Paradise lost, get over it

When it comes to the changes required in leadership to manage the talent of the
future, according to Steve Newhall, Vice President for Europe at talent
management consultancy DDI, for most businesses, the landscape has
changed beyond recognition.

The days of easy prosperity seem so long ago as to be almost a myth. Today’s
business environment is so fast-moving and volatile that leaders can scarcely
keep up with new pressures and demands placed upon them and unsurprisingly they
are struggling to cope. Fortunately there are some constants that leaders and
executives can cling to that will help them steer a steady ship not just
through the downturn, but beyond into whatever business environment that will
emerge.

Pullquote: ” When times
are easier, any leadership deficiencies are easily masked, but in crisis
situations problematic shortcomings are thrown into sharp relief

Recent headlines have demonstrated
how badly leadership has failed. High profile senior executives and company
heads have been accused of betraying their employees and acting carelessly with
the businesses they lead. But perhaps we shouldn’t be so shocked. Even in the
good times confidence in leadership skills across the world was decaying. DDI’s
Global Leadership Forecast 2008/09, released right before the onset of
the downturn, showed that just 35 per cent of HR professionals had high
confidence in their leaders’ ability to drive organisational success. Moreover,
most businesses had done little to build a strong pipeline of future leaders.
That many leaders have failed to take decisive and fast action to regaining
control of their organisations through leading courageously, with equanimity
and discipline is unfortunately not so surprising.

Knowing the skill sets and likely innate behaviors of the senior management
and leadership population is one step HR teams can take to immediately make a
real difference to the business. When times are easier, any leadership
deficiencies are easily masked, but in crisis situations problematic
shortcomings are thrown into sharp relief. Everyone has negative personality
traits, or ‘derailers’, that can be effectively managed around, once leaders
understand what they are and are taught coping mechanisms. Now is not the time
to let bad habits prevent cool and calm management. Staff need motivation and
focus, not panic and indecision.

Having identified the behavioral pitfalls, the remaining leadership gaps to
plug are skills. Unfortunately like every department, HR teams across the land
are facing serious budget cuts, just when leaders need support the most. Many
commentators have called for training and development budgets to be protected,
to help organisations survive after the recession. While this is a nice wish,
the reality is that this is unlikely to happen.
The key is to focus the remaining budget on those people who will make most
difference to the business; the most effective leaders and high flyers in the
company. These senior leaders and high potential groups should be the last to
be affected by development budget cuts – it’s critical they are given the
skills that the business needs to survive. Organisations need to be finding,
and developing, those who can innovate and create new ways of working. And new
innovations can only survive through effective motivation and empowerment.
However, achieving this type of dynamic environment is often problematic;
typically some 34 per cent of executives struggle to empower staff.

The problem is likely to increase during difficult times, with a rise in
tendency to micromanage together with its damaging effect on morale and
productivity. This is in fact one example of the kind of conflicting priorities
that are presenting themselves during this difficult time; senior staff are
increasingly being asked to perform paradoxes for example winning new business
while cutting costs, monitoring situations and making business adjustments yet
keeping a far enough distance from staff so as not to overbear.

High potential development groups will need to be revaluated in the context
of the new reality. Maintaining the pipeline of future leaders is critical –
but how many future leaders are needed if the organisation is downsizing?
Talent pools need to reflect the needs of the business not vice versa. Smaller
organisations with the same size talent pool will likely mean more people than
opportunities, leading to frustration. Set against this is that fact that the
downturn offers this group the best learning opportunity they may ever have.

The current climate isn’t without opportunities. These tough times offer HR
teams the best opportunity they have ever had to prove they can make a
significant and positive difference to the business. By reacting fast to
understand the leadership population and how it will react, as well as giving
the business useful data in a way it can understand, HR may finally win its
place on the strategic table. This is not just important for 2009, or even
2010. There is no doubt that the constantly changing, ambiguity filled,
uncertain environment faced by managers and leaders today is here to stay. Even
when the upturn begins, successful businesses will be working with new leadership
models, new ways of organising themselves, yet still struggling with the old
thorny issues of rapid globalization, new technologies, increasing competition
and changing demographics of the workforce. Investing in leaders now will help
steady the journey in the future.

Steve Newhall, Vice President for
Europe
DDI