17 Jan 2012
Global economic troubles and the European debt crisis, along with other dramatic socio-political changes, have organisations re-thinking their direction and operations. Industry-specific problems and numerous local sources of pressure add further complications. CEOs and senior executives know their organisations must be agile and innovative. New strategies are needed.
Unfortunately, at least two-thirds of strategic initiatives fail. For all our management expertise and effort, our success rate isn’t very impressive. Imagine if you sold only a third of the products you made or had customers for just a third of your service capacity. You would take a serious look at what is causing the failure.
When new strategy fails, chances are that leadership failed. Strategic changes in business also require strategic changes in leadership. You cannot assume that the leadership talent you have is the leadership talent you need.
So how do you know when you have a leadership gap? How can you recognise the mismatch between existing leadership capabilities and those required to implement new strategies before it’s too late? You need a leaderhip strategy – not just a business strategy.
A leadership strategy makes explicit how many leaders you need, of what kind, where, with what skills, and behaving in what fashion to accomplish your business strategies. We’ll share the elements of a leadership strategy in a moment, but first a few guidelines. To begin with, believing in the value of leadership is not a leadership strategy. Many CEOs and executives talk about the importance of leadership. They endorse lists of competencies and methods to assess them. Their organisations seek out best practices and programmes for developing leaders. But few executives are clear about what kind of leaders the organisation needs for the future or how to develop them.
Related to that point is this: past success doesn’t always translate into future success. You cannot be sure that previous experience prepares leaders to deal with a new set of circumstances. Your ‘top’ and ‘best’ leaders (including yourself) need the capability to think and act differently. So whenever you plan a bold new strategy, you need to ask yourself: “Does our leadership have the capabilities required to do this?”
You also need to know that organisational leadership is not the sum of individual competencies. Skilled individual leaders are vital, but collective leadership drives change, steers organisations through uncertainty, and solves complex problems. In today’s organisations, people are connected across functions, levels and teams. Leadership must cross over and engage people near and far, formally and informally, if you are to succeed in implementing new strategies. Now to the nuts and bolts of a leadership strategy. Remember, the goal of a leadership strategy is to ensure that you have the leadership talent you need to accomplish your business strategies. Here’s how to start.
Developing a leadership strategy
Define the business strategy and the leadership need. Be very clear and consistent about your business strategy. What are you trying to get the organisation to do or become?
Despite the time and effort put into crafting strategies in many organisations, many senior executives aren’t clear or in agreement about the purpose, direction or implementation of new initiatives. If there is any doubt, take time to clarify the new direction, plan or strategy, work through disagreement or concern, and identify challenges and possible pitfalls. Then assess current leadership capabilities against those needed in the future. What kind of leadership is needed to deliver on the business strategy? And, understanding that the strategy will continue to change over time, what skills will be needed for the organisation to remain agile?
Align talent systems
A leadership strategy addresses talent in a holistic way. When talent management and leadership development efforts are disconnected, key people walk out the door.
Executives, human resources and talent management need to take a close look at who is available to fill key roles. What development do they need to be ready for future assignments? Do existing leaders need to be replaced? How will leaders with different characteristics be attracted, developed and retained? Do the evaluation, promotion and compensation processes support leadership needs?
Invest in culture
A good leadership strategy must also address the cultural factors at play in the organisation. The organisational, local and business unit cultures are powerful forces. So, too, is your leadership culture. The norms, beliefs and expected behaviours in your organisation may be supporting or hurting the needs of the business. For example, if the culture is top-down/command and control, but you are driving change that requires agility, speed and innovation, you have a leadership culture that is undermining your strategy. In your organisation, what must change in the culture to allow a new way of operating that is aligned with the new strategy?
Adapt organisational design
Leaders do most of their learning on the job. If organisations are not intentional about shaping those experiences, talent at all levels learn less than they should – or focus on skills that may not be as essential to the organisation. Examine your organisation’s policies, practices and support for leadership development. What elements constrain the organisation and prevent it from developing necessary leadership talent? What could help your emerging leaders’ pool build new networks, gain perspective and learn valuable lessons? For example, you could rotate emerging leaders through roles in different divisions, sponsor cross-functional teams, and establish systems for local and global groups to interact in and learn from.
Finally, you – as a senior leader – must get clear about your core leadership beliefs and values, ensure that your senior leaders embody them, and be personally committed to implementing a leadership strategy. Are you willing to step up and change your own leadership style? Will you push for leadership that is capable of working in new ways to tackle the business strategy? Will you ask the tough question: is the talent we have the talent we need?
For more information about the Centre for Creative Leadership call +32 (0)2 679 90 10 or email VanimpeM@ccl.org