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All talk and no action leaves a gap in leadership ranks

All talk and no action leaves a gap in leadership ranks: Hudson survey

Research shows almost half of companies are operating with no leadership map

Companies are facing a looming leadership gap, with research suggesting that 46% are operating without a leadership strategy in place.

The Hudson Leadership in ANZ survey of 114 human resources business leaders from New Zealand and Australia found that while 92% agree that leadership is important to business success, only 54% have adopted a clearly articulated leadership strategy. That said, of those without a plan, 53% plan to create one in the next six months.

This reflects a focus on the issue, with business leaders reporting that leadership development is their top priority for the year ahead.

Simon Moylan, head of Talent Management at Hudson, said the results highlight a disconnect between intention and action.

“Every organisation needs a process for assessing the leadership team’s strengths, weaknesses and skills gaps, which then maps to the business strategy. It’s impossible to do this successfully without a plan – it’s like heading off on a road trip without a map.”

“It’s clear that identifying, hiring and developing leaders are ongoing focuses for HR leaders. A strategic approach and clear plan will help to ensure they succeed in setting the business up for success in these areas,” Mr Moylan said.

Hudson points to shrinking CEO tenures as a sign that companies still have blind spots around leadership development.

“All is not well at the leadership table right now. This year we’ve seen early and unexpected exits from top jobs at some of the largest companies, from supermarkets to insurers,” Mr Moylan said.

“There are complex reasons behind these decisions, but the momentum suggests that some companies are failing to match the leaders they hire, to the business they are running today and tomorrow.”

Blueprint for effective leadership unclear

The survey also found around one in three organisations is struggling to evaluate strong leadership, 37% don’t have processes in place to assess current leadership capability and 32% lack a capability framework to describe good leadership.

“Not every business needs the same kind of leaders, but a sound leadership strategy will look at where the business is now, where it’s heading, and the kinds of leadership traits required to get it there,” Mr Moylan said.

Leadership in context

Hudson suggests that in a rapidly changing business environment, leadership needs to be responsive.

“Good leadership is contextual and what makes a good leader in one situation may not work in another. We only need to look at former Christchurch mayor Bob Parker to see that his handling of the immediate aftermath of the Canterbury earthquakes was superb, but when it came time for the rebuild, the region benefited from the specialist expertise of other leaders.

“That doesn’t mean leaders can’t change though – people have the ability to develop their leadership capabilities and recognise that even the best leaders need self-awareness, insight and coaching to grow,” Mr Moylan said.

Next generation of leaders going unnoticed

While Talent Pipeline & Succession Planning was second on the list of 2016 HR business leaders’ priorities, the survey found a gap in this area. Almost half (46%) of organisations don’t have processes in place to identify potential leaders, and 32% don’t have a process to recruit or promote them.

“It’s more effective and costs less to build rather than to buy talent. Organisations without a plan for developing high-potential staff are really missing a trick. Moreover, it creates a flight risk, as the best talent won’t stick around forever, waiting for their turn,” Mr Moylan said.

“When it comes time for All Black captain Richie McCaw to step down, Kiwi rugby fans will no doubt appreciate the efforts of selectors in identifying and grooming his likely successors in Kieran Read and Sam Cane. Both have had the opportunity to take the helm already without the pressure that comes with being thrown in the deep end. The same approach applies in business.”

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