The forecast for leadership

Development Dimensions International’s 6th Global Leadership Forecast is a guide to our leaders’ attitudes in relation to talent management practices. Taking in 12,000 organisational leaders across 74 countries, the results paint a worrying picture for CEOs


It seems organisational leaders are not as self-confident as their CEOs believe. The research from the Global Leadership Forecast shows clearly that business leaders rate themselves poorly, do not possess the skills necessary for business in the future and that organisations do not have a sufficient pipeline of talent within their organisation.

Leaders rate themselves poorly
Before condemning our organisations for their talent management practices, it is important to look at the context of the Global Leadership Forecast. It was undertaken at the tail end of one of the most severe recessions to hit many of the countries surveyed. Organisations focussed on self-preservation and streamlining their businesses, R&D spending came under severe pressure as did the investment in talent. Undeniably, the last few years have been some of the worst in recent memory for many organisations, requiring our under pressure leaders to be more resilient than ever.

According to the Global Leadership Forecast, only 38 percent of leaders, at all levels, rate their own organisation’s leadership quality highly. Their Human Resources peers rate leadership even more poorly, with only 25 percent, (18 percent in the UK), of HR professionals stating that their organisational leadership quality is high.

Quality of leadership can make or break the success of any organisation and evidence
strongly suggests that the difference between the impact of a top-performing leader and an average leader can be enormous. It seems that leadership really does matter in many tangible areas. The Global Leadership Forecast found that organisations with the highest quality of leadership were 13 times more likely to outperform their competition in terms of financial performance, quality of products and services, employee engagement and customer satisfaction.

The pace of change
The perception of our leaders and lack of bench strength is not a new phenomenon. According to data from previous Leadership Forecasts, these factors have been low for the past decade, yet if companies are to remain competitive and grow their way out of austerity, they need to commit fully to their leadership practices and develop leadership capabilities that can keep up with the rapid speed of change in today’s markets.

So where should CEOs start? The initial point is to clearly understand that leadership quality and talent management are their responsibility. HR has a role to play to help manage the process and systems that enable good talent management but the responsibility is firmly with CEOs. Think about it this way. Is organisational profit the responsibility of finance? Of course not, and talent management should be thought about in the same way. To start with, CEOs should identify the critical skills leaders need to succeed and then provide opportunities to develop and apply those skills. Secondly, the organisation needs to develop systems and processes that support leadership selection, performance manage- ment and leadership succession. Finally, they should realise that leaders cannot be effective in an environment where employees lack the freedom to make decisions or innovate and where there is a lack of transparency around the talent management strategy.

The skillset of the future
The Global Leadership Forecast asked respondents to identify the skills most critical to their success over the last three years and those they will need in the next three. There has been little change between the top three skills needed and those that they think they will need in the future. Driving and managing change, executing organisational strategy, and coaching and developing others are all crucial to leadership effectiveness.

However, there has been a far greater shift toward the skill of identifying and developing talent, a clear indication that the war for talent is back on again. Fostering creativity and innovation has also risen in the list of skills required, and sees the most significant shift from previous surveys.

The need to remain competitive in a downturn has meant that the pressure to innovate has increased and it seems certain that being creative and innovative will be far more important in future. Unfortunately when leaders were asked how effective they were at the skills they identified, the findings were concerning. Only between 50-60 percent of leaders said they were effective in any of the critical leadership skills they will need. Around half is a risky proposition when it comes to something as critical as leadership quality and skills.

Riskier still, is that some of the skills that leaders were least effective in, such as innovation, were the skills that leaders needed the most. Only 50 percent of leaders said they were effective at fostering creativity and innovation, which could be a problem over the long-term, as innovation is needed to help fuel growth, improve products and services and defend against new entrants and competition.A variety of development methods.

The Global Leadership Forecast identified several methods of leadership development that are typically used to develop leaders, the most effective were found to be formal workshops and training sessions, but the most effective leadership development programmes tended to use a variety of methods of development including formal workshops and external and internal coaching.

So, what methods of development should a CEO support? The answer is as many as possible, because each method offers something different to leaders according to their development needs. Comparison data from the Leadership Forecast showed that the most effective organisations used a greater number of development methods compared, to less effective organisations.

According to the HR respondents of the survey, leadership selection is the most critical talent management system for organisational success, yet less than one third of both HR respondents and leaders rated selection systems as effective in their organisation.

Every CEO has experienced the consequences of poor recruitment. Unfortunately, no amount of development or performance management will make up for a poor recruiting decision, so it is critical to get it right from the start. CEOs need to work with HR and their senior team to articulate with clarity what characterises successful future leaders across the organisation and develop a vision of what success in role will look like: a success profile. These profiles need to reflect what leaders need to do to drive strategy execution and they need to be kept current to stay aligned to changing organisational goals.

Having a clear success profile will make it far easier to evaluate candidates through interviews and assessment. Unfortunately, only one in three organisations use such validated tools to make their leadership selection decisions.

On the positive side
There is some good news from the Global Leadership Forecast. Organisations seem to be doing quite well in terms of performance management, although there is still room for improvement. Leaders in the study rated the effectiveness of their organisation’s performance management systems as higher than any other talent management system and it is seen as an essential component of managing the business. Eight in ten leaders reported that their individual performance expectations were tied to corporate goals and strategies, and many organisations feel they have an appropriate balance between objectives, goals, competencies and behaviour.

However, there are still a high number of leaders whose performance management is focused on compliance, filling in the form, and following the process, and where discussion gets lost in the process. CEOs should not underestimate the power of quality discussions and feedback and they should be encouraging this across their whole organisation.

One of the key challenges organisations face is the need to fill the gaps in their leadership pipeline, yet the majority of organisations are not getting this crucial area right. Only 18 percent of organisations reported having strong leadership bench strength and cited frequently a lack of focus, strategy and formality of succession planning as the root cause. Sometimes the organisation’s rapid growth was cited as the reason for this gap, but on others, it was simply a lack of foresight.

Many senior managers argue that they know who their successors are and they look at the next layer down the organisation, but strength comes from spotting talented people five or even ten years away from senior roles and accelerating their readiness for bigger challenges. This should not become confused with decisions about readiness for bigger jobs, which should always be based upon the company’s selection and assessment criteria, rather it is about narrowing the funnel to focus on key people with the most potential. That way, the development budget can be aimed at those that are most likely to become leaders in the future.

Lead by example
It’s tempting to look to HR departments to solve pipeline deficits and effective leadership selection, yet in the most successful companies, talent management takes up a significant portion of a CEO’s focus. When the CEO invests time and energy into talent management, then the example set becomes embedded into the entire organisation. CEOs have a unique perspective in identifying the future needs of their organisation, they can champion a development cul- ture and ensure methods are in place to actively support and track people’s development.

By far the best way to develop the right leadership culture is through leading by example. Leading a talent management strategy means becoming involved with leaders further down the organisation as a scout, mentor and a model for your vision of leadership. Create opportunities to listen to your managers, share your experiences and pass on what you know. CEO’s might want to prioritise a two-hour slot at every leadership retreat to share their vision and strategy and dine with the upcoming talent at the end of a session. Developing talent represents possibly the greatest challenge in terms of your time commitment, because it means being accessible to many people, for little evident short-term return, yet the time invested will pay dividends over the longer term.

Would you like to know more?
If you would like to understand more about the role of the CEO in talent management, DDI produces a handy guide “The CEOs’ Guide to Talent Management” which is available free by contacting

For more information about the Global Leadership Forecast visit