Leadership – the Ticking Talent Time Bomb
Are you worried about the lack of management and leadership talent in your business? You should be. There is an underlying shift in demographics that is driving this – and it isn’t going to go away. The baby-boomers are beginning to retire in large numbers and this represents a major exodus of experience and talent. This problem is being compounded by the influx of a smaller, less-experienced generation of workers, managers and leaders.
How did we get into this mess?
Let’s be honest here, business has only looked at its available pool of talent only in the short-term. A few forward-thinking companies may have looked at this issue over a slightly longer time horizon, but they are few and far between. The problem is that business is driven by short-term results, and this is at the expense of the long-term. Leadership is increasingly short-term as a result and this is reflected in the average tenure of CEOs continuing to decline.
So where are we now with our leadership pipeline, and where will we be in the future? What will this mean for our ability to recruit and retain the talent we need to survive and thrive both now and in the future? The 2012 Global Leadership Survey from SHL provides a worldwide view of leadership potential spanning 25 countries.
The countries which currently today have the most effective leadership are not those with the greatest leadership potential.
Developed Countries Decline, Developing Countries on the Rise
Notably it is the developing countries that will have greatest leadership potential in the future, in part because they have the populations that are large and growing, and that many developed countries which will experience leadership shortages where the population growth is low. This is summarized in the graphic below:
The main reason for this is the demographic shift that is occurring, with baby-boomers beginning to retire and the next generation of the workforce (Gen Y) being significantly smaller in size and with less experience. The implications as regards this for future effective leadership are:
- For developing countries –rising education standards and a culture of entrepreneurialism are some of the environmental factors that are driving emerging economies. They have a huge growth opportunity if they can identify, nurture and develop this potential.
- For developed countries – although they have a strong supply of leaders today, they will be impacted if they continue to fail to invest in learning and development to cultivate their future supply of leaders and remain competitive.
What constitutes an effective leader?
An effective leader has many of the key leadership characteristics including:
- The ability to build relationships
- The ability to solve problems
- The ability to communicate effectively
- The ability to think laterally
- The ability to influence
- The ability to respond positively to change
- The ability to organize
- The ability to motivate and be motivated
Potential Leaders of tomorrow
Leaders of tomorrow are those individuals who exhibit some of the key leadership characteristics (outlined above) but require additional development to realize their full leadership potential.
Companies need to build their leadership talent pipeline and look outside their home markets for further talent. Understanding the supply of leadership is crucial for organizations. As such they need to develop and invest in their future leadership talent for the long-term in order to remain competitive in the global economy.
The Four Quadrants
Countries fall into four quadrants:
In The Talent Vacuum – countries with leadership gaps both today and in the future;
Talent Leapfroggers – countries in short supply of of leaders today but have a huge pool of leadership potential in the future;
Talent Timebombs – countries with strong supplies of leaders today and gaps in leadership supplies in the future;
Talent Trailblazers – Countries with strong supplies today and in the future;
Depending on your geography you will fall into one of the four quadrants – the question is, given where you are, what are you going to do to address the long-term problems and implications in the now?
Five Steps to Cultivating Leadership Success
So what can you and your business do to build long-term success by building the necessary leadership skills and future pipeline? There are 5 steps:
- Identify the behaviours and skills which make a successful leader in your organization;
- Have a complete overview of the leadership potential across your organization and don’t restrict that view to only those you think are high potential;
- Using data, benchmark your people against competitor talent and identify leadership shortages to avoid succession risk;
- Focus on development interventions including where to spend learning and development budgets and apply this across the business;
- Take a global view of where your leadership talent is located and be prepared to use creative strategies to source talent across borders to fill leadership gaps
What are you doing to develop and retain leadership and high-potentials in your organization? Do you have a long-term view or are you driven by short-term requirements? Share your ideas, insights and experiences here for others to benefit.
Share the knowledge, share the wealth!