organization’s investment in leadership development activities, and more than 65 percent state that the level of their organization’s investment in these activities has, in recent years, declined or stagnated.

In addition, 29 percent of respondents are not aware of their organization having any kind of leadership coaching or mentoring program at all.

A majority (56 percent) of respondents said they believe support from top management is a critical success factor for ensuring effective leadership development within organizations.

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But the level of satisfaction with the effectiveness of, and investment in, leadership development is low, they report, suggesting that either too little effort is made by organizations to establish leadership development programs or that what has been established fails to meet the expectations of executives.

“In prioritizing all of the elements that go into building a successful business, it would seem that many corporate heads consider leadership development to be a low priority ‘nice to have’ instead of a strategic imperative,” said Niels-Peter van Doorn, head of leadership consulting at Borderless.

“While most argue that effective leadership is necessary to achieve positive business results, the lack of focus on development suggests that leaders are expected to possess all essential leadership skills innately,” said Mr. van Doorn. “This is reflected in the trend within companies to ‘hire in’ senior executives instead of growing and advancing executives from within. Over-reliance on external hiring can frustrate and demotivate teams, he said, “and could consequently exacerbate internal organizational challenges.”

To that end, Borderless offers the following six recommendations to establish robust leadership development programs:

• In building leadership programs, a balanced approach focusing on both business acumen and soft skills, and understanding the interrelationships between these two elements, is required;

• The active involvement of top executives in leadership development is necessary, and accountability for it should be held by the CEO;

• Organizations must accelerate the development of less experienced executives to fill the emerging leadership gap, accentuated by ageing executive populations in many ‘traditional’ industries;

• Effective leadership development programs need to be grounded in real-life challenges;

• Job rotation, which has the added advantage of creating higher levels of understanding and cooperation between functions, deserves higher priority if organizations are to develop executives with broad-based general management skills;

• If leadership development drives profitability and growth, then active engagement in leadership development should never be optional.

Other recent reports have also stressed the importance of leadership development within organizations.

A survey released by the Hay Group division of Korn Ferry found that 87 percent of HR leaders say that linking an organization’s social responsibility efforts to leadership development has a positive impact on overall engagement and performance. Unfortunately, only 59 percent of respondents say their organizations actually do link the two.

Other reports point to companies failing at even the basic levels to develop high potential leadership talent. A recent survey released by Penna found that a mere 13 percent of employees described their organization as doing a lot to recognize their potential, with the result being that valuable talent has either gone to waste or left the business (estimated at around 23 percent in the past 12 months).

“It is time that organizations recognized the importance of spotting potential and talent development,” said Penny de Valk, managing director of Penna’s talent practice. “By failing to do so they are jeopardizing their greatest asset – their talent. Not only are they missing out on the opportunity to engage their most valuable employees, they also risk wasting – and possibly losing – existing talent at a time when it’s in short supply.”

Another report released last week by Penna asked how satisfied employees are with the level of career development they are receiving. Respondents gave only five out of 10 for their current organizations. And nearly two thirds (63 percent) of employees said that the lack of a development channel with their current employer would very much – or possibly – be enough to make them start looking for a new job.

Developing talent, therefore, remains a top priority for HR and corporate talent acquisition professionals.

Seventy-four percent of HR leaders have identified leadership succession and speed of development as the primary internal challenges they face, according to a survey by talent solutions provider Lumesse and research company Loudhouse.

Over the past several months, a handful of executive search firms have added or expanded leadership development services to address these growing needs. Here is a look at a few:

• Ryan Search & Consulting formed a partnership with the Center for Creative Leadership (CCL) to provide clients with a deeper array of leadership development resources. A global provider of leadership development, CCL works with individuals, teams, organizations and companies to help them achieve their objectives through leadership development & organizational guidance, coaching, change leadership, culture transformation and succession planning. For over 40 years, the firm has worked with more than one million leaders at all levels in more than 130 countries worldwide;

• In February, Heidrick & Struggles acquired Decision Strategies International (DSI), a Philadelphia-based strategy and leadership advisory firm. Founded in 1990 by Paul Schoemaker, DSI has advised some of the world’s best-known organizations; it specializes in strategic planning and decision making in uncertain operating environments, leadership development, and talent strategy. This acquisition comes on the heels of Heidrick’s acquisition of Co Company, a London-based advisory boutique specializing in leadership services that accelerate organizational performance. Both firms have now been merged into Heidrick’s leadership consulting business. Whether a direct result of these investments or not, Heidrick reported a phenomenally successful year of growth in its Americas business this past year. Hunt Scanlon Media reports the company saw revenues increase 15 percent;

• Former Egon Zehnder partner Rob Sloan recently launched Starboard Tack Partners, a strategic talent development and advisory services provider to boards, chief executives and executive teams in the financial services sector. Mr. Sloan said he decided to set out on his own to take advantage of the “major shift toward more diversified services” in the executive recruiting and leadership solutions sector. The talent continuum is very broad-based, said Mr. Sloan, and senior level recruiters now look at talent management from a more holistic perspective. This, he said, includes assessment, onboarding & integration, ongoing assessment, culture shaping, and career planning right up through to leadership development and succession planning;

• Executive search firm Conroy Ross recently partnered with Optimum Talent, a privately owned integrated talent management firm. Together, they provide clients with a full offering of leadership solutions including executive search, leadership development, coaching, organizational psychology and career transition.

Contributed by Scott A. Scanlon, Editor-in-Chief, Hunt Scanlon Media