The Competitive Correlations Between Leadership Development, Globalization, and Retention

For the past several years we’ve been diligently following the published research on the current state of leadership performance, the endemic employee disengagement crisis, and growing disconnect between Baby Boomer executives and their Gen X and Gen Y associates.  In just the past two years we’ve identified more than a dozen reports from highly respected global consultancies, leading universities, and prestigious institutions that paint a very gloomy picture (you are welcome to view some of the key take-aways from the research in slide format on the pages of our recently launched blog site, Igniting Creativity in Business).  Taken in succession, each new study validates the findings of the previous studies.  If one point of information is incidental, two points of information are an indicator, and three points of information are a trend, then twelve points of aligned information identifies a an irrefutable crisis.  Thankfully, it appears leadership is beginning to embrace the crisis at hand; and more importantly, beginning to act.

In January, Deloitte published a report as part of their Talent Edge 2020 series called “Redrafting Talent Strategies for the Uneven Recovery” that indicates senior leadership in many corporations are not just coming to clarity on leadership development issues for the 21st Century, but are starting to take action to maintain and improve their competitive standing.  This comes as a breath of fresh air.  The executives surveyed identified their organizations’ top three most pressing talent concerns as:

1.) Developing Leaders and Succession Planning.

2.) Recruiting Scarce Skill Sets.

3.) Sustaining Employee Engagement/Morale.

Developing a vibrant, strategically aligned, leadership development pipeline has never been more crucial for organizational success; both in the short and long-term.  The report indicated this is not only true for the younger generation, but for Baby Boomers as well.  Employees stated the single most important retention initiative in their eyes was promotion/job advancement.  The survey identified 41% of Gen Y employees, 64% of Gen X employees and 50% of Baby Boomers stated opportunities for advancement as their top priority for staying with their current employer.  While leaderships’ perspective aligned with the thoughts of the Gen Y and Gen X employees, promotion and job advancement for Baby Boomers wasn’t even in leaderships’ top three areas of concern for retaining seasoned talent.  This misalignment of worker expectations and leaderships’ perspective is a forecast for future turnover of highly experienced associates that will leave a void in mid to upper tier leadership in the coming years.

The survey went on to identify the fact that executives themselves have embraced the shortcomings of their organizations’ leadership development initiatives.  Only 17% of executives surveyed believed their leadership development programs were world-class across the board.  The other 83% of executives acknowledged significant improvements need to occur.  Interestingly, executives that state their leadership development programs are world-class also indicated, by margins of 20% or more, that their organizations were investing in professional development at a high rate.

The issues surrounding scarcity of skill sets is driven in great part by the globalization of business in general and the regional disparities that arise in leadership capabilities.  Being able to effectively lead in multi-cultural settings can be a challenge, especially for American-born associates who are typically far less traveled than their European counterparts (only 38% of Americans have a valid passport).  I learned these lessons first-hand during my early years of leading multi-national teams in global markets.  Cultural perspectives, attitudes towards inclusion, the assimilation of new ideas and strategies, and career expectations vary considerably; not only country-to-country, but often within national boundaries as well (i.e. the Iberian peninsula has five distinct cultural identities).  A strong multi-cultural educational element is a must have in today’s leadership development programs (i.e. Performance Transformation employs lessons from comparative mythology and Geert Hofstede’s research into the Dimensions of Culture to create a foundation of insight and sensitivity to cultural variations).

The need for multi-cultural leadership competencies will continue to accelerate.  The report identifies the second most critical strategy for future growth was accessing global, developing markets.   Cultivating multi-cultural awareness, diversity and inclusion are no longer about compliance but clearly centered as a strategic imperatives for growth.

When it comes to sustaining employee engagement/morale the proverbial horse has already left the barn.  When we consider multiple sources of employee engagement data (research from Gallup, RogenSi, Maritz Research, SixSeconds and the Chartered Management Institute) the term sustaining is a bit pollyanna.  According to the research, 70% of employees are neither cognitively, emotionally, or psychologically engaged with their employer.  In fact, additional research from Deloitte identified 65% of employees are either actively or passively looking for career opportunities outside of their current company.  Those figures closely correlate.  Before companies can sustain employee engagement they’re going to need to rekindle it.  The need to rapidly develop progressive, inclusive leaders; truly transformational leaders, is already lagging behind the competitive needs of businesses, the explicit desires of employees, and the growing demands of shareholders and institutional investors.  A study published by McKinsey & Co. last June identified only 1% of 5,560 “C” level and one-step-down executives scored excellent in eight key leadership competencies.  Ninety percent scored below average.  Even more unsettling is the fact that the leadership competencies they measured are no longer fully aligned with the new economic, generational and cultural landscape.

Fortunately, research published by Kaisen Consulting, Ltd. has identified and validated four critical attributes associated with the high potentials of the new economy.  Future leaders that are capable of embracing and employing accelerated leadership development programs.  The four attributes are:

Change Potential ~ Associates capable of not only adapting to change, but initiating change.  They see opportunity in uncertainty.

Intellectual Potential ~ Associates that think quickly, are flexible and open minded.  I would add the ability to think differently to this attribute as well.

People Potential ~ Associates capable of adapting to changing and complex interpersonal demands.  This speaks to Emotional Intelligence competencies (self-awareness, self-regulation, social awareness and relationship management skills).

Motivational Potential ~ Associates capable of sustaining intrinsic motivation and high performance in rapidly changing, challenging environments.

Associates with theses attributes should be the primary candidates for investments in leadership development.  They’re also very likely to be your organization’s most creative and restless employees…the two often go hand-in-hand.  If they cannot find opportunities for advancement in your company, they will in somebody else’s.  Keep in mind, the average length of employment for individuals at a company today is four years.  People that embody these attributes are indeed rather scarce, and if you have them, you’d be very well served to keep them, nurture them, and clear a path for their creative capabilities for driving growth well into the 21st century.

To learn more about Performance Transformation’s customized, intensive six month programs for Accelerated Transformational Leadership Development, please contact us and we’d be more than happy to explore our approach, discuss our curriculum, and help you assess your developmental needs.

© 2012, Terry Murray.

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