Future leaders: Who has the right stuff?

Making the leap from manager to leader has always been challenging, but what will the leaders of tomorrow be up against, and how can employers groom them for an uncertain future?

BY Iain Hopkins 16 Jun 2015

Leaders today are faced with challenges that have not been witnessed before, and these challenges will only escalate in the next 10-20 years.

Leadership consultancy DDI groups these challenges into four key categories: VUCA.

Volatility – anticipating and reacting to the nature and speed of change
Uncertainty – acting decisively without 100% clear direction and certainty
Complexity – navigating through complexity, chaos, and confusion
Ambiguity – maintaining effectiveness despite constant surprises and a lack of predictability.

Less than two-thirds of leaders around the globe said they were either ‘highly confident’ or ‘very confident’ in their ability to meet the four VUCA challenges. The result for Australian leaders was in line with their global counterparts.

To succeed, leaders of today and tomorrow will need a diverse mix of soft skills and technical business skills. In Development Beyond Learning’s latest book, The Leaders Edge, these skills are summarised under the acronym, SMART:

Situational understanding. A leader begins by assessing where they are as an organisation and then where they need to move to in three main areas: people, purpose and performance. “It’s understanding the current situation and where you personally fit into that, and how the rest of your team sits in relation to those elements,” explains Gary Lear, chairman and co-founder, Development Beyond Learning.

Motivating. “With all the challenges that are placed on a leaders head, one of the most important factors is the ability to motivate themselves and then motivating others to create a high performing team,” Lear explains.

Advancing goals. “Taking a business forward is not just about behavioural leadership but how you set a great strategy. Setting a great strategy and vision is important for the organisation, and advancing goals is based on that strategy and vision,” says Lear.

Reviewing actions. “The leader must be able to place things in context in their org and within their global focus. They must then be able to move people and their people structures forward to adapt to any upcoming changes,” says Lear.

Tracking progress. “This means consistently reviewing your own leadership and your organisation’s progress,” says Lear. “One of the biggest problems we get into is almost like a treadmill of doing the same thing every day and expecting a different result. Leaders need to start looking at tracking progress so they can bring about change quickly within their organisation.”

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Are we prepared?
If these external challenges are daunting, it’s nothing compared to what organisations are up against internally. Over the last five years, Lear has seen a contraction of focus on leadership development within organisations. This, he notes, is a ripple effect of the GFC, which focused most CEOs on the bottom line rather than people development.

“The challenge we’ve got right now is getting the CEO’s eyes off the bottom line and onto their people. One of the problems is they don’t realise that their people are their organisation. They are creating a leadership capability gap which is going to be hard to fill,” he says.
Part of the problem is a failure to map out explicit career opportunities and paths to upcoming leaders. In the past, individuals could enter an organisation and conformably spend the next 20 years working their way through a relatively static and defined career path. In today’s VUCA world, this is tough.

Organisations are constantly changing and reshaping their structures. This can make it can be challenging to map about well-defined career paths over a long period of time.

However, research shows that career paths remain important and contribute to employee engagement and retention. So what can organisations and leaders do to manage this need in a very different business context?

Dan Musson, chief executive of Australian Institute of Management, suggests some of this comes down to changes organisational hierarchies. Where once there were deep hierarchical structures, with a career path seemingly for each individual, this no longer applies in 2015. At the same time, career development has been handed over to the individuals themselves to manage. “Managers are out of practice in looking for and developing the capability within their company. They’re focused on their job and developing future leaders is kind of a secondary thing, or a HR thing,” he says.

This concept of the ‘free agent’ has taken flight amongst younger workers. Employees are free to move between companies and industries, and they have capabilities that extend across multiple areas. Yet this does not mean employers can take a hands-off stance. Employees still need clarity or direction, even in a flat organisation. “You can’t just say, ‘let us know what development you want to do and we’ll let you know if we’ll fund it’,” Musson says. “That’s too ad-hoc. People get lost in that. They will understand that lateral movements are just as valuable as moves up the hierarchy because there are fewer opportunities upwards – but they need a very deliberate direction.”

He suggests that managers must take an active role, either as a mentor or coach. “That has to be part of the leader’s job now. How much am I spending developing capability as part of my day?” he says.

“One of the first things leaders can do is to ensure that individuals (right across the leadership pipeline) have development plans in place,” suggests Mark Busine, managing director, DDI. “In the absence of clearly defined career paths, leaders need to work with their team members to ensure they are receiving the opportunities that facilitate growth and development. This includes looking out for the roles, experiences and opportunities that will facilitate growth and support engagement.”

Sadly, only 36% of a sample of more than 13,000 leaders reported having an up-to-date development plan.

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Leadership development for Millennials
By 2025, Millennials (those born 1981-1997) will represent 75% of the workforce. DDI’s Global Leadership Forecast research found the engagement level of this group can be raised by providing them with a greater understanding of their career path as a leader. The challenge is how you do this in a business context that is frequently changing.

“Providing Millennials an awareness of a range of possible paths that may be ahead of them – not a single route from point A to point B as on a map – is the key, and managers need to know-how to tap into these motivators and opportunities,” suggests Busine. He adds that this can be achieved by having career conversations: what do Millennials want and what do they expect?

Importantly, Millennials want leadership modeling right now.

“They want to have leadership that they can see and use as a model for the future,” says Lear. “They’re asking for leadership.” The most successful organisations, he adds, already have managers who model leadership for their Millennials. These managers are also clear on the purpose of an organisation (‘why are we doing this?’), which is a critical element for Millennial engagement.

“We’re working closely with the managers of Millennials, to engage them in developing their teams,” says Lear, who adds that ‘engagement dynamics’ is one way to build this bond. Engagement dynamics brings together both parties in scenario-based learning to develop both the manager and the young professional.

DBL also offers ‘action learning periods’. “Our programs are not just two days face-to-face and then out of the room. We carry that through a period of six months, which brings about a change in behaviour. You learn a behavior over a long period of time; you won’t bring about change in that behavior in a period of two days,” Lear says.

And of course, for this always-connected generation, access to learning 24-7 is critical. Gamified apps and integrating social learning into development programs – via virtual learning platforms – are also important.

Musson suggests that not only have Millennials been exposed to learning and generally want more of it, but there has been growth in what he calls just-in-time learning. Facilitated by technology, just-in-time learning will occur when an individual wants to undertake just a small chunk of learning, just-in-time for a new career step – whether that’s from manager to leader – of just-in-time for a change of industry or job. “We’re no longer seeing education and learning as something where you tick off three courses and as soon as that’s done you’ve got the foundation and you can move on. Today it’s more fluid. It’s up to us as a supplier to say, ‘ok, which short courses are people going to want? How will they get it delivered?’

For example, AIM has just rolled out its MBA program in an online format because Musson says even with formal education people are looking for the flexibility that technology provides.

“The challenge for us is not just how we take a face-to-face environment and put it online, but it’s about how do we compete with the latest movie or latest game,” Musson says. “This generation is referred to as the digital natives for a reason. It’s how they communicate with each other, how they seek and gather information.”

One thing is clear: leadership development is not solved by a single solution or one-size-fits all approach. The concept of the 70:20:10 development model suggests that a good development experience will involve a variety of different learning and development methods and approaches – yet Busine suggests that too much emphasis has been placed on the ratio, and this was never the intention of the original developers of the concept.

“Most people can readily identify people who have been great coaches or mentors throughout their careers. Unfortunately they can’t always identify multiple people and more often than not their examples don’t include their own managers from across their career,” he says.

Musson agrees, and says that it’s only through the application of theory that the student and the company will get a return on the investment of training. “I’m also a fan of the coaching component that sits in and around that model,” he says. “It embeds the learning. It’s not now HR’s job or it’s not AIM’s job to deliver it. It’s embedded in the company.”

A first step is to turn leaders and managers in to better coaches and ensuring they have the skills to effectively coach their team members (formally and informally). Secondly (and driven by a particular need and/or development goal) provide individuals with access to other coaches and mentors both inside and outside the organisation.

Echoing Lear’s view that Millennials want to learn from their own managers, DDI’s Global Leadership Forecast indicates that 71% of leaders surveyed would like to spend more time learning from others. This compares with just 26% who indicated they would like to spend more time learning on the job. Interestingly, 76% indicated they would like to spend more time in formal learning.

“It’s amazing to watch how people develop using their own learning style, their own processes, but doing it themselves with the support of some good books, some online assessments, some videos and audios. They can choose which way they want to learn. Some people learn through watching; others learn through doing,” says Lear.

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The role of HR
The most important message for HR professionals is to understand that the senior executive team must be involved in the process of grooming upcoming leaders; they shouldn’t feel obliged to ‘do it all’ themselves. Secondly, they need to make it clear to other executives how critical leadership development is, and be able to target the areas where the company is most vulnerable if it loses leadership.

“The HRD’s job is to bring to the notice of the CEO where these vulnerabilities exist in the organisation and then work with the CEO to put in place an open, transparent and measurable development program that can develop new leaders from within,” says Lear.

He also suggests that HR can be critical for spotting potential in unexpected places. “What I’ve found is that leadership comes from some strange places. You can have someone sitting quietly in an organisation and not appearing to be a great leader. But when they are put under pressure or when they get the opportunity they naturally take up the leadership mantle. Programs need to be directed by the CEO and assisted by the HR director – because the HRD often has a broader perspective of the potential within the organisation than the CEO.”

Key take-aways: Identifying future leaders
Although there are countless assessments on the market to assess personality and aptitude for leadership roles, Gary Lear of Development Beyond Learning suggests there are 10 questions to ask in order to identify potential future leaders

Have they got a proven track record of accomplishing impressive results?
Do they take charge and make things happen?
Do they inspire with confidence?
Can they lead with persuasion and influence?
Do other people trust them?
Does this person have an understanding of how to separate the what from the how?
Do they have a global perspective?
Do obstacles stop this person or are they able to push through?
How does this person deal with multitasking?
Do unexpected changes affect this person’s performance?