If you answer is yes, then your company is one of the few ones around the world that really values its leadership pipeline.
The latest studies of the CEB SHL Talent Measurement shows that most of the senior executives are not confident in the strength of their leaders as they regard them as missing the big picture, retreating in response to growing complexity and focusing narrowly on their individual span of control. Senior executives are sure that this kind of leadership is not enough to drive business results that organisations expect.
Such observations are supported by the opinions of HR managers. According to CEB’s 2014 Enterprise Leadership Head of Function Survey, only 16% of HR heads believe that leaders of their companies remove barriers to their teams’ performance; 22% say their organisation is effective at generating innovative ideas; 25% believe leaders will be able to adapt to a significant change in business strategy and 29% believe leaders can adapt to big shifts in the market.
So where does the lack of confidence from senior leaders and HR managers come from? It’s not a traditional leadership competency problem, because two-thirds of leaders are already effective or very effective at traditional leadership competencies. But the performance that got leaders to where they are today is not what organisations need to move forward. The business reality has changed significantly and has a stronger than ever impact on the employees and leaders in particular. What are the changes the leaders have experienced in recent years? What are the new challenges for them?
Firstly – accordingly to CEB SHL Talent Measurement studies – peer interactions have become more complex. The majority of leaders agree that the number of people they need to consult to make a decision has increased. More than 80% of leaders agree their jobs are increasingly diverse and include more responsibilities than before. Because of that leaders, need to consult and build consensus with more of their peers to make decisions, they are given larger scope of responsibility, they must rely on peers’ expertise and navigate unfamiliar peer relationships within new organisational cultures.
Secondly, the leader-team dynamics today are more complicated. More than half of leaders report an increase in time spent working with direct reports in different locations in the past three years. Employees spend an average of three hours a week with their direct leader – just half the time they had two years ago. As a result, leaders lack visibility into teams’ day-to-day work. This in turn requires higher levels of trust, and a culture that enables staff to seek guidance, support and development from one other as well having a greater span of control and autonomy – without constant input from the leader.
The workplace environment has changed, but unfortunately leaders have not kept pace. There have been many radical changes in the business environment, and the traditional outlook on leadership is no longer effective in driving business results.
So does the new business environment need a new type of leader? According to CEB SHL Talent Measurement – yes. It does. Of course, it is still important for the leaders to focus on achieving their individual goals and goals of the business units they are managing, but the leaders of the future have to bear in mind the importance of achieving collective goals.
To be effective leaders, they must consider broader outcomes across networks and across the organisation. They have to remember the importance of improving performance of people from various teams within the organisation and use their contributions to improve individual performance. They should be also open to letting their team members support the projects thanks to which other leaders and other teams may also reach their goals.
Such leaders are the Enterprise Leaders.
Why are the Enterprise Leaders so valuable for organizations? Because of the superior team outcomes they may bring. The research of the CEB SHL Talent Measurement proves that 57% of teams managed by Enterprise Leaders achieve high levels of innovation and 87% of them are effective at generating solutions to new or unanticipated problems. Moreover, Enterprise Leaders are more effective at building more engaged teams and at improving the customer satisfaction than leaders focused on individual goals.
Enterprise Leaders are also able to change the organisational culture. Thanks to them organisations develop strategies that incorporate needs beyond their business units, seeking cross-functional partnerships, allocating resources to business unit objectives that align with organisational goals and share opportunities among various teams and functions.
Nevertheless, identifying and developing Enterprise Leaders may be quite a challenge for many companies. Accordingly to CEB SHL Talent Measurement studies, only 31% of HR heads think leaders of their companies are effective in supporting organisational goals and only 13% of them claim that the leaders are successful at supporting each other in achieving business targets. Our research shows that nowadays only 1 in 10 leaders is an Enterprise Leader in the true sense of the term.
What companies should start with when developing Enterprise Leaders? Firstly, some investment has to be made in targeted development to change leadership skills and minds-set. Secondly, company has to encourage cooperation and collaboration to create the opportunity for leaders to give and take. And the organisation should recognise and reward the Enterprise Leaders appropriately. Only 17% of managers identified as Enterprise Leaders received top ratings in their last performance evaluation – criteria have clearly not caught up with the today’s fast-changing business environment.
Companies need Enterprise Leaders if they want to achieve outstanding performance through innovation, greater adaptability, higher employee engagement and customers satisfaction. It can be achieved only if they will support leaders who focus not only on themselves, but are able to think globally about organisational goals.